Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Agha v Devine Real Estate Concord Pty Ltd & Ors [2021] NSWCA 29 Hearing dates: 23 July 2020 Decision date: 09 March 2021 Before: Payne JA at [1]; White JA at [2]; McCallum JA at [184] Decision: (1) The appeal of the first appellant be allowed in part. (2) The appeal of the second appellant be allowed. (3) Set aside orders 5, 6 and 9 made on 4 December 2019. (4) The appeal of the first appellant be otherwise dismissed. (5) The respondents pay the second appellant's costs of the appeal so far as those costs concern only the claims of the second appellant. (6) The first appellant pay the respondents' costs of the appeal, not including costs referable only to the claims of the second appellant. Catchwords: EQUITY — Breach of confidence — Concurrent confidentiality obligation in contract EQUITY — Breach of confidence — Necessary quality of confidence — Employment EQUITY — Breach of confidence — Necessary quality of confidence — Material in public domain COMMERCE — Restraint of trade — Particular cases — Protection of business connections COMMERCE — Restraint of trade — Particular cases — Protection of staff connections COMMERCE — Restraint of trade — Validity and reasonableness Legislation Cited: Competition and Consumer Act 2010 (Cth), ss 45, 51 Corporations Act 2001 (Cth), ss 181, 182, 183 Crimes Act 1900 (NSW), ss 253, 308D Evidence Act 1995 (NSW), s 140(2) Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) Restraints of Trade Act 1976 (NSW), s 4 Cases Cited: Aussie Home Loans Ltd v X Inc Services Pty Ltd [2005] NSWSC 285 Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 Devine Real Estate Concord Pty Ltd & Ors v Wajih Agha (aka Roger Agha) & Anor [2019] NSWSC 786 Devine Real Estate Concord Pty Ltd v Agha (No. 2) [2018] NSWSC 564 Devine Real Estate Concord Pty Ltd v Agha [2018] NSWSC 556 Harman v Secretary of State for the Home Department Harman v Secretary of State for the Home Department [1983] 1 AC 280 Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 Herbert Morris Ltd v Saxelby [1916] 1 AC 688 Isaac v Dargan Financial Pty Ltd [2018] NSWCA 163 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kasupene v Ajax Foundry Pty Ltd [2006] NSWCA 309 Kearney v Crepaldi [2006] NSWSC 23 Lindner v Murdock's Garage (1950) 83 CLR 628 Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535 Orica Investments Pty Ltd & Ors v William McCartney & Ors [2007] NSWSC 645 Weldon & Co v Harbinson [2000] NSWSC 272 Category: Principal judgment Parties: Wajih Agha (aka Roger Agha) (First Applicant) Lewis Coombe (Second Applicant) Devine Real Estate Concord Pty Ltd (First Respondent) Devine Real Estate Drummoyne Pty Ltd (Second Respondent) Steven James Devine (Third Respondent) EMC Just Holdings Pty Ltd (Fourth Respondent) Representation: Counsel: P Doyle Gray with A Djurdjevic (Applicants) I Neil SC with M Seck (Respondents) Solicitors: Baybridge Lawyers (Applicants) Jemmeson Fisher (Respondents) File Number(s): 2019/401378 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2019] NSWSC 786 Date of Decision: 4 December 2019 Before: Sackar J File Number(s): 2018/87652 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] Mr Agha was employed by Devine Real Estate Concord Pty Ltd. He was also a shareholder. A shareholders' agreement and his employment agreement contained clauses in restraint of trade and clauses protecting confidentiality. The restraints were or different periods and overlapping areas. The majority shareholder and managing director was Mr Devine. In late 2017, Mr Agha and another employee, Mr Coombe, forwarded client lists to their own personal email addresses. A person using Mr Agha's username altered contacts in the client database. Mr Agha gave notice to Mr Devine pursuant to the shareholders' agreement of his intention to exit the business and sell his shares. He also indicated his intention to resign. Mr Devine discovered that Mr Agha had sent Excel spreadsheets to his personal email address and terminated his employment. Mr Agha and Mr Coombe entered into employment agreements with Belle Property Neutral Bay. Both took steps to act for former clients of Devine Group. The primary judge granted injunctions against Mr Agha to enforce covenants in restraint of trade and restraining him from disclosing confidential information. Declaratory relief was granted against both defendants. The principal issues on appeal were: 1. Whether the primary judge erred in finding that Mr Coombe entered into an employment agreement that included a restraint of trade clause and contractual protections of confidential information. 2. Whether the primary judge erred in finding that Mr Agha and Mr Coombe breached contractual obligations of confidentiality. 3. Whether the filing and service of the summons and the affidavit of Mr Devine, or the reading of the affidavit and the tendering of the exhibits meant that the client information contained therein ceased to be confidential. 4. Whether the primary judge erred in holding that a combination of a radius restraint provided for in the employment agreement and a postcode restraint provided for in the shareholders' agreement should apply for the longer period provided in the shareholders' agreement. 5. Whether the primary judge erred in granting injunctive relief enforcing cl 10 of the shareholders' agreement and cl 19 of the employment agreement. The Court held per White JA (Payne JA and McCallum JA agreeing), dismissing Mr Agha's appeal save in respect of Declaration 5 made on 4 December 2019, and upholding Mr Coombe's appeal: In relation to the first issue: i. the primary judge erred in finding that Mr Coombe had executed a second agreement which had then been removed: [93]-[95]; ii. the primary judge's findings as to the seriousness of the alleged breaches did not justify the finding in question: [96]. In relation to the second issue: iii. because of the resolution of the first issue in Mr Coombe's favour, only the findings in respect of Mr Agha's breaches fall for consideration: [118]; iv. Mr Agha's employment agreement (which unlike the shareholders' agreement defined Confidential Information to include client lists) was not void for purportedly modifying the shareholders' agreement: [130]; v. in any event, client contact lists were plainly confidential. An employee is not entitled to remove or cause to be removed lists which are the employer's property, or to make copies or commit lists to memory: [132]. In relation to the third issue: vi. service did not place the exhibits in the public domain: [134]; vii. after the reading of the affidavit and the tendering of the exhibits, orders were made preserving the confidentiality of specified evidence: [136]; Isaac v Dargan Financial Pty Ltd [2018] NSWCA 163 distinguished. viii. in any event, even if the tender of the exhibits meant that Devine Concord lost the protection of equity, it did not lose its contractual rights: [139]. In relation to the fourth issue: ix. the fact that the two agreements impose overlapping restraints is of no moment because there are no relevant inconsistencies: [144]; x. the primary judge erred in making Declaration 5 that the three-year restraint in the shareholders' agreement should operate for the radius restraint and the postcode restraint, which required amendment to each agreement: [145]. In relation to the fifth issue: xi. it is irrelevant that the evidence did not disclose any person who came within the definition of "regular customer" when cl 10 i also referred to a person "otherwise in the habit of dealing with Concord (or who shall approach or shall have been approached by Concord with a view to dealing …)": [150]; xii. Mr Agha's employment with and shareholding in Devine Concord began after Devine Concord purchased the business of Stefani and Associates, in which Mr Agha had held a 40 per cent interest. At the time of the purchase, the parties had proceeded on the basis that it would take 3.66 years for Devine to recover the purchase price. This provided a rational connection with the three-year restraint period in cl 10 of the shareholders' agreement: [161]; xiii. the restraints in each agreement were reasonable for the protection of Devine Concord's trade connection, which extends to a covenant against enticement of other employees from leaving their employment: [164]; xiv. the restraints were reasonable in the interests of the parties and the public given Mr Agha's seniority and position as a past shareholder: [167]. Judgment 1. PAYNE JA: I agree with White JA. 2. WHITE JA: This is an application for leave to appeal from orders of the Equity Division (Sackar J) granting final injunctive relief to enforce covenants in restraint of trade given by the first appellant, Mr Roger Agha (first defendant at trial) and restraining him from disclosing trade secrets or other confidential information relating to the first respondent (Devine Real Estate Concord Pty Ltd ("Devine Concord")) (first plaintiff at trial). The second appellant, Mr Lewis Coombe (second defendant at trial), also appeals from declarations affecting him (Devine Real Estate Concord Pty Ltd & Ors v Wajih Agha (aka Roger Agha) & Anor [2019] NSWSC 786). 3. On 4 May 2018 the primary judge ordered that the question of the defendants' liability on the plaintiffs' claim, including the making of final injunctions, be determined separately and before the plaintiffs' claims for the taking of accounts and any assessment of damages and compensation. 4. The respondents do not oppose the grant of leave to appeal. Leave should be given. 5. Although only declaratory relief has been granted against Mr Coombe, the effect of at least one of the declarations made concerning him would be to render him liable to pay damages. Background 1. The parties are real estate agents. Devine Concord has its office at 65 Majors Bay Road, Concord. The second respondent, Devine Real Estate Drummoyne Pty Ltd ("Devine Drummoyne") has its office at 25 Lyons Road, Drummoyne. At relevant times the third respondent, Mr Steven Devine, held or controlled a majority shareholding in each of Devine Concord and Devine Drummoyne. The fourth respondent, EMC Just Holdings Pty Ltd ("EMC") is the trustee of a family trust of which Mr Devine is a beneficiary. He is its sole director and shareholder. 2. Mr Devine deposed that in March 2018 the Devine Group of companies, of which Devine Concord and Devine Drummoyne are two, operated from five offices in New South Wales and one office in the Philippines. The initial office was in Strathfield. Mr Devine purchased his father's shares in the company that conducted business through the Strathfield office. In about 2004 he changed the brand from Strathfield Real Estate to Devine Real Estate because he intended to expand the business beyond Strathfield. In early 2008 he was interested in opening a new Devine Group office in Concord by purchasing the assets of Stefani and Associates Pty Ltd ("Stefani and Associates") that traded as a real estate agency. Mr Agha was an employee and 40 per cent shareholder of Stefani and Associates. 3. On 8 August 2008 Devine Concord entered into a contract to buy the business and assets of Stefani and Associates. The purchase price was $1,266,000. Of this, all but $260 was attributable to the value of the rent roll. The purchase price was calculated on the basis of $3.66 for each dollar of annual commission received from the rent roll. 4. In clause 54 of the sale of business agreement Stefani and Associates acknowledged that Devine Concord had purchased the goodwill of the rent roll. The contract provided that only Mr Bill Stefani would sign the "restraint deed", but clause 58 provided: "Completion Conditional on Further Agreement Exchange of this Contract is subject to and interdependent with mutual execution of a Shareholders Agreement between the Purchaser and Roger (Wajih) Agha of [XX] Bennett Street, Wentworthville or his nominee (acceptable to the company) and completion is dependant [sic] upon the Issue by the Vendor to the said Roger Agha of shares comprising twenty (20%) per centum of the issued share capital of the Vendor. In addition such shareholders agreement will contain a provision that guarantees a multiple of 3.66 against the gross management income excluding letting fees, sundries, & other income derived other than management income in the event that shares are sold between directors or shareholders." 1. Mr Devine asked Mr Agha (and the majority shareholder, Mr Xenos) to become minority shareholders of Devine Concord. Mr Agha was asked to be a director. 2. Also on 8 August 2008 Devine Concord, Mr Devine, Mr Xenos and Mr Agha entered into a shareholders' agreement. The agreement recited that Mr Devine held 700 shares, Mr Xenos held 100 shares and Mr Agha held 200 shares in Devine Concord. 3. Clause 3.2 of the shareholders' agreement provided that each party was entitled to appoint, remove and replace from time to time one director. The maximum number of directors was specified to be three, unless the shareholders otherwise unanimously agreed (clause 3.1). Clause 1 provided that notwithstanding anything to the contrary in the company's constitution, so far as it was lawful, the directors and shareholders were required to act in accordance with the provisions of the agreement. 4. By clause 4(a) each party agreed to be faithful to and co-operate with each other in relation to all matters concerning the affairs of the company in a manner consistent with the agreement. 5. Clause 6 provided as follows: "Personal commitments 6.(a) Excepting for Devine and Xenos, the parties shall each devote the whole of their time and attention to the interests of the company and shall serve and be employed as full-time working employees during the continuance of this agreement. Contracts of employment with the company shall be entered into by the other parties. (b) The parties each undertake with the other that they will use their best endeavours to promote the interests and welfare of the company. (c) Excepting for Devine and Xenos, the parties shall [not] (except as a representative of the company or with the consent of the other), whilst a director or shareholder be directly or indirectly engaged concerned or interested in any other business competing in any respect with the business of the company whatsoever and shall be accountable to the company for any profits fees or other sums derived from the interest which he may have in breach of this provision PROVIDED THAT either party may hold shares or securities listed on a recognised stock exchange not exceeding one per cent of any class of shares or securities in any one company or concern. (d) Neither party shall at any time whilst a shareholder or director or after he ceases to be a shareholder or director disclose to any person firm or company whomsoever any trade secrets or other confidential information relating to the company or its customers or suppliers save as necessary in the course of the company's business." 1. It was common ground that clause 6(c) contained a typographical error by the omission of the word "not" after "shall" in the first line. 2. Clause 9 dealt with what should happen if Mr Devine wished to buy out a minority shareholder, or if he wished to sell his shares, or if either Mr Xenos or Mr Agha wished to dispose of their shares (in the case of Mr Agha if he wished to do so within 12 months). Clause 9.1 provided a method of valuing the shares if they were to be sold pursuant to that clause. Shares were to be valued on a net asset basis with the rent roll to be valued at a multiple of 3.66. 3. Clause 10 provided: "Restraints after sale of shares 10. Except for Steven Devine and Nick Xenos, each party undertakes with the other that if he shall dispose of his shareholding to the other he will not for a period of three (3) years after the date of disposal within the following postcodes: 2046, 2127, 2131, 2132, 2134, 2135, 2136, 2137, 2138, 2140. from the company's business or the business of any subsidiary at the date of disposal: i. on his own account or for any other person firm or company solicit interfere with or endeavour to entice away from the company any person firm or company who or which at the date of disposal is an employee or regular customer of or supplier to or otherwise in the habit of dealing with the company (or who shall approach or shall have been approached by the company with a view to dealing either as such customer or as such supplier such approach not having been rejected by the other party); 'regular customer' or 'regular supplier' meaning having entered into not less than [three] transactions in the [six months] immediately prior to the date when this undertaking takes effect; ii. directly or indirectly engage or offer any employment to any person who at any time during the term of this agreement shall have been an officer or employee or agent of the company with access to confidential information relating to any of its suppliers' products or customers; iii. be or become in any capacity whatsoever engaged or concerned or interested in any business which is or is to his knowledge about to be engaged in competition with any business carried on by the company at the date of disposal PROVIDED THAT this restriction shall not prevent him from holding (directly or through nominees) by way of investment only shares or securities in respect of which listing or permission to deal has been granted by any stock exchange or any shares or securities in respect of which written consent has been given by the other party so long as he does not hold more than [one] per centum of the shares or securities of any class in any one company or concern. PROVIDED THAT: 1. Each of the obligations and restrictions in this clause shall be a separate distinct and severable obligation; 2. It is agreed that the said obligations or restrictions are only such as are reasonably necessary for the protection of the company's business but should any of the same be held void voidable illegal or otherwise unenforceable the same shall be deemed to be rewritten with such maximum restrictions as are compatible with the same being enforceable." 1. Mr Devine deposed that by 16 March 2018 Mr Agha had increased his shareholding to 30.43 per cent of the total shareholding. 2. The restraints in clause 10 of the shareholders' agreement protected the purchase of goodwill, both when the business of Stefani and Associates was purchased in August 2008 and later when Mr Agha's shareholding in Devine Concord was purchased in 2018. 3. From about August 2008 Mr Agha was employed by Devine Concord as a full-time salesman working out of the Concord office. Mr Devine deposed that: "I instituted a practice in the Devine Group that every employee, including Roger, would have a written employment agreement. In 2011 I updated the employment agreements in the Devine Group as part of a general review of Devine Group's employment processes. Roger signed his latest employment agreement with Concord as a full-time commission only salesperson on or around 20 April 2011." 1. Mr Agha's employment agreement included terms protecting Devine Concord from misuse of Confidential Information (as defined) and restricting post-employment activities. Clause 14, dealing with the protection against disclosure of Confidential Information, provided: "14. Confidential Information 14.1 You agree that You will, at all times both during and after your employment with the Employer, and for all reasons: (a) use Confidential Information for the sole purpose of performing your Duties with the Employer; (b) keep confidential all Confidential Information, other than Confidential Information You are required to disclose in the course of your normal Duties, that is or has become public knowledge (other than as a result of a breach of confidentiality by you), or that You are required by law to disclose; (c) immediately notify the Employer of any suspected or actual unauthorised use, copying or disclosure of Confidential Information; (d) provide assistance reasonably requested by the Employer in relation to any proceedings the Employer may take against any person for unauthorised use, copying or disclosure of Confidential Information. 14.2 You agree that You will not, at any time or for any reason: (a) use any Confidential Information to your own advantage or to the advantage of any other person, firm or company without the prior written consent of the Employer; (b) disclose any Confidential Information to any other person, firm or company without the prior written consent of the Employer; (c) use or attempt to use any Confidential Information which You may acquire in the course of your employment for any speculative purposes. 14.3 In relation to the restrictions contained in this paragraph 14, You acknowledge that: (a) the Employer's rights under this paragraph 14 are in addition to, and do not derogate from or affect the Employer's common law rights; (b) the restrictions are reasonable and necessary for the protection of the Employer; and (c) the remedy of damages may be inadequate to protect the interests of the Employer and the Employer is entitled to seek and obtain injunctive relief, or any other remedy, in any court. 1. "Confidential Information" was defined in clause 1.1(f) as follows: "Confidential Information means all information, except to the extent that it is generally available to the public (other than due to a breach of this Agreement), of which You become aware or generate in the course of, or in connection with, employment with the Employer, of a commercial, operational, technical or financial type relating to: (1) the Employer or a related entity (as that term is used in the Corporations Act 2001) to the Employer; and (2) any customer or client of the Employer, and includes, without limitation, each of the following: A information which the Employer identifies as confidential; B information which a reasonable person in your position should understand is confidential; C trade secrets and intellectual property; D agreements, arrangements or terms of trade with clients, customers and suppliers or prospective clients, customers or suppliers; E names, addresses (including email addresses), phone numbers and all other contact information of sellers, buyers, prospective sellers and buyers, and property owner (including their employees, contractors and representatives) on whose behalf a property is managed by the Employer; F contractual and technical information; G marketing plans and marketing and sales techniques; H business plans and forecasts; I business systems and procedures; J financial records; reports and accounts; K business proposals; L manuals; M operational materials; N details concerning the Employer's business affairs; O customer/client lists; P customer/client details and records including, but not limited to, all personal and financial information revealed by customer/clients; and Q employee information." 1. Mr Agha's employment agreement also included a restriction on post-employment activities. Clause 19 relevantly provided: "19.1 Without the Employer's prior consent, from the Termination Date, You are not to: (a) solicit, attempt to solicit, or accept any instructions to perform any work from any Client for the Restraint Period; (b) carry on or be engaged, concerned, interested directly or indirectly whether as a shareholder, director, employee, partner, joint venture participant, principal, agent, trustee, unitholder or otherwise, in carrying on any business for a Competitor for the Restraint Period; (c) solicit, attempt to solicit, entice or encourage any Employer Representative to leave their engagement with the Employer for the Restraint Period; (d) encourage, condone or entice any other person or entity, in which You are interested or by which You are engaged, to engage in conduct which, if You engaged in such conduct personally, would cause You to breach this paragraph 19. 19.2 In this paragraph 19: (a) Restraint Period means: (1) 12 months; (2) 9 months; (3) 6 months; (4) 3 months; (b) Client means any person or entity: (1) to which the Employer provided services during your employment; (2) with which the Employer had direct dealings during your employment in relation to the provision (or proposed provision) of services by the Employer to the person or entity; (3) which referred business to the Employer during your employment; (4) with which You had direct dealings in the course of, or in connection with, Your employment with the Employer. (c) Competitor means any business engaged in providing real estate agency services within a radius of: (1) 6 kilometres from the office of the Employer in which You were employed; (2) 5 kilometres from the office of the Employer in which You were employed; (3) 4 kilometres from the office of the Employer in which You were employed; (4) 3 kilometres from the office of the Employer in which You were employed. (d) Employer Representative means: (1) any director or person involved in the management of the Employer; (2) any employee of the Employer who has knowledge of Confidential Information or who reported to You or who was engaged in sales or marketing activities during your Employment; (3) any employee of the Employer; (4) any independent contractor contracted to the Employer. 19.3 It is acknowledged by You that: (a) each of the covenants in paragraph 19.1 shall be construed and have effect as a number of separate covenants which results from combining each covenant with each sub-section of the definition in paragraph 19.2 for each defined term referred to in the covenant, with each such resulting covenant being severable from each other such resulting covenant. The covenants are cumulative and overlapping. If any such resulting covenant shall be invalid or unenforceable for any reasons, such invalidity or unenforceability shall not prejudice or in any way affect the validity or enforceability of any such resulting covenants; (b) the restrictions in this paragraph 19 apply to conduct which is either direct or indirect (e.g. done through an agent of any kind) and regardless of whether the conduct is engaged in for your own benefit or for the benefit or on behalf of any other person or entity; (c) the Employer's rights under this paragraph 19 are in addition to, and do not derogate from or affect the Employer's common law rights; (d) these restrictions are reasonable and go no further than is necessary to protect the interests and Confidential Information of the Employer; (e) injunctive relief may be sought by the Employer to enforce these restrictions; (f) if any of the above restrictions or parts of them are found not to be enforceable then it is agreed that the remainder of the restriction(s) will apply; and (g) the rights and obligations of the Employer and You in this paragraph 19 survive termination of this Agreement." 1. Mr Agha's employment agreement also included express terms of fidelity (cll 4.1(c) and (h) and 5.1(a) and (e)). 2. On 8 December 2017 Mr Agha gave Mr Devine written notice under clause 9 of the shareholders' agreement that he wished to exit the business and sell his shares. He said that he assumed that Mr Devine would want to purchase his shares in Devine Concord and proposed that the shares be valued in accordance with clause 9 of the shareholders' agreement. Mr Agha also wrote: "We also need to discuss what restraint, if any, I am subject to after the sale of my shares. Without waiving the privilege that attaches to it, I can say that I have received legal advice that the current restriction as contained in clause 10 of the Concord Shareholder's Agreement (a 3 year restraint spreading over numerous local post codes) would be unenforceable at law because it is unreasonably oppressive. Therefore, I would like to agree with you on a reasonable restriction of my trade prior to my share sale completing. I should also mention that I would be resigning my employment to coincide with the completion of my share sale. I sincerely hope that we are able to manage my share sale and exit from the business in a cordial fashion. I will of course continue to work in the best interests of the business right up to the [sic] my last day. I would prefer to have this issue sorted out sooner rather than later, so I would be obliged if you could give it your urgent attention." 1. In the weeks before giving this notice Mr Agha had arranged for an employee of Devine Concord to forward to him client contact lists which were then forwarded from his email address to his personal email address. Client lists were forwarded to his personal email addresses on 15 November, 23 November, 28 November and 4 December 2017, and again on 8 December 2017. 2. Also on 8 December 2017 a person using Mr Agha's username and password at Devine Concord altered 905 contacts in the client data base by altering a digit or digits in the record of the customer's telephone number. The primary judge found that Mr Agha was responsible for those alterations. That finding is contested. 3. On 12 December 2017 Mr Devine accepted Mr Agha's offer to sell his shares in Devine Drummoyne and gave notice of his intention to purchase Mr Agha's shareholding in Devine Concord. 4. Mr Devine deposed that in or around early December 2017 he accessed Mr Agha's work email address and discovered that Mr Agha had been sending emails to his personal email address attaching Excel spreadsheets that contained contact details for thousands of clients. He confronted Mr Agha about this on 13 December 2017 and asked for an explanation as to why Mr Agha had emailed confidential information to his personal email address. Mr Agha's explanation was that the internet at the office was slow so that he worked from home. Mr Devine said "... you seem to have emailed yourself a lot in the last few weeks ... can you see why I'm concerned? Do you think you should have asked first?". Mr Agha said "I'm a director, I can do what I want." Mr Devine was not satisfied with Mr Agha's response and terminated his employment forthwith. He required that the confidential information that had been taken be returned or destroyed. Mr Agha said "I wouldn't use it". 5. Meanwhile, on 12 December 2017 a Ms Kristy Salmon from Belle Property Australasia congratulated Mr Agha for his resignation from the Devine Property Group and sent him a draft franchise agreement for him to become a franchisee of Belle Property Australasia. On 13 December 2017 she advised a Mr Kuchta of Kelly Partners Pty Ltd that Mr Agha would be "opening our Belle Property Concord office". 6. On 13 December 2017 Ms Salmon (head of franchise operations of Belle Property Australasia) advised Mr Agha that his franchise had been approved. She advised another person in the Belle Property group that Mr Agha would be opening "our Belle Property Concord office". 7. On 19 December 2017 Devine Group discovered that changes had been made to the client telephone contact details in its email database. 8. On 20 December 2017 Mr Coombe resigned. He commenced working with Mr Agha as a sales agent under the name of Belle Property from at least 24 January 2018 (J [62]). 9. On about 12 January 2018 Mr Devine (who was then overseas) discovered that Mr Agha was then working for Belle Property Neutral Bay, which was a franchisee of Belle Property Australasia and had started listing and selling properties through Belle Property Neutral Bay that were clients of Devine Concord. 10. The primary judge found that from January 2018 Mr Agha began to be advertised as a sale agent as part of Belle Property Real Estate Agency, and both he and Mr Coombe were advertised as agents for Belle Property (J [56] and [57]). 11. On 21 December 2017 Mr Agha signed an employment agreement with Belle Property Neutral Bay (J [53]). 12. The primary judge made detailed findings as to steps taken by Mr Agha to act on the sale of properties of former clients of the Devine Group through Belle Property. The primary judge also made findings in respect of steps taken by Mr Coombe, after he had left his employment with Devine Group, to act for former clients of the Devine Group in his new employment with Belle Property. Neither Mr Agha nor Mr Coombe challenges those findings. 13. Mr Agha does not dispute that he entered into an employment agreement with Devine Concord as well as the shareholders' agreement. He challenges the validity of the restraint of trade clauses in those agreements. 14. Devine Concord contended that it entered into an employment agreement with Mr Coombe containing similar terms for its protection against disclosure or use of confidential information and post-employment constraints on competition as were contained in Mr Agha's employment agreement as set out above. Mr Coombe denied that he entered into such an employment agreement. No employment agreement signed by Mr Coombe was tendered. Mr Coombe challenges the primary judge's findings that he entered into an employment agreement with Devine Concord that included a restraint of trade clause and he challenges the validity of that clause if it be found that he did enter into such an agreement. Primary judge's findings 1. The primary judge found that Mr Agha breached his contractual, equitable or statutory duties as follows: * whilst still a director and employee of Devine Concord, diverting clients to his proposed new employer, a competitor (Belle Property) (J [298], [306]); * thereafter breaching the post-employment restraints in the shareholders' agreement and his employment agreement whilst acting as a real estate agent for Belle Property (J [291]-[375]); * sending confidential client lists to his personal email address (J [271], [275], [277]-[280]); and * sabotaging Devine Concord's client contact lists by changing one digit in clients' telephone numbers on 905 occasions on 8 December 2017 (J [281]). This was the date on which Mr Devine terminated Mr Agha's employment after Mr Agha failed to provide a satisfactory explanation for having forwarded client lists to his personal email address. 1. The primary judge found that Mr Coombe: * breached his duty to maintain the confidence of Devine Concord's confidential information by sending confidential client lists to his personal email address (J [271]-[274], [276]-[278], [392]); * was bound by the same terms (so far as relevant) of an employment agreement as that which bound Mr Agha (J [382]-[387]); and * breached those terms by diverting existing clients of the Devine Group to Belle Property (J [291], [294], [301], [307], [308], [320], [322], [329], [333], [336], [343], [346], [349], [352], [355], [358], [362], [367], [370]-[371], [374]-[375]). 1. Neither Mr Agha nor Mr Coombe gave evidence. 2. The primary judge did not make a finding that Mr Agha or Mr Coombe used Devine Concord's confidential information in their dealings with the existing clients of the Devine Group. 3. The respondents commenced proceedings against Mr Agha and Mr Coombe on 19 March 2018. The summons stated: "On the grounds set out in the Affidavit of Steven James Devine made 16 March 2018 the plaintiffs claim the following relief: ..." 1. There then followed 18 pages of orders sought against Mr Agha and Mr Coombe. 2. Mr Devine's affidavit of 16 March 2018 described how confidential client information was stored on software programs used by the Devine Group. Mr Devine exhibited to his affidavit the client information claimed to be confidential that had been sent to Mr Agha's and Mr Coombe's personal email addresses and the details of the instructions to Ms Harris and Ms Harris' findings as to the sabotage of client contact details. Mr Devine identified in detail the information he claimed to be confidential and the significance he claimed that the client information would have to a competitor. 3. The summons and affidavit were filed in court before Hallen J, sitting as duty judge, on 19 March 2018. 4. A notice of motion seeking interlocutory relief was also provided to his Honour. His Honour made orders for short service and stood the matter over to the Registrar's list on 22 March 2018. The summons and all affidavits, including the exhibits, were served. The appellants contend that this placed the client information in the public domain. 5. On 22 March 2018 Mr Agha and Mr Coombe gave undertakings to the Court, including undertakings not to use or to disclose Confidential Information (as defined in the orders) and to take immediate necessary steps to return or to destroy the Confidential Information in their possession within seven days. The definition of the Confidential Information that both Mr Agha and Mr Coombe undertook to return or destroy and not to use included all "Confidential Information" as defined in Mr Agha's employment agreement. 6. Mr Agha and Mr Coombe gave other undertakings, including undertakings against solicitation of clients of Devine Concord up to 4 April 2018. 7. The matter came before Parker J sitting as duty judge on 4 April 2018. The hearing before his Honour then continued over four further days. His Honour delivered reasons on 13 April 2018 (Devine Real Estate Concord Pty Ltd v Agha [2018] NSWSC 556). After a further hearing on 19 April 2018 interlocutory injunctions were made on 4 May 2018 against Mr Agha and Mr Coombe until further order. 8. During the course of the first hearing before Parker J, Mr Devine's affidavit of 16 March 2018 was read and the exhibits to the affidavit were tendered without any order being sought or made to restrict the disclosure of the confidential client information. In closing address, counsel for Mr Agha and Mr Coombe submitted that by the affidavit's being read in open court and the tender of the exhibits containing client information, the information ceased to be confidential. In further reasons of 19 April Parker J rejected that contention. On 27 April 2018 his Honour made non-publication orders in respect of the confidential evidence. (Devine Real Estate Concord Pty Ltd v Agha (No 2) [2018] NSWSC 564). 9. A notice of appeal should state briefly, but specifically, the grounds relied on in support of the appeal (UCPR r 51.18(1)(e)). There are 18 grounds of appeal. They are neither brief nor specific. Sabotage of Devine Group's client records 1. The primary judge found: "164 Ms Harris swore one affidavit on 19 June 2018. … 165 Her affidavit outlines her employment as a senior IT support person for the software system Complete Data, a system with which she has 11 years' experience. 166 On or about 19 December 2017 an employee of the Devine Group Mr xxxxxxxxx Melotti emailed her regarding an alleged interference with the Devine Group's Complete Data software. 167 Upon receiving this request, Ms Harris logged into the Plaintiffs' database remotely and conducted a 'find on a field' search within the database. This search captures modifications made to the record of the database, and when a change is made it dates and time-stamps when the field was changed, the username who changed it along with the data that was in the field prior to and after the change was made. 168 Although confidentiality was sought over these documents, it is uncontroversial to reproduce Ms Harris' findings as they do not identify any clients (CB 3017): My findings found that on the 8th December 2017 the username of Roger Agha changed 905 contact records over a period of approximately 1.5 hours. The user went through and randomly changed 1 number from the contacts mobile number, home number and work number so that these phone numbers were no longer correct. The user commenced changing these records at 8:52am and the last record he changed was at 10:23am. 169 On 19 December 2017, Ms Harris supplied 2 excel spreadsheets of her findings to Mr Melotti, Mr Devine and Ms Mazzei. These were screenshots which demonstrated that the username associated with the First Defendant had changed one digit of the phone number of 905 contact records. … 173 Ms Harris was not required for cross-examination. … 281 I am satisfied the First Defendant engaged in the systematic and repeated sabotage of the Plaintiffs' client contact numbers by changing one number only in 905 files on 8 December 2017. To suggest otherwise is likewise contrary to common sense. 282 This much was demonstrated by Ms Harris for the Plaintiffs who was not required for cross-examination, and provided persuasive evidence that the First Defendant had engaged in this sabotage. 283 Ms Harris' report suggests that on the 8 December 2017 the username of the First Defendant changed 905 contact records over a period of approximately 1.5 hours. According to Ms Harris' report, the username went through and randomly changed 1 number from the contact record mobile number, home number and work number so that these phone numbers were no longer correct. The user commenced changing these records at 8:52am and the last record changed was at 10:23am. 284 Attached to Ms Harris' affidavit was Exhibit CH-1, which provided extensive screenshots of data demonstrating the username associated with the First Defendant altered the database phone records of the Plaintiffs. 285 In the absence of explaining who else did this, in the absence of evidence of self-sabotage by any of the other employees of the Plaintiffs, and further in the absence of cross-examination of Ms Harris, there is a clear suggestion that it was indeed the First Defendant who, through his username, changed the phone records. 286 Further, the 8 December 2017 was the very same day that the First Defendant's employment in the Devine Group was terminated. There was only one person at that time that could have had access to the phone lists and a motive to obstruct the Devine Group: the First Defendant. To suggest the First Defendant did not change the phone numbers is also contrary to the evidence that his log-in was used to gain access to the complete data database of the Plaintiffs from 8:52am and 10:23am (CB 2050, 3017-3020). 287 Although there is no direct evidence of the First Defendant's behaviour, in my view this plainly was an act of seeking maliciously to disadvantage and obstruct the Plaintiffs from doing business and maintaining contact with their clients. Had it not been rectified it was likely to have wreaked havoc and caused a great deal of time to reconstruct the client contact details. The evidence of Ms Harris provides ample material to suggest the First Defendant in fact accessed the system of the Plaintiff's for 91 minutes on 8 December 2017 in order to change the telephone numbers. No one else relevantly would conceivably have had a motive to perpetrate this activity. It was not suggested the Plaintiffs had themselves done this for good reason. 288 This act indicates a degree of malevolence directed to harming the Plaintiffs' business. This is also to be seen alongside the First Defendant's clear attempt to contrive an early termination of exclusive agency with Mr Boumelhem, by asking him to sign a notice of termination as late as December 2017 despite the document purporting to be dated 1 October 2017. 289 The effect of this act was to breach the Shareholders Agreement entered into by the First Defendant particularly clause 6(a) requiring devotion to 'the interests of the company', clause 6(b) requiring 'best endeavours' and clause 8(e) prohibiting an act that would diminish the business of the company. This also breached clause 5.1(d) of the Employment Agreement requiring the First Defendant to perform his duties in a 'diligent, professional and ethical manner and refrain from doing anything that may adversely affect or reflect' upon his employer." 1. Ground 1 of the notice of appeal challenged this finding. Although prolix, the essence of this ground of appeal is that the evidence contained in Ms Harris' report is insufficient to enable an inference to be drawn that Mr Agha was responsible for the changes made to the contact details of 905 clients. Mr Agha contended that the court misapprehended the evidence about how the electronic information had been modified and failed to give proper weight to what was said to be the "unexplained absence of testimony by eye witnesses". He also contended that the primary judge failed to give adequate reasons and failed to address the fact that the finding amounted to a finding that Mr Agha had committed a serious criminal offence (s 308D of the Crimes Act 1900 (NSW)). 2. Mr Agha submitted that the primary judge associated the username Roger Agha with Mr Agha, when the evidence did not prove such an association. The primary judge accepted Ms Harris' report when, according to Mr Agha's submission, "basic arithmetic" would have revealed that her evidence was internally inconsistent. He submitted that the primary judge wrongly relied upon evidence of motive and the absence of evidence of any motive for sabotage by other employees. 3. Ms Harris was employed by the Real Estate Academy as a senior IT support person for the software system known as Complete Data. She provided support services to Real Estate Agencies that subscribed to the Complete Data software. The Devine Group subscribed to four Complete Data software programs. The four programs provided detailed information for all clients. Mr Devine deposed that for a user to access the client information the user needed a password and username. 4. Ms Harris deposed that on or about 19 December 2017 she received an email from an employee of the Devine Group, a Mr Melotti, regarding alleged interference with the Complete Data software by a former employee, and that she carried out an investigation and provided her report. 5. Mr Melotti asked Ms Harris to "… pull up a detailed summary of Roger Agha's activities on the 8th of December in Complete Data and produce it as a report, so we are able to produce this as evidence please?" 6. Ms Harris reported as follows: "Upon receiving this email request, I logged into Devine's Complete Data remotely and conducted a find on a field within our CRM called LogData. This field captures modifications made to the record. When a change is made it dates and timestamps when the field was changed, the username who changed it along with the data that was in the field prior to and after the change was made. My findings found that on the 8th December 2017 the username of Roger Agha changed 905 contact records over a period of approximately 1½ hours. The user went through and randomly changed 1 number from the contacts mobile number, home number and work number so that these phone numbers were no longer correct. The user commenced changing these records at 8:52 am and the last record he changed was at 10:23 am." 1. Ms Harris also reported that records had been modified by the username of Roger Agha on 8 December 2017 by changing either two numbers on a telephone contact for a customer or, in one case, three numbers. 2. Mr Agha submitted that the primary judge failed to deal with his submission that this uncontradicted evidence did not establish to the Briginshaw standard that he was the person responsible for sabotaging the client information. 3. Mr Agha also submitted before the primary judge and again on appeal that Ms Harris' report does not explain what steps are required to be taken in order to access each of the 905 records, one after another, nor what steps are required to be taken to make the separate changes to either one, two or three digits to each of the 905 records. Mr Agha submitted that there was no evidence of how long it would take to access records and make the changes. 4. This objection seeks to challenge the adequacy of the evidence that the changes were made within the timeframe identified by Ms Harris. But the evidence that the changes were made by a person using the username "Roger Agha" was undisputed. 5. The principal challenge was to the asserted absence of evidence linking the username "Roger Agha" to Mr Agha. He submitted that there was no evidence that he was seen at his computer for the 91 minutes in question. There were no eye witnesses and no CCTV footage of his doing so. 6. But there was evidence that the username "Roger Agha" was password protected. The primary judge rightly pointed to the coincidence that the changes to the client details were made on the same day that Mr Agha gave notice to Mr Devine that he wished to exit the business. The primary judge referred to the "… absence of evidence of self-sabotage by any of the other employees of the plaintiffs". In oral submissions on appeal Mr Doyle Gray, who appeared with Mr Djurdjevic for the appellants, appeared to suggest that Mr Coombe had the same motive as Mr Agha and the respondents had not discharged the onus of negativing his involvement in the sabotage. 7. Mr Agha submitted that because the sabotage found was a serious criminal offence it was necessary that the claim be clearly pleaded and particularised, and that the court bear in mind that the party making the claim always bore the legal burden of proof (Kasupene v Ajax Foundry Pty Ltd [2006] NSWCA 309 at [20]-[21]). He submitted that the court should not draw inferences in the absence of direct evidence if such direct evidence is readily available, that the failure to lead such direct evidence was unexplained, that the evidence of witnesses should be critically evaluated and that s 140(2) of the Evidence Act 1995 (NSW) should have been applied. 8. The inference was clearly available that Mr Agha was responsible for the sabotage of the client information. The sabotage was carried out by a person using his username access (which was password protected) on the same day that he gave notice of his intention to leave the Devine Group and when he was planning to set up business in competition to the Devine Group. The primary judge was correct to find that the inference that Mr Agha was responsible for the sabotage could more readily be drawn from his failure to give evidence to contradict that inference. 9. Mr Agha submitted: "44. As for ground of appeal 1, Sackar J (1) 'associated' the username Ms Harris identified with the person Mr Agha with no explanation of why they should be associated—and when no evidence proved an association; (2) omitted any critical evaluation of Ms Harris's analysis against basic arithmetic revealing her evidence to be internally inconsistent; (3) treated the absence of evidence of self-sabotage as evidence of no self-sabotage when to do so is illogical; (4) and dismissed the absence of direct evidence as to opportunity by recourse to evidence of motive: reasons at [281]-[289] but c.f. [394]." 1. But it is obvious why the username "Roger Agha" (which had password protection) should be associated with Mr Agha. The criticism of Ms Harris that it would not have been possible for someone to alter the telephone records of 905 clients within the timeframe in which the alterations were made in part assumes an alteration of three numbers in all cases, rather than two or one, does not suggest that it is inherently implausible that the number of alterations could be made manually (taking six to eight seconds for each alteration) and in any event, if it were to be challenged, should have been put to Ms Harris. This submission also assumed that direct evidence as to Mr Agha's opportunity to make the changes in the form of a witness's recollection of his sitting at his computer screen or CCTV footage of his doing so at the relevant time was available. 2. This ground of appeal should be rejected. 3. By ground 5 of the notice of appeal the appellants contended that they were denied procedural fairness by the primary judge's finding that they had committed a serious criminal offence in breach of s 253 of the Crimes Act 1900 by reason of their contriving to change records by use of a forgery. 4. The appellants complain that no such claim had been pleaded and that the first notification they had that such a claim was made against them was when reasons for judgment were published. 5. No claim in those terms was pleaded. Nor should it have been. Section 253 of the Crimes Act provides for the offence of forgery. The offence involves the making of a false document with the intention that the false document will be used to induce some person to accept it as genuine and thereby to obtain an advantage. 6. No such claim was made. The primary judge made no such finding. The claim that the Devine Group's client information records had been sabotaged was clearly pleaded. This ground of appeal is without substance. Mr Coombe's employment agreement 1. Grounds 2 and 3 of the notice of appeal challenged the primary judge's finding that Mr Coombe had entered into a written contract of employment containing the same terms for protection of confidential information and restrictions on post-employment activities as were contained in Mr Agha's employment agreement. The grounds of appeal asserted that the primary judge denied both appellants procedural fairness in finding that they had committed a serious criminal offence by breaking into the respondent's premises at Strathfield and stealing the employment contract, when no such claim had been pleaded. 2. The pleading point is without substance. Mr Doyle Gray submitted that the respondents were required to plead that the defendants, or one of them, unlawfully removed Mr Coombe's employment agreement from a locked filing cabinet stored in the office of a Ms Tara Mazzei at Strathfield. 3. But the material fact that the respondents alleged was that Mr Coombe entered into an employment agreement with Devine Concord that included the restraints against post-employment activities and provision for protection of confidential information that were contained in the then applicable form of employment contract provided by the Real Estate Employers Federation ("REEF") at the time Mr Coombe accepted a position as personal assistant to Mr Agha. 4. The respondents were not required and not entitled to plead the evidence upon which they would rely to seek to prove that Mr Coombe entered into such a contract. 5. That evidence was as follows. 6. Mr Devine deposed that Mr Coombe was employed as a receptionist in the Concord office in or around March 2012 and at that time signed an employment agreement with Devine Concord. The terms of that agreement were not in evidence. The agreement was not produced. 7. Mr Devine deposed that in or around August 2013 Mr Coombe moved into the sales team and began working as a sales assistant for Mr Agha in his team. He deposed that "in line with the practice of the Devine Group, Lewis would have signed an employment agreement with Concord in or around October 2013." That evidence was admitted only for the limited purpose of stating Mr Devine's belief or understanding. It was not admitted as evidence of the asserted fact. 8. The same ruling was made in respect of a statement of Mr Devine's belief that all employees from late 2012 to around early 2014 signed an employment agreement based on the "December 2012 Reef Contract". 9. Ms Tara Mazzei was the human resources manager for five offices of the Devine Group. She commenced employment in March 2016. She deposed that the Devine Group is a member of the Real Estate Employers Federation and through that membership had access to a range of products, including employment agreement templates. She exhibited the form of REEF Contract as at late 2012 (the December 2012 REEF Contract). It contained the same definition of "Confidential Information" as was contained in Mr Agha's employment agreement and the same provisions for the protection of Confidential Information. It also contained a restraint of trade clause, albeit a clause that provided for different Restraint Periods and different radii for the operation of the restraint. 10. Ms Mazzei believed that all employees of the Devine Group from late 2012 to around early 2014 signed an employment agreement based on the December 2012 REEF Contract. That evidence was not admitted as evidence of the underlying facts. 11. Ms Mazzei's office was at the Strathfield branch of the Devine Group. She kept in her office the employment agreements and ancillary documents of all current employees of the Devine Group. The filing cabinet was kept locked and the key was usually placed in a secret location. Ms Mazzei deposed that on or about 20 December 2017 Mr Coombe arranged to see her over coffee and gave her notice of his resignation. He told Ms Mazzei that he had not yet made up his mind whether he would work for Mr Agha. Ms Mazzei said "Don't forget about the restraints on you." Mr Coombe asked her whether she really thought that Mr Devine would pursue him regarding the restraints. He asked her whether she had a copy of his employment contract. Ms Mazzei said "Yes, I'll have a look ... We should have it." They left the cafe and went to Ms Mazzei's office. She deposed: "I opened the cabinet and found the folder that I believed contained Lewis' employment records. I opened the folder in front of Lewis. Noticing that a copy of the employment agreement was missing we said words including: Tara: '...actually I'll have a look in the system...I'm sure we will find a copy there... why are you asking anyways? Lewis: '...if you don't have my contract, does that mean that I am not going to be restrained...are there are no restraints on me?' Tara: '...there are restraints on you...remember, do not breach your employment contract or your obligations in any way...especially if you work with Roger...' Lewis: '...okay...'" 1. Ms Mazzei could not find an electronic copy of the employment agreement. She deposed that she believed that someone entered her office when she was not there and manhandled the filing cabinet and removed Mr Coombe's employment agreement. 2. Ms Mazzei did not give any evidence of having previously had occasion to check Mr Coombe's file or of having previously seen an employment agreement to which he was a party. It can be inferred from Mr Coombe's request to Ms Mazzei as to whether she had a copy of his employment contract that he believed that he had signed an employment contract. But the evidence of Mr Devine establishes that Mr Coombe did sign an employment agreement in March 2012 when he was employed as a receptionist. There is no reason to think that that employment agreement would have contained a restraint of trade clause, or the clause for protection of confidential information contained in Mr Agha's employment agreement. 3. Mr Devine deposed that "previous and current management employees of Devine Group have used the Reef Contracts when preparing employment agreements for Devine Group employees." That is not evidence that a REEF Contract was prepared for and signed by Mr Coombe. 4. Ms Mazzei commenced employment with Devine Group in March 2016. She was therefore not able to speak with first-hand knowledge of a practice in 2013 as to whether a person who moved into a sales position, such as Mr Coombe did, would be required to sign a new employment agreement. As noted above Mr Devine's evidence to that effect was admitted only as evidence of his belief and not as evidence of the fact of such a practice. Ms Mazzei was asked in her evidence-in-chief whether she had referred to files that were older than March 2016. She said that she had done so. She was asked "What typically would you expect to see from the observation in their employment file?". Ms Mazzei's response was: "A. So there'd be a - a contract - at least one, because some employees changed roles throughout their employment as well, so each time they changed role, they were getting a new contract. And again, the new starter paperwork. Prior to me coming onboard, things like timesheets, annual leave forms, all of that; it wasn't automated back then, so it was all paper based. So their files were quite thick 'cause all those kind of forms were in their files. Q. When you say "contract", from your observation, was there any practice about what kind of contract an employee had in a file? A. So all the contracts we got from REEF." 1. The primary judge found: "382 In my view, the Second Defendant is bound by the same Employment Agreement entered into by the First Defendant. The evidence of Ms xxxx Mazzei called for the Plaintiffs was to the effect that it was the usual practice of her office to ensure new employees entered into an employment agreement. When it came time for her to retrieve the Second Defendant's agreement from the office it was missing. Her evidence which I accept is that such an agreement was executed by the Second Defendant but removed from the Plaintiffs' files in all likelihood. 383 It was not suggested, nor is there any evidence, that the Devine offices are conducted in a shambolic fashion. The evidence is that employees are allocated specific employment documents. They are routinely and systematically executed and filed in an orderly way. There is no reason to suppose this did not occur with the Second Defendant's employment contract. There is no suggestion on the evidence that the Plaintiffs employed persons on the basis of an oral agreement followed by a handshake. 384 Given my above factual findings as to the seriousness of the breach of the Defendants and the systematic way in which they went about disrupting the Devine Group including the sabotage of the telephone numbers, I consider I am able to draw the inference that the Second Defendant did execute a version of the Employment Agreement that protected against breach of confidential information (including client lists and business information) and effected a restraint period of 12 months. 385 Whilst this is not a conspiracy case, the overwhelming inference is that the First Defendant and Second Defendant were working assiduously together to divert as much business as possible from the Plaintiffs towards themselves. In this context I infer that that the version of the Employment Agreement executed by the Second Defendant was taken from the Devine offices, again to pursue this aim of diverting business and subverting the interests of the Plaintiffs. 386 This is again in the light of the Defendants not being called to refute these suggestions and the evidential inferences I make in accordance with Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 and Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389. 387 In my view on the evidence available I consider the Second Defendant should be bound by the Employment Agreement in terms relevantly identical to those entered into by the First Defendant. In my view therefore the lack of the existence of a signed version his employment contract does not preclude him being bound by the restraints sought by the Plaintiffs." 1. The primary judge enjoyed no advantage over this court in making this finding. 2. With respect, the primary judge's findings "as to the seriousness of the breach of the Defendants", do not justify a finding that Mr Coombe executed an employment agreement containing contractual restraints against competition and for protection of client information, but that that agreement was removed from the files of the Devine Group. First, Ms Mazzei's evidence was that employment contracts were stored in a locked filing cabinet in her office at the Strathfield office of the Devine Group, not the Concord office from which Mr Coombe worked. It would require extraordinary bravado for Mr Coombe to raid Ms Mazzei's office at Strathfield to attempt to gain access to his employment contract that was kept in a locked filing cabinet, even if he knew where the contract was stored. 3. Secondly, Ms Mazzei's evidence was that there would have been an electronic copy of the employment agreement. The respondents gave no explanation for the absence of an electronic copy of the agreement if such an agreement had been signed. 4. Thirdly, there was an explanation for the absence of an employment agreement. Mr Coombe was initially employed as a receptionist, not as a salesman. It is unlikely that he would have been required to execute a contract containing the standard REEF terms, that included restraints against competition, when employed as a receptionist, even if such standard contracts existed in March 2012. It is plausible that when he changed roles he might not have signed a new employment agreement. No-one gave evidence that he did sign a new employment agreement. Mr Devine's belief that he had done so was not admitted as evidence of the fact. 5. Fourthly, the primary judge's findings as to the seriousness of the defendants' breaches and the "systematic way in which they [sic] went about disrupting the Devine Group including the sabotage of the telephone numbers" (J [384]) is not evidence that either Mr Agha or Mr Coombe removed an employment contract signed by Mr Coombe. At best, such conduct would only establish a propensity of the perpetrator to engage in illegal conduct. But in any event, there was no such evidence in relation to Mr Coombe. There was no evidence to link him to Mr Agha's sabotage of the telephone numbers. 6. Mr Coombe did send confidential client lists to Mr Agha, but at the time he did so Mr Agha was his immediate boss and there is no evidence that he was doing anything other than acting on his superior's direction. 7. The primary judge's factual finding as to the seriousness of the breaches by Mr Coombe of his employment agreement by soliciting clients of the Devine Group assumes that Mr Coombe was bound by the restraints against competition, which in turn assumes that he entered into an employment agreement which included the restraints. The primary judge's finding that Mr Coombe was working assiduously with Mr Agha to divert as much business as possible from the Devine Group towards themselves (J [385]) cannot support a finding that Mr Coombe entered into a contract which precluded his doing so. 8. The respondents' evidence did not give rise to an inference going beyond mere speculation that Mr Coombe had entered into an employment agreement containing the covenants in restraint of competition and for the protection against disclosure of confidential information. No Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference arises from Mr Coombe's not giving evidence that he did not enter into such an agreement. 9. The primary judge erred in finding that Devine Concord had established that Mr Coombe had entered into an employment agreement containing the same relevant terms as Mr Agha's employment agreement. Alleged denial of procedural fairness 1. By ground 4 of the notice of appeal Mr Coombe contended that he had been denied procedural fairness by the primary judge's finding that he breached the terms of his employment by sending documents by email on 23 November 2017 to Mr Agha. He also contended that the primary judge erred in that finding. 2. A contention that a judge has denied a party procedural fairness is a serious allegation that should not be made without proper grounds. 3. The respondents pleaded that Mr Coombe used his position to copy and remove confidential information of Devine Concord without Devine Concord's consent or authority, by sending to his personal email address at least one email attaching two spreadsheets of confidential customer information and foreshadowed as an additional particular "such further information as may be discovered after disclosure is given". 4. There was no denial of procedural fairness. The claim was pleaded and supported by evidence served by the respondents. 5. The primary judge found that on 23 November 2017 Mr Coombe forwarded two Excel spreadsheets containing confidential customer information to his private email address in response to Mr Agha's request to do so (J [36], [266], [276], [277]-[279]). 6. Mr Devine exhibited to his affidavit of 16 March 2018 a printed copy of an email dated and timed 23 November 2017 at 4:48 pm, that on its face showed Mr Coombe's forwarding the email to his personal email address under the subject "Contact Lists", with attachments called "Lewis Coombe 1D1.xlsx; Olivia Touma 1D1.xlsx". 7. Mr Devine deposed that one spreadsheet included contact information for Concord Clients with whom Mr Coombe had previously had dealings and the other spreadsheet included contact information for Concord Clients with whom Olivia Touma had previously had dealings. 8. The appellants contended that the tender of printed copies of the email and attachments did not establish that either Mr Coombe sent the email or that he received it. But there was no reason to doubt that the paper documents produced were authentic copies of the electronic records. The primary judge did not err in his findings. 9. The appellants also submitted that what was transmitted was not a list of customers, but instead a list of persons with whom the respondents had not traded. 10. But Mr Devine's evidence was to the contrary. It was uncontradicted. 11. This appeal ground fails. 12. Ground 5 has been partly addressed at [72]-[75] above. 13. Ground 5 of the notice of appeal covered another complaint. The primary judge found (J [270] and [298]) that while still a director and shareholder of Devine Concord, Mr Agha actively solicited a client of Devine Concord who had signed an exclusive agency agreement with Devine Concord for the sale of units in a property on Underwood Road, Homebush. His Honour found that in December 2017 Mr Agha presented a Mr Boumelhem with a letter of termination of that agency agreement for Mr Boumelhem to sign that had been backdated to 1 October 2017. The appellants complain that this amounted to a finding of forgery. They submit that that claim ought to have been pleaded and particularised and they should have been afforded an adequate opportunity to lead evidence in relation to it. 14. Mr Boumelhem gave evidence to the effect that on 12 December 2017 Mr Agha told him that he had decided to leave the Devine Group and that he replied "I don't even know who he is. Wherever you go, I'm coming … I'm coming with you." (J [230]) His evidence that Mr Agha gave him a backdated letter to sign terminating his agency agreement was adduced in cross-examination. Mr Agha complained that he was denied procedural fairness because he was not given prior notice that the respondents would contend and lead evidence that he had procured Mr Boumelhem's signature to a forged document. In oral submissions counsel for Mr Agha submitted that this had not been pleaded and had not been raised by the close of the plaintiffs' case. 15. This point should not have been pleaded. It was not a material fact to any cause of action pleaded by the respondents. There was no denial of procedural fairness. Mr Agha could have been called to explain the circumstances in which the document was prepared and signed. Confidential Information 1. Orders 4 and 7 were as follows: "4. Mr Agha shall be restrained from disclosing to any person firm or company whomsoever any trade secrets or other confidential information relating to Concord (or its customers or suppliers (in accordance with clause 6(d) of the CSA). … 7. In Order 4, confidential information incorporates the meaning contained in the EA, of which Mr Agha became aware or generated in the course of, or in connection with, his employment with Concord of a commercial, operational, technical or financial type relating to: 7.1. Concord or a related entity (as that term is used in the Corporations Act 2001); and 7.2. any customer or client of Concord, and includes, without limitation each of the following: A information which Concord identifies as confidential; B information which a reasonable person in Mr Agha's position should understand is confidential; C trade secrets and intellectual property; D agreements, arrangements or terms of trade with clients, customers and suppliers or prospective clients, customers or suppliers; E names, addresses (including email addresses), phone numbers and all other contact information of sellers, buyers, prospective sellers and buyers, any property owner (including their employees, contractors and representatives) on whose behalf a property is managed by Concord; F contractual and technical information; G marketing plans and marketing and sales techniques; H business plans and forecasts; I business systems and procedures; J financial records; reports and accounts; K business proposals; L manuals; M operational materials; N details concerning Concord's business affairs; O customer/client lists; P customer/client details and records including, but not limited to, all personal and financial information revealed by customers/clients; and Q employee information." 1. Ground 6 of the notice of appeal challenged the primary judge's finding that Mr Agha and Mr Coombe breached contractual obligations of confidentiality by sending confidential client lists to Mr Agha's personal email address. 2. My conclusion that the primary judge erred in finding that Mr Coombe entered into an employment agreement containing the term for the protection of confidential information on which the respondents relied means that this ground need only be considered in Mr Agha's appeal. 3. The relevant contractual terms are cl 6(d) of the shareholders' agreement quoted at [14] and cl 14.1 of the employment agreement read with the definition of "Confidential Information" quoted at [21] and [22]. 4. The primary judge found that the defendants sent confidential client lists to their personal email addresses prior to terminating their employment with the plaintiffs (J [266] and [271]). 5. On 15 November 2017 at 4:43 pm Mr Agha sent an email from his work email address to his private email address attaching spreadsheets containing client contact lists. The spreadsheets were headed "Corporate Events" and were prepared to track which clients of Devine Group would be invited to corporate events. 6. On the same day Mr Agha forwarded two further emails from his work email address to his private email address attaching spreadsheets with client contact details. Those lists had been forwarded to Mr Agha by a Devine Group employee as client contacts of an Olivia Touma and Mr Coombe. 7. Olivia Touma is a real estate agent who was employed by Devine Concord. She worked for Mr Agha. Mr Agha's employment was terminated by Mr Devine on 13 December 2017. A few days later he asked Ms Touma to work for him, but she declined. 8. On 28 November 2017 Mr Agha forwarded to his private email address a zip file of documents that included contact details for owners of properties managed by competitors of Devine Concord, a document showing a monthly summary of appraisals, listings and sales by Mr Agha between December 2012 and October 2017 including therefore details of properties owned by Devine Concord's clients, a document showing contact details for persons whom Concord had identified as potentially new clients, further information concerning persons identified as potential new clients and a document identifying potential vendors who might use Concord's services (J [38]). 9. On 4 December 2017 Mr Agha emailed to his personal email address an Excel spreadsheet containing information as to which of Devine Concord's clients had been invited to a corporate event and which had accepted, and two further Excel spreadsheets containing details of clients who had been recently dealt with by another Devine Concord employee (J [39]). 10. Ground 6 asserted that the primary judge failed to deal with submissions made by the appellants below in relation to the interpretation of the shareholders' agreement and employment agreement. When read with the submissions made by the appellants below, and as explained in the appellants' submissions on appeal the appellants contended that cl 6(d) of the shareholders' agreement prohibited only the disclosure of trade secrets or other confidential information. It did not prohibit Mr Agha's own use of trade secrets or other Confidential Information. Moreover, so it was submitted, the reference in cl 6(d) to "other confidential information" was to information that was secret. The appellants submitted that the way in which employees of Devine Concord were allowed to use and disseminate client lists by sending them to their own private email addresses showed that the information was not secret. 11. The appellants accepted that the employment agreement had a wider operation. It defined Confidential Information to include expressly names, addresses, phone numbers and other contact information of clients or prospective clients and all customer/client details and records. Also, by his employment agreement, Mr Agha did not only agree to keep Confidential Information confidential. He also agreed only to use Confidential Information for the sole purpose of performing his duties with Devine Concord. 12. Mr Agha contended that the employment agreement purported to add to, subtract from and modify the shareholders' agreement and to the extent to which it did so, it was void. He submitted that the only relevant duty to which he was subject was an obligation under cl 10(d) of the shareholders' agreement not to disclose information that was secret. 13. Contrary to the appellants' contention, the primary judge did deal with this submission. The primary judge rejected the appellants' argument that to the extent the employment agreement purported to add to, subtract from or modify the shareholders' agreement, it was void (J [244]-[246]). 14. The appellants argued that the combined effect of cll 1 and 4 of the shareholders' agreement was to elevate the shareholders' agreement to the "supreme statement of the rights and liabilities and duties of the parties to that agreement". They then argued that Mr Agha's contract of employment that was provided for by cl 6(a) of the shareholders' agreement should have reflected the terms of the parties' bargain in the shareholders' agreement and should have expressed no departure from or addition to those terms. But the fact that the parties to the shareholders' agreement agreed that its provisions would prevail over anything to the contrary in Devine Concord's constitution, and agreed to be faithful and co-operate with each other in relation to all matters concerning the affairs of the company in a manner consistent with the agreement, raises no implication that they intended that there could be no expansion of the obligations to be assumed by Mr Agha under the contract of employment that it was contemplated he would enter into. In any event, the employment contract was entered into after the shareholders' agreement was signed. If there were any inconsistency between the two agreements, the latter, not the former, would prevail. 15. In fact, as the primary judge held, the two agreements were intended to co-exist. There was and could be no dispute that the client lists in question were covered by Mr Agha's agreement in the employment contract to use such information only for the purpose of Devine Concord's business and not to disclose them. 16. In any event, client contact lists were plainly confidential and not part of Mr Agha's general know-how. His arranging for the client details to be emailed to his personal email address when he was planning to leave Devine Group and set up in competition with it demonstrates that fact. Even in the absence of an express contractual restraint, the use or disclosure of the client information would be protected in equity unless and until it came within the public domain. An employee is not entitled to remove lists which are the employer's property, or to make copies or commit lists to memory (Weldon & Co v Harbinson [2000] NSWSC 272 at [72]). Arranging for the lists to be forwarded to his personal email address in order to have access to the client information is conduct of the same character (Orica Investments Pty Ltd & Ors v William McCartney & Ors [2007] NSWSC 645 at [254]). 17. As noted at [48] by ground 7 of the notice of appeal the appellants contend that the client information was placed in the public domain by the summons and supporting affidavit of Mr Devine in court and then serving that process together with the confidential exhibits to Mr Devine's affidavit. 18. The appellants could cite no authority as to why these steps would place in the public domain the client information for which Mr Devine in his affidavit made claims for confidentiality. At this time the exhibits had not been tendered. Service of the exhibits for which confidentiality was claimed did not place them in the public domain. Mr Agha's contractual obligations to keep the information confidential were unaffected. It is unnecessary to decide whether the implied undertaking referred to in Harman v Secretary of State for the Home Department [1983] 1 AC 280 applied to the documents exhibited to Mr Devine's affidavit, that is, an undertaking that the documents not be used otherwise than for the purposes of the proceedings, unless received into evidence (as to which, see Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 at 155 [96]; and Helicopter Aerial Surveys Pty Ltd v Robertson [2015] NSWSC 2104 at [9]-[18]). Even if the Harman implied undertaking were inapplicable, it does not follow that service of the exhibits in support of the respondents' claim that the appellants had breached contractual and equitable obligations of confidence placed the material in the public domain, or released the appellants from any contractual obligations in respect of the material. 19. Grounds 8 and 9 of the notice of appeal challenge the primary judge's findings upholding the respondents' claim for confidentiality after the confidential exhibits had been tendered in open court (see [51] and [52] above). The appellants relied upon the decision of this court in Isaac v Dargan Financial Pty Ltd [2018] NSWCA 163 at [170] where Gleeson JA, with whom Bathurst CJ and Beazley P agreed, said: "166 In considering the significance of the disclosure of information and whether it has entered the public domain, it is necessary to distinguish between cases where there is an equitable obligation of confidence (the retention of the quality of confidence being necessary to sustain relief in equity) and cases where the obligation of confidence is imposed by way of contract (and may involve use or disclosure of information which is not, in its nature, confidential). 167 As to the position in equity, once information becomes public knowledge or is in 'the public domain' equity will refuse to intervene to protect the information because the information has lost its confidentiality: Johns v Australian Securities Commission (1993) 178 CLR 408 at 475 (McHugh J), 432 (Brennan J), 438 (Dawson J) and 460–461 (Gaudron J); [1993] HCA 56. The question whether information is in the public domain is largely one of fact: Johns v ASC at 461 (Gaudron J). Whether information has entered the public domain, requires consideration of the accessibility to the information should members of the public wish to do so: GE Dal Pont, Law of Confidentiality (1st ed, 2015, LexisNexis Butterworths) at 195. … 170 In the present case, the information containing details of Dargan's client list was tendered in evidence in open court by the party now asserting an entitlement to injunctive relief to restrain use or disclosure of the information. Insofar as the relationship between Dargan and Mr Isaac is equitable, the conduct of Dargan may be taken to have implicitly released Mr Isaac from his obligation of confidentiality: Maggbury at [48] (Gleeson CJ, Gummow and Hayne JJ), citing the remarks of Lord Goff in Attorney-General v Guardian Newspapers Ltd [No 2] [1990] 1 AC 109 at 285: … that a case where the confider himself publishes the information might be distinguished from other cases on the basis that the confider, by publishing the information, may have implicitly released the confidant from his obligation. 171 As to the contractual obligation imposed by the Agreement, Dargan did not contend that only a limited publication of the information has occurred, or that the relative secrecy of the information remains, or that the information is not accessible to the public. 172 With regard to the last matter, reference should be made to Practice Note SC Gen 2 which deals with access to court files. SC Gen 2 provides that access to material in any proceedings is restricted to parties, except with leave of the Court (par 6) and that access will normally be granted to non-parties in respect of, among others, material that was admitted into evidence, unless the Judge or Registrar dealing with the application considers that the material or portions of it should be kept confidential (par 7). 173 There was no evidence on appeal as to whether any person has sought access to the February 2017 commission statement or the Retained List that were tendered in evidence by Dargan. Nor was it suggested that Dargan has not taken any steps since the trial to seek a confidentiality order in relation to that material. 174 I would conclude that the information tendered by Dargan in open court entered the public domain. It is accessible to members of the public who wish to inspect such material, unless the court dealing with the application considers that the material or portions of it should be kept confidential. The basis upon which a claim for confidentiality might be made by Dargan has been foregone by Dargan's tender of the material in open court." 1. There are important factual differences between the present case and Isaac v Dargan Financial Pty Ltd. In particular, on 27 April 2018, Parker J made an order until further order that the appellants and their legal representatives treat specified evidence as confidential to the plaintiffs and not publish or use the contents of the specified evidence, except for the purposes of the proceedings. His Honour also ordered that specified evidence be treated as confidential on the court file and not be released without further order from a judge (orders 10 and 11). 2. Those orders are not subject of appeal. Nor did the appellants seek an order that they be discharged. In any event, the issue is academic. As noted at [49] above, on 22 March 2018 Mr Agha and Mr Coombe gave undertakings not to use or disclose Confidential Information (as defined in the orders). Those orders were not expressed to be made on an interim basis. Nor could they have been because Mr Agha and Mr Coombe also undertook to the court to return or destroy the Confidential Information in their possession within seven days. 3. The final orders made by Sackar J did not include any injunction against Mr Coombe restraining him from disclosing or using confidential information. 4. Mr Agha was restrained from using Confidential Information as defined in his Employment Agreement. But that injunction is supported by his contractual undertakings. As Gleeson JA explained in Isaac v Dargan Financial Pty Ltd, the parties by contract can impose restraints on the use or disclosure of information which is not in its nature confidential and which would not be protected in equity. Even if the inadvertent tender of the confidential exhibits meant that Devine Concord lost the protection of equity, it did not lose its contractual rights. Mr Agha's restraint against using or disclosing Confidential Information in cl 14 of his Employment Agreement applied "at all times both during and after [his] employment". Mr Agha accepted that this was so if his construction of cl 10(d) of the shareholders' agreement ([126] above) were not accepted. 5. Ground 18 of the notice of appeal asserted that the primary judge erred in exercising his discretion when making order 4 quoted at [116] above in the absence of evidence that any trade secrets existed "within the definition in the 2008 shareholders' agreement". The appellants also asserted that the primary judge did not give reasons for rejecting the appellants' submissions to that effect. But, as indicated above, this ground (which was repetitious of earlier grounds) depended upon a construction of the interrelationship between the shareholders' agreement and the employment agreement that the primary judge correctly rejected. The injunction in order 4 is supported by cl 6(d) of the shareholders' agreement and by cl 14 of the employment agreement. To the extent that the particular specification of Confidential Information in order 4 contained in order 7 may not be supported by cl 6(d), it is supported by cl 14 of the employment agreement. Interrelationship of the shareholders' agreement and Mr Agha's employment agreement 1. Grounds 10-12 of the notice of appeal challenged the primary judge's construction of the interrelationship of the shareholders' agreement and Mr Agha's employment agreement. I have already dealt with and rejected Mr Agha's submission that the employment agreement was operative only to the extent it did not add to, subtract from or modify the 2008 shareholders' agreement. 2. However, the primary judge did not only find that the two agreements should be read with one co-existing with the other. In dealing with the restriction on post-employment activities, his Honour held that the three-year restraint period in the shareholders' agreement should operate and that during that period a combination of the radius restraint provided for in the employment agreement and the postcode restraint provided for in the shareholders' agreement should apply (J [257]). His Honour made a declaration in the following terms: "5. A declaration that the 'restraint period' contained in clause 19.2 of the employment agreement dated 20 April 2011 between Concord and Mr Agha (the 'EA') means 'three (3) years' and is, as regards its application to Mr Agha, altogether valid for a period of three (3) years, with effect from 26 April 2018, and 'Competitor' means any business engaged in providing real estate agency services within a radius of 6 kilometres from the office of the first defendant." 1. This declaration was not reflected in the injunctions granted. The final injunctions granted were in the following terms: "1. From 26 April 2018 until 26 April 2021 within the following postcodes 2046, 2127, 2131, 2132, 2134, 2135, 2136, 2137, 2138, 2140, Mr Agha shall be restrained from, on his own account or for any other person firm or company soliciting interfering with or endeavoring to entice away from Devine Real Estate Concord Pty Ltd ACN 132 522 671 ('Concord') any person firm or company who or which at the date of disposal of Mr Agha's shares in Concord is an employee or regular customer of or supplier to or otherwise in the habit of dealing with Concord (or who shall approach or shall have been approached by Concord with a view to dealing either as such customer or as such supplier such approach not having been rejected by the other party); 'regular customer' or 'regular supplier' meaning having entered into not less than three transactions in the six months immediately prior to the date when this order takes effect (in accordance with clause 10 i of the Concord Shareholders' Agreement dated 8 August 2008 ('CSA')). 2. From 26 April 2018 until 26 April 2021 within the following postcodes 2046, 2127, 2131, 2132, 2134, 2135, 2136, 2137, 2138, 2140, Mr Agha shall be restrained from, directly or indirectly engaging or offering any employment to any person who at any time during the term of the CSA shall have been an officer or employee or agent of Concord with access to confidential information relating to any of its suppliers' products or customers (in accordance with clause 10 ii of the CSA). 3. From 26 April 2018 until 26 April 2021 within the following postcodes 2046, 2127, 2131, 2132, 2134, 2135, 2136, 2137, 2138, 2140, Mr Agha shall be restrained from, being or becoming in any capacity whatsoever engaged or concerned or interested in any business which is or is to Mr Agha's knowledge about to be engaged in competition with any business carried on by Concord at the date of disposal of Mr Agha's shares in Concord, being 26 April 2018, (provided that this restriction shall not prevent Mr Agha from holding (directly or through nominees) by way of investment only shares or securities in respect of which listing or permission to deal has been granted by any stock exchange or any shares or securities in respect of which written consent has been given by Concord and Mr Devine so long as Mr Agha does not hold more than one per cent of the shares or securities of any class in any one company or concern) (in accordance with clause 10 iii of the CSA)." 1. Clause 10 of the shareholders' agreement and cl 19 of the employment agreement are quoted at [17] and [23] above. Subject to questions of their validity, they each operate in accordance with their terms, that is, for the periods and in the areas for which each provides. The fact that for the first 12 months that means that there are overlapping restraints is of no moment because there are no relevant inconsistencies. One agreement does not expressly permit what the other agreement prohibits. 2. Nonetheless, the primary judge erred in concluding that the three-year restraint in the shareholders' agreement should operate for the radius restraint and the postcode restraint in combination. That construction requires an amendment of the shareholders' agreement by the insertion of the radius restraint in it and amendment of the employment agreement by extending its period to three years. Declaration 5 should be set aside. This does not affect the injunctions made. To this extent ground 12 should be upheld, but grounds 10 and 11 rejected. Construction of cl 10 of the shareholders' agreement and discretion to grant injunctive relief 1. Under the heading "Competition and restraint of trade" the appellants contended that the primary judge erred in making orders 1 and 2 quoted at [143] because there was no evidence that any person existed who came within the definition of "regular customer" in order 1 or who came within the definition of any person who had access to Confidential Information relating to suppliers' products or customers in order 2 (grounds 13 and 14). 2. The appellants also contended that the primary judge erred in his discretion in making order 3 because cl 10 iii of the shareholders' agreement was invalid at common law, and unenforceable by reason of s 45 of the Competition and Consumer Act 2010 (Cth) and s 4 of the Restraints of Trade Act 1976 (NSW). The appellants also contended that the primary judge failed to give reasons for making order 3 (ground 15). 3. By ground 16 of the notice of appeal the appellants contended that the court ought to have found that the shareholders' agreement came to an end on 13 December 2017 when Mr Agha was excluded from the running of the business and so the restraint of trade in cl 10 iii should have commenced from 13 December 2017 and not from 26 April 2018 when the purchase of his shares was completed. 4. Ground 17 challenged the primary judge's exercise of discretion when granting the injunctions in orders 1, 2 and 3, and making the declaration in order 5. That declaration should be set aside for other reasons. In relation to orders 1-3 the appellants contended that the primary judge erred in his evaluation of the reasonableness of the restraint. Although framed as a challenge to the exercise of discretion, grounds 15 and 17 in truth challenge the validity of the restraints. 5. The appellants submitted before the primary judge that the evidence did not disclose any person who came within the definition of "regular customer" in cl 10 i of the shareholders' agreement, being someone who had entered into at least three transactions within six months immediately prior to the undertaking taking effect. That is true, but irrelevant. Clause 10 i refers also to a person who was "otherwise in the habit of dealing with Concord (or who shall approach or shall have been approached by Concord with a view to dealing … )". The injunction mirrors the terms of cl 10 i. There was ample evidence that Mr Agha had breached the terms of cl 10 i as well as cl 10 iii. The primary judge found that Mr Agha had solicited existing clients (J [290]-[375]). 6. The appellants complained that the primary judge failed to give reasons for making the order in the absence of evidence that a person existed who came within the definition of "regular customer" in the shareholders' agreement. But they did not contradict the respondents' submission that after the primary judge delivered his reasons and invited the parties to address him on the precise form of orders to be made, the respondents proposed a form of final orders to which the appellants did not object. 7. The same reasoning applies to ground 14 that challenged the making of order 2 in what was said to be the absence of evidence that a person existed who came within the definition of "a person with access to confidential information" in the shareholders' agreement (cl 10 ii). 8. In relation to this ground there is the additional point that there was evidence that Mr Agha had sought to entice one of Devine Concord's employees, Ms Touma, who had access to confidential information in relation to Devine Concord's customers (paras [122] and [123] above). There is no substance to ground 13 or 14. 9. Before considering the challenge to the validity of the restraints raised by grounds 15 and 17, it is first necessary to construe the restraints in cl 10 iii to determine the ambit of the operation of cl 10 iii. Thus, it is appropriate to deal first with ground 16. By ground 16 Mr Agha contends that the restraint in cl 10 iii operates only from 13 December 2017 and not from 26 April 2018 when Mr Agha was paid for his shares and transferred them. 10. Mr Agha complains that the primary judge did not deal with his submission that the relevant date from which the restraint in cl 10 iii operates was 13 December 2017. It is true that the primary judge did not deal with that argument. But that argument was not advanced at trial. Rather, it was contended that the respondents delayed payment to Mr Agha and were thereby disentitled to equitable relief to enforce a covenant in restraint of trade. That contention was not advanced on appeal. 11. The restraints in cl 10 i-iii expressly applied for a period of three years from the date of disposal of Mr Agha's shareholding. It is common ground that that date was 26 April 2018. The undertaking in cl 10 i took effect from that day. Ground 16 should be rejected. 12. As to ground 15, the appellants complained that the primary judge failed to give reasons for making order 3 when they had contended that cl 10 iii of the shareholders' agreement was void at common law, unenforceable by the operation of s 45 of the Competition and Consumer Act and unenforceable by reason of s 4 of the Restraints of Trade Act. 13. It is true that the primary judge made no reference to s 45 of the Competition and Consumer Act. That is not surprising. No issue was raised on the pleadings in relation to s 45 of the Competition and Consumer Act. Had such an issue been raised, it would have given rise to a "special federal matter" within the meaning of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) and, prima facie, the proceeding, or so much of the proceeding as was within the jurisdiction, including the accrued jurisdiction of the Federal Court, would have to have been transferred to the Federal Court. No such issue was raised on the pleadings. Section 45 was referred to in half of a single sentence of written closing submissions consisting of 66 pages. Referring to cl 10 iii of the shareholders' agreement the appellant submitted that: "The third obligation amounts to (1) a contract that restricts dealings or affects competition within the meaning of s 45 Competition and Consumer Act 2010 (Cth) and so is unenforceable …" 1. Not only was there no issue raised on the pleadings in relation to s 45, but there was no evidence that cl 10 iii had the purpose or would have or be likely to have the effect of substantially lessening competition. In determining whether there was a contravention of s 45, regard is not to be had to: "any provision of a contract of service or of a contract for the provision of services, … under which a person … agrees to accept restrictions as to the work, whether as an employee or otherwise, in which he or she may engage during, or after the termination of, the contracts …". (s 51(2)(b)) The submission was both irrelevant to any issue and so exiguous that the primary judge was entitled to ignore it. 1. Because Devine Concord has not established that its employment contract with Mr Coombe included restraints on post-employment activities, no question arises as to whether a restraint in the terms of cl 19 of Mr Agha's employment agreement, if contained in an employment agreement with Mr Coombe, would be valid. 2. It is of first importance that the restraints to which Mr Agha agreed protected the goodwill of the business acquired from Stefani and Associates (of which Mr Agha was a 40 per cent shareholder) and the goodwill of Devine Concord of which he was a 20 per cent shareholder and, by the time of the employment agreement, a 30 per cent shareholder. The goodwill of the business of Stefani and Associates was valued on the basis of a multiple of 3.66 of the rent roll annual commission and the calculation of the purchase price of Mr Agha's shareholding was made on the same basis. This implied that the parties had proceeded on the basis that it would take 3.66 years for the purchaser of goodwill to recover the purchase price. As the respondents submitted, this provided a rational connection with the three-year restraint period in the shareholders' agreement. 3. The validity of the restraint in cl 19 of the employment agreement is also to be considered on the basis that Mr Agha was a shareholder in Devine Concord and not merely an employee. As noted at [9] the sale of business agreement with Stefani and Associates acknowledged that Mr Agha would enter into a shareholders' agreement with Devine Concord and as noted at [14] cl 6(a) of the shareholders' agreement provided that he would enter into a contract of employment with Devine Concord. 4. The restraint in cl 19 of the employment agreement applied for no more than 12 months. The restraint in cl 19.1(b) from carrying on any business for a Competitor applied to any business engaged in providing real estate agency services within a radius of six kilometres from Devine Concord's office. That six-kilometre restraint substantially, but not wholly, overlapped with the postcodes of the restraints in cl 10 of the shareholders' agreement. For the reasons above, to the extent to which the restraint on carrying on any business for a Competitor engaged in providing real estate agency services within six kilometres from Devine Concord's office extended beyond the postcodes specified in cl 10 iii of the shareholders' agreement, then that restraint applied only for 12 months from the termination of Mr Agha's employment. 5. Those restraints are valid to the extent they were reasonable having regard to the interests of the parties and in reference to the interests of the public (Nordenfelt v Maxim Nordenfelt Guns & Ammunition [1894] AC 535, 565; Herbert Morris Ltd v Saxelby [1916] 1 AC 688, 706, 707; Lindner v Murdock's Garage (1950) 83 CLR 628, 653). An employer is not entitled to be protected from mere competition from an employee. But the employer is entitled to protection against disclosure or use of trade secrets or the use of a connection built up by the employee with the employer's customers. The restraints in cl 10 of the shareholders' agreement and cl 19 of the employment agreement are reasonable for the protection of Devine Concord's trade connection. The protection of the trade connection extends to a covenant against enticement of other employees of Devine Concord from leaving their employment (Aussie Home Loans Ltd v X Inc Services Pty Ltd [2005] NSWSC 285 at [26]; Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 at [55]; Kearney v Crepaldi [2006] NSWSC 23 at [58]). 6. The primary judge found that the restraints were reasonable for the following reason (at [410]): "The maliciousness, blatancy and extensiveness of the breach demonstrates to me that the First Defendant should be restrained for 3 years in both the maximum 6 kilometre radius area of the Employment Agreement and all post code areas of the Shareholders Agreement. This conclusion is furthered by the seniority of the First Defendant as both a past shareholder and employee of the Devine Group." 1. I accept the appellants' submission that the validity of the restraint should not be assessed having regard to the "maliciousness, blatancy and extensiveness of the breach". The validity of the restraints is assessed having regard to what was reasonable in the interests of the parties and the public when the agreements were made, subject to the operation of s 4 of the Restraints of Trade Act. I have already said why the primary judge erred in concluding that the three-year restraint in the shareholders' agreement could be applied to the six-kilometre radius area of the employment agreement. 2. Nonetheless, the primary judge's conclusion that the restraints in the shareholders' agreement and the employment agreement were reasonable in the interests of the parties and the public interest having regard to the seniority of Mr Agha and his position as a past shareholder was correct. 3. Ground 17 asserted that the respondents' own submissions before the primary judge sought only to justify a restraint for six to 12 months. The respondents denied that that had been their submission in the court below. The appellants' submissions do not identify any part of the respondents' submissions below containing such a concession. The primary judge did not consider that any such concession had been made (J [82]). The challenge to the restraints upon Mr Agha's post-employment activities should be rejected. 4. It follows that Mr Agha is liable to pay damages for the particular breaches found by the primary judge. Breaches of the Corporations Act 1. Orders 8 and 9 made on 4 December 2019 were as follows: "8. A declaration that Mr Agha breached the Corporations Act s.181-183. 9. A declaration that Mr Coombe breached the Corporations Act s.181-183." 1. No specific ground of appeal addressed these declarations. But in the course of oral argument the question was raised as to the appropriateness of the declaration in order 9 that Mr Coombe had breached ss 181-183 of the Corporations Act 2001 (Cth). Mr Coombe was an employee of Devine Concord, but not an "officer" of Devine Concord within the meaning of ss 181-183 (s 9, definition of "officer"). Section 181 of the Corporations Act did not apply to him. Sections 182(1) and 183(1) of the Corporations Act provide: "182 Use of position—civil obligations Use of position—directors, other officers and employees (1) A director, secretary, other officer or employee of a corporation must not improperly use their position to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation. Note: This subsection is a civil penalty provision (see section 1317E). … 183 Use of information—civil obligations Use of information—directors, other officers and employees (1) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation. Note 1: This duty continues after the person stops being an officer or employee of the corporation. Note 2: This subsection is a civil penalty provision (see section 1317E)." 1. The statement of claim alleged that Mr Coombe breached ss 182 and 183 of the Corporations Act (statement of claim, paras 98-101). (In para 99 of the statement of claim the respondents pleaded that while an employee of Devine Concord and after his employment ceased Mr Coombe was under a duty not improperly to use information obtained because of his position to gain an advantage for himself or someone else, or to cause detriment to the company. The "Particulars" to para 99 referred to s 182 of the Corporations Act, but that was evidently a typographical error and the reference was intended to be to s 183.) 2. The breaches of ss 182 and 183 alleged against Mr Coombe included that he had used his position to copy and remove confidential information of Devine Concord and failed to notify Devine Concord that he had done so (para 101(1), (2) and (3)), and that he had taken, used and disclosed confidential information of Devine Concord to its detriment and for the purpose of his own gain or benefiting other persons by disclosing confidential information to Mr Agha's business associates with Belle Property (para 101(4)). 3. However, the primary judge made no finding that Mr Coombe had used or disclosed confidential information other than by sending confidential information to Mr Agha whilst both he and Mr Agha were employees of Devine Concord. There was no notice of contention. 4. The respondents alleged that Mr Coombe had failed to notify Devine Concord of suspected or actual unauthorised use, copying or disclosure of confidential information while an employee and after his employment ceased (para 101(3)). 5. There was no finding that Mr Coombe suspected or knew of unauthorised use of confidential information whilst an employee of Devine Concord. To the extent the allegation related to his post-employment conduct, it could not have been a breach of s 182 and it would not fall within s 183. 6. It was also alleged that Mr Coombe had solicited customers from Devine Concord and had been engaged in carrying on a competing business. But these allegations were only established in respect of Mr Coombe's post-employment activities and would not constitute a breach of either ss 182 or 183. 7. Finally, it was alleged that Mr Coombe had knowingly assisted or been concerned in the breach by Mr Agha of Mr Agha's obligations in using and disclosing confidential information of Devine Concord and competing with Devine Concord. That allegation was raised only as a particular of a breach of s 182 or s 183 of the Corporations Act. There was no finding of any such conduct while Mr Agha was an employee (which would have constituted a breach of s 182). While such conduct might amount to a breach of s 183, the primary judge made no finding that Mr Agha had used and disclosed confidential information of Devine Concord. Knowing assistance by Mr Coombe in the breach by Mr Agha of Mr Agha's obligations not to compete with Devine Concord would not be a breach of s 183. The respondents did not sue Mr Coombe in tort for knowingly assisting Mr Agha's breach of contract. 8. There were four plaintiffs below, namely, Devine Concord, Devine Drummoyne, Mr Steven Devine, and EMC Just Holdings Pty Ltd. Mr Devine was arguably a proper party because he was a party to the shareholders' agreement. It is not clear why either Devine Drummoyne or EMC Just Holdings Pty Ltd were joined as parties. However, the joinder of Devine Drummoyne, Mr Devine and EMC Just Holdings Pty Ltd did not increase the costs of the appeal. The respondents had common representation. Conclusion and orders 1. For these reasons Mr Agha's appeal should be dismissed, save in respect of the declaration in order 5 made on 4 December 2019. The second appellant's appeal should be allowed. 2. No issue arose on appeal as to the costs of the proceedings below. Indeed, it does not appear that orders for costs of the proceedings below have yet been made. So far as the costs of the appeal are concerned, the appellants had common representation. Most of the submissions concerned Mr Agha's appeal. To the extent the issues concerned Mr Agha alone or were common to Mr Agha and Mr Coombe, the respondents have been successful, save for one issue, namely, the primary judge's construction of the relationship between the employment agreement and the shareholders' agreement reflected in the declaration contained in order 5. To the extent the issues concerned Mr Coombe alone, he has been successful. 3. The issue of construction reflected in the declaration in order 5 was in a narrow compass and occupied only a small part of the hearing. Mr Agha's success on that issue does not detract from the fact that he has been substantially unsuccessful on the appeal. 4. For these reasons I propose the following orders: 1. The appeal of the first appellant be allowed in part. 2. The appeal of the second appellant be allowed. 3. Set aside orders 5, 6 and 9 made on 4 December 2019. 4. The appeal of the first appellant be otherwise dismissed. 5. The respondents pay the second appellant's costs of the appeal so far as those costs concern only the claims of the second appellant. 6. The first appellant pay the respondents' costs of the appeal, not including costs referable only to the claims of the second appellant. 1. McCALLUM JA: I agree with White JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 March 2021