Metstech Pty Ltd v Park [2022] NSWSC 1667

Supreme Court New South Wales

Medium Neutral Citation: Metstech Pty Ltd v Park [2022] NSWSC 1667 Hearing dates: 6 – 27 May 2022; final submissions 22 July 2022 Date of orders: 5 December 2022 Decision date: 17 November 2022 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Parties to bring in short minutes to give effect to these reasons, see [676]. Catchwords: CONSPIRACY TO INJURE BY UNLAWFUL MEANS – electronics engineers and funder establish company to develop new products – designer is employee and shareholder – shareholder agreement imposes obligations for trade secrets and confidential information – Taiwanese manufacturer engaged – products launched and gain international interest – directors fall out over money – funder jettisoned from board and bank accounts – funder open to buy out – fellow directors prefer to 'phoenix' – raise false invoice by designer – register false security interest – appoint administrator without notice – set up new company without funder – continue to exploit company's products and customer base – funder proposes deed of company arrangement (DOCA) – directors frustrate DOCA – delete data – 'warehouse' trademark and domain name – revoke shareholders agreement – release designer from obligations – assert products designed by Taiwanese manufacturer all along. COPYRIGHT – mining telecommunications – employee designs electronic devices – related company claims R&D grant – employee claims Taiwanese manufacturer undertook design work – use of ODMs and OEMs – employer seeks delivery up of PCB assemblies, schematics and documentation – employee denies works exist – expert evidence and contemporaneous documents suggest otherwise – principles at [554]-[566] – copyright vests in employer – copyright not assigned to related company – orders made for delivery up. COPYRIGHT – software – software developer writes software for no fee and becomes employee and shareholder – implied licence – exclusive licence –whether changes after became employee were "original" at [616]-[618] – licence included right to alter software at [227]-[230], [621]-[623] – licensee entitled to delivery up of source code. TORT – conspiracy to injure by unlawful means – damages the gist of the action at [650]-[659] – plaintiffs do not plead or adduce evidence of damage – fusion fallacy – conspiracy claim fails on this basis. CORPORATIONS – oppression – Corporations Act 2001 (Cth), ss 232, 233 – minority shareholder entitled to buy-out majority shareholders. CONFIDENTIAL INFORMATION – TRADE SECRETS – shareholders agreement imposes duties of confidentiality – directors and employee also bound by equitable obligations of confidence – company entitled to delivery up, damages and/or account. Legislation Cited: Circuit Layouts Act 1989 (Cth) Copyright Act 1968 (Cth), ss 10, 32(1), 29(1)(a), 35, 131A(1), 131C, 131D, 196 Corporations Act 2001 (Cth), ss 232, 233, 437A, 437D Court Suppression and Non-publication Orders Act 2010 (NSW), s 8(1)(a) Evidence Act 1995 (NSW), s 140(2) Income Tax Assessment Act 1997 (Cth), div 355 Industry Research and Development Act 1986 (Cth), s 27A Judiciary Act 1903 (Cth), s 39(2) Cases Cited: Aardwolf Industries LLC v Riad Tayeh [2020] NSWSC 299 AB v Curry (No 3) [2015] NSWSC 1677 Acohs Pty Ltd v R A Bashford Consulting Pty Ltd (1997) 37 IPR 542 AG Australia Holdings Limited v Burton [2002] NSWSC 454; (2002) 58 IPR 327 Anacon Corp Ltd v Environmental Research Technology Ltd [1994] FSR 659 Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (No 2) [1991] 2 VR 636 Ausmart Services Pty Ltd (In Liq) v Zheng [2019] FCA 2162 Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297; [2011] FCAFC 151 Australian Liquor, Hospitality & Miscellaneous Workers Union v Liquorland (Aust) Pty Ltd [2002] FCA 528 Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17 BCI Finances Pty Ltd (In Liq) v Binetter (No 4) [2016] FCA 1351; (2016) 348 ALR 227 Beck v Montana Constructions Pty Ltd (1963) 5 FLR 298 Blatch v Archer (1774) 1 Cowp 63; (1774) 98 ER 969 Briginshaw v Briginshaw (1938) 60 CLR 336 Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17 Centrestage Management Pty Ltd v Riedle (2008) 170 FCR 298; [2008] FCA 938 Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445; [2011] VSC 184 Coco v AN Clark (Engineers) Ltd (1968) 1A IPR 587 Commissioner of Taxation v Iannuzzi (No 2) [2019] FCA 1818 Dais Studio Pty Ltd v Bullet Creative Pty Ltd (2007) 165 FCR 92; [2007] FCA 2054 David Syme & Co Ltd v General Motors-Holden's Ltd [1984] 2 NSWLR 294 EdSonic v Cassidy (2010) 189 FCR 271; [2010] FCA 1008 F45 Training Pty Ltd v Body Fit Training Company Pty Ltd [2020] NSWSC 1879 Fatimi Pty Ltd v Bryant [2004] NSWCA 140 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 Gerard Cassegrain & Co Pty Ltd v Cassegrain (2013) 87 NSWLR 284; [2013] NSWSC 453 Gruzman Pty Ltd v Percy Marks Pty Ltd (1989) 99 FLR 116; (1989) 16 IPR 87 Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44 HT v R (2019) 269 CLR 403; [2019] HCA 40 IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; [2009] HCA 14 In the matter of Anna Bay Resort Pty Ltd [2022] NSWSC 331 International Furnaces Ltd v Reaves [1970] RPC 605 Jones v Dunkel (1959) 101 CLR 298 JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20; (2016) 329 ALR 625 Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173 Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd [2018] FCA 1807; (2018) 137 IPR 189 McKellar v Container Terminal Management Services Ltd [1999] FCA 1101 Milltec Australia Pty Ltd v Burnes [2006] NSWCA 13 Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692; (1987) 5 ACLC 222 Munnings v Australian Government Solicitor (1994) 118 ALR 385 at 389-90; [1993] HCA 66 N P Generations Pty Ltd v Feneley (2001) 80 SASR 15; [2001] SASC 185 Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; 265 ALR 281 Re a Company (No 00709 of 1992); O'Neill v Phillips [1999] 2 All ER 961; [1999] UKHL 24 Redrock Holdings Pty Ltd v Hinkley [2001] VSC 91; (2001) 50 IPR 595 Ronchi v Portland Smelter Services Ltd [2005] VSCA 83 Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262; [2000] NSWCA 29 Sino-Resource Imp & Exp Co Ltd v Oakland Investment Group Ltd [2018] QSC 98 Slea Pty Ltd v Connective Services Pty Ltd (No 9) [2022] VSC 136 Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 194 FCR 142; [2010] FCAFC 149 Tomanovic v Global Mortgage Equity Corp Pty Ltd [2011] NSWCA 104; (2011) 288 ALR 310 University of Sydney v Objectivision Pty Ltd [2019] FCA 1625; (2019) 148 IPR 1 Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 Victoria University of Technology v Wilson [2004] VSC 33; (2004) 60 IPR 392 Wayde v New South Wales Rugby League Limited (1985) 180 CLR 459 Wilson v Basson [2020] NSWSC 512 Wright Prospecting Pty Ltd v Hamersley Iron Pty Ltd (No 3) [2013] NSWSC 1069 Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458; (2012) 299 ALR 621 Texts Cited: Bently, Lionel, et al, Intellectual Property Law (5th ed, 2018, Oxford University Press) Brennan, David, Copyright Law (2021, Federation Press) Ricketson, Staniforth and Chris Creswell, Law of Intellectual Property (2001, Thomson Reuters) van Caenegem, William, et al, Intellectual Property in Australia (7th ed, 2022, LexisNexis) van Caenegem, William, Intellectual and Industrial Property Law (3rd ed, 2019, LexisNexis) Wigmore, John Henry, Wigmore on Evidence (3rd ed., 1940, Little, Brown and Co.) Category: Principal judgment Parties: Metstech Pty Ltd (First Plaintiff) Auxilia Holding Pty Ltd as trustee for the Auxilia Holding Trust (Second Plaintiff) Chad Jefferson (Third Plaintiff) Auxilia Investments Pty Ltd (Fourth Plaintiff) John Geldhart Park (First Defendant) Old Name Pty Ltd (Second Defendant) Chung-Chieh Chou (Third Defendant) Welldesign Electronics Pty Ltd (Fourth Defendant) Tracy Ann Sibthorpe (Fifth Defendant) Graeme Corbett (Sixth Defendant) Chlobo & Bluey Pty Ltd as trustee for the Super Dooper Super Fund Corbett Family (Seventh Defendant) Christopher Martin (Eighth Defendant) CMS Family Investments Pty Ltd (Ninth Defendant) Rorque Poisson (Tenth Defendant) Metstech (Trading) Pty Ltd (Eleventh Defendant) 10Telco Pty Ltd (Twelfth Defendant) Metstech IP Pty Ltd (Thirteenth Defendant) Representation: Counsel: Mr A Fernon SC / Mr D Meyerowitz-Katz (First, Second, Third, Fourth Plaintiffs) Ms D Woods (First, Second, Eight, Ninth Defendants) Mr V Bedrossian SC / Mr H Zhao (Third, Fourth Defendants) Mr R Poisson (In Person) (Tenth, Eleventh Defendants)