Orient Capital v Thomson Reuters & Ors [2010] NSWSC 1005

New South Wales Supreme Court

CITATION : Orient Capital v Thomson Reuters & Ors [2010] NSWSC 1005

HEARING DATE(S) : 3 September 2010

JUDGMENT DATE : 9 September 2010

JUDGMENT OF : Ball J

DECISION : See paragraphs 36 and 37 of judgment.

CATCHWORDS : DISCOVERY - claim for damages and injunctive relief for misuse of confidential information - whether documents sought reasonably necessary for defendant to properly defend claim - costs of discovery would be substantial

CATEGORY : Procedural and other rulings

CASES CITED : Del Casale v Artedomus (Aust) Pty Limited [2007] NSWCA 172 Wright v Gaswell Pty Ltd (1991) 22 NSWLR 317

TEXTS CITED : R Dean, The Law of Trade Secrets and Personal Secrets, 2nd ed, (2002)

Orient Capital Pty Limited ACN 010 142 453 (Plaintiff) Thomson Reuters (Professional) Australia Limited ACN 058 914 668 (First Defendant) PARTIES : Thomson Financial Pty Limited ACN 008 644 666 (Second Defendant) Billabong International Limited ACN 084 923 946 (Third Defendant) Thomsno Reuters (Markets) Australia Pty Limited ACN 002 834 237 (Fourth Defendant)

FILE NUMBER(S) : SC 2009/290181

COUNSEL : Mr K L Andronos (Plaintiff) Mr J M Hennessy (First, Second and Fourth Defendants)

Henry Davis York (Plaintiff) SOLICITORS : Gilbert & Tobin (First, Second and Fourth Defendants) Middletons (Third Defendant)

- 2 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BALL J

9 SEPTEMBER 2010

2009/290181 ORIENT CAPITAL PTY LIMITED ACN 010 142 453 v THOMSON REUTERS (PROFESSIONAL) AUSTRALIA PTY LIMITED ACN 058 914 668 & ORS

JUDGMENT

1 The present application concerns orders sought by the first, second and fourth defendants (the Thomson Defendants) that the plaintiff (Orient) give discovery in accordance with a document dated 6 January 2010 specifying categories of documents for discovery. A number of categories are agreed. Fifteen remain in dispute. Before dealing with the disputed categories, I should set out some background concerning the proceedings. Background 2 Orient and the Thomson Defendants both provide share registry management and investor relations services to publicly listed companies. The Orient services and associated software are known as "miraqle" and "mirlin". The Thomson Defendants service is known as Thomson ONE. Both services provide detailed information concerning the registries of publicly listed companies, including contact details of relevant individuals and information concerning the beneficial owners of shares in those companies. Both Orient and the Thomson Defendants enter into agreements with customers by which they provide access to their respective services in exchange for the payment of a fee. Access is provided by a web-based application. Orient, and presumably the Thomson Defendants, issue to each individual employee of a customer who subscribes to their service a username and password which permits access to the services for which the customer has subscribed. 3 The miraqle system also permits individual customers to record their own information in the database and, on termination of a customer licence, a customer is entitled to transfer that information to another database. As I understand it, the Thomson ONE system offers a similar facility. 4 Two of Orient's former customers were the third defendant (Billabong) and Valad Property Group (Valad). Both those customers decided to switch from the service provided by Orient to the one provided by the Thomson Defendants. The licence between Orient and Billabong terminated on 7 August 2009. The Valad licence terminated some time in September 2008. 5 In connection with Billabong's switch, one of Billabong's employees who had access to miraqle provided, at the request of an employee of the Thomson Defendants, her username and password to the Thomson Defendants. The Thomson Defendants used that username and password to obtain access to miraqle. Orient says that the Thomson Defendants did so in breach of a duty of confidence that they owed Orient. Orient commenced these proceedings seeking injunctive relief and damages. Originally, Billabong was also joined in the proceedings. However, Orient's claim against Billabong has recently been settled. 6 Considerable evidence was led before me in relation to the costs of giving discovery of the documents sought by Orient. That evidence was given on various assumptions concerning the expected number of documents that would have to be produced if Orient were required to give discovery in accordance with the Thomson Defendants' categories and the costs of giving discovery in relation to each document. The evidence suggested that the cost could be in the range of $250,000 to $1,200,000. 7 During the course of the hearing I indicated to the parties that I did not think it was important to resolve the dispute between them concerning the likely costs of discovery in order to determine what order should be made. On any view, the costs of discovery are likely to be substantial. Any estimate is necessarily rough, since the total number of documents that Orient may need to discover is unknown. Moreover, and not unexpectedly, none of the estimates provided to me is broken down in a way that clearly identifies the likely cost consequences of the various combinations of orders that could be made. The parties are large commercial enterprises. In those circumstances, I indicated to the parties that I intended to focus on the question whether the documents sought by the Thomson Defendants were reasonably necessary for them properly to defend the case brought against them. If so, it appeared to me that they were entitled to the documents they sought. In doing so, however, it is important to bear in mind that the Thomson Defendants are not entitled to discovery as of right and that the substantial costs of giving discovery need to be considered in determining whether the documents really are necessary for the Thomson Defendants properly to defend the case brought against them. 8 I should mention two other points about the case. 9 One of those is that, broadly speaking, Orient's claim has three aspects. First, Orient claims that the database it has compiled is confidential, much in the same way as a customer list might be said to be confidential. So far as this claim is concerned, the individual records contained in the database are not themselves necessarily confidential. What is confidential is the collection of information that Orient has put together. Secondly, Orient says that some of the information contained in the miraqle and mirlin databases is itself confidential. In Confidential Appendix 1 to its amended statement of claim, Orient describes the categories of information contained in its databases. Mr Andronos, who appeared for Orient, informed me during the course of the hearing that the information falling within categories 3(a)(i), (ii) and (iv), 3(b)-3(e), 3(f)(i) and (ii) and 3(g) was not claimed of itself to be confidential. It was confidential only by reason of the fact that it was information contained in a confidential database. On the other hand, Orient regards information falling within categories 3(a)(iii), 3(a)(v) and 3(f)(iii) as being in itself confidential. In the case of information falling within 3(a)(iii), Orient says that that information is confidential to the companies with which the information is concerned. In the case of the other categories, Orient says the information is confidential because it has been collected by it from sources which are not publicly available. Thirdly, Orient claims that the features and functionality of miraqle (including the format of the screens that can be viewed by subscribers) are confidential. 10 The other point to note is that it is not claimed that the Thomson Defendants have accessed every item of information and every feature of the miraqle database and software. In fact, Orient has identified the precise web pages that the Thomson Defendants have accessed and consequently it is in a position to know what information and what features and functionalities the Thomson Defendants have had access to. Although Orient has pleaded that all the information contained in and features of the miraqle system are confidential, the case can only be concerned with the confidentiality of the information and features and functions to which the Thomson Defendants have had access. It cannot be concerned with the confidentiality of information or features and functions that the Thomson Defendants have not seen. Clearly, this point is relevant to the scope of any permitted discovery. Categories 9 and 25 11 Category 9 is in the following terms: "9. All Documents which comprise, record or refer to Orient's knowledge, of the use, reproduction or disclosure of the Confidential Information by, or on behalf of, Billabong, from 1 July 2009 to 19 August 2009."