FEDERAL COURT OF AUSTRALIA TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd (No 3) [2016] FCA 1117 File number: NSD 102 of 2015 Judge: PERRAM J Date of judgment: 15 September 2016 Legislation: Corporations Act 2001 (Cth) Date of hearing: 9 September 2016 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Category: No Catchwords Number of paragraphs: 8 Counsel for the Applicant: Mr K Smark SC Solicitor for the Applicant: Tomaras Lawyers Counsel for the Respondents: Mr B Katekar Solicitor for the Respondents: Bartier Perry ORDERS NSD 102 of 2015 BETWEEN: TICA DEFAULT TENANCY CONTROL PTY LTD ACN 087 400 379 Applicant AND: DATAKATCH PTY LTD ACN 601 884 806 First Respondent REGINALD JOSHUA Second Respondent ANTHONY NOUNNIS (and others named in the Schedule) Third Respondent JUDGE: PERRAM J DATE OF ORDER: 15 SEPTEMBER 2016 THE COURT ORDERS THAT: 1. The parties bring in orders giving effect to these reasons within 7 days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT PERRAM J: 1 This action concerned allegations of breach of confidence and infringement of copyright, and was tried over three days between 21 and 23 March 2016. On 15 July 2016 judgment was delivered: TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd [2016] FCA 815. The basic contention was that the software operated by the applicant for the purposes of its business had been copied by the first respondent for the purpose of starting a similar business. 2 Although it was held that copyright inhered in the TICA system, I found that an infringement of that copyright had not been shown. I did, however, uphold the applicant's allegation that Mr Anthony Nounnis had breached an obligation of confidence owed to the applicant by using confidential usernames and passwords taken from the applicant to access its website to assist in the design of Datakatch's software. I also concluded that Datakatch and Mr Joshua were involved in this activity. Additionally, I found Mr Nounnis liable for the same conduct under s 183(1) of the Corporations Act 2001 (Cth). 3 The parties were directed to bring in short minutes of order. They have been able to agree on many of the issues which arise but not all of them. They remain in dispute on the following issues. First, whether the relief sought against Datakatch, Mr Joshua and Mr Nounnis arising from the four usernames and passwords identified in the principal judgment should be limited to those four usernames and passwords, or whether it should instead be more generally expressed to apply to any usernames and passwords of the applicant which the respondents have. The relief sought in this regard is a final injunction and, variously expressed, orders for delivery up of usernames and passwords. Secondly, whether the applicant should pay the costs of the first to third respondents, or whether there should be no order as to costs. Thirdly, whether the applicant should pay the costs of the fourth and fifth respondents on the ordinary basis or on an indemnity basis. 4 As to the first issue, the respondents submit that the form of relief should reflect the findings made. Those findings were that Mr Nounnis took four usernames and passwords from the applicant, viz. those of Century 21, Ray White, Style Property and Define Property, and provided them to Mr Joshua. Both men then used them to access TICA's website so that they could use it to design their own: see TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd [2016] FCA 815 at [99]. Consequently, Datakatch, Mr Nounnis and Mr Joshua should only be restrained from using those usernames and passwords, and ordered to deliver up only the same usernames and passwords. The applicant's response to this is that there is no reason to think that any further use by the first to third respondents of other usernames or passwords would be authorised. Further, if relief were not granted on a broader basis, it could lead to a multiplicity of proceedings. 5 The relief should extend beyond the four identified usernames and passwords to any usernames and passwords obtained from TICA and held by the first to third respondents. It is true that I was unable to identify any other usernames and passwords which were being used. However, and more importantly, I found that the four usernames and passwords were being used for a particular purpose, namely, to assist Mr Nounnis Jnr and Mr Joshua with the design of their own Datakatch software. That system is neither complete nor yet fully operational by reason of the existence of these proceedings. I think there is a risk that the same conduct could easily happen again. The relationship between the parties is, after all, toxic. Mr Nounnis Snr and Mr Nounnis Jnr have had a spectacular falling out the emotional contours of which can only have been poisonously exacerbated by the fact that they are father and son. Mr Joshua and Mr Nounnis Snr parted company in circumstances which can hardly have enamoured each with the other. On top of that, the three of them have now spent a large amount of money running this litigation, which is unlikely to have decreased the antipathy each camp bears the other. In such a rich soup of human dysfunction, I have little difficulty in accepting that there is a real risk that Mr Nounnis Jnr and Mr Joshua might suffer a lapse of judgement and keep doing what they were caught out doing. This would be unwise, of course, but wisdom long ago abandoned these parties. 6 Turning to the second issue, the choice is between ordering the applicant to pay the costs of the first to third respondents or making the two camps bear their own costs. Either outcome is plausible. The applicant was in part successful, but only in a relatively minor way. On other hand, whilst it is possible to see the first to third respondents as having prevailed on most of the issues it was a scrappy victory, if a victory it was. On the whole, I think this case a draw and I propose to make no order as to costs. 7 As to third issue – whether the four and fifth respondents should have their costs on an indemnity basis or the ordinary basis – I think the costs should be on an indemnity basis for the trial but on the ordinary basis beforehand. The difficulty the applicant has is that it in fact ran no case against these parties. Despite that curious circumstance, they remained parties and were represented throughout the trial. The fourth respondent really had nothing to do with the case and had indicated this in reasonably clear terms. The role of the fifth respondent was never explained to me. Once the trial began it was apparent that they should not have remained parties. No doubt the significance of this was obscured because all of the respondents were jointly represented but that does not, when all is said and done, remove the fact that they were kept in a case in which nothing was being put against them. In my view, this should not have happened. Whilst one can be sympathetic about the circumstances which may have generated this oversight, a very significant oversight it remains. Pursuing a party against whom one makes no allegations is not the same kind of activity as pursuing a case known to be false, but it has much the same result, which is that a person is brought before the Court who, by any measure, should not have been required to be involved. On that basis, I think it appropriate to award indemnity costs. 8 This resolves the drafting issues between the parties. They should now forward an appropriate minute of order within 7 days. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 15 September 2016 SCHEDULE OF PARTIES NSD 102 of 2015 Respondents Fourth Respondent: NATHAN PORTELLI Fifth Respondent: DATAKATCH INTERNATIONAL PTY LTD AS TRUSTEE FOR THE KATCHALL UNIT TRUST