Cigarette & Gift Warehouse (Franchising) Pty Ltd v Whelan [2018] QDC 212

DISTRICT COURT OF QUEENSLAND CITATION: Cigarette & Gift Warehouse (Franchising) P/L v Whelan [2018] QDC 212 PARTIES: CIGARETTE & GIFT WAREHOUSE (FRANCHISING) PTY LTD ACN 055030567 (plaintiff) v ANDREW WHELAN (defendant) FILE NO/S: B3434/16 PROCEEDING: Civil trial ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 23 October 2018 DELIVERED AT: Brisbane HEARING DATE: 10, 11 and 12 April, 7 and 11 August 2017 JUDGE: Andrews SC DCJ ORDER: I declare that the defendant has breached the terms of the “Contract of Employment” entered into between the Plaintiff and the Defendant The plaintiff’s claim for damages for breach of contract in the sum of $1,274.56 is dismissed Costs reserved The parties are at liberty to forward submissions on the costs of the proceeding, excluding costs reserved in respect of the Anton Piller order and its execution, in writing not exceeding 4 pages by 6 November 2018 CATCHWORDS: DEED – where the plaintiff could not produce a deed – whether the deed was made EVIDENCE – where the plaintiff could not produce contract – whether it could prove a contested clause by secondary evidence COUNSEL: Roney QC with Dietz for the plaintiff E White for the defendant SOLICITORS: Nyst Legal for the plaintiff Adams Wilson Lawyers for the defendant -- 1 of 42 -- 2 INDEX The remaining issues ............................................................................................................ 3 The Prayer for Relief ............................................................................................................ 4 The claim for costs ............................................................................................................... 4 What documents does the 3FASOC allege that the defendant retained? ............................. 5 Costs Reserved ..................................................................................................................... 8 Issues left for decision – how they have been decided......................................................... 8 Credit issues ......................................................................................................................... 9 The Deed ............................................................................................................................ 11 Employment Contract and clause 10 .................................................................................. 12 Employer’s policy .............................................................................................................. 13 The rules in Browne v Dunne and Jones v Dunkel ............................................................. 13 The facts and findings ........................................................................................................ 20 The application to set aside the Anton Piller order ............................................................ 32 The course of this proceeding and the trial ........................................................................ 33 Did the defendant sign the Deed? ....................................................................................... 34 Confidential documents were retained by the defendant ................................................... 40 Claim for damages for breach of contract .......................................................................... 41 -- 2 of 42 -- 3 The remaining issues [1] The parties agreed on some orders during the trial. The remaining issues look simple: 1. Did a missing contract contain clause 10? The plaintiff cannot find the contract. 2. Did the defendant sign a deed? The plaintiff cannot find the deed. 3. Can the plaintiff have indemnity costs pursuant to the deed? The remaining orders sought are: 4. By the plaintiff: a declaration that the Defendant has breached the terms of the “Contract of Employment” entered into between the Plaintiff and the Defendant; 5. By the plaintiff: Damages for breach of contract in the sum of $1,274 for pre- litigation costs; and 6. By the plaintiff and the defendant: that litigation costs be reserved until the parties are further heard. [2] The trial ended as a contest to determine which party pays the other’s legal costs and whether the plaintiff can have its costs on an indemnity basis. [3] Even the declaration which the plaintiff seeks is not essential. I find that there was a breach of contract for reasons below. The declaration has no obvious utility once the finding is made. The defendant did not submit that I should refuse the declaration on the discretionary basis that it has no utility. [4] The plaintiff claimed mandatory orders. As soon as the defendant was asked, on the fourth day of trial, if he would agree to the plaintiff’s requests for injunctive relief, the defendant agreed. A draft order for injunctive relief was prepared and was made by consent at the conclusion of the fifth day. [5] The case was unusual insofar as the plaintiff sues upon two documents it cannot produce: a contract and a deed. [6] The plaintiff alleged that the defendant breached clause 10 of a written contract of employment (Contract). The defendant denied breach on a flimsy legal basis abandoned in address: that there was no breach as the defendant had justification for retaining documents until the Anton Piller order was executed, about 17 days later. [7] The defendant’s defence also put the plaintiff to proof that the terms of his contract of employment contained clause 10. The basis of the non-admission was that the defendant did not have a copy. The defendant accepted that he had signed a contract of employment. The plaintiff does not have the original contract. The plaintiff was required to prove clause 10 with secondary, circumstantial evidence. But when it was suggested to the defendant in cross-examination that his contract contained clause 10, he said that it probably did. I accept this evidence. The defendant’s counsel conceded in address1 that if the contract contained clause 10, then the defendant had breached it. Thus, even the propositions of fact and law which are the subject of the declaration were ultimately conceded. [8] The costs issues are much more complex: 1 T5-44 lines 6 to 25. -- 3 of 42 -- 4 1. If the plaintiff can establish that the defendant entered into a Confidentiality and Intellectual Property Deed (“the Deed”), the plaintiff is prima facie entitled to its reasonably incurred costs on an indemnity basis. The plaintiff added during oral addresses an express claim 4A for indemnity pursuant to clause 6.2 of the Deed. 2. The plaintiff spent considerable costs obtaining an Anton Piller order. The defendant alleges that the plaintiff made some material nondisclosures. The defendant has an application to set the order aside. It is still to be heard; 3. On the one hand, the plaintiff has obtained some relief which the defendant did not offer before trial and on the other, most of the trial was about very many peripheral credit issues fought to prove that the Deed was signed and stolen. I am not satisfied that it was. 4. On the one hand, the plaintiff has obtained an order about specific electronic documents which the defendant did not offer before trial and on the other, the plaintiff had made no formal claim for those documents and the defendant was unaware that he retained them. The Prayer for Relief [9] The prayer for relief in the plaintiff’s third further amended statement of claim (3FASOC) seeks: 1. An order that the Defendant be restrained from making any use of the Plaintiff s confidential information, including the information referred to in Schedule A to the Further Amended Originating Application ("Schedule A"); 2. An order that the Defendant be restrained from making any use of any copies of or information derived from any of the Plaintiff s confidential information, including the information referred to in Schedule A; 3. An order that within 7 days of judgment, the Defendant: a. deliver up to the Plaintiff all copies of any document referred to in Schedule A; and b. deliver up to the Court for destruction all copies of any document in the possession or control of the Defendant that incorporates or was prepared by making use of or reference to the information referred to in Schedule A. 4. A declaration that the Defendant has breached the terms of the 'Contract of Employment' entered into between the Plaintiff and the Defendant; 4A. An order that the Defendant pay … an amount equal to the loss and damage pleaded in paragraph 21 above pursuant to the indemnity contained in clause 6.2 of the Deed. 5. Damages for breach of contract; 6. An order that the defendant pay to the plaintiff an amount equal to the loss and damage pleaded in paragraph 21 of the third further amended statement of claim pursuant to the indemnity contained in clause 6.2 of the Confidentiality and Intellectual Property Deed (“the Deed”). The claim for costs [10] The particulars of loss and damage allegedly caused by breaches of the Contract and Deed appear in 3FASOC at paragraph 21. Those particulars are: -- 4 of 42 -- 5 1. Legal fees associated with the enforcement of the plaintiff's rights under the Contract before the institution of these proceedings in the sum of $1,274.56; 2. Fees for forensic examination of the plaintiff's laptop and iPhone returned by the defendant in the sum of $7,150.00; and 3. Ongoing fees and costs of and incidental to these proceedings on an indemnity basis, including (but not limited to) costs associated with the enforcement of this Court's order dated 9 September 2015, which as at the date of this pleading total the sum of $177,924.26. [11] The plaintiff’s submissions about its claims for money are: 1. Written submissions, which refer to a claim for damages for breach of contract found at p 741 of Exhibit 18. That claim is for $1,274.56. It is a claim for pre- proceeding legal costs incurred for legal work done by solicitors acting for the plaintiff prior to the institution of this proceeding. 2. That the quantum of fees and costs in relation to the plaintiff’s obtaining an Anton Piller order is about $117,000; and 3. That the costs of the proceeding, which seem to have exceeded about $184,000 at the stage of the plaintiff’s written submissions2 are claimed pursuant to clause 6.2 of the Deed. [12] Roney QC in oral submissions3 confirmed that the sum which was incurred for pre- proceeding legal costs is being claimed as a sum for which the defendant is liable to indemnify the plaintiff for pursuant to clause 6.2 of the Deed. The plaintiff’s written outline at par 308 is consistent with this. However the plaintiff has an alternate claim for those pre-litigation costs as damages for breach of contract. I must therefore consider that alternative too. What documents does the 3FASOC allege that the defendant retained? [13] This topic is relevant to only the reserved issue of costs either as costs of the proceeding or as costs or pursuant to the Deed. The parties expended effort in submissions over whether the defendant knew before the time of trial that he retained electronic documents in Mrs Whelan’s laptop and that the plaintiff claimed relief which included retrieval or destruction of the electronic documents. [14] The plaintiff’s prayer for relief did not expressly reveal that this relief was claimed. Was it implied? [15] The plaintiff by its 3FASOC does not expressly allege that the defendant retains any document. The tense of the verbs used in the plaintiff’s allegations is relevant. The plaintiff’s allegations are that on 25 August 2015 the defendant copied documents4 and on 11 September 2015, “In executing the …search order, the Defendant had in his possession …”5 hard copy documents listed in annexure 2 of the Report of Independent Solicitor and electronic copies of documents listed in a report of Dr Schatz. The defendant admitted those allegations in his third further amended defence (3FAD). It follows that the defendant did not deny having any document when the plaintiff executed the search order. 2 Plaintiff’s written outline par 322. 3 T5-56 line 35 to 46. 4 3FASOC par 15A. 5 3FASOC par 17. -- 5 of 42 -- 6 [16] Notwithstanding the absence of an allegation in 3FASOC that the defendant retained a document, the prayer for relief in 3FASOC obtusely implies that the defendant may have copies of some documents referred to in “Schedule A”. But “Schedule A” did not refer to a document. The prayer for relief is not the appropriate place to make an allegation of fact. [17] There is no reference in the prayer for relief to hard copy documents listed in annexure 2 of the Report of Independent Solicitor or to electronic copies of documents listed in a report of Dr Schatz. Instead, the prayer for relief refers to “1A. … the plaintiff’s confidential information, including the information referred to in Schedule A to the Further Amended Originating Application (“Schedule A”)… 1A. … copies of … information derived from … the information referred to in Schedule A. … 2. … copies of any document referred to in Schedule A”. That schedule appeared in the originating application filed on 9 September 2015. It has not changed in the further amended originating application. The schedule is a list of 13 types of information rather than a list of particular documents. Schedule A does not refer to a document. It is consistent with a claim for relief to restrain the defendant from misusing information. Whether the reference to Schedule A in the prayer for relief should have been interpreted as revealing that the plaintiff alleged that the defendant retained any hard or electronic documents and wanted any document returned would ordinarily be unnecessary to decide. The defendant agreed to do all that the plaintiff’s counsel asked with respect to injunctive relief, as soon as he was asked on the fourth day of the trial. But this is not an ordinary case. The trial appears to have been primarily about obtaining a judgment for the recovery of the costs which the plaintiff had incurred and was incurring. [18] I accept the defendant’s evidence that he did not know that his laptop contained any relevant and accessible documents after the Anton Piller order was executed. The plaintiff accepts that Ms Ozioko gave evidence in Federal Court proceedings to the effect that she believed that the defendant retained no data.6 [19] Notwithstanding that the 3FASOC and its earlier versions failed to expressly allege that the defendant retained a document, the defendant pleaded in its successive defences to and including 3FAD “9. … the defendant has no confidential information …”. That allegation did not refer specifically to documents as opposed to knowledge. But in 3FAD the defendant responded to an amendment added the week before to the plaintiff’s FASOC and which remains in 3FASOC. [20] To make sense of the allegations, one must look at the three pleadings. The 3FASOC pleads: 23. Unless restrained, the Defendant will make use of and deal with confidential information of the Plaintiff. The 3FAD pleads: 8B. The defendant denies the allegations in paragraph 23 of the Statement of Claim on the basis that the Defendant does not have possession of any confidential information belonging to the plaintiff. [21] The allegation in 3FAD par 8B that the defendant did not have possession of confidential information belonging to the plaintiff, arguably: 1. Is an allegation of fact; 6 T5-15 lines 40-44. -- 6 of 42 -- 7 2. Was not responded to by the plaintiff in its reply; and 3. As a consequence of UCPR 166 (1) was admitted; and 4. It was not an issue to be tried that the defendant retained documents in his laptop. [22] This was raised by the defendant in oral address. The plaintiff submitted in rebuttal, in essence:7 1. Where the 3FASOC at par 23 alleged “Unless restrained, the Defendant will make use of and deal with confidential information of the Plaintiff” it is a formal plea to justify injunctive relief; 2. The denial of that on the basis that the defendant does not have possession of any confidential information is joining issue with the allegation; 3. The absence of a response in the Reply does not amount to a deemed admission; 4. The defendant’s allegation should be read as an allegation that he disputes that any of the information that he had or has is confidential; 5. If the court finds that 3FAD par 8B should be read as alleging that the defendant does not have possession of any information then the plaintiff would seek leave to amend the reply to add an express denial of the allegation; 6. Dr Schatz’s report stated that he took copies of documents; and 7. In the opening it was made clear for the plaintiff that relevant documents remained in Mrs Whelan’s laptop. [23] In the plaintiff’s opening, Roney QC made clear that he had ascertained from Dr Schatz that Dr Schatz did only copy but did not remove material from Mrs Whelan’s laptop.8 That was a wise precaution, for the report of Dr Schatz had not expressly dealt with the issue of removal of documents. Dr Schatz was called to clarify one issue only: whether he copied the documents on Mrs Whelan’s laptop or removed them.9 Dr Schatz clarified that he took a copy but otherwise left the computer in the state in which he found it. He did not remove data. [24] I am satisfied that the 3FASOC, properly interpreted, did not allege that the defendant retained any documents and that the reply was a deemed admission that the defendant did not have possession of any confidential information. [25] Insofar as the plaintiff raised a new allegation in its opening and led evidence from Dr Schatz to support the new allegation which would otherwise have been irrelevant, the defendant made no objection and consented to orders which became appropriate upon proof of that new allegation. He consented to the appropriate orders in respect of making the laptop available when he was asked to, notwithstanding that the plaintiff had not then applied to amend its 3FASOC or its reply to make the appropriate allegation or denial and notwithstanding that the plaintiff had not applied for that relief. [26] It is probable that if the plaintiff had properly alleged in 3FASOC that the defendant retained documents in Mrs Whelan’s laptop and had claimed for the return or destruction of those electronic documents: 1. the defendant would not have contested that claim; and 7 T5-84 to 5-85. 8 T1-75 l 30. 9 T1-82 lines 13-20. -- 7 of 42 -- 8 2. the plaintiff would have been saved any costs incurred in obtaining that part of its mandatory relief. [27] However, the plaintiff claimed more general mandatory orders and obtained agreement to that relief on only the fourth day of trial. Costs Reserved [28] The plaintiff reserved the right to address the issue of costs once reasons are given.10 The defendant submits that I should not make an order in respect of the reserved costs of the plaintiff’s application for an Anton Piller order. The defendant agrees that I should reserve the question of other costs until after a finding about whether the defendant entered into the Deed.11 [29] It is appropriate to reserve costs until after publishing these reasons because: 1. The plaintiff seeks to recover costs incurred in respect of the plaintiff’s enforcement of an Anton Piller order; and 2. The defendant has applied to set aside the Anton Piller order. [30] It is not necessary that the defendant’s application to set aside the Anton Piller order be heard by me. The defendant may elect to abandon or resolve it. If the application was determined by me and was successful it might permit me to entertain submissions about a holistic costs outcome. Finding time soon in my finite calendar, convenient to the parties, to hear contested evidence about material non-disclosure is problematic. But some time is available. [31] I am content to determine costs of the proceeding without determining the reserved costs in respect of the Anton Piller order and its execution so that those costs can await a later determination. If I am to determine the costs of the proceeding without determining the costs in respect of the Anton Piller order and its execution, the parties are at liberty to forward submissions on the costs of the proceeding, excluding costs reserved in respect of the Anton Piller order and its execution, in writing not exceeding 4 pages, by 6 November 2018. Issues left for decision – how they have been decided [32] The parties have agreed the terms of mandatory orders. The defendant made clear at cross-examination’s end on the fourth day of trial that he would consent.12 It follows that the only relief about which there is contest is the plaintiff’s claim for costs. There is faint resistance to the plaintiff’s allegation that the defendant has breached the Contract. [33] The plaintiff’s claim for reimbursement of its legal costs has three bases: 1. Pursuant to clause 6.2 of the alleged Deed; 2. Pursuant to the exercise of the court’s discretion to award costs of the proceeding; and 3. As damages for breach of the Contract, but only in respect of $1,274 of legal costs incurred before the proceeding commenced. [34] The two principal issues in the pleadings are: 10 Plaintiff’s written outline par 350. 11 T5-49. 12 T4-102 lines 1-25. -- 8 of 42 -- 9 1. Whether the defendant entered into the Deed; (I find for reasons set out below that the plaintiff failed to establish that the defendant did.) and 2. Whether the contract of employment which the defendant entered into with the plaintiff contained a clause 10 in the terms alleged in 3FASOC at par 7 (d). (I find for reasons set out below that it did.) [35] There were two other issues in the pleadings: 1. Whether the defendant, on or after 25 August 2015, when he copied electronic documents from one laptop to another, or when he failed to return documents, breached the terms of the Deed and/or the Contract; (I find that he breached the Contract.) 2. Whether the purpose for which the defendant breached the alleged Deed or the Contract was to interfere with the plaintiff’s rights or to protect the defendant’s. (I find that it is not necessary to make such a finding as it is irrelevant to the issue of whether the defendant breached the Contract.) Credit issues [36] Much of the evidence was about the collateral issues of the credit of the defendant and Ms Ozioko. There was detailed examination of the defendant’s behaviour from June 2015 to day’s end on 24 August 2015. The defendant’s texts to and from his wife were extracted by an expert, tendered and analysed. The defendant’s conduct in other litigation and in asking for information from a friend working for a former employer were scrutinised. The purpose was to prove that he left the office on 24 October intending never to return, that the documents he took on 24 August were taken for sinister reasons and not for work, that he stole his Contract and Deed that day or some time before and that he was not to be trusted. None of that was alleged in a pleading. It was all about credit. [37] The 3FASOC does not allege that the defendant’s removal of the plaintiff’s laptop, iPhone or documents from the office on 24 August 2015 was a breach of duty. [38] Whatever may have been the plaintiff’s contention when seeking an ex parte Anton Piller order, however much time was devoted during the trial to the defendant’s movements during 24 August 2015, it was not alleged in the 3FASOC that the defendant breached the Deed or the Contract on 24 August 2015. [39] The primary relevance of evidence of the defendant’s disagreements with Mr Beynon prior to his employment’s termination and the evidence of his movements on 24 August 2015 is to the defendant’s credit, but not to whether there was a breach of the Contract or the Deed on 24 August 2015. [40] Roney QC submitted13 that: Now, in relation to the documents, our case is that he appropriated those on the day of his termination. Those are the hardcopy documents he was – found on the execution of the Anton Piller order. And, of course, you may be against us in terms of whether, when he put those in his car, he was indeed appropriating them or whether, indeed, you accept his evidence that he was going to do some work on – on budgets and so on. Ultimately, it’s of no moment because your Honour has – was going to make the injunctive orders by consent, which include those documents. So we – we’d submit, in relation to that, you’d accept that he was removing those documents on the day of his termination, but it doesn’t ultimately matter because even if he wasn’t, the demand was then made for him to deliver up any – deliver up or destroy any confidential information that he had, and that occurred in the email which is exhibit 13. 13 T5-70 l 28. -- 9 of 42 -- 10 [41] If that submission implies that the defendant’s motive on 24 August for taking documents home is irrelevant to whether he breached the Contract when he declined to return them on a later date, I accept it. The email, exhibit 13, which demands the return of documents, was sent on 25 August at 12:14pm. The breach contract alleged in the 3FASOC occurred no earlier than that. [42] If that submission implies that there was an issue that the plaintiff misappropriated documents when he left work on 24 August, in breach of the Contract or of the alleged Deed, that implication is not consistent with the pleadings. It is not pleaded in 3FASOC that there was a breach of the Contract or the Deed on 24 August. [43] It was unnecessary to lead evidence of the plaintiff’s conduct for the preceding 9 weeks in order to establish a breach of the contract by failure to return documents. [44] The defendant’s motive for taking documents on 24 August 2015 can be relevant only to the defendant’s credit. Had motive on 24 August been a material fact, for instance in proof of breach of duty on that day, the plaintiff would have been obliged to plead the defendant’s motive14 and to plead particulars of the matters from which the motive was to be inferred. Motive for taking documents on 24 August 2015 is relevant to the defendant’s credit primarily on the issues of whether the defendant: 1. Took the alleged Deed on 24 August 2015; and 2. Took the missing Contract on 24 August 2015; and 3. Retained the plaintiff’s documents on 25 August 2015 for justifiable reasons. [45] If there is a finding that the defendant’s Contract contained clause 10 in the terms alleged by the plaintiff, the defendant’s counsel conceded15 during oral address that the defendant would have breached the contract. The concession did not expressly say how the contract was breached, but I am satisfied that it was breached at 4:00pm on 25 August 2015. The breach was by retaining documents after 4:00pm when the plaintiff had demanded at 12:14pm on 25 August 2015 that they be returned or destroyed by 4:00pm. Clause 10 gave the plaintiff the right to require that documents be returned and that electronic documents be deleted or erased. Counsel’s concession that there was a breach of contract came with the qualification that the breach of contract was for reasons which were not for the purpose of causing harm to the plaintiff. Counsel explained that the issue would be about damages caused, but not whether there had been a breach of contract. [46] It follows that I need not deal with the defendant’s written submissions at paragraphs 41 or the plaintiff’s written response by submission dated 11 August 2017. Consistently with the concession made during oral address, the defendant’s counsel’s outline at paragraph 42, submitted “There is no evidence that the Defendant breached anything other than Clause 10.2.1 of the Contract by withholding the Documents”. It follows that I need not further deal with the unconvincing written submissions for the defendant that there was no breach of clause 10 of the contract because clause 10: 1. Did not expressly require the return of documents;16 14 UCPR r 150(1)(k) 15 T5-44 lines 6 to 25. 16 Defendant’s submissions par 45. -- 10 of 42 -- 11 2. Does not require the defendant to comply with a direction to return property;17 and 3. Does not specify a time limit within which to return property.18 [47] Defence counsel submitted that the plaintiff unlawfully terminated the defendant’s employment contract. That was not pleaded by the defendant. It is not an issue in this proceeding. [48] More evidence was led in respect of credit issues than on anything else. [49] The credit issues that one party or the other submitted were useful to determine so that I could resolve the outstanding primary issues included: 1. Whether the defendant stole the Contract on 24 August 2015 or at an earlier time; 2. Whether the defendant stole the Deed on 24 August or at an earlier time; 3. Whether the defendant had a motive on 24 August 2015 to remove other paper and electronic documents for sinister purposes; 4. Whether the defendant intended to leave the plaintiff’s employment permanently on 24 August 2015; 5. Whether an examination of all the documents he took will reveal that they were all useful for doing the tasks he proposed to do that weekend; 6. Whether the defendant lied when alleging that Mr Beynon had authorised him to send a Zoo Magazine article to a model; 7. Whether the plaintiff had falsely claimed in the letter terminating the defendant’s employment that it was for a breach of confidence (for sending the magazine article to the model); 8. Whether the defendant lied about alleging that Mr Beynon had been unwilling to permit compliance with the plaintiff’s obligation to discover documents in proceedings in the Federal Court of Australia (“The TSG Proceedings”); 9. Whether the defendant perjured himself in that proceeding; 10. Whether the defendant lied in alleging that Mr Beynon excused him from entering into a Deed; 11. Whether the defendant had the opportunity on 24 August 2015 to take documents from a filing cabinet upstairs in the plaintiff’s premises at Upper Coomera without being observed or filmed; 12. Whether Ms Ozioko had given false evidence and whether she had done so dishonestly in material in support of the application for an Anton Piller order; 13. Whether there was a breach of the rule in Browne v Dunn; 14. Whether Jones v Dunkel inferences could be drawn to assist in resolving the credit issues; and 15. Whether the defendant’s possession of a document dated May 2014 and relating to a former employee, Dean Foster, established that he accessed employment records and thus was able to have stolen his own Deed and Contract from the area where employee records were kept. The Deed [50] In the Deed, if it was signed by the defendant, the plaintiff would have been defined as “the Disclosing Party” and the defendant as “the Recipient”. The terms of the Deed, so far as they seem relevant to the remaining issues, would have been: 17 Defendant’s submissions par 46. 18 Defendant’s submissions par 47. -- 11 of 42 -- 12 1. Defined terms & interpretation 1.1 Defined terms In this deed: Confidential Information means any information, irrespective of its form, including but not limited to oral or visual form, or recorded or stored in a document, relating to the Candy Shop Mansion and/or the Disclosing Party including: (a) the existence and terms of any negotiations, discussions or agreements between the parties, including the existence or content of this deed and the obligations and roles contemplated by it; (b) all information disclosed by the Disclosing Party to the Recipient, or otherwise acquired or accessed directly or indirectly by the Recipient, in connection with the Candy Shop Mansion whether before or after execution of this deed and whether through any Authorised Person; (c) all other information of a confidential or proprietary nature directly or indirectly disclosed by or on behalf of the Disclosing Party to the Recipient or any Authorised Person; (d) that part of all notes and other records (including copies) prepared by the Recipient or any Authorised Person based on or incorporating the information referred to in paragraphs (a) to (c) inclusive. … 4.1 Transmission (a) The Recipient must not, and must ensure that each Authorised Person does not transmit or permit the transmission … of Confidential Information to any person except with the Disclosing Party's prior consent. 6. Acknowledgement and indemnity 6.1 Acknowledgement The Recipient acknowledges … that: (a) it is aware that any breach of this deed will result in the Disclosing Party suffering damage, for which damages may not be an adequate remedy; and (b) in the event of a suspected or actual breach of this deed or any obligation of confidentiality and Intellectual Property or Intellectual Property Rights under this deed, the Disclosing Party is entitled to seek and obtain injunctive relief (c) To avoid any doubt, injunctive relief will be in addition to any other rights and remedies available to the Disclosing Party in respect of (i) the breach of or threatened breach of confidentiality obligations; and/or (ii) the infringement or threatened infringement of Intellectual Property or Intellectual Property Rights. 6.2 Indemnity The Recipient indemnifies the Disclosing Party against all losses, damages, expenses and legal costs (on a solicitor and own client basis and whether incurred by or awarded against the Disclosing Party) that the Disclosing Party may reasonably sustain or incur as a result, whether directly or indirectly, of any breach by the Recipient or any Authorised Person of this deed or the obligations of confidentiality under this deed, or the infringement of the Disclosing Party's Intellectual Property. Employment Contract and clause 10 [51] Did the terms of the Contract include clause 10 of the standard form contract which was set out in paragraph 7 of the 3FASOC? [52] The pleaded clause provides: 10.0 Em ployee Responsibilities 10.1 Confidential Information & Intellectual Property -- 12 of 42 -- 13 As a condition of employment the Employee undertakes to comply with the Employer's policy regarding treatment of confidential information and intellectual property. 10.2 Property of the Employer 10.2.1 The Employer may, at any time, require the Employee to return to the Employer any of the Employer's property which may be in the Employee's possession including (but not limited to) any confidential information, documents, equipment or software (including any computer information), keys and/or access cards. 10.2.2 Where any of the Employer's information has been recorded in the form of videotape, computer information or software, the Employer may require that such information be deleted or erased in such manner that it cannot be retrieved. Employer’s policy [53] There was no written “Employer's policy regarding treatment of confidential information and intellectual property” within the meaning of those words in clause 10.1. There was no allegation in 3FASOC that there was an “Employer’s policy”, written, oral, by custom, or otherwise. Nevertheless, there was evidence led from Ms Ozioko that there was a policy “promulgated” in relation to confidentiality that would “manifest” itself day to day. The plaintiff submitted that the evidence was unchallenged. The evidence is set out adequately in the plaintiff’s outline at paragraph 48. It was unconvincing as proof of an employer’s policy. The defendant’s failure to challenge the evidence did not add to its probity on the issue of whether there existed an employer’s policy. The evidence did not establish that there was any policy which could match the description of “Employer’s policy”. More importantly, the existence of an employer’s policy was not an issue in the proceeding. For these reasons, I reject the plaintiff’s submission19 that the plaintiff established the existence of a policy. [54] The need for confidentiality was relevant, but to the different issue of whether the plaintiff needed the protection of mandatory relief, not to whether there was an Employer’s policy within the meaning of the contract. The rules in Browne v Dunne and Jones v Dunkel [55] The credibility of Ms Ozioko and the defendant was scrutinized at length. I will deal with their credibility in the course of my reasons about the facts and findings. But before turning to their credibility, I should first dealt with whether any presumption arises which may affect the assessment of the defendant’s evidence. [56] Mr Beynon was not called to give evidence by either party. As the plaintiff’s managing director at all material times, it is the plaintiff which would be expected to call Mr Beynon, if Mr Beynon had evidence to give on any relevant issue. The plaintiff’s failure to call Mr Beynon as a witness is relied upon by the defendant. The 19 Plaintiff’s written outline par 44. -- 13 of 42 -- 14 defendant submits that the court may and should draw Jones v Dunkel inferences about at least four conversations alleged by the defendant to have been between the defendant and Mr Beynon. The defendant submitted that the four conversations were about:20 1. Giving the defendant the authority to email a Zoo Magazine Article to a model21 – which was the reason stated in the plaintiff’s solicitor’s letter22 dated 26 August 2015 for termination of the defendant’s employment; 2. Excusing the defendant from having to sign a confidentiality deed;23 3. Telling the defendant he would not discover documents, including emails in the TSG litigation in the Federal Court of Australia;24 and 4. Telling Ms Ozioko not to pay ex-employees their statutory entitlements until they were contacted by Fair Work.25 [57] I should first decide whether the court may draw a Jones v Dunkel inference from the failure to call Mr Beynon in rebuttal before considering what inference should be drawn. I need not make a finding about whether Mr Beynon was required to give evidence in the plaintiff’s case. [58] I focus only on the plaintiff’s failure to call evidence in rebuttal because, by the close of the defendant’s case, it was clear what relevant conversations were alleged to have involved Mr Beynon. [59] The plaintiff did not submit that there was any impediment in fact or in principle to its calling Mr Beynon to give evidence in rebuttal, if the plaintiff wished. Indeed, the plaintiff recalled Ms Ozioko. The plaintiff was at liberty to call Mr Beynon in rebuttal,26 but it did not seek leave to do so. Mr Beynon was regularly in the courtroom during the trial. The plaintiff did not give evidence of a reason or excuse for failing to call Mr Beynon. The plaintiff made submissions that it was unnecessary to call Mr Beynon. [60] The plaintiff submitted,27 in essence, that: 1. The four matters should have been put to Ms Ozioko or some other unspecified witness28 called by the plaintiff to allow the witness an opportunity to respond; 2. The defendant was obliged to put these matters to a witness pursuant to the rule in Browne v Dunn;29 3. The allegation that Mr Beynon told the defendant that he was not going to discover in the TSG proceedings relevant emails about incentives was never pleaded and was ultimately abandoned during cross-examination of the defendant;30 20 Defendant’s submissions par 68. 21 T3-39 line 20. 22 Ex 30. 23 T3-36 line 35. 24 T3-73 lines 5, 20 and 25. 25 T3-83 line 5. 26 Cf Karidis v General Motors-Holdens [1971] SASR 422 at 425-426 per Bray CJ followed in Cosmetic Equipment Co Pty Ltd v Forrest [2008] SASC 144 per White J at [48] and Cross on Evidence, Australian Edition, LexisNexis, vol. 1 at [17460]. 27 Plaintiff’s written outline pars 24 to 40. 28 Plaintiff’s written outline par 28. 29 Plaintiff’s written outline par 27. 30 Plaintiff’s written outline par 30. -- 14 of 42 -- 15 4. The plaintiff’s case did not depend on resolving any conflict between Mr Beynon’s and the defendant’s versions of events;31 5. To the extent that the defendant ran a case that he was justified32 in appropriating the plaintiff’s data because of the defendant’s state of mind33 it was unnecessary to call Mr Beynon;34 and 6. Mr Beynon’s evidence would have been merely corroborative or cumulative.35 [61] The defendant’s employment with the plaintiff was terminated on 24 August 2015 by a letter36 emailed at 4:28pm on 24 August 2015 when the defendant was away from the plaintiff’s office. The defendant did not return to the office after the email was sent. The letter advised: Due to recent events, you are being dismissed immediately due to gross misconduct; specifically breach of confidentiality. [62] The plaintiff’s solicitors sent a letter37 dated 26 August 2015 advising the defendant: As you know, on 24 August 2015 your employment… was terminated as a result of you having unlawfully, in breach of your obligations to our client, disclosed confidential information to a third party, which was later published to the public… We are instructed that: - 1. In or around June 2015 you were provided an article produced by our client’s public relations company, which was to be published in Zoo Magazine for publicity purposes; 2. You subsequently forwarded the article to a third party without the consent or knowledge of our client… [63] The expression in the letter “As you know” is apt to mislead. The defendant received no earlier advice from the plaintiff that his provision to a model of an article to be published in Zoo Magazine was: 1. Without the plaintiff’s consent or knowledge; and 2. Alleged to be a breach of his obligations the plaintiff. [64] The plaintiff did not allege in 3FASOC or any prior statement of claim in this proceeding that there had been gross misconduct or a breach of confidentiality prior to the defendant’s termination. Thus, the plaintiff did not plead that the defendant had forwarded an article without its knowledge or consent prior to termination of the defendant’s employment. The conduct of the defendant alleged to constitute breaches of either the Contract or the Deed is set out in 3FASOC at paragraphs 19, 19A and 20. Those paragraphs incorporate references to eleven other paragraphs. Eventually, the pleading reveals that the defendant’s alleged misconduct begins after the plaintiff terminated his employment. It is no part of the plaintiff’s pleaded case that the defendant breached his Contract or the Deed before his employment was terminated by the emailed letter alleging his breach of confidentiality. [65] The defendant’s 3FAD denied38 that he breached either the Contract or the Deed. To the plaintiff’s allegation that the defendant committed a breach by, among other 31 Plaintiff’s written outline par 38. 32 This must be a reference to 3FAD pars 6 and 7. 33 This may be a reference to 3FAD subpars 7(vi), (vii), (viii) and (ix) or some of them. 34 Plaintiff’s written outline par 39. 35 Plaintiff’s written outline par 26. 36 Exhibit 27. 37 Exhibit 30. 38 3FAD par 7 responding to 2FASOC par 20. -- 15 of 42 -- 16 things, transmitting Confidential Information of the plaintiff without the plaintiff’s consent,39 one basis alleged in 3FAD for the denial was that:40 “the plaintiff was falsely accusing the defendant of breaching confidentiality (and) unlawfully disclosing documents”. [66] The truth of that denial was denied by the plaintiff in its reply. Consequently, there was an issue of fact raised by the defendant as to whether the defendant’s termination of his employment was based upon a false accusation that he had breached confidentiality by forwarding an article without the plaintiff’s knowledge or consent. That raised the possibility that the breach alleged against him by the plaintiff’s solicitors that he had forwarded an article without the plaintiff’s knowledge or consent, would be in issue. It was to be anticipated that the defendant would lead evidence of either: 1. The plaintiff’s knowledge or consent; or 2. The defendant’s not sending the article. [67] The defendant gave evidence41 that while overseas with Mr Beynon in Ibiza in June 2015 he sent a Zoo Magazine article42 to one of the models who had been photographed in preparation for the article. He explained that he received a message from the model asking if he could send the article to her, but he asked Mr Beynon as they were sitting having lunch in Ibiza and that Mr Beynon approved it. The defendant gave evidence that he then sent the email. He gave evidence that after his return to Australia neither Mr Beynon nor Ms Ozioko accused him of an unauthorised disclosure of that or of any other document. The defendant’s evidence that the plaintiff had knowledge and that the defendant had consent was evidence of a conversation in Ibiza when Ms Ozioko was in Australia. The defendant did not suggest that Ms Ozioko knew of the alleged conversation. The plaintiff submitted43 that the defendant should have put to Ms Ozioko that she did not require the defendant to sign the Deed because she had a conversation with the defendant in which the defendant told her that he had been excused from signing it. That submission is based on a false premise inconsistent with the evidence. The defendant did not give evidence that he told Ms Ozioko of being excused by Mr Beynon from the obligation to sign a deed. [68] Mr Beynon’s evidence on this topic would not have been merely cumulative or corroborative. [69] I may more readily draw an inference fairly to be drawn from the defendant’s evidence by reason of the plaintiff’s being able to call Mr Beynon on the subject of that conversation had it chosen to. [70] The plaintiff submits this conversation was invented and that I may use it to find that the defendant is not credible.44 I am not satisfied that the defendant invented this conversation. That does not determine the issue of whether the defendant ultimately signed a deed. I must consider whether to accept the version of Ms Ozioko in preference to the denial by the defendant. 39 32FASOC par 20 and par 19A (a) (ii). 40 3FAD par 7 (x). 41 T3-38 and 39. 42 Page 2 of Exhibit 24 being p 440 of the trial bundle. 43 T5-75. 44 Plaintiff’s written outline par 20. -- 16 of 42 -- 17 [71] The second conversation was described by the defendant.45 He gave evidence of a conversation between himself and Mr Beynon. He did not suggest that there was any other person within earshot. His evidence was to the effect that: 1. The defendant told Mr Beynon that the defendant had witnessed signatures to the plaintiff’s Confidentiality and Intellectual Property Deeds; and 2. That a course he had done when employed at BATA led him to believe that a witness needed to be a company’s director or secretary and that as a general manager, the defendant was neither of those things. [72] The defendant gave evidence that Mr Beynon told him in that conversation: 1. Not to worry (that he was neither a director nor a secretary); 2. The major benefit of the Deeds was to restrain any models who came to the Candy Shop Mansion from selling their stories to the media; 3. The defendant did not need to sign a confidentiality deed; 4. Mr Beynon treats the defendant as he treats his property business partner, Mr Roth; and 5. If the defendant did have to sign a Deed and if Mr Beynon had to put every direction to the defendant in writing, it would be a full time job for Mr Beynon. [73] The last of those items recalled by the defendant is curious. The terms of the deeds are standard. The terms say nothing about the need for written instructions. The defendant was invited in cross-examination46 to accept that if Mr Beynon had said those words it would have been complete nonsense because the Deed had nothing to do with written directions. It was a reasonable question. The defendant answered: “You’ll have to ask your client for that, because that was his words.” [74] I reject the plaintiff’s submission that this was something which should have been put to Ms Ozioko. It was not alleged that she was privy to this conversation. It emerged in evidence that Mr Roth was a person who had not signed a confidentiality deed notwithstanding that Mr Roth attended every promotional party at the Candy Shop Mansion. [75] Mr Beynon’s evidence on the topic of the alleged conversation with the defendant would not have been merely cumulative or corroborative. [76] There were several aspects to the alleged conversation. I may more readily draw an inference fairly to be drawn from the defendant’s evidence by reason of the plaintiff’s being able to call Mr Beynon on the subject of that conversation had it chosen to. [77] I am satisfied that the defendant told Mr Beynon that he had witnessed signatures to the plaintiff’s deeds. It is consistent with Ms Ozioko’s evidence that the defendant did this. There are examples in evidence of the defendant having done this. I am satisfied that the defendant told Mr Beynon that when he was employed at BATA he had done a course. I am satisfied that he said words to the effect that the course led him to believe that a witness needed to be a company’s director or secretary. It is plausible that persons at BATA were instructed that only the signatures of directors and the company secretary were effective in certain circumstances. The defendant is not a lawyer. It is plausible that he would assume that the preconditions for authority to bind a company by a signature were the same as the preconditions for witnessing 45 T3-36 line 27. 46 T4-32. -- 17 of 42 -- 18 the plaintiff’s deeds. The definition of “Confidential Information” in the plaintiff’s deeds was very general, except for its reference to oral or visual recordings “relating to the Candy Shop Mansion”. The deeds would have sufficed to bind models visiting the mansion to refrain from transmitting anything they recorded. It is plausible that Mr Beynon may have regarded the major benefit of the deeds as a means to restrain models who came to the Candy Shop Mansion from selling their stories. That alleged belief by Mr Beynon that restraining models was the major benefit of the deeds was consistent with the purported ground for termination of the defendant’s employment: giving a model an article which she put online. Notwithstanding the evidence of Ms Ozioko that all persons who came to the Candy Shop Mansion were required to sign a deed, Mr Roth was not required to sign one. To that extent, the alleged conversation is consistent with evidence I accept. [78] The plaintiff’s failure to call Mr Beynon results in my being more ready to draw an inference that the defendant’s evidence of this alleged conversation is generally reliable. Notwithstanding the curious reference to written directions alleged to have been made by Mr Beynon, I find that Mr Beynon told the defendant that he need not sign a deed. [79] It follows that I do not accept the submission that this conversation was invented or that it shows the defendant was incredible. [80] That does not determine the issue of whether the defendant ultimately signed a deed. I must consider whether to accept the version of Ms Ozioko in preference to the denial by the defendant. [81] The third alleged conversation is described in the 3FAD.47 The allegation was that the defendant was aware that the plaintiff had failed to discover emails in the TSG proceedings48 because Mr Beynon had informed the defendant that he would not provide documents in response to a request for discovery and Mr Beynon did this at a meeting at the plaintiff’s premises in July 2015. The defendant gave evidence49 of two conversations with Mr Beynon in relation to an obligation of the plaintiff or Freechoice Australia to produce documents in the TSG proceedings. The defendant gave evidence that the first was at the Beynon house and that, when the defendant asked if Mr Beynon had a copy of “the incentive” or any emails, Mr Beynon said “no, fuck them. I’m not going to provide anything. It’s my company. I’ll do what I want.” The defendant gave evidence of another meeting in Melbourne at which Mr Beynon allegedly reiterated that he was not providing a document about an incentive. [82] The defendant gave evidence of some prior improper conduct by himself.50 After the defendant left his employment with BATA, he received a spreadsheet from a former colleague who was still working with BATA. The spreadsheet set out the sales volume of cigarettes of franchisees of BATA. The defendant frankly admitted that when the defendant received that information from his former colleague, he knew it was improper for his former colleague to provide it and that he believed that his retention of the information was unlawful and that he proposed to use it in the interests of Freechoice Australia. 47 Three FAD par 7(xi) at particulars (b) and (c). 48 TSG Franchise Management Pty Ltd v Cigarette & Gift Warehouse (Franchising) Pty Ltd (No 2) [2016] FCA 674. 49 T3-73. 50 T4-13 line 22 to 4-17 line 36. -- 18 of 42 -- 19 [83] The defendant’s pleading about the venue for the conversation between Mr Beynon and the defendant was different from his evidence. The 3FAD alleged that there was one conversation and that occurred at the “plaintiff’s premises”. The defendant explained in evidence that it was at the home of Mr Beynon. To the extent that the 3FAD was inconsistent, I do not regard that inconsistency as helpful in deciding whether to accept the defendant’s evidence. [84] The defendant gave evidence that he swore an affidavit dated 20 July 2015 in the TSG proceeding.51 He swore it as general manager of the plaintiff and on the basis that he was the person authorised to make the affidavit on the plaintiff’s behalf. He deposed that there were no documents specified in the orders for discovery made on 17 July 2015 that were or had been in the control of the plaintiff other than the documents specified in the list and previous lists disclosed by the plaintiff in that proceeding. The defendant was cross-examined before me as to why he would fail to disclose to the Federal Court that he had a conversation with Mr Beynon in which Mr Beynon had directed the defendant that there were documents Mr Beynon was not prepared to disclose. In response, the defendant gave evidence that he was told the documents were not relevant because they had not been asked for.52 [85] With respect to the alleged conversation about Mr Beynon’s refusal to discover documents including emails, I reject the plaintiff’s submission that the proposition was ultimately abandoned during cross-examination of the defendant. The proposition that Mr Beynon had indicated that he would not disclose an incentive and emails was not abandoned. I reject the submission that it was a matter that should have been put to Ms Ozioko or some other witness called by the plaintiff. It was not suggested that anyone other than Mr Beynon and the defendant were privy to the two alleged conversations about discovery in the TSG proceedings. [86] Mr Beynon’s evidence on the topic of the alleged conversations with the defendant would not have been merely cumulative or corroborative. [87] The plaintiff’s failure to call Mr Beynon results in my being more ready to draw an inference that the defendant’s evidence is correct. I accept that it is correct. It follows that I reject the plaintiff’s submission that the conversation was an invention that assists me to find the defendant incredible. I should add that rejecting the plaintiff’s submission that the defendant was incredible about this evidence has not helped me with the ultimate issue of whether the defendant signed the Deed. [88] The defendant gave evidence that he had been involved in conversations between Mr Beynon and Ms Ozioko in which Mr Beynon had instructed Ms Ozioko not to pay entitlements to employees when they were due and to wait until the employees had complained to Fair Work.53 The evidence had not been put to Ms Ozioko at that stage of the trial, notwithstanding that she had given her evidence and been cross-examined. The evidence was led on the issue of whether the defendant reasonably believed that the plaintiff had previously failed to pay employees their statutory entitlements and bonus payments upon termination of their employment.54 Ms Ozioko was subsequently recalled and satisfied me that there had been occasions when: 51 Exhibit 62. 52 T4-94 line 45 and 4-95 line 1. 53 T3-82 line 3. 54 3FAD par 7(vi) and par 6(v). -- 19 of 42 -- 20 1. The plaintiff and a former employee had disagreed as to the employee’s proper entitlements; 2. Former employees had taken their complaints to Fair Work Australia; and 3. The plaintiff paid the employees after they had been to Fair Work Australia. [89] It was not in issue that the plaintiff had failed to pay proper entitlements. The issue was the reasonableness of the defendant’s state of mind about the plaintiff’s practices. The defendant’s state of mind was submitted to be a justification for failing to return the plaintiff’s documents. I am not satisfied, because it was not an issue, that the plaintiff improperly delayed paying former employees before it terminated the defendant’s employment. Had the propriety of the plaintiff’s compliance with obligations to pay former employees their entitlements been an issue, the evidence of Ms Ozioko was sufficient to allow me to find that a direction to await communication from Fair Work Australia was not sufficient to establish impropriety. Mr Beynon’s evidence about his alleged direction to Ms Ozioko not to pay ex-employees their statutory entitlements until the plaintiff was contacted by Fair Work would have been cumulative or corroborative of Ms Ozioko’s. [90] I am not assisted by the plaintiff’s failure to call Mr Beynon in determining whether to accept the defendant’s evidence on the issue of whether he believed the plaintiff would object to paying the entitlements which the defendant regarded as due. [91] I am satisfied for the reasons above that when the defendant closed his case: 1. The defendant’s evidence that Mr Beynon had given him authority to email a Zoo Magazine article to a model required contradiction; 2. The defendant’s evidence that Mr Beynon excused him from having to sign a confidentiality deed required contradiction; 3. The defendant’s evidence that Mr Beynon had told the defendant that Mr Beynon would not discover documents including emails in the TSG proceedings required contradiction; 4. That the defendant’s evidence that Mr Beynon told Ms Ozioko not to pay ex- employees their statutory entitlements until they were contacted by Fair Work Australia did not require a contradiction. [92] The plaintiff has failed, by evidence or submissions, to establish a reasonable excuse for failing to call Mr Beynon to contradict those parts of the evidence which required contradiction. The facts and findings [93] The plaintiff is a wholesale supplier of tobacco and a national franchisor of tobacconist retail outlets. The plaintiff and Freechoice Vending Pty Ltd together trade under the name Freechoice Australia. The plaintiff’s managing director at all material times was Mr Travers Beynon. The plaintiff has about 260 franchisees which sell retail tobacco in Australia. The plaintiff also owns and operates approximately 30 “Black” stores, through which it sells retail tobacco. [94] Freechoice Vending Pty Ltd supplies cigarette vending machines to hotels and clubs in Australia. [95] Freechoice Australia is unable to advertise tobacco brands. It uses a different form of marketing. It promotes the character of the Candy Man who lives in the Candy Shop Mansion. Mr Beynon maintains the persona of the Candy Man. Mr Beynon -- 20 of 42 -- 21 lives in Candy Shop Mansion. Candy Shop Mansion is used for business. It is a venue for franchisees’ conferences, promotional parties, business meetings and staging publicity photographs of the Candy Man enjoying his supposed lifestyle. The plaintiff promotes the image of the Candy Man enjoying a lifestyle to make the late Hugh Hefner envious. It has taken precautions to protect that image. One precaution is the deed it requests people to sign. [96] Freechoice Australia maintained a corporate office at Upper Coomera. [97] Ms Ozioko was the primary witness for the plaintiff. Ms Ozioko worked at material times for Freechoice Australia. From January 2012 she was the Human Resources Manager. In June 2013 Ms Ozioko took on the additional role of Operations Manager. In that role, Ms Ozioko was responsible for insurance, monitoring expenses for the plaintiff and for Freechoice Vending Pty Ltd, security, vehicle fleet, vending, information technology, legal affairs and litigation. Ms Ozioko would authorise the payment of legal bills, work closely with lawyers on any case and was the point of contact for lawyers dealing with Freechoice Australia. At trial, she described her occupation as National HR and Operations Manager. [98] The defendant was headhunted by Mr Beynon. Negotiations with Mr Beynon proceeded for about five weeks from April 2013. Ms Ozioko was not involved in negotiating with the defendant. No police check was done by the plaintiff prior to engaging the defendant. Mr Beynon told the defendant that he knew that BATA would have done checks before it engaged the defendant.55 [99] The 3FASOC alleged at paragraph 4 that the defendant was offered employment as Commercial Manager but, inconsistently pleaded a particular of that offer that the defendant was offered the position of National Sales Manager. Resolving that dispute is relevant as there is only secondary evidence of the terms of the defendant’s contract, and the secondary evidence includes a contract describing his position as Commercial Manager. [100] The defendant was offered $205,000 per annum, with the prospect of a bonus. The defendant was then working at BATA in national sales management, national field management and national account management. BATA was then one of Freechoice’s three major tobacco product suppliers. The defendant was living in Sydney at the time Mr Beynon made his approaches. [101] The defendant began work for the plaintiff on about 4 June 2013. That date is agreed in the pleadings. He began in a role described by the defendant as National Sales Manager. The defendant continued residing in Sydney until July 2013. He stayed in Sydney for about six weeks after starting with the plaintiff. He remained in Sydney because he was obliged to sell his home in Sydney and prepare to move his family to the Gold Coast. He worked from Sydney for the plaintiff during those weeks. The defendant received by post, in Sydney, a laptop computer and an iPhone. They were sent by the plaintiff. The defendant gave evidence that he signed his employment contract in Sydney56 and that Ms Ozioko was not present. That he would sign in Sydney is very plausible. Ms Ozioko gave some inconsistent evidence, which I set out below. She ultimately conceded that a contract could have been signed in Sydney. 55 T3-35 lines 37-40. 56 T3-33 line 7. -- 21 of 42 -- 22 [102] The defendant gave evidence that a Mr Schruyer was the commercial manager for the plaintiff when the defendant commenced. I accept that evidence. The defendant’s first role was concerned with vending, retail and the franchise business. [103] When shown a draft contract describing the role as Commercial Manager, the defendant was adamant that it was not a draft of the contract which he had signed because: 1. It described his title as commercial manager and he claimed that he would not have resigned his position with BATA in national sales management, national field management and national account management to take on a role as “commercial manager”; and 2. It was dated 1 May 2013, which was prior to the date of his resignation from BATA. [104] I am satisfied that the defendant would not have accepted a role described as Commercial Manager. I accept that a contract describing the defendant as National Sales Manager was signed in Sydney in Ms Ozioko’s absence. It follows that the draft contract describing the defendant as Commercial Manager is not a draft of the contract which the defendant signed in Sydney. [105] The employment contract upon which the plaintiff sues is a paper document which the plaintiff cannot produce. The plaintiff has an unsigned draft which contains a job description for the defendant of Commercial Manager57 but I accept the defendant’s evidence that he did not sign the original of that draft. I am satisfied that the plaintiff prepared another contract containing the defendant’s job description as National Sales Manager and that the defendant signed it in Sydney and that it contained clause 10 in the form which is pleaded in the 3FASOC. I accept Ms Ozioko’s evidence that clause 10 was a standard clause in the plaintiff’s employment contracts. I accept the defendant’s evidence that the contract he signed probably contained clause 10. I find that the defendant’s contract of employment contained clause 10. The defendant gave evidence that he did not sign two contracts when he commenced employment.58 There is no direct evidence that the defendant signed two contracts. [106] The defendant put the plaintiff to proof of the terms of his Contract, in particular as to whether it contained clause 10. The basis for the non-admission was the defendant’s allegation that he had no copy of the Contract. The plaintiff was using Ms Ozioko to give secondary evidence of the Contract. The plaintiff could not find the original. It was not where such documents would ordinarily be filed. [107] Ms Ozioko found the electronic draft of a contract for employment of the defendant as Commercial Manager saved on her computer drive. She gave evidence about in respect of a paper contract created from that draft. [108] Ms Ozioko gave evidence: 59 Roney QC: And did you have anything to do with this document having been signed or countersigned by either Mr Whelan or Mr Beynon or anyone else? Answer: Yes I put it in front of both of them to countersign. So I witnessed Travers sign it and I witnessed Andrew sign it. 57 Exhibit 21. 58 T3-33 line 15. 59 T1-94 line 46 to T1-95 line 8. -- 22 of 42 -- 23 Roney QC: Is there any doubt in your mind that this is a copy of the document that they signed? Answer: No. There isn’t. Roney QC: What did you do with it once signed? Answer: It was then given to my assistant to go through the rest of the documents and put it in the personnel file. [109] Ms Ozioko was there giving evidence to the effect that she witnessed the signatures on the original of a document which described as the defendant’s job as “Commercial Manager”. Ms Ozioko’s evidence that it had contained the words “Commercial Manager” was inconsistent with the defendant’s evidence that he would not have accepted such a position. I prefer his evidence. That leaves open the possibility that Ms Ozioko made a mistake because she assumed that a draft on her drive was the final draft. That would be an honest mistake. Ms Ozioko gave that mistaken evidence with confidence. [110] On several occasions Ms Ozioko reconstructed events she did not actually remember and gave confident evidence as if she remembered. I deal with them below. [111] Ms Ozioko’s evidence led to prove that the defendant signed the “Commercial Manager” contract was flawed in another respect. [112] Under cross-examination, Ms Ozioko’s evidence was:60 1. That her evidence in chief “was that both Mr Whelan and Mr Beynon signed this document in front of you? --- That’s correct.”; 2. “You said that they countersigned the document and you witnessed their signature? --- That’s correct.”; 3. “…There’s nowhere there for you – no provision there for anyone to witness either of those signatures, is there? --- No. …When I say I witnessed, I saw Travers sign and I saw Andrew sign. I didn’t physically say I witnessed, by signing on the line. That’s what I mean by witness.”; 4. “So…your evidence is that you just happened to be standing in the same room as these people when they signed this document? --- …when I gave the document to Travers, he signed it so that he could give the offer to Andrew. So he reviewed it – that’s not an uncommon practice – … he reviews it and he signs it. So I didn’t just happen to be there…”; 5. “Mr Whelan wasn’t there at the time was he? – No he wasn’t.”; 6. “I said I witnessed both of them sign it. I never said I was in the same place when they signed it.” [113] The picture which emerged in cross-examination was very different from the picture in examination in chief. Thus far, it had changed from witnessing both men sign together to witnessing both men sign separately. [114] In the next tranche of cross-examination, Mz Ozioko wrongly asserted that she had not used the expression “countersign” the day before. But more importantly, consistently with the defendant’s evidence, she acknowledged that he may have signed in Sydney. That would have meant that he signed in her absence. Her evidence is consistent with accepting that she may not have seen the defendant apply his signature to an employment contract. The transcript reveals:61 White: Well what does countersigned mean?---Ozioko: It means I saw each of them sign it. 60 T2-44 line 31 to T2-46 line 22. 61 T2-46. -- 23 of 42 -- 24 White: At different times, in different places?---Ozioko: Yes. White: Well, that’s – I suggest to you, Ms Ozioko, that is a far different picture from what you painted to the court yesterday?---Ozioko: Well, then perhaps I misunderstood when you said countersign, but I didn’t see both of them sign it together. White: Well, they were your words, Ms Ozioko. You said – you used the word “countersign” yesterday?---Ozioko: I don’t believe I did. White: And so, is your evidence, now, that you saw – you say you gave this document to Mr Beynon to review and he signed it and subsequently, Mr Whelan signed it at another time, at another place?---Ozioko: That’s correct. I didn’t have anything to do with sending the document to Andrew Whelan. As I said, I wasn’t involved in negotiations. I didn’t see the document again until Mr Whelan started employment with us. White: And there would be no need, would there, for him to sign that document in front of you?---Ozioko: Mr Beynon or Mr Whelan? White: Mr Whelan?---Ozioko: There would be no need for him to sign it in front of me, no. As long as he’d signed it. White: Yes. I beg your pardon?---Ozioko: No, as long it was signed, there’d be no need to sign it in front of me, no. White: And what I suggest to you is that he signed a different document in Sydney at another time?---Ozioko: Well, as I’ve answered already, I didn’t prepare another document with regards to him signing this document – it’s in the – it could have happened. I’m not aware of it. [115] Thus, Ms Ozioko gave evidence that: 1. She put the contract of employment in front of the defendant to countersign; and 2. She saw him sign it. [116] Ms Ozioko then accepted that the defendant could have signed in Sydney. That means her confident evidence that she put it in front of the defendant to sign and witnessed his signature is unreliable. I do not accept it. I do not accept that Ms Ozioko saw the defendant sign or countersign a contract of employment. [117] On 11 November 2013 the defendant was promoted to the role of General Manager with a base salary of $230,000. In that role he was responsible for the overall management of all the groups. [118] Mrs Whelan had been employed by the plaintiff as an accounts communication manager from 19 November 2013 until February 2015. Though she did not sign a deed in the form prepared in May 2015, she had signed a document concerning confidentiality in 2013. [119] On about 17 January 2014, the terms of the defendant’s contract of employment were varied again. His base salary became $309,586. It further added that “Your performance will be reviewed annually and any increase will be dependent on both performance and budget at that time”. That further addition promised an annual review, not a pay rise. [120] As General Manager, the only person senior to the defendant was Mr Beynon. Before the defendant became General Manager, he and Ms Ozioko were essentially on the same high level in the staff’s hierarchy. Once the defendant became General -- 24 of 42 -- 25 Manager, Ms Ozioko began reporting to him. Until the appointment of the defendant as General Manager, Ms Ozioko would report directly to the managing director, Mr Beynon. [121] Ms Ozioko was responsible for signing off on all expenses to be paid. She was involved in developing annual budgets. She oversaw the IT department, which supported the franchisees. If the defendant was absent, Ms Ozioko took on his responsibilities. [122] Ms Ozioko worked closely with Mr Whelan in the time that they worked together. Although they each had their own office upstairs in the headquarters at Upper Coomera, they shifted from those offices to a shared workstation downstairs. [123] I infer that Ms Ozioko was paid something similar to the amount offered to the defendant when he was headhunted. Ms Ozioko gave the impression during her evidence of having a strong sense of duty to the plaintiff and of disrespect for the defendant. [124] A firm of solicitors prepared a form of Confidentiality and Intellectual Property Deed for the plaintiff or Freechoice Australia on 12 May 2015. The IT department ultimately retained an electronic copy to use. Ms Ozioko explained that no electronic copy any individual’s deed was retained. Each time a further individual’s deed was required, the name of the last individual would be overwritten in the electronic draft deed. It was overwritten with the name of the further individual and a new electronic version created. Staff would prepare a paper copy from that new electronic version. The paper deed would be signed and witnessed and the paper deed would be retained by the plaintiff. It follows that a search of the electronic records would not reveal which persons had signed a deed. [125] Persons signing the deed would agree to various things in the plaintiff’s interests. The deed, among other things, permitted the plaintiff to control the use of any signatory’s recordings of events at the Candy Shop Mansion or any signatory’s information about the Candy Shop Mansion or about the plaintiff. The deed acknowledged that damages for a signatory’s breach may not be an adequate remedy, that the plaintiff was entitled to seek an injunction to restrain breach and that the signatory would indemnify the plaintiff for legal costs on a solicitor and own client basis. The plaintiff went about requiring its employees, its contractors and visitors to the Candy Shop Mansion to sign the deed. [126] There were exceptions. The plaintiff does not have a Deed signed by the defendant. The defendant denies signing one. Much of the case was about whether the defendant was an exception or whether I should accept Ms Ozioko’s evidence that she watched the defendant sign the Deed and find that the alleged Deed is lost or has been stolen by the defendant. The plaintiff’s right to indemnity costs depends heavily upon the result. [127] The final version of the deed was sent to the defendant by a staff member of the plaintiff on 25 May 2015.62 The email did not call for the defendant to sign that deed. As General Manager it is plausible that most subordinates would have been reluctant to ask the defendant to do so. 62 Exhibit 22. -- 25 of 42 -- 26 [128] In her role of Human Resources Manager, Ms Ozioko was responsible for obtaining and storing for safekeeping all of the employee records for the organisation, including employment contracts and any confidentiality deeds. She kept a filing cabinet in her office on the first floor in which employees’ records, including any contracts and deeds, were alphabetically stored. [129] The plaintiff’s employment files were searched at some date after the defendant’s employment was terminated. The search revealed a signed deed for every senior employee of the plaintiff with the exception of the defendant. Senior employees Wild, Engel, Lal and Graham signed deeds on 27 May 2015. Ms Ozioko signed a deed on 5 June 2015. [130] On the weekend of 7 June 2015 numerous models came to the Candy Shop Mansion to be photographed. The plaintiff proposed that photographs taken that weekend would comprise part of a magazine article to be published in Zoo Magazine. [131] On Monday 15 June 2015 Mr Beynon, the defendant and a Mr Jason Comans flew from Sydney to London.63 [132] On about 22 June 2015 Mr Whelan emailed Ms Ozioko a copy of the proposed Zoo Magazine article. [133] On 23 June 2015, the defendant emailed an article to a model, Chanel Stewart, which was intended for publication in Zoo Magazine. The article is in evidence.64It is a page with photographs of Mr Beynon accompanied by many young women. It contains a paragraph of writing but the message is in the photographs and captions. [134] The friendly relationship between Mr Beynon and the defendant broke down in late June 2015. Mr Beynon was critical of the defendant’s work performance. The defendant was privately critical to his wife about Mr Beynon’s financial extravagance, unfairness to the defendant and failure to appreciate the defendant’s long hours. The defendant began to muse in texts to his wife about leaving his employment, but lamented that he could not afford to. [135] On 29 June 2015, Mr Whelan told Ms Ozioko that Mr Whelan and Mr Beynon had argued on their recent European trip and that he said to Mr Beynon that he was “done with Freechoice” and that he swore at Mr Beynon and told him that he wanted nothing more to do with him. Ms Ozioko was shocked. [136] Ms Ozioko told Mr Beynon what she believed to have been the defendant’s version of the argument. Mr Beynon told her that the defendant’s version was a complete fabrication, and that he would have to deal with it later. [137] At about this time Mr Beynon spoke with the defendant and was generally critical of the defendant’s performance of his duties. This conversation was a day or two before the alleged conversation in which the defendant asserts that Mr Beynon first refused to discover documents in the TSG proceedings. [138] Ms Ozioko gave hearsay evidence that on 29 June 2015 Mr Beynon instructed Ms Ozioko to investigate how it was that a model, Ms Chanel Stewart had obtained a copy of a Zoo Magazine article before publication. 63 Exhibit 56. 64 Exhibit 24. -- 26 of 42 -- 27 [139] On 22 July 2015 in the TSG proceeding the defendant was being cross-examined and accepted that he knew that it was improper for a BATA employee to provide information to him and that what the employee was doing was unlawful.65 [140] The defendant gave evidence in this proceeding that the data he received from an employee of BATA in a spreadsheet was data which was publicly available but that by asking for it in the spreadsheet he was short-circuiting the process he would have been obliged to follow to collate the material. There was no challenge to his evidence that the data was publicly available. I accept that it was. The defendant was unqualified to give a legal opinion. The defendant’s concession to counsel for the plaintiff that it was unlawful for an employee of BATA to have given him the spreadsheet was an opinion on a matter of law by a man unqualified to give it. It may have been a breach of a promise given by the employee of BATA to have given a document to the defendant. I need not decide that. It may have been confidential information despite the fact that the content was publicly available. It may not have been confidential information. It may have been a breach of contract which was on no consequence and causing no loss or risk of loss. The defendant’s willingness to ask for, receive and use that publicly available information does not persuade me that his evidence in this proceeding is generally incredible. [141] Mr Beynon’s mother died and her funeral was on about 17 July 2015. Mr Beynon took some time away from work. [142] Between 28 July and 24 August 2015, the defendant exchanged numerous texts with his wife. They are the subject of Exhibit 5. In the texts the defendant complained, in effect, that Mr Beynon treated him unfairly, was reckless with the plaintiff’s money, was unfairly critical of the defendant and failed to pay the defendant enough. [143] On 17 August 2015 the defendant texted Mr Beynon swearing to his undying loyalty as his “right hand man”. [144] On 20 August 2015 the defendant commiserated with his wife about how he moved their family to Queensland to get ahead and yet he had made things worse, that he felt like a failure and he was stuck there because of their debt and that he could not just leave to get another job due to their payments. [145] That was not consistent with an intention, on 20 August, to resign. [146] Later that day, the defendant texted his wife, referring to Mr Beynon: “Fuck him. Just need to do dodgy way now”. His wife responded that they had Beynon’s credit card details. Mr Whelan told her to “hold onto them for one day to fuck him up. As I will with the ATO.” [147] That was not consistent with an intention to quit work at the end of that week. [148] On 24 August 2015 Mr Beynon gave the defendant a long dressing down in the morning. It was recorded and transcribed.66 It went for over two hours during which they argued over the defendant’s salary, his financial management skills, the bonus scheme as it would apply to the defendant, work hours, health, obedience and conduct 65 Exhibit 54. 66 Exhibit 11. -- 27 of 42 -- 28 towards staff. There was no accusation of any breach of confidentiality generally or in particular by releasing a Zoo Magazine article to a model. [149] The defendant’s ambition for a substantial bonus was dashed. The defendant texted his wife at 12:16pm, clearly in response to a texted question about how the meeting had gone. The defendant texted in response: Terrible. He’s a cunt darling. I can’t stand anymore and can’t put up with his abuse and shit. No bonus. No bonus structure this year. Said he will give a bonus when he feels like it. I need to leave ASAP. He is setting me up to fail babe as he changes his mind what I have to do every day. [150] Later in his text the defendant complained that Mr Beynon wanted him to remain at work in the afternoons and to work weekends, and had directed the defendant that he should not be coaching his children in sport if it meant he had to leave early. The defendant texted his wife to discontinue contact with Mr Beynon’s wife and to block her so she did not see their activities online. [151] At about 2:30pm Ms Ozioko told the defendant that Mr Beynon wanted Mrs Whelan to sign a Deed because she had attended a party at the Candy Shop Mansion. [152] At about 3:03pm, while still at work, the defendant received a call from Mr Beynon which lasted for 13 minutes and 50 seconds. During the call Mr Beynon demanded that Mrs Whelan sign a Deed and that the defendant have it on Mr Beynon’s desk by 9am the next day, Saturday. [153] These texts exchanged between the defendant and his wife were uncovered in preparation for trial but were not known to the plaintiff on 24 August 2015. [154] The defendant was feeling sick with distress. He was instructed by Ms Ozioko that that he should not leave work that day, without again speaking with Mr Beynon. The defendant left after he told Ms Ozioko truthfully that he was going to the doctor. [155] The defendant soon left work early on 24 August 2015 shortly before 4:00pm. [156] The defendant left in possession of a laptop computer and an iPhone, both the property of the plaintiff, which the plaintiff had provided to him for his use. Taking the laptop and iPhone when leaving work was permissible practice. The laptop contained large numbers of electronic documents. There is no suggestion that it contained more than usual. The defendant took some paper documents too. Some of the documents, paper and electronic, were of a kind which should be kept confidential in the plaintiff’s interest. [157] When the defendant left the plaintiff’s premises for what was to be his last time, he did not take with him his family photos or a poem written by his daughter who was then deceased. I am satisfied that they had sentimental value for the defendant. He tried on at least two occasions through legal representatives to seek the return of those personal items. At the time of the hearing, the plaintiff still retained the defendant’s personal items. The defendant’s omission to take those items is not consistent with the defendant’s having an intention never to return or to terminate his employment when he left the plaintiff’s office that afternoon. [158] After leaving work, the defendant drove to his doctor. He obtained a certificate from the doctor that he was unfit for work until and including 28 August 2015. -- 28 of 42 -- 29 [159] As he was leaving the doctor at about 4:50pm,67 the defendant read an email sent at 4:28pm, which was after he had left work for the day. It attached a letter informing him that his employment was terminated “due to gross misconduct: specifically breach of confidentiality”. The letter68 did not specify what the breach of confidentiality was. It requested the return of the laptop and iPhone, but not documents. [160] At about 5:00pm, Mr Beynon, Ms Ozioko and two other employees of the plaintiff arrived at the defendant’s house and requested of Mrs Whelan that she return the company laptop and iPhone. She did not have them. Mrs Whelan became upset and was screaming. The defendant arrived at home by car with Mr Beynon and three others following him up the street. He saw his wife and children crying and his wife hysterical. 69 The defendant went inside at his wife’s insistence and without speaking to the plaintiff’s representatives. [161] Mr Beynon, Ms Ozioko and two other employees of the plaintiff stayed outside the defendant’s premises for a time but the defendant did not come out to talk. At about 6:00pm Ms Ozioko and another employee returned with a security guard who was posted outside the defendant’s house. The guard subsequently left when police attended later that evening. [162] Bearing in mind that it was not alleged that the defendant breached any duty until 25 August 2015, there was much evidence led of what people said and did before the breach. [163] Subsequent relevant events continued in this abbreviated sequence: 1. At 8:53pm on 24.08.15 Mrs Whelan emailed to advise the plaintiff that the defendant then had documents on the laptop and iPhone to prove his innocence of breach of confidentiality and once she and the defendant had advice on the evidence they would return the equipment. In fact, he had paper documents too. 2. On the morning of 25 August 2015 the defendant copied from his work laptop to Mrs Whelan’s personal laptop his work email mailbox containing thousands of emails and attachments. If he had entered into the alleged Deed, that transfer arguably amounted to a breach of clause 4.1(a) of that Deed; 3. The plaintiff’s solicitors at 12:14pm on 25.08.15 emailed the defendant70 to advise: “your wife … admitted you have retained a laptop for … removing Intellectual Property and Confidential Information belonging to our client… In accordance with the terms of the Confidentiality and Intellectual Property Deed … Our client demands that you either return or destroy any Confidential Information and Intellectual Property … by 4pm … In the event that you neglect or refuse … our client intends to take immediate steps to enforce its rights under the Deed.” The solicitor’s letter was wrong in asserting that the Deed’s terms purported to give the plaintiff an agreed right to require the return or destruction of anything. But clause 10.2.2 of the standard form of employment contract was a source of such a contractual right to demand the return of documents. The defendant put the plaintiff to proof that clause 10.2.2 was in his Contract. The plaintiff satisfied me that it was. 67 T3-73 line 40. 68 Exhibit 27. 69 T3-74 line 5 70 Exhibit 13. -- 29 of 42 -- 30 4. On 26 August 2015 the defendant returned the plaintiff’s laptop and iPhone. He did not return or destroy paper documents or the electronic documents in Mrs Whelan’s laptop. Some of them fit the description of confidential information. The omission to destroy or return them was a breach of clause 10.2.2 of the Contract. 5. At 6:31pm on 26.08.15 the plaintiff’s solicitors emailed71 the defendant to the effect that the particulars of his breach of the Deed by disclosures of confidential information were that in about June 2015 the defendant was provided with an article to be published in Zoo Magazine, that he forwarded the article to a third party without the plaintiff’s consent or knowledge, that the third party posted the article online and that the defendant dishonestly denied to Mr Beynon that he had unlawfully disclosed the article to the third party. The email warned: “…our client believes that you have taken steps to retain confidential information and intellectual property belonging to our client. In that regard, our client is in the process of undertaking a forensic analysis of your company computer to determine whether any documents have been removed unlawfully.” 6. By 28.08.15 the defendant had obtained legal advice. That day, his solicitors wrote72 to the plaintiff’s solicitors about various issues. The letter made no express reference to the topic of the plaintiff’s solicitors’ demand for destruction or return of Confidential Information and Intellectual Property or the plaintiff’s three day old written warning that it would immediately enforce its rights under the Deed. 7. On 08.09.15, the defendants’ solicitors again wrote.73 This time they advised of their instructions to commence proceedings in the Fair Work Commission and the Federal Court. The letter made no express reference to the topic of the plaintiff’s solicitors’ demand for destruction or return of Confidential Information and Intellectual Property or the plaintiff’s fourteen day old written warning that it would immediately enforce its rights under the Deed. 8. On 09.09.15 the plaintiff filed an originating application in the Supreme Court of Queensland seeking an Anton Piller order. The application was heard ex parte and the order74 was made that day. [164] The Anton Piller order was executed on 11.09.15 without prior notice to Mr Whelan. An independent expert, Dr Schatz, attended the defendant’s premises when the Anton Piller order was executed. He took a digital copy of the documents which were in Mrs Whelan’s laptop. Relevant paper and electronic documents were found and classified into three types: 1. A copy of the defendant’s work mailbox. The entire mailbox was copied and placed on Mrs Whelan’s laptop. That included about 13,000 items of which about 197 documents related to the defendant’s employment; 2. About 56 paper copies of documents, including a blue folder which contained a body of documentation that was put together for a meeting, which the plaintiff was to conduct with British American Tobacco Association, (BATA) which is one of the plaintiff’s major tobacco suppliers; and 3. An email mailbox, which appears to have been under the name of Mrs Whelan containing 4 relevant documents. 71 Exhibit 30. 72 Exhibit 57. 73 Exhibit 52. 74 Exhibit 19. -- 30 of 42 -- 31 [165] When the Anton Piller order was executed, a Confidentiality Agreement dated 11 April 2014 signed by Mrs Whelan was found in the home of Mr and Mrs Whelan. That document must have been in different terms from the deed which was created in May 2015. Mrs Whelan’s employment contract with the plaintiff was also found. The defendant’s Contract and the alleged Deed were not among the paper documents found. [166] The defendant’s defence, now amended to 3FAD, alleged75 that he had retained documents out of concern that the plaintiff could take reprisal action by failing to pay the defendant statutory entitlements as an employee and a bonus allegedly due. [167] A few documents could have been useful for that purpose. There were documents at the defendant’s home which had been taken on 24 August 2015 and documents which had been taken previously. Dean Foster’s record dated May 2014 is an example probably taken previously. Which of the paper documents were packed that Friday and which may have been at his home before that Friday was not explored. The defendant explained that he had a lot of MD reports. He explained that MD reports are done every Monday by 4pm and that he would usually collect them from the relevant people in the business, review them and get them ready to hand to Mr Beynon later in the week. He described MD reports as a pulse for the business. 24 August 2015 was a Friday. He gave evidence that he took “a lot of budget folders in relation to budgets, actuals, cashflows” and explained it was “because we were six to seven weeks into the financial year and budget hadn’t been finalised yet and Mr Beynon had told me he wanted it finalised that week”. The defendant said that he took them so that he could work on them at home at night to get them completed on time. I am satisfied that the defendant would regularly have possession of MD reports in the ordinary course of his work. There is no suggestion that he should not have taken MD reports to his home. [168] The reason for the defendant’s leaving the plaintiff’s premises with paper documents was contentious. The defendant said it was for work. The plaintiff submitted that this was preposterous and that the defendant was planning to leave work and permanently. I am not satisfied that this is correct. I accept the defendant’s evidence as to the basis upon which he took home the paper documents recorded when the Anton Piller order was executed. [169] The defendant gave evidence that, after the Anton Piller order, was executed he could not and did not access the electronic originals. I accept that evidence. [170] In separate proceedings in another court, which had not been to trial when this matter was heard, the defendant claimed from the plaintiff: 1. Payment in lieu of the plaintiff’s notice of termination; 2. Payment of a performance bonus; 3. Payment in lieu of his accrued leave. [171] The defendant took some months to find other employment. That was not consistent with his having left the plaintiff’s headquarters on 24 August with an intention not to return. The earnings in his subsequent employment were less. 75 3FAD par 7 (iv) to (vi). -- 31 of 42 -- 32 The application to set aside the Anton Piller order [172] The defendant filed an application on 04.04.17 to set aside the Anton Piller orders made (and executed) about 19 months before. The application was made returnable on the first day of trial on 10.04.17. The plaintiff objected to the hearing of that application on 10.04.17. I upheld the objection and adjourned the defendant’s application to a date to be fixed. The defendant’s application has not been heard. I infer that if it proceeds, evidence will be led by the applicant defendant to support submissions that: 1. When the plaintiff presented evidence to the Supreme Court, material nondisclosures (that the defendant put documents in his car before he was terminated, not after; and if the defendant had removed his alleged Deed and Contract from a filing cabinet that day it would have been captured in a video recording) created an allegedly false impression that the defendant had improper motives when taking documents from the plaintiff’s office; 2. Without the material nondisclosures the Anton Piller orders would not have been made; 3. Without the material nondisclosure the costs which were incurred in executing the Anton Piller order would not have been incurred; and 4. Those costs were not reasonably incurred. [173] Some evidence relevant to that application has coincidentally been canvassed in this trial while the defendant’s counsel was seeking to impugn the credit of Ms Ozioko. It is the case that a camera would have recorded on 24 August 2015 whether the defendant had accessed filing drawers in the upstairs office of the plaintiff’s premises. The practice was to store any employee’s deed there, along with the employee’s employment contract. Ms Ozioko gave evidence that she was unaware that a camera would have recorded any person accessing the filing drawers on 24 August 2015 when she made her affidavit for the application for an Anton Piller order. I am not satisfied that Ms Ozioko knew of that when the Anton Piller order was obtained. [174] I infer that the plaintiff would contest the application to set aside the order submitting, in essence, that if there was a nondisclosure: 1. The evidence led on the application was to the effect that CCTV footage showing the hallway outside the upstairs office revealed that the defendant did not enter the office, so the failure to acknowledge that there was also footage that the defendant failed to access filing drawers was inconsequential; 2. The evidence was that the defendant retained some confidential documents the misuse of which could harm the plaintiff, that he had a contractual obligation to return them, that his excuse for retaining them to obtain advice did not explain retention for 20 days, that there was a risk of misuse of documents to the detriment of the plaintiff and that the plaintiff could not identify all the documents, that the defendant’s solicitor had been warned of the plaintiff’s intention to protect itself and had failed to respond; 3. Those matters justified the making of an application for an Anton Piller order and executing the order; and 4. If principle often leads courts to set aside an ex parte order obtained after material nondisclosure, where the nondisclosure occurred by honest mistake and where an order should have been made, the order should stand as there is no utility in setting it aside. -- 32 of 42 -- 33 The course of this proceeding and the trial [175] The plaintiff’s proceeding progressed in the Supreme Court through the exchange of pleadings. The plaintiff continued to claim damages and injunctive relief. The proceeding was transferred to the District Court, by consent, on 25 August 2016. The plaintiff incurred legal costs before and during this proceeding and its costs have become significant. [176] The matter was listed for trial on 10.04.17. [177] The only sums which the plaintiff seeks from the defendant are sums to reimburse it for legal fees and costs it has incurred prior to and in this proceeding. It seeks those costs on the indemnity basis, relying primarily on the Deed. [178] The trial began as a contest about two kinds of relief: 1. Mandatory orders against the defendant; and 2. Whether the plaintiff could have costs on the indemnity basis, because of the Deed. [179] The defendant resisted mandatory orders on the basis that he did not have possession of any confidential information.76 [180] During the plaintiff’s opening, Roney QC opened that the evidence of Dr Schatz would be that Dr Schatz did not remove documents from Mrs Whelan’s laptop but merely copied them. Defence counsel interrupted to submit that the defendant’s instructions were that all material was removed from Mrs Whelan’s laptop when the Anton Piller order was executed;77 that the defendant sought to justify his retention of the documents for only the 20 odd days between his employment’s termination and the execution of the Anton Piller order.78 It became obvious from those instructions that if the defendant was wrong about his continuing possession of documents in Mrs Whelan’s laptop that he was likely to consent to mandatory orders for their removal and if he did not have the initiative to offer that, it was just a matter of asking the defendant or his counsel. [181] Whether the defendant knew or did not know that his wife’s laptop continued to hold relevant electronic documents after Dr Schatz had taken temporary possession of Mrs Whelan’s laptop, during cross-examination of the defendant, he was reminded of Dr Schatz’s evidence that Mrs Whelan’s laptop held relevant electronic documents. As soon as the defendant was asked by Roney QC whether he would agree to mandatory orders, the defendant agreed to all orders put to him by Roney QC in respect of the return or destruction of documents. Upon that concession, the proceeding then unequivocally became a contest only with a view to recovery of past and future legal costs and with a view to their recovery on an indemnity basis pursuant to the Deed. [182] Dr Shatz’s report79 reveals that “a copy of the laptop was successfully completed”. That was the only sentence I saw in the 6 page report which implied that the originals were left on the laptop. 76 3FAD par 8B. 77 T1-28 line 6. 78 T1-21 line 40. 79 Exhibit 4. -- 33 of 42 -- 34 [183] Dr Schatz gave oral evidence that he left the electronic originals on the laptop. It is not the plaintiff’s case that the defendant: 1. Accessed the material transferred to Mrs Whelan’s laptop after the Anton Piller order was executed; or 2. Used the documents after his employment was terminated, to the plaintiff’s detriment or at all. [184] There was no evidence led or allegation pleaded that at any time after his employment was terminated the defendant used the documents which were in his possession, save for transferring electronic documents to Mrs Whelan’s laptop. 80 [185] During the plaintiff’s opening, as soon as the issue of the defendant’s being in “possession” of documents in August 2015 was raised by Roney QC81 the defence counsel conceded that the defendant had been in possession of all 3 types of documents.82 The concession was that the defendant had downloaded all but one of the electronic documents on 25 August 2015 and that when the Anton Piller order was executed, the defendant was in possession of them all, including those in Mrs Whelan’s laptop.83 Did the defendant sign the Deed? [186] The plaintiff alleged that the plaintiff and the defendant executed the deed in or about May 2015.84 The defendant denied that on the basis that he did not execute the deed.85 The Plaintiff’s evidence at trial was that the Deed was signed by the defendant in June 2015. The evidence given by Ms Ozioko made the date unclear. Certainly, it was a date not earlier than 7 June 2015. But Ms Ozioko did not say that it was signed on 7 June. It is possible that Ms Ozioko’s evidence was intended to convey that the defendant signed at some date on or after Sunday, 7 June 2015 because she spoke of having a pile of documents from that weekend before the defendant signed. Her version seems to cover a period between 7 and 15 June 2015, when the defendant and Mr Beynon travelled overseas. [187] Proof of the defendant’s signing of the alleged Deed is significant for the plaintiff’s claim for indemnity costs and is an alternative basis for the plaintiff’s claim of breach of duty. It is the most significant factual allegation in the plaintiff’s case. The defendant gave evidence that he did not sign a confidentiality deed. Ms Ozioko could not find the alleged Deed in the filing cabinet in the office where such deeds were stored. The defendant did not disclose the Deed as a document in his possession. The plaintiff has no direct evidence of the Deed’s ever being in the defendant’s possession. It relies upon only Ms Ozioko’s recollection of watching the defendant sign the Deed. Ms Ozioko was aware that the issue of a signed confidentiality deed was significant in the proceeding. [188] There were occasions when the defendant was given the responsibility for obtaining signatures from staff on such deeds. Ms Ozioko specifically recalled an occasion on 7 June 2014 when models came to the house for auditions to become Candy Mansion 80 T5-77. 81 T1-9 line 39. 82 T1-9 line 39. 83 T1-10 lines 30-34 and T1-6 lines 27-30. 84 3FASOC par 11. 85 3FAD par 4. -- 34 of 42 -- 35 Goddesses. Ms Ozioko’s evidence was that she and the defendant were stationed out at the front of the Candy Shop Mansion that day, requiring anyone who came in that day to sign a Deed.86 I infer that the persons who were required to sign agreements that day included persons who were not staff of the plaintiff or of Freechoice Australia. [189] Ms Ozioko recalled collecting a pile of signed deeds about 10cm thick.87 [190] Ms Ozioko then volunteered88 “at that time, I got him to sign his as well.” On this crucial topic, Roney QC then asked Ms Ozioko to say more about it, where and how it happened. [191] The transcript89 revealed how sparse the evidence was: Ozioko: So following the weekend of our June 7th auditions, we had the pile probably about that thick of what we’d received that weekend. Roney QC: So that thick – you’ve shown something about --- ? About that thick. Roney QC: Ten centimetres? Yes, of the ones that were received that weekend, because we had to get them signed off on by both myself and Mr Whelan. At that time, I got him to to sign his as well. Roney QC: And can you tell us more about that? Where did that happen? How did it - - -?---In the vending office downstairs that we both shared. Roney QC: All right. And did you present him with the document?---Yes. Roney QC: And did he say anything in the process of signing it? Did you have any conversation about it?---No, not other than we were – while we were signing the rest of the documents and we needed to get his signed, no. Roney QC: So you said words to that effect?---Yeah, along those lines. Yes. Roney QC: And after he’d signed, what do you do with it?---It was put in a pile to be filed in my office – so it was put on the pile for – that had come back from the weekend – the June 7th – and the ones that we had previously. So we’ve collected a number of them from staff – our actual employment staff the week before, so they were all going into a folder until they were all ultimately filed into personnel files. So they were just added to that pile. Roney QC: And did you have any cause to refer to Mr Whelan’s agreement at any time after that other than when you went looking for it after his termination?---Not that I can recall, no. [192] If Ms Ozioko’s evidence that “while we were signing the rest of the documents” was meant to convey that she and the defendant were signing deeds as witnesses, that would ordinarily suggest that other persons were present. The other persons would be potential witnesses. If her evidence was intended to convey that she or other staff were systematically obtaining signatures from any person who had not signed, she failed to say so. If that is what she intended, it would have been more cogent with other evidence. Ms Ozioko is the person who instructs the plaintiff’s lawyers. It would have assisted the plaintiff to have had Ms Ozioko explain the inconsistency between the date pleaded for the defendant’s entry into the alleged Deed which was in “about May” and Ms Ozioko’s evidence of a date on or after 7 June. 86 T1-99 lines 6 to 10. 87 T2-3. 88 T2-4 line 20. 89 T2-4 lines 13 to 43 -- 35 of 42 -- 36 [193] Electronic records of the plaintiff for the material period in 2015 were unhelpful on this issue. Ms Ozioko’s assistant generally prepared any confidentiality deed by overwriting the electronic draft with the name of the next person for whom the deed was to be prepared. It follows that the plaintiff has no electronic record of any confidentiality deed bearing the name of the defendant. [194] If there had been a systematic approach, there would have been a checklist of staff who had signed. Ms Ozioko or her assistant would have been required to type in the defendant’s name into an electronic version of the deed in two places and to print a paper copy. There was no evidence of who prepared and printed the alleged Deed and whether it was done in advance or at the time the defendant signed. [195] Presumably someone was given the task to put the alleged signed Deed in the defendant’s personnel file. It would have been Ms Ozioko or perhaps her personal assistant if she had one at the time. Ms Ozioko’s evidence omitted that detail. The person filing the document may have remembered. [196] Evidence of the defendant’s opportunity to take the original of the alleged Deed would be a significant piece of circumstantial evidence to bolster the plaintiff’s evidence that the deed was signed by the defendant. The circumstantial evidence of the defendant’s removal of the confidentiality deed from Ms Ozioko’s custody was explained in the plaintiff’s opening:90 Ms Ozioko … in her role as human resources manager, she was also responsible for obtaining and storing, for safe keeping, all the employee records within the organisation, contracts, confidentiality agreements and the like. They were kept in a filing cabinet in her room. It was alphabetically stored. It was unlocked during office hours and it was not exposed to any security camera so if someone went into the office during business hours and she wasn’t there, it would’ve been accessible, the filing cabinet, and it wasn’t locked. There was a security camera outside of the room but it didn’t catch what was going on inside the room. The significance of that, your Honour would probably have gleaned from this morning’s argument, is that it’s contended in the plaintiff’s case, and she’ll tell you that after the dismissal of Mr Whelan in the days following, she discovered the two critical documents out of his HR file which she kept, were missing. They were the employment contract about which there does not seem to be any much, if any, dispute that one was signed but the signed copy is not available and the deed, the confidentiality deed, which was signed much later, and it was signed in 2015 as opposed to 2013 when he started and signed up the employment contract. So the inference that you’ll be invited to draw is that either on the day of his termination, earlier on that day, amongst the material that he put in his car that day … or at some other time, we don’t know when, he was able to get into her officer and take those files away [197] Notwithstanding that Ms Ozioko gave evidence that anyone who attended the Candy Shop Mansion was required to sign a confidentiality deed, some visitors to the Candy Shop Mansion had not signed when the defendant’s employment was terminated. They included: 1. Mr Beynon; 2. Mr Roth, who was not an employee but a business partner of Mr Beynon in relation to real property and who visited the Candy Shop Mansion; and 3. A photographer, Mr Jason Comans, who had attended all parties at the Candy Shop Mansion; and 4. Tori Armstrong, the manager of a model agency. [198] I am unsure whether Mrs Whelan had ever been a visitor. Ms Ozioko gave evidence that Mrs Whelan had been involved in the planning and that anyone involved in the 90 T1-65 line 28. -- 36 of 42 -- 37 planning was required to sign a Deed. Ms Ozioko gave the hearsay evidence that it was not until 24 August 2015 that Mr Beynon first asked her to get Mrs Whelan and Tori Armstrong to sign Deeds. [199] The defendant had been in a unique position in the plaintiff’s employment hierarchy. From November 2013, when he was promoted to general manager, he was senior even to the multi-tasking Ms Ozioko. [200] There were sufficient exceptions to the requirement to sign Deeds to lend support to the defendant’s evidence that: 1. He was told by Mr Beynon that he did not need to sign a Deed; and 2. He did not sign a Deed. [201] The Contract and the alleged Deed would ordinarily have been stored in a file pertaining to the defendant, along with files pertaining to other employees, in two and a half black filing cabinets in Ms Ozioko’s upstairs office. By June 2015, Ms Ozioko was not occupying her upstairs office. Ms Ozioko mostly sat downstairs in “vending” at a workstation shared with the defendant. [202] The defendant’s opportunity to remove the Deed and Contract: Ms Ozioko’s evidence in chief appeared to bolster the plaintiff’s case that the defendant had the opportunity, on 24 August 2015 or on earlier occasions, to remove the alleged Deed and Contract undetected. It was to the effect, firstly, that the upstairs office was empty and unlocked as were the filing drawers in it and secondly, that there was no camera to record persons who went to the drawers. Her evidence of those matters was given sequentially. Ms Ozioko’s evidence implied and she must have known that the sequential evidence implied that the defendant had the opportunity to take his Deed and Contract unseen and unfilmed from an unlocked drawer in an unlocked upstairs office. Her evidence was:91 Ozioko: You come around the corner, there is a security camera on the corner that can view both hallways but there is no security camera footage that – that views within my office. Roney QC: So the camera that’s there can see the hallways? Ozioko: It can. Roney QC: Perpendicular and horizontal to? Ozioko: To my office. Roney QC: …your office but not into the office? Ozioko: Not within my office. No. Roney QC: All right. And what’s the position then with access to a filing cabinet which contains HR information? Was your office locked during the day? Ozioko: My office was not locked during the day. So my office would generally be opened by either myself or my assistant, whoever got in first, and then it would be open throughout the day until one of us left during the evening. Roney QC: What about the filing cabinets that were in there? No. Those remained open throughout the day. So we would always lock the office when we left it in the evening but we did not lock the filing cabinets within the office. 91 T1-91 line 40 to T1-92 line 12. -- 37 of 42 -- 38 [203] That evidence bolstered the case that the defendant had the opportunity to remove the alleged Deed and his Contract unseen and unfilmed. [204] Significantly, in cross-examination on the next day, Ms Ozioko gave evidence that her assistant sat in Ms Ozioko’s office upstairs for most of the working day.92 [205] The presence of an assistant in the upstairs office on 24 August 2015 would have weakened the plaintiff’s argument that the defendant had the opportunity to remove his Deed undetected. On hearing that an assistant sat in the upstairs office where confidentiality deeds were stored, counsel for the defendant asked Ms Ozioko if the assistant was sitting in the office for most of the working day on 24 August 2015. Ms Ozioko gave evidence that:93 Ozioko: I don’t believe I had an assistant that day… I think I was between assistants at that time… an assistant that I had for quite some time had left earlier in the year… I can’t remember the time frame… I’m 90 per cent sure that I didn’t have an assistant at that time. So I’ve gone through a few temps and I was recruiting… I may have had a temp in at the time. I don’t think I did… if I didn’t have an assistant at that time, would not have been actually open on the 24th of August because it would have been unlikely that I would’ve opened the office if I didn’t need to use it. White: So you’re saying the office was locked? Ozioko: Potentially, yes, that day. On the actual day of the 24th, yes… White: Your evidence yesterday was that you unlocked that office when you came to work and the filing cabinets were not locked either? Ozioko: That’s correct… White: When questioned by your counsel about whether the room was unlocked, you volunteered that it was. And you, then, before being asked the question, volunteered that the filing cabinets were also unlocked? Ozioko: That’s correct. [206] That exchange began with an answer which would have maintained the plaintiff’s opportunity to argue that the defendant had the opportunity to take documents unseen on 24 August 2015. Then it changed. It caused me concern about the reliability of evidence that for any relevant date the door was unlocked and the office unoccupied. [207] I am not satisfied that the upstairs office was unlocked or unoccupied on 24 August 2015 or at any relevant date. It lessened my confidence in the reliability of Ms Ozioko. [208] The CCTV footage of the upstairs office: The drawers in the upstairs office were also under scrutiny by camera. The footage did not just cover the hallway outside the room. That was established during the trial. The CCTV footage looped for 8 weeks. It meant that anyone wishing to check footage of the drawers containing the defendant’s records when the Anton Piller order was applied for could have checked footage of 24 August 2015 and earlier dates for evidence of whether the defendant had accessed them. [209] Ms Ozioko used to occupy that office before moving downstairs. It remained her office to occupy if she chose, but she did not occupy it. She knew there was a camera 92 T2-50 lines 18-33. 93 From T2-50 line 38 to T2-51. -- 38 of 42 -- 39 outside the office. The capacity of the camera to have recorded any person accessing filing drawers in the office on or before 24 August 2015 was a live issue when the Anton Piller order was applied for. After the order was obtained, the defendant took issue with the evidence led on the application. The plaintiff’s solicitor was asked for information about whether footage of the interior of the room existed for the crucial period from 3.00pm to 4:00pm. Ms Ozioko advised the solicitor for the plaintiff that the camera did not cover inside the room. That advice was incorrect. [210] Ms Ozioko gave evidence confident in the trial that the interior of the office was not under the camera’s scrutiny. The evidence was incorrect. At best for the plaintiff, Ms Ozioko’s error arose because she assumed that the camera did not capture images from inside the room. [211] Ms Ozioko’s willingness to swear to her assumption about another critical matter led her into error. It lessened my confidence in the reliability of Ms Ozioko. [212] Once it had emerged that the upstairs office could have been locked if Ms Ozioko had no personal assistant and thus there was no reason for the door to be unlocked, the plaintiff led evidence from Ms Ozioko that the defendant had a master key. Thus, the possibility arose that the defendant had opportunity to access the drawers on any date. [213] CCTV footage of the corridor outside the upstairs office was captured and kept and revealed that the defendant did not enter the upstairs office between 3:21pm and 4:00pm on 24 August 2015. He departed shortly before 4:00pm. [214] Having regard to Mr Whelan’s unique position as a General Manager to whom Ms Ozioko would report, it is plausible that he was treated with more trust than the young models who visited the Candy Shop Mansion and staff lower in the hierarchy than the General Manager. It is plausible that he was treated with the trust given to Mr Roth. [215] The results of the search when the Anton Piller order was executed assist. The absence of the Deed and Contract make it less likely that they were taken by the defendant on 24 August 2015 or on some earlier day. Their absence at the time of Mr Cowen’s thorough search suggests they were not then at the defendant’s home. The fact that other confidential documents were found while the Deed and Contract were not found suggests that their absence was not as a result of the defendant’s implementing a scheme to destroy evidence. [216] The defendant’s motive for taking his Contract and Deed was not pleaded or explained. If it was to destroy secondary evidence so as to impede the plaintiff’s proof of the existence of the Contract or Deed that would assume knowledge of the rules of evidence. That would be farfetched. No legal proceeding by the plaintiff against the defendant was instituted or in contemplation when the defendant left work on 24 August 2015. [217] The lack of any obvious motive for the defendant to take and conceal or destroy the alleged Deed and Contract is relevant in considering the issue of whether the defendant stole the alleged Deed. If the defendant’s motive to steal his Deed and Contract on 24 August 2015 is obscure, it becomes harder to build a plausible motive for a theft at earlier dates. -- 39 of 42 -- 40 [218] The lack of evidence that the defendant used any document taken from the office for his advantage or to the plaintiff’s detriment is relevant. [219] The fact that the defendant frankly conceded that his missing Contract would have included clause 10 was: 1. Against his apparent interest; 2. Inconsistent with the implied submission that he took his Contract from his file for a forensic advantage; 3. Inconsistent with a motive to impede proof of clause 10 being in the Contract; and 4. Consistent with his giving truthful answers. [220] I am not satisfied that Ms Ozioko was reliable in her evidence about putting the Contract in front of the defendant and witnessing him sign for reasons above. It assists me to assess her contested, uncorroborated evidence about witnessing the signing of the Deed. [221] There is an allied issue about whether Mr Beynon expressly excused Mr Whelan from signing a deed. Mr Whelan purported to recollect a conversation with Mr Beynon in which the explanation for not requiring him to sign the deed was given by Mr Beynon. That alleged explanation made no obvious sense. If I could be satisfied the defendant gave dishonest evidence, it would assist me on the issue of whether the alleged Deed was signed. But it was not contradicted by Mr Beynon. I am not satisfied that the defendant’s evidence of his conversation with Mr Beynon was dishonest. The evidence that Mr Beynon excused the defendant from signing a Deed is accepted. It is another impediment to the plaintiff’s satisfying me that the alleged Deed was signed and lost or stolen. [222] The plaintiff bears the onus of proof that Mr Whelan executed the Deed. I am not satisfied by Ms Ozioko’s evidence. I am not satisfied that the defendant signed the alleged Deed. Confidential documents were retained by the defendant [223] Ms Ozioko prepared a schedule94 of particular documents found in the defendant’s possession when the Anton Piller order was executed on 11 September 2015. She listed 58 paper documents. Some of the documents listed had attachments. Paper documents included one described as the 2016 financial year budget, with attachments and annotations including profit and loss information. That was a commercially sensitive item. [224] The defendant conceded that if some documents, being budget documents and report documents, had fallen into the hands of a competitor, it would have had potentially serious consequences for Freechoice Australia.95 I infer that “report documents” was a reference to MD reports, of which there were some. [225] Ms Ozioko’s schedule indicated that not all the paper and electronic documents were confidential. Ms Ozioko referred in her schedule to a blue folder containing various documents as a confidential document. That folder became, or a copy of it, became exhibit 39. The only challenge to Ms Ozioko’s description relating to that folder was 94 Exhibit 16. 95 T4-66 lines 37-39. -- 40 of 42 -- 41 her assertion that there were only two copies. It seems likely that she was mistaken, but her error does not assist me to resolve any issue. It is consistent with Ms Ozioko’s tendency to express her assumptions as fact. She referred also to electronic documents in a USB “seized from Defendant’s laptop on 11 September 2015”. That description is consistent with Ms Ozioko’s belief that the defendant was not left in possession of relevant documents after the order was executed. Ms Ozioko, like the defendant, wrongly believed that the electronic documents were not simply copied but were removed during the execution of the Anton Piller order. [226] The defendant’s counsel, without referring to particular documents in Ms Ozioko’s schedule, nevertheless conceded that there were numerous documents within it of a confidential nature. [227] I accept the evidence of the defendant that on 24 August 2015 he was proposing to work on the plaintiff’s budget and that he was obliged to collate MD reports and budget reports. [228] Among the documents identified by Ms Ozioko as being confidential there was a bonus budget spreadsheet that is relevant to the defendant’s entitlement to a bonus96 and documents relevant to the performance of the plaintiff which were themselves relevant to the defendant’s entitlement to a performance bonus.97 Arguably, if the plaintiff was not justified in terminating the defendant’s employment, the defendant would have had an interest in some of the confidential documents for the purpose of assembling evidence of his entitlements. [229] I am not satisfied that when the defendant left with the plaintiff’s headquarters with hardcopy documents on 24 August he had any motive to use them improperly. I am satisfied that when the defendant left work with some of the plaintiff’s confidential electronic documents stored in the laptop and iPhone, they were stored there in the ordinary course of business and the laptop and iPhone were taken in the ordinary course of the defendant’s performance of his duties as general manager. [230] There is no evidence that the defendant was forewarned of the execution of the Anton Piller order. It is notable that when the order was executed: 1. The plaintiff had made no allegation that the defendant had removed either the original of the alleged Deed or his Contract; 2. The defendant was in possession of retained paper documents which were obviously confidential and which competitors might have been able to use to harm the plaintiff; 3. The defendant had not destroyed such paper documents; and 4. He was not in possession of originals or copies of the alleged Deed or his Contract. Claim for damages for breach of contract [231] The plaintiff claims as damages for breach of contract, $1,274.56 for costs it incurred before litigation commenced. It was submitted in writing: Further, page 741 of Exhibit 18 sets out a detailed description of the attendances referable to the legal costs incurred by the Plaintiff prior to the institution of these proceedings. Those attendances are plainly attendances taken in an effort to mitigate damage to the Plaintiff caused by the Defendant’s 96 T2-100 line 36. 97 T2-100 line 42 to T2-101 line 10. -- 41 of 42 -- 42 breaches of both the terms of the relevant employment contract and the Deed. With the benefit of hindsight, those steps might readily be inferred to have been successful, since they resulted in the return of the Plaintiff’s laptop and iPhone. The Plaintiff ought therefore recover these costs as damages for breach of contract on the basis that they are expenses incurred in attempting to mitigate loss. [232] The breach of clause 10 of the Contract occurred at 4.00pm on 25 August 2015, when the plaintiff failed to return or erase paper and electronic documents and failed to return the hardware. On 26 August 2015, the defendant partially remedied his breach by returning the hardware. [233] A perusal of page 741 of exhibit 18 reveals: 1. That most costs incurred were probably incurred before the breach of contract occurred at 4.00pm and the plaintiff has led no evidence that any of that day’s costs were incurred after the breach of contract; 2. The costs incurred on 26 August seem to be costs incurred because the defendant complied with his obligation to return the laptop and iPhone to the plaintiff’s solicitor. [234] The fact that costs were incurred on 26 August 2015 so that the plaintiff’s solicitors could return the laptop and iPhone to the plaintiff does not satisfy me that the costs were caused by breach of contract. The costs incurred on 26 August are likely to have been incurred due to the defendant’s compliance with his obligation to return the iPhone and computer. I am not satisfied the costs were caused by the defendant’s breach of contract on 25 August. If the plaintiff terminates an employment contract while an employee retains a phone and computer, the employee does not immediately commit a breach of contract. If the plaintiff demands the return of its hardware after termination, the plaintiff’s costs of demanding the return of the hardware and destruction of electronic documents are not necessarily the costs of a breach of contract. The costs incurred recovering the hardware the plaintiff demanded are not necessarily caused by the defendant’s breach of contract. If the defendant’s failure to offer the hardware at 4.00pm on 25 August 2015 caused the plaintiff to incur more by way of legal costs than it would have incurred if the hardware had been returned at 4.00pm, the additional costs would be caused by breach. [235] I am not satisfied that any of the pre-litigation costs claimed were caused by the defendant’s breach of the Contract. -- 42 of 42 --