Nexgen Sydney Pty Ltd v Barakat [2022] NSWSC 312

Supreme Court New South Wales

Medium Neutral Citation: Nexgen Sydney Pty Ltd v Barakat [2022] NSWSC 312 Hearing dates: 7 – 8, 14 September, 19 November, 18 December 2020; Final Submissions September 2021 Date of orders: 24 March 2022 Decision date: 24 March 2022 Jurisdiction: Equity Before: Ward CJ in Eq Decision: (1) Order that the first and third defendants pay the plaintiffs nominal damages in the amount of $1 for breach of her or his respective employment contracts. (2) Dismiss the remainder of the plaintiff's amended statement of claim. (3) Discharge the undertaking proffered by Ms Barakat and Mr Youssef on 29 November 2019. (4) Direct that any brief written submissions on costs be filed and served within 14 days with a view to being determined on the papers. Catchwords: EQUITY — Breach of confidence — Where plaintiffs and defendants provide telecommunications hardware solutions and services — Where plaintiffs and defendants procure new customers by way of telemarketing — Where both plaintiffs and defendants purchase databases of potential "leads" from the same suppliers — Where first, second and third defendants left the employ of the plaintiffs and commenced employment with the fourth and fifth defendants — Where first and third defendants alleged to have taken confidential information of the plaintiffs with them in the form of spreadsheets and emails — Where first, second and third defendants alleged to have used confidential information in the business of the fourth and fifth defendants to solicit, approach, or entice away customers of the plaintiffs — Where plaintiffs suffered no loss — Where concurrent confidentiality obligation in employment contract — Where first, second and third defendants admit to owing fiduciary duties to the plaintiffs — Whether breach of fiduciary duties — Whether breach of duty of confidence CONTRACTS — Breach of contract — Where confidentiality obligation concurrent with equitable duty of confidence and fiduciary duties — Whether transfer and use of spreadsheets and emails breached obligation of confidence CONTRACTS — Illegality — Restraint of trade CORPORATIONS — Employees — Improper use of position — Improper use of information EQUITY — Equitable remedies — Permanent injunctions Legislation Cited: Competition and Consumer Act 2010 (Cth), ss 46, 47 Corporations Act 2001 (Cth), ss 79, 182, 183, 1324 Crimes Act 1900 (NSW), ss 308B, 308C Uniform Civil Procedure Rules 2005 (NSW), r 29.7 Cases Cited: Advanced Fuels Technology Pty Ltd v Blythe [2018] VSC 286 AIIB Pty Ltd v Beard [2009] NSWSC 1001 Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40 Anderson v Canaccord Genuity Financial Ltd [2022] NSWSC 58 Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 Bayley Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178 Berkeley Administration Inc v McClelland [1990] FSR 505 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 Coco v AN Clark (Engineers) Limited [1969] RPC 41 Colour Control Centre Pty Ltd v Ty (1993) 39 AILR 5-058 Concut Pty Ltd v Worrell (2000) 176 ALR 693; [2000] HCA 64 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434; [1987] FCA 266 DC Payments Pty Ltd v Next Payments Pty Ltd (2016) 51 VR 151; [2016] VSC 315 Del Casale v Artedomus (Aust) Pty Limited (2007) 165 IR 148; [2007] NSWCA 172 Deta Nominees Pty Limited v Viscount Plastic Products Pty Ltd [1979] VR 167 Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509 Faccenda Chicken Ltd v Fowler [1987] Ch 117 Forkserve Pty Ltd v Jack [2000] NSWSC 1064 Geraghty v Minter (1979) 142 CLR 177; [1979] HCA 42 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Halliday and Nicholas Insurance Brokers Pty Limited v Corsiatto [2001] NSWCA 118 Herbert Morris Limited v Saxelby [1916] 1 AC 688 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Krishell Pty Ltd v Nilant (2006) 32 WAR 540; [2006] WASCA 223 Metrans Pty Ltd v Courtney-Smith (1983) 8 IR 379 Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844 Nordenfelt v The Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 Nottingham University v Fishel [2000] ICR 1462 O'Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 33 Ocular Sciences v Aspect Vision Care Ltd (No 2) [1996] EWHC Patents 1; [1997] RPC 289 Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31 Robb v Green [1895] 2 QB 1 Rosewood Advertising Pty Ltd v Hannah Marketing Pty Ltd [2000] NSWSC 1034 Russell v Trustees of the Roman Catholic Church for the Archdiocese of Sydney (2007) 69 NSWLR 198; [2007] NSWSC 104 Southern Real Estate v Dellow (2003) 87 SASR 1; [2003] SASC 318 Stenhouse Australia Ltd v Phillips [1974] AC 391 Sullivan v Sclanders (2000) 77 SASR 419; [2000] SASC 273 Taypar Pty Ltd v Santic (1989) 21 FCR 485; [1989] FCA 543 Trendtex Trading Corp v Credit Suisse [1982] AC 679 United States v Grossman 843 F 2d 78 (2nd Cir, 1988) Victoria International Container Terminal Ltd v Lunt (2021) 95 ALJR 363; [2021] HCA 11 Vokes v Heather (1945) 62 RPC 135 Warman International Limited v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34 Woolworths Ltd v Olson (2004) 184 FLR 131; [2004] NSWSC 849 Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 Texts Cited: JD Heydon, MJ Leeming, PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, LexisNexis, 2014) Category: Principal judgment Parties: LV6 Sydney Pty Ltd (formerly known as Nexgen Sydney Pty Ltd) (First Plaintiff) Business Telecom Australia Pty Ltd (Second Plaintiff) Samantha Barakat (First Defendant) Shane Mitchell (Second Defendant) Mina Youssef (Third Defendant) Easytel Australia Pty Ltd (Fourth Defendant) Easytel Group Pty Ltd (Fifth Defendant) Representation: Counsel: R Marshall SC with C Cassimatis (Plaintiffs) A Hourigan (First, Third, Fourth and Fifth Defendants)