Supreme Court New South Wales Medium Neutral Citation: Devine Real Estate Concord Pty Ltd v Agha [2018] NSWSC 556 Hearing dates: 5, 11, 12, 13 April 2018 Date of orders: 13 April 2018 Decision date: 13 April 2018 Jurisdiction: Equity - Duty List Before: Parker J Decision: Plaintiffs have a prima facie case against the first defendant for breaches of his contractual obligations. Plaintiffs also have a prima facie case against each of the first and second defendants for breaches of statutory obligations of confidence owed to the plaintiffs, statutory obligations not to their position as a director or employee of the plaintiffs for their own benefit; and breaches of equitable obligations of confidence owed to the plaintiffs. Catchwords: REAL PROPERTY – interlocutory injunctions – where the plaintiffs seek contractual, statutory and equitable injunctive restraints against the defendants prior to hearing and determination of a breach of confidence and restraint of trade case – whether the plaintiffs have a prima facie case against the defendants for any or all of those injunctive restraints to be granted EQUITY – equitable remedies – specific performance – maxims – "he who seeks equity must do equity" – where the plaintiffs have not paid the first defendant the moneys he is owed for their purchase of his shares – whether the plaintiffs' conduct disentitles them to interlocutory relief in the form of specific performance – breach of contract – whether plaintiffs are "ready, willing and able" to comply with their contractual obligations – discussion of the application of the "ready, willing and able" rule in applications for interlocutory relief – whether the plaintiffs' failure to fulfil their contractual obligations is a ground for refusing to enforce the first defendant's statutory or equitable obligations Legislation Cited: Corporations Act 2001 (Cth) Category: Principal judgment Parties: Devine Real Estate Concord Pty Limited (First Plaintiff) Devine Real Estate Drummoyne Pty Ltd (Second Plaintiff) Steven James Devine (Third Plaintiff) EMC Just Holdings Pty Ltd (Fourth Plaintiff) Wajih Agha (aka Roger Agha) (First Defendant) Lewis Coombe (Second Defendant) Representation: Counsel: V Heath (Plaintiff) P Doyle Gray (First and Second Defendants) Solicitors: Jemmeson Fisher (Plaintiff) Baybridge Lawyers (First and Second Defendants) File Number(s): 2018/87652 Publication restriction: Nil Judgment – EX TEMPORE Revised and issued 1 May 2018 1. This is an application for interlocutory injunctions in a breach of confidence and restraint of trade case. 2. The third plaintiff, Steven James Devine, is the majority shareholder of a group of companies to which I will refer as the Devine Group. The Group was founded by Mr Devine's father as a real estate agency business at Strathfield in western Sydney. It subsequently expanded, and now operates five offices in New South Wales and one in the Philippines. 3. Two of the Group's offices are at Concord and Drummoyne in inner western Sydney. The Concord office is operated by the first plaintiff, to which I will refer as the "Concord company". The Concord company was incorporated in August 2008. Mr Devine holds 42.16 per cent of the shares in the company. The fourth plaintiff, which is the trustee of Mr Devine's family trust, holds a further 26.95 per cent of its shares. The Drummoyne office is operated by the second plaintiff, to which I will refer as the "Drummoyne company". The Drummoyne company was incorporated in 2011. Mr Devine holds 70 per cent of its shares. He is also a director of all of the Devine Group companies including the first and second plaintiffs. 4. The first defendant, Wajih (known as Roger) Agha, is a real estate agent who was formerly a business associate of Mr Devine. Their association began when Mr Devine was establishing the Devine Group Concord office and setting up the Concord company. The office was established in part by acquiring the business of an existing real estate agent in the area. Mr Agha had an interest in that business. When the Concord company was established he became a director. A shareholders' agreement was also entered into, to which he became a party, along with Mr Devine and another business associate who apparently is no longer with the company, a Mr Xenos. The Concord company is also a party to the shareholders' agreement. 5. Upon the establishment of the Drummoyne office, Mr Agha also became a shareholder and director of the Drummoyne company, but there is no formal shareholders' agreement which regulates that company's affairs. 6. Mr Agha was until recently employed under a formal written employment contract by the Concord company. 7. The second defendant, Lewis Cumming Coombe, joined the Devine Group in 2012 as a trainee. Initially he was employed by another company in the Devine Group, Strathfield Real Estate (Management) Pty Limited. That company is not a party to these proceedings. Mr Coombe first worked as a receptionist at the Strathfield office. In July 2013, he was assigned to work with Mr Agha as his personal assistant at the Concord office. He worked for Mr Agha in that role but apparently has obtained his own qualifications, and in December 2017 he undertook his first auction on his own account. 8. The dispute which has led to these proceedings was precipitated by a decision on Mr Agha's part to leave the Devine Group. This took place in December 2017. On 8 December Mr Agha wrote to Mr Devine. His letter referred to cl 9 of the Concord company shareholders' agreement. That clause contained provisions for shareholders to buy each other out. The letter purported to be a formal notice under cl 9. The letter went on to note that there was no comparable shareholders' agreement for the Drummoyne company, but said that Mr Agha wished to sell his shares in that company as well and proposed that the method of the valuation of the shares prescribed in cl 9 of the Concord company shareholders' agreement should also apply to the Drummoyne company for this purpose. 9. On 12 December, Mr Devine responded with his own notice under cl 9 of the Concord company shareholders' agreement. The notice was addressed to Mr Agha on behalf of Mr Devine and the fourth plaintiff. The notice recited that pursuant to cl 9.3(a), any majority shareholder from "time to time" had the option to purchase the whole or part of any minority shareholding by giving "one month's written notice". The notice purported to exercise what was described as Mr Devine's "option as majority shareholder" to purchase Mr Agha's shareholding in the company. The price to which Mr Agha was entitled was said to be $675,338.69, and the notice contained extracts from the Concord company's balance sheet in support of this calculation. 10. Although Mr Agha's letter had purported to be a notice under clause 9, it appears that he did not have the right to trigger a sale, but all parties proceeded on the basis that Mr Devine's notice of 12 December was a valid notice for the purpose of cl 9 and gave rise to an enforceable obligation to proceed to completion of the purchase of Mr Agha's shareholding at the price fixed under cl 9.1. 11. Mr Devine, and another shareholder in the Drummoyne company, also wrote to Mr Agha purporting to accept his offer to sell his shares in that company. The purported acceptance stated that the price, as calculated in accordance with cl 9 of the Concord company's shareholders' agreement, would be $141,705.33. This purported acceptance appears to have been sent on 16 December. 12. There may be room for argument about whether Mr Agha's letter of 8 December, so far as it concerned the Drummoyne company, was a formal offer capable of acceptance. But it is clear that, if it was not, a contract has now come into existence, as a result of the parties' conduct, whereby Mr Agha has agreed to sell, and Mr Devine and his associate have agreed to buy Mr Agha's shares in the Drummoyne company for a price calculated in accordance with the mechanism in cl 9.1 of the Concord company shareholders' agreement. 13. On 13 December Mr Devine caused the Concord company to terminate Mr Agha's employment. That termination was expressed to be for misconduct by Mr Agha amounting to breach of his obligations as an employee. Mr Agha did not contest his dismissal. He remained a director of both the Concord company and the Drummoyne company but resigned on 5 April this year. 14. On 20 December, Mr Coombe resigned from his employment with the Devine Group with immediate effect. Both Mr Agha and Mr Coombe are now working (or, at least, are retained to work) for a real estate chain which operates under the name "Belle Property". The chain has offices in various suburbs of Sydney. Mr Agha and Mr Coombe are attached to the Neutral Bay office. The evidence does not reveal the legal structure of the Belle Property chain, nor is it clear whether there is a direct employment relationship between Mr Agha and Mr Coombe personally and the particular entity operating the Belle Property Neutral Bay business. It may be that the relationship with Belle Property is a contractual one through companies controlled by Mr Agha or Mr Coombe. 15. In a case where a business seeks to restrict the activity of a former employee, officer or shareholder, there are usually three types of restraint which may be in issue. These are: first, a restraint on using information obtained in the course of working for the business; second, a restraint on soliciting customers of the business; and third, a restraint on competing with the business. The third type of restraint is the broadest because it is not necessarily limited to using information derived from the business or approaching the customers of the business. 16. In the present case, the plaintiff seeks final injunctive restraints of each type against both Mr Agha and Mr Coombe. In this application, the plaintiffs seek interlocutory restraints of an equivalent nature. 17. The plaintiffs rely upon restraints arising as a matter of contract (the existence of which is disputed in Mr Coombe's case). They also rely on statutory restraints under the Corporations Act 2001 (Cth), and restraints imposed in equity for breach of confidence, which do not depend upon the existence of a contractual relationship. 18. As against Mr Agha, there are two contractual sources for the restraints which the plaintiffs seek to enforce. The shareholders' agreement (cl 6) contained provisions restricting the disclosure of confidential information and restricting the parties from being engaged in competing businesses. It is common ground that these restrictions apply while the parties are shareholders. But the agreement also contains restrictions which apply for a period of three years after the date of disposal of any party's shares. These include non-competition provisions, non-solicitation provisions and provisions which prevent "poaching" of other employees of the Concord company. 19. Mr Agha's employment agreement also contains provisions restraining the use of confidential information (both during and after Mr Agha's employment) and restrictions on the solicitation of clients and on being engaged in competing businesses for a period of up to 12 months after employment ceases. 20. As a director of both the Concord company and the Drummoyne company, and as an employee of the Concord company, Mr Agha was also subject to the obligations in Part 2D.1 of the Corporations Act, which includes provisions relating to confidential information, good faith and the use of the director or employee's position. To the extent that he received information in circumstances in which equity imposes an obligation of confidence, he is also subject to equitable obligations to maintain that confidence. 21. The plaintiffs have presented evidence in this application of conduct by Mr Agha, which, if sustained at trial, would demonstrate that he engaged in various breaches of these obligations. As it currently stands, the evidence can be summarised as falling into seven categories. 22. First, there is evidence that Mr Agha removed client lists and contact information and that those client lists and contact information have been supplied, presumably by Mr Agha, to other people at Belle Property. Second, there is evidence that in his work at Belle Property he has solicited customers of the Devine Group's Concord office, including the six identified customers. Third, and more generally, in his work for Belle Property, he has promoted himself as a real estate agent specialising in the inner-western Sydney area, and appears to be engaged in a business which directly competes with the business of the Concord company. 23. Fourth, it is alleged that before Mr Agha left the Devine Group, he sabotaged the Group's computer records by changing contact details, so that those who work for the company would be hindered or prevented from making contact with customers and potential customers. Fifth, it is alleged that he was responsible for removing copies of agency agreements and related correspondence for a similar purpose. Sixth, he recruited Mr Coombe to work with him at Belle Property. Seventh, it is said that when questions were asked of him about these activities, he has responded with prevarication and evasion; and that he has failed to disclose, in an accurate and timely way conduct which his obligations required him to disclose. 24. This material gives rise to a strong prima facie case. The first three categories of evidence, on the face of it, demonstrate breaches of each of the restraints which the plaintiffs seek to enforce in these proceedings. The other four categories do not directly do so, but, if established at trial, would show a pattern of misconduct demonstrating that Mr Agha cannot be trusted and that injunctions are necessary to force him to comply with his legal obligations. 25. There is no affidavit evidence from Mr Agha in response to the application. Counsel for the defendants did not contest that the material to which I have referred amounted to a prima facie case sufficient to justify the making of the orders which the plaintiffs seek. Counsel argued, however, that the plaintiffs' conduct disentitled them to that relief. 26. Counsel's submissions focussed, in particular, on the completion of the sale of Mr Agha's shares in the Concord and Drummoyne companies and payment being made for those shares. Since December 2017, when notice was given on behalf of Mr Devine that he would purchase Mr Agha's shares in the Concord and Drummoyne companies, there has been extensive correspondence between the parties. I will not seek to summarise all of that correspondence, but it included various requests from Mr Agha's solicitors for further information to support Mr Devine's calculations of the purchase price for the shares in the two companies. The conduct to which I have referred has also been raised in the correspondence. Mr Agha's solicitors suggested on a number of occasions that a settlement conference be held to discuss the finalisation of the share purchases and also questions of breach and what undertakings should be given going forward concerning Mr Agha's new venture. Eventually, a settlement conference was held but Mr Agha asserts that it was not taken seriously by the plaintiffs and no settlement was reached. The parties have also attempted to mediate their dispute but to no avail. 27. Apparently as a result of some of the requests for information by Mr Agha's solicitors, the amount due to Mr Agha for his shares has been revised upwards on a couple of occasions so that now they are said to be upwards of $900,000. It was explained to me from the Bar Table that the price of the shares depends, in part, upon the settlement of transactions which were entered into before Mr Agha left the Devine Group, and that, as those transactions settle the figures are revised. There was no debate before me as to whether this was an accurate interpretation of cl 9 of the shareholders' agreement. 28. At all events, the purchase price has not been paid and the shares remain in Mr Agha's name. 29. Counsel for Mr Agha offered on his behalf an undertaking to comply with the post-sale restraints in the Concord company shareholders' agreement once payment has been made for his shares in the Concord and Drummoyne companies. But counsel argued that the plaintiffs could not get any injunctive relief until and unless the sale was completed and the moneys owing to Mr Agha for his shares were paid. Counsel relied on the equitable maxim that he who seeks equity must do equity, and specifically on the rule that a party seeking specific performance must not be in breach of its own obligations. 30. Counsel also argued that the conduct of the plaintiffs, which he characterised as deliberate delay, and holding Mr Agha out of a payment to which he is entitled in order to extract concessions from him in other areas, amounted to economic duress. 31. The rule that a party in breach of its own obligations cannot obtain the Court's assistance by way of specific performance is, of course, well recognised but the rule is not an absolute one. It is not the case that any breach whatsoever by the party seeking specific performance whether in the past or even continuing, necessarily disqualifies that party from receiving the assistance of the Court. 32. Properly understood, the rule is simply an aspect of the wider principle that a party who seeks specific performance must be ready, willing and able to comply with its own obligations. Past breaches which have been rectified, or even existing breaches which are relatively unimportant, are no bar to the making of an order of specific importance. 33. A consequence of this, which is of particular relevance in the present circumstances, is that the application of the rule must be judged when the time comes to make the order for specific performance. It is only at that stage that the Court needs to make a final decision on whether in all the circumstances the party seeking specific performance is ready, willing and able to comply with its obligations. 34. It follows that the question for me at this interlocutory stage is not whether the plaintiffs or some of them are in breach of their obligations. The question is whether they have demonstrated a sufficient likelihood that by the time the Court comes to consider whether to make an order for specific performance they will be found to be ready, willing and able to carry out their obligations. In short, at this point in the litigation, the rule is not an independent defence to the application for interlocutory relief. It is simply an aspect of the overall assessment of the strength of the plaintiffs' prima facie case. I understood counsel for the defendants to accept this analysis. 35. When these proceedings first came before me in the Duty List, the plaintiffs' application included orders that they pay the amounts due to Mr Agha into Court. The plaintiffs professed themselves ready, willing and able to pay the amount for Mr Agha's shares but asserted the existence of a set-off arising from the breaches flowing from the conduct of Mr Agha to which I have already referred. The plaintiffs' position was that they would pay the moneys, but the money should be held in a fund which would enable them, should they succeed in establishing an entitlement to compensation, to recoup themselves out of the fund. 36. In my view that approach was misconceived. Counsel for the plaintiffs sought to justify the proposed order for payment of the purchase price into Court as an order in aid of the specific performance of the parties' contractual obligations under the shareholders' agreement. I did not, and do not, agree. Once the plaintiffs wish to enlist the Court's assistance in enforcing Mr Agha's obligations under the shareholders' agreement, they must comply with their own obligations so far as payment of the purchase price is concerned. Payment of the purchase moneys into Court would not be such compliance. The plaintiffs' obligation is to pay Mr Agha and I see no basis on which the Court, in making orders for specific performance of the share purchases, could deprive Mr Agha of his entitlement to receive those moneys. Had the plaintiffs persisted in this approach, then the Court might well have refused relief to the extent that it depended upon enforcement by the plaintiffs of rights under the shareholders' agreement. But the plaintiffs did not maintain that position. They now accept that they must tender payment to Mr Agha in order to comply with their obligations with respect to the share purchases, although they have foreshadowed an application for a freezing order to ensure that the moneys paid over are not dissipated by Mr Agha. I do not need to say anything further about that foreshadowed application which, should the plaintiffs pursue it, will be dealt with in the ordinary course. 37. The parties have now agreed on a date for the settlement to take place. They have also agreed on a sum of money to be paid to Mr Agha, although this agreement is without prejudice to either party and enables either party to contend ultimately that the appropriate consideration was more or less and claim an adjustment to reflect that. 38. Despite this change of position, the defendants still refuse to give undertakings except for the period after the settlement. Counsel for the defendants maintains that the plaintiffs remain in breach, and that injunctive relief which would apply before the settlement has taken place should be refused. 39. Counsel for the defendants submitted that the effect of cl 9 of the shareholders' agreement was that the payment should have been made for the shares within 30 days of 12 December, that is by 9 January 2018. He referred to correspondence on the plaintiffs' side where, as late as March, the plaintiffs' solicitors were suggesting that the parties needed to draw up and agree on the terms of separate contracts for the sale of the shares and to agree on the amounts due between the parties before any settlement could take place. Counsel characterised this conduct as being, if not deliberate stalling, a complete failure to appreciate that, under the shareholders' agreement, there was an unconditional obligation to pay by 9 January. I am inclined to agree with counsel for the defendants to this extent: the shareholders' agreement contains the whole of the parties' bargain in relation to the sale of the shares. There is no need for any further written document to be drawn up. Furthermore, the obligation under the agreement is an obligation to pay the correct amount as calculated in accordance with cl 9.1. It is not in some way conditional on the vendor agreeing on the amount, although in practice it is easier if the amount can be agreed. The plaintiffs' obligation is to attend the settlement and pay the amount which, as a matter of proper construction of cl 9.1, is due. 40. But I do not necessarily accept that the plaintiffs' failure to pay to this point is a breach. Clause 9 is very sparsely drafted. It does not expressly say when the settlement of the purchase is to take place. The contract is open to the interpretation that although 30 days' notice must be given, the actual completion must only take place within a reasonable time thereafter. What a reasonable time would be would depend upon all relevant contractual circumstances, including difficulties which might arise in carrying out the calculation. 41. As the calculation is based on the net assets of the Concord company on a particular date, the parties might be supposed to have appreciated that the precise figure would not be available on that date, and that it would need to be calculated (perhaps with the assistance of accountants) at a later point. Especially is this so where the 30 days' notice can be given at any time and therefore the end of the 30 day period would not necessarily correspond with the end of the Concord company's financial year or even with the end of a month. 42. In this regard, I note that the parties appear so far to have been proceeding on the assumption that the relevant date is 30 November, that being the Concord company's closest available month end. But it seems to me that the correct date at which net assets should be calculated must either be the date of the notice itself or the date 30 days later, probably the latter. Neither of these is a date where it will be easy to calculate the net assets of the company down to the particular day. 43. Also relevant in determining what a reasonable time is would be the conduct of the parties. It is notable that Mr Agha's solicitors themselves have sought information so as to verify the calculations. It does not appear that, before 9 January, they ever took up the position that the obligation was to pay on that date and no later. 44. In short, I am not satisfied that there has necessarily yet been a breach of the obligation to pay for the shares. If there had, there would still be a question as to whether such a breach would be serious enough to deprive the plaintiffs of entitlement to specific performance. That is a matter for final hearing but at this stage on the material presented to me it seems unlikely. Accordingly, I do not consider that the defendants' argument should deflect me from granting interlocutory relief. 45. But there is more. So far, I have been considering the arguments by reference to the plaintiffs as a group. But the obligation to pay for the shares is the obligation of the third plaintiff, Mr Devine, alone. Even if there has been a failure to pay for the shares within the time fixed by the contract, that is Mr Devine's failure. It is not a breach by the Concord company. As I have mentioned, that company is a party to the shareholders' agreement. It clearly has its own interest in upholding the restraints which are the subject of these proceedings. I see no reason whatsoever why a failure on Mr Devine's part to pay the contractual price should prevent the Concord company, as a separate plaintiff, from enforcing its rights under the shareholders' agreement. 46. Counsel for the defendants suggested that, up until now, the plaintiffs have been collectively represented, and have behaved collectively. This may be so, but I do not think that any failure to analyse the matter by reference to the different plaintiffs up to this point, can, or should, prevent the Court from analysing the matter properly on this application. 47. Counsel also suggested, somewhat faintly, that the Concord company was itself in breach of its obligations under the shareholders' agreement. That agreement does contain the provisions in general terms which require the parties to co-operate with each other to carry out the actions required under the agreement. I accept that this obligation applies to the Concord company and that it may have some application in relation to the provision of information necessary to calculate the price due for the purchase of the shares. But I have already explained why I consider it doubtful that Mr Devine is in breach of his obligations, and in my opinion, those considerations lead even more strongly to the conclusion that the Concord company is not. On the face of it, requests have been made by Mr Agha for information, which has been supplied. It was not explained to me how at this particular point the Concord company is in breach of some sort of obligation of co-operation with Mr Agha. 48. For these reasons, I will make interlocutory orders which reflect the pre share settlement restraints in the Concord company shareholders' agreement. This leaves the alternative bases on which relief was sought against Mr Agha, and which I will now briefly consider. 49. First, there are Mr Agha's obligations under his employment agreement. The plaintiffs' case, so far as those restraints are concerned, is significantly stronger. The restraints arise out of a contract separate from the shareholders' agreement, and to which Mr Devine is not even a party. I cannot see how a failure by Mr Devine to perform his obligations under the shareholders' agreement (or a failure by the Concord company for that matter) would be a reason for the Court refusing to lend its assistance to the Concord company in enforcing obligations of Mr Agha under the employment contract. 50. Counsel for the defendants pointed out that the shareholders' agreement contained an express provision contemplating that the parties would enter into employment contracts with the company. But that, in my view, does not alter the fact that Mr Agha's employment contract gives rise to an entirely separate legal relationship, which can be enforced independently of the shareholders' agreement. There is nothing in the shareholders' agreement or in the employment agreement which would make the performance of obligations under the two agreements interdependent with each other. 51. Accordingly, should it be sought, I will grant interlocutory relief in terms of the restrictions on Mr Agha under his employment agreement. 52. As I have mentioned, the plaintiffs also relied upon provisions of the Corporations Act 2001 (Cth). Mr Agha's defence to the injunction application is even weaker with respect to the enforcement of such obligations. The obligations are imposed by statute and it is difficult to see why a failure to comply with contractual obligations would be a ground for refusing to enforce Mr Agha's statutory obligations. 53. I think that the defendants' arguments provide no justification for withholding interlocutory relief and, if asked for, I will make interlocutory orders reflecting statutory obligations of confidence on Mr Agha with respect to information obtained by him as a director and employee of the Concord company. Counsel for the plaintiffs appeared to suggest that there was some wider basis for restraint, grounded in the statutory obligation on Mr Agha not to use his position, or his powers as a director or officer, otherwise than for the purpose of advancing the interests of the Concord company. But while the evidence to which I have referred shows a prima facie case of past breaches of those obligations, the relationship of employee and of director have both come to an end and I think it is insufficiently clear that the statute gives rise to some sort of ongoing obligation, that would justify a continuing restraint. 54. Finally, equitable obligations of confidence are also independent of the parties' contractual obligations and entitlements. I see no reason, least of all at an interlocutory stage, why alleged breaches of contract on the part of Mr Devine, or even on the part of the Concord company, should prevent the Court granting interlocutory relief to protect information which was provided to Mr Agha in confidence. I should also note that the information systems on which the information was stored are used by the Group as a whole and accordingly the information which Mr Agha took included information which belonged also to the Drummoyne company. I do not think that the Drummoyne company is implicated in any way in the allegations which are made on behalf of Mr Agha concerning breach of contract. Accordingly, if asked, I will grant interlocutory injunctions restraining the use of confidential information obtained by Mr Agha, either from the first plaintiff or the second plaintiff, in the course of his activities as a director and employee of the two companies. 55. It remains to consider the allegation of economic duress. Such a claim, of course, would give rise to a cross-claim which could be pursued at trial, but I am prepared to accept for the sake of argument that an allegation of economic duress is something which might be deployed by way of opposition to the grant of equitable relief. However, as with the argument based on alleged non-compliance with contractual obligations, it is not possible to make final findings at this stage and the only relevance of this claim is at the level of the existence and strength of the plaintiffs' prima facie case. 56. I do not think that the allegation of economic duress has any significant weight in the present application. It is entirely unsupported by evidence. There is nothing from Mr Agha to suggest that he did in fact feel constrained to act, or in fact acted, in any different way because of the alleged pressure from the plaintiffs. 57. The central complaint seems to be a failure to pay the purchase price for the shares and as I have mentioned, even if there was wrongful pressure by Mr Devine, that provides no reason why the Concord company should not be entitled to obtain equitable relief enforcing the restraints which the law imposes on Mr Agha or which he has voluntarily undertaken by contract. I see no basis for the suggestion that the first plaintiff, or the second plaintiff for that matter, has engaged in any form of economic duress at all. Whether or not this allegation proves to have any substance at trial, it does not persuade me that I should refuse interlocutory relief. 58. The plaintiffs' case against the second defendant, Mr Coombe, is based on contract, and also on the provisions of the Corporations Act, and the equitable doctrine of confidence. 59. It is common ground that Mr Coombe was initially employed in 2012 by another company in the Devine Group. The plaintiffs' case is that he subsequently signed a contract with the Concord company. The contract allegedly signed was in a standard form, and a copy of the relevant form is in evidence. It provides for restraints on the use of confidential information, on soliciting customers, and on being concerned in a competing business, and appears to be similar, if not the same, as the contract signed by Mr Agha. 60. But the plaintiffs have no direct evidence that Mr Coombe signed such a contract. No signed copy of any such agreement has been found, at least at this point, in the records of the Concord company. 61. The plaintiffs' case is that a contract in this form would have been signed as a matter of practice. The suggestion is that such a written contract was, in fact, signed when Mr Coombe went to work at the Concord office of the Devine Group, but the document has since been removed from the records of the Concord company. As I have mentioned, the plaintiffs have presented evidence that Mr Agha removed agency agreements and related correspondence before his employment was terminated. The suggestion is that he likewise removed Mr Coombe's written employment contract, intending, so it is suggested, to "poach" Mr Coombe and hoping that by removing the employment contract he would make it harder for the Concord company to resist that happening. The plaintiffs do not allege, at least at present, that Mr Coombe had anything to do with this. But they do present evidence of discussions that Mr Coombe had with other employees of the Group before he resigned which are said to amount to an acknowledgment that he did, in fact, have a written employment contract and was conscious that it did (or might) contain some restrictions on him. Mr Coombe does not deny these conversations. But on his account, which is verified by affidavit, he never did sign a formal employment contract with the Concord company. He says that at some point after 2013 when he moved to the Concord office, he was told that a contract would be given to him to sign, but this was never followed up. 62. The evidence suggests that, at least as at December 2017, Mr Coombe was being paid as if he was an employee of the Concord company. His previous years' pay slips and summary taxation information are not in evidence, but it may well be that he was paid by the Concord company after he moved to the Concord office in 2013. Following a degree of manoeuvring, it seems that the parties are now agreed that Mr Coombe was in fact, prior to his resignation from the Group, employed by the Concord company. But this is not enough for the plaintiffs. They must establish not only an employment relationship but also the terms and the restraints upon which they rely. 63. This will obviously be an issue at trial which cannot be resolved at this stage. The question for me is whether the plaintiffs have shown a sufficiently strong prima facie case to justify interlocutory injunctions along the lines of the restraints to which it is alleged Mr Coombe was subject. I do not think it has. The plaintiffs' evidence that Mr Coombe signed a contract with the Concord company is not strong. The plaintiffs have not responded to Mr Coombe's suggestion that he was told that he would be signing such a contract, but it was not followed up. The evidence falls short at this stage of establishing that the Group's practice was such that obtaining Mr Coombe's signature on a written contract could not have fallen through the cracks. The evidence of the conversations in which Mr Coombe appears to have accepted that there was a written employment contract does not go very far, since it is not inconsistent with the fact that he did sign such a contract but with a different company. While the significance of this might be obvious to a lawyer engaged in the dispute now, there is no reason to think it necessarily would have struck Mr Coombe as important in December 2017. 64. I also think that the plaintiffs' suggestion that the contract once signed was removed by Mr Agha is, on the evidence before me, extremely speculative. I appreciate that the plaintiffs have a prima facie case that Mr Agha was removing documents and sabotaging the plaintiffs' records so as to impede their ability to compete with him. But the suggestion that he would have gone into another office in the building, searched for Mr Coombe's employment contract and stolen it, so as to create a later difficulty for the plaintiffs in seeking to enforce contractual restrictions in Mr Coombe's contract is to attribute to Mr Agha a degree of foresight which, on the evidence before me, seems quite far-fetched. 65. It must be remembered that Mr Coombe did not leave the Concord company until a week after Mr Agha's employment was terminated. While the evidence suggests that Mr Agha may have been intending to poach a number of employees, including Mr Coombe, there is no evidence that the other employees' contracts are missing (there is no evidence that they are not; there is simply no evidence on the question before me). There is also no evidence before me that Mr Agha knew that Mr Coombe would join him in the days leading up to his termination. Of course it is possible that it is Mr Agha's fault that the plaintiffs now find themselves in the difficulty of not having a copy of a written contract with Mr Coombe, but it is pure suspicion and on the evidence before me a most unlikely suspicion. I do not think that the plaintiffs' case in this regard is strong enough to justify the grant of interlocutory relief in terms of the contractual restrictions to which the plaintiffs allege Mr Coombe was subject. 66. This, however, is not the whole of the plaintiffs' case against Mr Coombe. As I have mentioned, the plaintiffs rely on statutory restraints and the equitable doctrine of confidence. There is evidence from the plaintiffs that, like Mr Agha, Mr Coombe removed copies of client lists and the like. Mr Devine's affidavit annexes a copy of an email attaching some client lists apparently sent by Mr Coombe to his private email address shortly before his resignation. Mr Coombe's response in his affidavit is to deny that any such email was ever sent. He annexes to his affidavit an extract from his inbox showing no such email as having been received. There is thus a clear dispute, on a factual level, between the plaintiffs and Mr Coombe. It hardly seems possible that the contradiction between Mr Devine's evidence and Mr Coombe's evidence can be resolved without finding that one or other of them has not only lied, but has also falsified documents. 67. The resolution of this issue will be a matter for trial, and it is neither possible nor appropriate for the Court, at this stage, to predict how the issue will ultimately be resolved. It is sufficient to say that the plaintiffs have a prima facie case. If the plaintiffs' case were accepted, as it may be, then a breach of confidence would be established. Furthermore, it would be a breach of confidence which Mr Coombe was prepared to lie about in his affidavit. 68. I am satisfied that, as with Mr Agha, it is appropriate to grant interlocutory injunctions in relation to the use of confidential information obtained by Mr Coombe while employed at the Concord office. If it makes any substantial difference (and if sought), injunctions should be made against Mr Coombe, both in the form of the statutory restraint, and in the form of restraint imposed by the equitable obligation of confidence. 69. I should note that when this matter first came for hearing before me there was evidence that the first plaintiff had written to Mr Coombe indicating that approximately $3,000 was owed to him by way of commissions for work done by him in December 2017. After Mr Coombe pressed for payment, he was told that Mr Devine made the decisions, and I infer that Mr Devine put a hold on any payment to Mr Coombe. If this conduct had been persisted in, I would have needed to consider whether the failure to pay an amount, which on the Concord company's own admission was due to Mr Coombe, was a sufficient reason for refusing equitable relief. But it is not necessary to go through the sort of analysis I undertook for Mr Agha, because the amount has now been paid. There remains some quibbling about whether the payment was, in some way, without prejudice to contentions which may be made in the proceedings, but as a matter of substance, I do not think that there is now any reason to refuse interlocutory relief. 70. Finally, there was evidence before me about Mr Coombe's compliance (or, on the plaintiffs' case, non-compliance) with undertakings that had previously been given. The proceedings were commenced on 19 March. On 22 March, a form of undertaking was agreed to by both Mr Agha and Mr Coombe, embodying restraints on the use of confidential information and the solicitation of customers. At the hearing, the plaintiffs presented some evidence which suggested that on 24 March, after the undertakings had been given, promotional material for the sale of units in a development at Homebush was still being distributed with Mr Agha shown as a contact person. The suggestion was that Mr Coombe was involved in this. The evidence which emerged in response was that there had indeed been some delay within the Belle Property organisation in altering its promotional and other material so as to comply with the undertakings, but the specific incident on 24 March was denied. It was said that material distributed on that date no longer contained reference to Mr Agha and was instead limited to Belle Property. 71. I do not propose to burden this already lengthy judgment with a further analysis of this evidence. No application has been made for punishment of any person for contempt of the undertakings. Counsel for the plaintiffs suggested that I should be satisfied of a failure to comply with the orders and that this should lead me to make orders against Mr Coombe restraining him from any action to assist Mr Agha in breaching his obligations (and perhaps vice versa). But I see no need for this step. Through their involvement as defendants in these proceedings, each of Mr Agha and Mr Coombe, who are commonly represented, will be aware of the orders made against the other and will be subject to the penalties which apply to any person who, with knowledge of orders made by a Court against a party, is knowingly concerned in conduct by that party which would amount to breach of the orders. 72. But I do think that the evidence before me shows that there has been a less than complete explanation of the steps taken up till now to comply with the undertakings and orders of the Court. This is exacerbated by the fact that on the evidence before the Court the task of securing compliance appears to have been delegated to other people at Belle Property. That organisation is not a party to these proceedings and there have been no affidavits from those within the organisation responsible for ensuring that the undertakings have been complied with. 73. The Court does not have power directly to order Belle Property to provide such information, but it can order the defendants in these proceedings in their capacities as parties to put on evidence which actually explains what steps were taken, not only by them but by others on their behalf, to comply with the undertakings. 74. In my view, the evidence is sufficient to establish the desirability of that happening, particularly in the case of Mr Agha who has not yet provided any affidavit at all. Accordingly, I will make orders in the appropriate form requiring Mr Agha and Mr Coombe to explain the steps they have taken to comply with the undertakings and orders previously made. 75. I will hear the parties on the form of the orders which I have foreshadowed making in this judgment. ********** 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: 01 May 2018