Woolworths Limited v Mark Konrad Olson & Anor [2004] NSWSC 849

Reported Decision : 63 IPR 258

New South Wales Supreme Court

CITATION : Woolworths Limited v Mark Konrad Olson & Anor [2004] NSWSC 849 HEARING DATE(S) : 7/09/04, 8/09/04, 9/09/04, 10/09/04, 13/09/04, 14/09/04, 15/09/04, 17/09/04 JUDGMENT DATE : 22 September 2004

JURISDICTION: Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Limited relief to be given. Short minutes of order to be brought in. ; [NOTE: This is the edited text of the judgment delivered on 22 September 2004. It does not include material [the subject of a confidentiality regime imposed by Court order] which may not be published except in such manner and for such purposes as the Court specifies. (See note at end of Judgment)]

CATCHWORDS : Anton Pillar relief granted by Federal Court - Cross-vesting orders made under Jurisdiction of Courts (Cross-Vesting) Act 1987 - Litigation before Supreme Court consolidated to include joint hearing of Federal Court proceedings, proceedings before Industrial Relations Commission under section 106 of Industrial Relations Act 1996-Confidential information - Intellectual Property - Fiduciary obligations of employee - Breach of copyright - Exemplary damages - Contract of employment - Employee agrees to be bound by employers code of conduct requiring employees to declare any interest they might have that could adversely affected employer - Fraudulent intent of employee - Employee determines to accept employment with competitor and to send to home computer e-mail attachments containing highly confidential information of first employer - Conflict between duty and interest exists from moment when employee forms intention to dishonestly take and use employers confidential information for his own benefit, contrary to fiduciary and contractual obligations - Further conflict of duty and interest constituted by the preferring by employee of his own interests in failing to disclose the conflict - Summary dismissal of employee - Restraint of Trade covenants - Employee proposes as soon as permitted to take up a position with major competitor - Relief - No evidence as to any pecuniary loss suffered by employer as a result of employees breach - No evidence of profit acquired by employee - Nominal damages - Restraint provision held invalid - Not possible to read down restraint period or geographic area to give restraint a reasonable operation - Court cannot redraft restraint provision Copyright Act 1968 (Cth) Copyright Amendment (Digital Agenda) Act 2000 (Cth) Corporations Act 2001 (Cth) Evidence Act 1995 (NSW) LEGISLATION CITED : Industrial Relations Act 1996 (NSW) Interpretation Act 1987 (NSW) Jurisdiction of Courts (Cross--Vesting) Act 1987 (Cth) Restraints of Trade Act 1976 (NSW) Trade Practices Act 1974 (Cth) A Buckle & Son Pty Ltd v McAllister (1986) 4 NSWLR 426 Adami v Maison de Luxe Ltd (1924) 35 CLR 143 Adamson v New South Wales Rugby League Ltd (1991) 31 FCR 242 Amalgamated Mining Services Pty Ltd v Warman International Ltd (1992) 24 IPR 461 Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 Angus & Coote Pty Ltd v Render (1989) 16 IPR 387 Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 ASX Operations Pty Limited v Pont Data Australia Pty Limited (No 1) (1990) 27 FCR 460 Attorney-General v Blake [1998] Ch 439 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 Australasian Performing Right Association Ltd v Commonwealth Bank of Australia (1992) 40 FCR 59 Autodesk Inc & Ors v Yee & Anor (1996) 35 IPR 415 Autodesk Australia Pty Ltd v Cheung (1990) 17 IPR 69; 94 ALR 472 Bailey v Namol Pty Ltd (1994) 53 FCR 102 Barry v Incitec Ltd & Greenleaf Pty Ltd (1991) 45 IR 143 Bell v Lever Brothers Limited [1932] AC 161 Bettini v Gye (1876) 1 QBD 183 Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 Boardman v Phipps [1967] 2 AC 46 Boston Deep Sea Fishing & Ice Company v Ansell (1888) 39 Ch D 339 Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 Briginshaw v Briginshaw (1938) 60 CLR 336 Bristol & West Building Society v Mothew [1998] Ch 1 Brown v Cunich [1994] ATPR 46-117 Bruce v AWB Ltd (2000) 100 IR 129 Buckley v Tutty (1971) 125 CLR 353 Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 Butler v Fairclough (1917) 23 CLR 78 Butt v Long (1953) 88 CLR 476 Canadian Aero Services Ltd v O'Malley (1973) 40 DLR (3d) 371 Canberra Bushrangers Baseball Team Pty Ltd v Byrne (ACTSC), Higgins J, No SC707 of 1994, 21 December 1994, unreported). Canson Enterprises Limited v Boughton & Co [1991] 3 SCR 534 Chappell & Co Ltd v Associated Radio Co of Australia Ltd [1925] VLR 350 Clouston & Co Limited v Corry [1906] AC 122 Coco v AN Clark (Engineers) Limited [1969] RPC 41 Colour Control Centre Pty Limited v Ty (1996) 39 AILR 5-085 Columbia Pictures Industries Inc & Anor v Luckins (1996) 34 IPR 506 (FCA) Comax Secure Business Services Limited v Wilson (unreported, QBD, Richard Seymour QC, 21 June 2001) Concut Pty Limited v Worrell (2000) 176 ALR 693 Consul Development Pty Limited v DPC Estates Pty Limited (1975) 132 CLR 373 Courtaulds Northern Textiles Ltd v Andrews [1979] IRLR 84 Curro and Anor v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 Dart Industries Inc v Décor Corporation Pty Limited & Anor (1993) 179 CLR 101 Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 Desmond Henry Randall v Aristocrat Leisure Limited [2004] NSWSC 411 Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 Drafting and Enforcing Post-Employment Restraints (1997) 10 AJLL 181 EFG Australia Ltd v Kennedy [1999] NSWSC 922 Elcom v Electrical Trades Union of Australia, New South Wales Branch (1983) 5 IR 267 Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd [1943] Ch 167] Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269 Exxon Corporation v Exxon Insurance Consultants International Ltd [1981] 2 All ER 495 Faccenda Chicken Ltd v Fowler & Ors [1987] Ch 117 Farley v Lums (1917) 19 WALR 117 Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664 FNH Investments Pty Ltd v Sullivan [2003] FCAFC 246 Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 Galipienzo v Solution 6 Holdings Limited (1998) 28 ACSR 139 Gilbert J McCaul (Aust) Pty Limited v Pitt Club Limited (1957) 59 SR (NSW) 122 Gooley v Westpac Banking Corporation (1995) 129 ALR 628 Gray v Motor Accident Commission (1998) 196 CLR 1 Guth v Loft (1939) 5 A 2d 503 SCDel Harmer v Cornelius (1858) 5 CBNS 236 Harris v Digital Pulse Pty Limited (2003) 44 ACSR 390 Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 Heptonstall v Gaskin and Ors [2004] NSWSC 80 Herbert Morris Ltd v Saxelby [1916] 1 AC 688 Hollingsworth v Commissioner of Police (No 2) (1999) 47 NSWLR 151 Home Counties Dairies Ltd v Skilton [1970] 1 All ER 1227 Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Idameneo (No 123) Pty Limited v Angel-Honnibal [2002] NSWSC 1214 CASES CITED : Incitec Ltd v Industrial Court of New South Wales (1992) 45 IR 155 Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443 International Writing Institute Inc v Rimila Pty Ltd & Anor (1994) 30 IPR 250 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 IRAF Pty Ltd v Graham [1982] 1 NSWLR 419 Jennings v Stephens [1936] Ch 469 Johnson v Unisys Ltd [2003] 1 AC 518 Jupiter General Insurance Co Ltd v Ardeshir Bomanji Shroff [1937] 3 All ER 67 Kabushiki Kaisha Sony Computer Entertainment v Stevens & Ors (2003) 200 ALR 96 Knogo Corporation v Halligan (1984) ATPR 40-460 Kone Elevators Pty Ltd v McNay (1997) ATPR 41-564 Lakatoi Universal Pty Ltd & Walker [2000] NSWSC 113 Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 Littlewoods Organisation Ltd v Harris [1978] 1 All ER 1026 Lloyd's Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 72 ALR 643 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 76 ALJR 246 Malik v Bank of Credit and Commerce International SA (in liq) [1997] 3 WLR 95 Mellor v Australia Broadcasting Commission [1940] AC 491 Meyrick v Stirling Bros Ltd (1899) 1 WALR 51 Mitchforce Pty Ltd v Industrial Relations Commission of New South Wales & Ors (2003) 57 NSWLR 212 MJA Scientifics International Pty Ltd & Anor v SC Johnson & Son Pty Ltd (1998) 43 IPR 275 Neary v Dean of Westminster [1999] MLR 288 New Zealand Netherlands Society v Kuys [1973] 1 WLR 1126 News Ltd v Australian Rugby League Football Ltd (1996) 64 FCR 410 Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 North v Television Corporation Ltd (1976) 11 ALR 599 Nottingham University v Fishel (QBD) [2000] ICR 1462; [2000] IRLR 471 O'Brien v Komesaroff (1982) 150 CLR 310 Ogden Industries Pty Ltd v Lucas (1968) 118 CLR 32 Orr v University of Tasmania (1957) 100 CLR 526 Orton v Melman [1981] 1 NSWLR 583 Pascoe v Federal Commissioner of Taxation (1956) 30 ALJR 402 Pedler v Richardson (Young J, Supreme Court of New South Wales, 16 October 1997, unreported) BC9705263 Pepper v Webb [1969] 1 WLR 514 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 Petrofina (Great Britain) Ltd v Martin [1966] Ch 146 Pilmer v The Duke Group Ltd (in liq) (2001) 207 CLR 165 PMC Holdings v Smith [2002] EWHC 1575 (QB) Polygram Records Inc & Anor v Raben Footwear Pty Ltd (1996) 35 IPR 426 Prenn v Simmonds [1971] WLR 1381 Prior v Lansdowne Press Pty Ltd [1977] VR 65 Queensland Co-operative Milling Association v Pamag Pty Ltd (1973) 133 CLR 260 R v Darling Island Stevedoring & Lighterage Co Ltd; Ex parte Halliday & Sullivan (1938) 60 CLR 601 Raben Footwear Pty Ltd v Polygram Records Inc & Anor (1997) 75 FCR 88 Ravenscroft v Herbert & New English Library Ltd [1980] RPC 193 Reading v Attorney General [1951] AC 507 Regal (Hastings) Limited v Gulliver [1967] 2 AC 134 Rentokil Pty Ltd v Lee (1995) 183 LSJS 444 Robb v Green [1895] 2 QB 1 Rouen v Ryan [2001] NSWCA 230 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 Ryan v Rouen [2000] NSWSC 468 Saltman Engineering Co Limited v Campbell Engineering Co (1948) 65 RPC 203 Sea Acres Rainforest Centre Pty Ltd v State of New South Wales (2001) 109 IR 56 Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 Solution 6 Holdings Ltd and Ors v Industrial Relations Commission of New South Wales and Ors (2004) 208 ALR 328 State Rail Authority v Earthline Constructions Pty Limited (O'Keefe CJ, Supreme Court of New South Wales, 14 September 1994, unreported) Stevenson v Barham (1977) 136 CLR 190 Sullivan & Anor v FNH Investments Pty Ltd t/as Palm Bay Hideaway (2003) 57 IPR 63 Talk of the Town Pty Ltd v Hagstrom (1990) 99 ALR 130 Telstra Corp Ltd v Australasian Performing Right Association Ltd (1997) 191 CLR 140 Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488 Turner v Mason (1845) 14 M & W 112 Vardy v Cuthbert (1872) 3 AJR 25 Victoria University of Technology v Wilson & Ors [2004] VSC 33 Walker v Industrial Court of New South Wales & Anor (1994) 53 IR 121 Warman International Limited v Dwyer (1995) 182 CLR 544 Watson v Foxman (2000) 49 NSWLR 315 Webb v Ryleen Pty Limited (Young J, Supreme Court of New South Wales, 8 November 1994, unreported) BC9403215 Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71 Woolworths Limited ACN 000 014 675 v Mark Konrad Olson & Anor [2004] NSWSC 871 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 Youyang Pty Limited v Minter Ellison Morris Fletcher [2003] HCA 15 Woolworths Limited ACN 000 014 675 (Plaintiff) PARTIES : Mark Konrad Olson (First Defendant) Dianne Olson (Second Defendant) FILE NUMBER(S) : SC 50116/04 COUNSEL : Mr RM Smith SC, Mr MA Jones (Plaintiff) Mr RM Goot SC, Mr SEJ Prince (Defendants) SOLICITORS : Clayton Utz (Plaintiff) Maddocks (Defendants)