Imak International Pty Ltd v WDN Exports Pty Ltd [2006] FCA 1152

FEDERAL COURT OF AUSTRALIA

Imak International Pty Ltd v WDN Exports Pty Ltd [2006] FCA 1152

IMAK INTERNATIONAL PTY LTD ABN 15 002 732 756 v WDN EXPORTS PTY LTD ABN 77 115 855 653 & ORS NSD541 OF 2006

EMMETT J

22 AUGUST 2006

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD541 OF 2006

BETWEEN: IMAK INTERNATIONAL PTY LTD ABN 15 002 732 756

Applicant

AND: WDN EXPORTS PTY LTD ABN 77 115 855 653

First Respondent

ANTONY JOHN WILLIAMS

Second Respondent

JONATHAN PAUL NICHOLS

Third Respondent

JUDGE: EMMETT J

DATE OF ORDER: 22 AUGUST 2006

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The respondents pay all reasonable costs of the applicant reasonably incurred up to 23 June 2006. 2. If, upon taxation in accordance with Order 1, the applicant's costs are certified as being $126,000 or more, the respondents pay the applicant's costs of the motion. 3. Otherwise, the applicant pay the respondents' costs of the notice of motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD541 OF 2006

BETWEEN: IMAK INTERNATIONAL PTY LTD ABN 15 002 732 756

Applicant

AND: WDN EXPORTS PTY LTD ABN 77 115 855 653

First Respondent

ANTONY JOHN WILLIAMS

Second Respondent

JONATHAN PAUL NICHOLS

Third Respondent

JUDGE: EMMETT J

DATE: 22 AUGUST 2006

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The second respondent, Mr Anthony John Williams ('Mr Williams') was, from July 2003 until January 2003, an employee of the applicant, Imak International Pty Limited ('Imak'). Imak is a licensed meat exporter and exports beef, pork and sheep meats to markets throughout the Commonwealth of Australia, Papua New Guinea and the Far East and South Pacific. 2 Mr Williams resigned his employment with Imak during January 2006. There is some disputation as to precisely when his employment ceased, but it was either on 9 or 11 January 2003. Following his departure, Imak formed the view that he had committed breaches of duty as an employee by forwarding to himself by email information that Imak claims to be confidential. 3 On 17 February 2006, Imak's solicitors wrote to the third respondent, Mr Jonathan Paul Nichols ('Mr Nichols'), a director and shareholder of the first respondent, WDN Exports Pty Limited ('WDN Exports'). The letter was marked 'without prejudice except as to costs', although it may be that that heading resulted from some misapprehension as to what was proposed. To the extent to which an offer of compromise by the execution of the deed of release was being made it may be that the letter would appropriately attract a privilege against any admission. The letter asserted that Mr Williams had made confidential information available to WDN Exports. A demand was made for Mr Nichols and WDN Exports to return all information and other property of Imak in their possession. Imak also required each of Mr Nichols, Mr Williams and WDN Exports to execute a deed of release. 4 In any event, the solicitors for the respondents replied on 24 February 2006 in an open letter. The reply asserted that the letter of 17 February 2006 was defamatory and inflammatory, particularly affecting Mr Williams. The letter asserted that, on their instructions, the assertions were untrue in substance and in fact. The letter called upon Imak's solicitors to specify with precision when, where and how the alleged instances of dissemination of confidential information by Mr Williams occurred, why it was asserted that the occurrences were either serious or persistent and what it was that had been disseminated and to whom. 5 The letter also called on Imak's solicitors to produce what they had characterised as incontrovertible evidence that Mr Nichols and WDN Exports had been complicit in the dissemination of confidential information. The letter asserted that it was outrageous to suggest a deliberate conspiracy, as Imak's solicitors had. The letter went on to say that the respondents denied any contravention of law protecting Imak's confidential information and would strenuously defend any proceedings commenced. The letter denied that any of the respondents had in his or its possession any information or property of Imak. 6 However, on the same day, the respondents' solicitors wrote to Imak's solicitors making an offer that Mr Williams enter into a deed of settlement in terms of a draft, which was attached. Imak's solicitors responded on 1 March 2006, observing that there had been no response from either WDN Exports or Mr Nichols. That letter was marked 'without prejudice'. It went on to say that Imak would derive little benefit from any deed proposed without some agreement from Mr Nichols and WDN Exports. 7 After further exchanges, in which the respondents' solicitors made clear that WDN Exports and Mr Nichols were not offering to be parties to any settlement, Imak commenced this proceeding by filing an application and statement of claim on 15 March 2006. On 22 March 2006, the respondents' solicitors served a notice to produce, requiring production of copies of the documents referred to in the statement of claim. On 24 March 2006, Imak's solicitors responded, indicating that all documents to which reference was made in the statement of claim may be inspected in the week commencing 29 March 2006. Following a directions hearing on 7 April 2006, a folder containing some 180 pages of documents referred to in the statement of claim was provided to the respondents' solicitors on 12 April 2006. 8 On 20 April 2006, the respondents' solicitors requested particulars of the statement of claim. On the same day, a 'without prejudice' letter was written by the respondents' solicitors proposing a compromise. The letter asserted that Imak had no prospect of recovering compensation for damages, even if injunctive orders sought in the proceeding were ultimately made. The letter also asserted that WDN Exports had not profited from use of Imak information. The letter proposed that the draft deed of settlement, which had been forwarded by the respondents' solicitors on 24 February 2006, be amended to include WDN Exports and Mr Nichols as parties, whereby they would confirm that they would not act in competition with Imak and would otherwise enter into similar provisions concerning the return of property. The letter proposed that the parties bear their own costs. 9 The respondents filed a defence to the statement of claim on 27 April 2006 making significant admissions. On 29 May 2006, Imak's solicitors responded to the request for particulars contained in the letter of 20 April 2006. 10 Further correspondence resulted in various exchanges of proposed short minutes of order that would be made by consent. The correspondence ultimately led to the Court's making orders by consent on 23 June 2006. The orders that were made by consent on 23 June 2006 involve a compromise so far as Imak's claims are concerned. 11 In its application, Imak sought relief which might be summarised as follows: · an order that the respondents deliver up copies of the confidential information;