Supreme Court New South Wales Medium Neutral Citation: Data Processors Pty Limited v O'Toole [2023] NSWSC 451 Hearing dates: 26 April 2023 Date of orders: 26 April 2023 Decision date: 26 April 2023 Jurisdiction: Equity - Commercial List Before: Ball J Decision: Search orders granted Catchwords: CIVIL PROCEDURE — Interim preservation — Search orders — Interlocutory injunction restraining employee from using or disclosing any data or information — Where employee surreptitiously installs software Category: Procedural rulings Parties: Data Processors Pty Limited (Plaintiff) Sean O'Toole (Defendant) Representation: Counsel: SA Lawrance SC with A Smorchevsky (Plaintiff) Solicitors: Kardos Scanlan (Plaintiff) File Number(s): 2023/232617 Publication restriction: The Court's reasons for judgment on the plaintiff's application for preliminary discovery not be published (other than to the defendants) before 3 May 2023 EX TEMPORE JUDGMENT 1. Before the court is an application by the plaintiff Data Processors Pty Ltd for search orders and an interlocutory injunction against Mr Sean O'Toole one of its employees. Data Processors carries on the business of selling data concerning betting odds for sporting events, which it generates using algorithms, which it has developed over a period of more than 20 years. Mr O'Toole has been employed by Data Processors since 1 May 2017, initially as a Data Analyst, and now as a Stage 4 Quantitative Analyst. In that role, Mr O'Toole undertakes research and quantitative analysis of sporting data for American basketball and baseball. 2. It is Data Processors' case that Mr O'Toole has been using a code to access a page of Data Processors' intraweb containing internally generated betting probabilities in relation to thoroughbred, harness and greyhound racing, and has been using that code to transmit data to an IP address, which is external to Data Processors in breach of duties of confidence he owes to Data Processors arising from his employment by Data Processors. 3. In order to obtain a search order Data Processors must satisfy the Court (a) that it has a strong prima facie case on an accrued cause of action; (b) that the potential or actual loss or damage to Data Processors will be serious if the search order is not made; (c) that there is sufficient evidence that Mr O'Toole possesses important evidentiary material; and (d) that there is sufficient evidence that there is a real possibility that Mr O'Toole may destroy such material or cause it to be unavailable. 4. I am satisfied that Data Processors has a strong prima facie case that Mr O'Toole has breached the duty of confidence he owes to the company. The evidence discloses that sophisticated software has been installed surreptitiously on Data Processors' computer systems which extracts betting data and sends it to an external IP address. The software was installed and has been accessed by somebody using Mr O'Toole's username and password. The data is clearly confidential. It is the type of data that Data Processors generates and sells to customers, which is the core part of its business. 5. I am also satisfied that Mr O'Toole possesses important evidentiary material. That evidentiary material is, at least, of two types. It would indicate how Mr O'Toole has used the data. It would also indicate whether and to whom Mr O'Toole has provided the data to others. 6. The other two matters that Data Processors must satisfy the Court of can be taken together. The risk of serious harm arises from the fact that there is a real possibility that Mr O'Toole may destroy what would be important information to Data Processors' case. I accept that there is a real possibility that material will be destroyed in that case. That possibility arises from a number of factors, but by far, the most important is the surreptitious way in which the software was installed in the first place. Data Processors also seeks an interlocutory injunction restraining Mr O'Toole from using or disclosing any data or information that he has obtained using the code that has been installed on Data Processors' systems. That interlocutory injunction is appropriate, and the fact that it should be granted follows from the reasons I have given in relation to the question whether a search order should be granted. 7. Thirdly, Data Processors seeks an order which, in effect, requires Mr O'Toole to swear an affidavit identifying each person to whom he has disclosed data or information which was obtained using the code. In my opinion, it is appropriate to make an order of that type in this case. There is, at least, some evidence before the Court to suggest that Mr O'Toole is operating in a syndicate. 8. Data Processors first became aware that code may have been surreptitiously installed on its systems when it received an anonymous email tipping it off to that possibility. That email suggests that Mr O'Toole has been using the data as part of a syndicate. Some weight can be placed on the anonymous email since it proved to be correct in relation to the question of whether material has been surreptitiously taken from Data Processors' computer system. 9. Some evidence can also be obtained from the fact that the two IP addresses that have been used, one to install the code, and the other to receive information extracted by the code, are IP addresses which are not associated or do not appear to be associated with Mr O'Toole. 10. The plaintiff in its proposed search orders have made a number of variations to the standard form search order. Most significantly included at the beginning of the search order are paragraphs which make it clear that a building manager or security guard of the premises at which the search order is to be executed is required to comply with the order by admitting the search party to the building, and taking the search party to the door of the unit in which, on the evidence, Mr O'Toole lives. 11. That order is necessary because the evidence is that the unit in which Mr O'Toole lives is in a secure building and access can only be obtained to the unit through a security door. It seems to me that that order or that amendment to the order is consistent with par 6 of the standard form order which makes it clear that the order extends to any other person having responsible control of the premises. 12. The other significant amendment proposed to the standard form order is to include a definition of IT Device and expand the description of the computer systems or computer related systems which may be searched. It seems to me that those amendments simply make clear what is implicit in the standard form search order, and are appropriate having regard to the nature of the allegations in this case. 13. Accordingly, I make the following orders: 1. Upon the plaintiff, by its counsel, giving the usual undertaking as to damages, search orders against the defendant in the form of Annexure A to this order. (1A) Upon the plaintiff's solicitors giving an undertaking to pay any filing fees, leave given to file in court Summons, Commercial List Statement, affidavit of Alistair McKeough affirmed 26 April 2023, affidavit of Michael Khoury affirmed 25 April 2023, affidavit of Taidg Hannon affirmed 26 April 2023 and affidavit of Matthew Robinson affirmed 19 April 2023. 1. Subject to Order 3, or before 5 May 2023, the defendant file and serve an affidavit: 1. identifying (to the extent the defendant is able) the name, address and email address of: 1. each person to whom the defendant has disclosed any data or information which was obtained by the defendant by use of, or as a result of, the code installed on the plaintiff's computer systems with the file name "jupyter-themes.js" (Jupyter Code); 2. each person who, to the knowledge of the defendant, has used any data or information referred to in ai above; 1. identifying all information in the defendant's possession or knowledge about the disclosure or use of any data or information referred to in ai above; and 2. annexing all documents in the defendant's possession, custody or power which evidence or record any disclosure or use of any data or information referred to in ai above. 1. This Order 3 applies if you wish to object to complying with Order 2 on the grounds that some or all of the information required to be disclosed may tend to prove that you: 1. have committed an offence against or arising under an Australian law or a law of a foreign country; or 2. are liable to a civil penalty. In that case, you must: 1. disclose so much of the information required to be disclosed to which no objection is taken; and 2. prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and 3. file and serve on the plaintiff a separate affidavit setting out the basis of the objection. 1. Upon the plaintiff, by its counsel, giving the usual undertaking as to damages, order that, until 4.30 pm on Friday, 5 May 2023, the defendant be restrained from using or disclosing any data or information referred to in Order 2ai above, otherwise than: 1. for the purpose of complying with any of these orders; or 2. as required by law; or 3. for the purpose of obtaining legal advice or legal services. 1. These orders not be recorded in the Court's computerised record system until 3 May 2023. 2. The Court's reasons for judgment on this application not be published (other than to the defendant) before 3 May 2023. 3. Liberty to apply on 6 hours' notice. 4. These orders be entered forthwith. ********** 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: 26 July 2023