Agility CIS Ltd v White (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 29 March 2022
• Neutral Citation: [2022] FCA 293
• Date: 29 March 2022
• Court: Federal Court

Federal Court of Australia

Agility CIS Ltd v White (No 2) [2022] FCA 293

File number(s):	VID 195 of 2021
Judgment of:	ANDERSON J
Date of judgment:	29 March 2022
Catchwords:	PRACTICE AND PROCEDURE – further application pursuant to rr 16.21 and 26.01 of the Federal Court Rules 2011 (Cth) and s 31A(2) of the Federal Court of Australia Act 1976 (Cth) to strike out and/or give summary judgment in relation to parts of the applicants’ amended statement of claim – where the applicant alleges a misuse of confidential information – where the applicant has failed to articulate the misuse with sufficient precision – where the applicants’ claims in their current form are speculative in nature – application to strike out pleadings pursuant to r 16.21 of the Federal Court Rules 2011 allowed
Legislation:	Federal Court Act 1976 (Cth) Federal Court Rules 2011 (Cth)
Cases cited:	Agility CIS Ltd v White [2021] FCA 1145 Australian Competition and Consumer Commission v Pauls Ltd [1999] FCA 1750 CA Inc v ISI Pty Ltd (2012) 95 IPR 424 Campaigntrack Pty Ltd v Real Estate Tool Box Pty Ltd [2021] FCA 809; 160 IPR 362 Creative Brands Pty Ltd v Franklin [2001] VSC 338 Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 75 WN (NSW) 261 IPC Global Pty Ltd v Pavetest Pty Ltd (2012) 122 IPR 445 Jones v Dunkel (1959) 101 CLR 298 Liberty Financial Pty Ltd v Scott (No 4) (2005) 11 VR 629 Lynx Engineering Consultants Pty Ltd v The ANI Corporation Ltd (No 2) [2009] FCA 363 Meridian VAT Reclaim Australia Pty Ltd v Agius [2006] VSC 503 Niven v Grant (1903) 29 VLR 102 ObjectiVision Pty Ltd v Visionsearch Pty Ltd [2014] FCA 1087 Pioneer Concrete Services Limited v Galli (1985) VR 675 University of Sydney v ObjectiVision Pty Ltd [2019] FCA 1625; 148 IPR 1 Young Investments Group Pty Ltd v Mann [2012] FCAFC 107
Division:	General Division
Registry:	Victoria
National Practice Area:	Employment and Industrial Relations
Number of paragraphs:	37
Date of hearing:	23 March 2022
Counsel for the Applicants:	Mr L Merrick
Solicitor for the Applicants:	Corrs Chambers Westgarth
Counsel for the Respondents:	Mr S Rebikoff
Solicitor for the Respondents:	Clyde & Co

ORDERS

		VID 195 of 2021
BETWEEN:	AGILITY CIS LTD (and another named in the schedule) First Applicant
AND:	LEE WHITE (and others named in the schedule) First Respondent

order made by:	ANDERSON J
DATE OF ORDER:	29 MARCH 2022

THE COURT ORDERS THAT:

1. The Applicants’ Amended Statement of Claim dated 30 November 2021 be struck out pursuant to r 16.21 of the Federal Court Rules 2011.

2. Leave is granted for the Applicants to re-plead their Statement of Claim by 4.00 p.m. on 2 May 2022 or such other time as may be agreed by the parties.

3. The Applicants pay the Respondents’ costs of the application on a lump sum basis to be agreed or in default of agreement in such lump sum as determined by a Registrar of this Court.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ANDERSON J:

introduction

1. The Respondents by their interlocutory application dated 18 February 2022 seek orders that the proceeding be summarily dismissed pursuant to s 31A of the Federal Court Act 1976 (Cth) (FCA Act) or that the Amended Statement of Claim dated 30 November 2021 (ASOC) be struck out pursuant to r 16.21 of the Federal Court Rules 2011 (Cth) (Rules).

2. On 23 September 2021, I struck out the Applicants’ Statement of Claim dated 22 April 2021 pursuant to r 16.21 of the Rules and granted the Applicants leave to file an Amended Statement of Claim: Agility CIS Ltd v White [2021] FCA 1145 (Agility).

3. In Agility, I struck out the Applicants’ Statement of Claim because it did not identify:

1. the alleged confidential information with sufficient precision to enable the Court to identify what is sought to be protected: Agility [36] and [37];

2. the manner of the alleged misuse of confidential information: Agility [38]-[42]; and

3. the claim because of the lack of particularity exposed the speculative nature of the Applicants’ claim: Agility [40].

respondents’ submissions

4. The Respondents submit that the ASOC fails to rectify the defects in the previous Statement of Claim and suffers from the same deficiencies that caused me to order it be struck out on 23 September 2021.

5. The Respondents contend that it is plain from the Applicants’ continued inability to articulate the alleged misuse of their confidential information with any specificity that it is a claim that has no reasonable basis and therefore ought never have been brought. On this basis, the Respondents contend that the proceeding should be dismissed.

6. In support of their application, the Respondents rely on the affidavit of Nicole Joy Wearne dated 18 February 2022 (Wearne affidavit).

7. The Respondents submit that there are two substantive changes to the pleading introduced by the ASOC:

1. The alleged confidential information has now been defined only as “the source code of ORION and its supporting applications”: ASOC at [8]. No particulars of the source code are provided. However, Confidential Annexure A is said to contain “a description of the components of the ORION source code” comprising various elements and forms of code which have been used in the source code.

2. The ASOC includes an additional allegation from which a misuse of confidential information is said to be able to be inferred: the fact that a former employee of Utility Software Services Pty Ltd (USS) told a former employee of the Applicants that he had observed “employees of USS writing source code for CORE by displaying and referring to the source code of ORION”: ASOC at [17]. The unnamed “employees of USS” are not otherwise identified in the pleading.

8. The Respondents contend that neither of these amendments are sufficient to address the fundamental deficiencies identified by the Court in Agility for the following reasons:

1. First, the ASOC continues to describe the alleged confidential information in wide and general terms without specifically identifying the information that is sought to be protected. In particular, while the ASOC purports to limit the claim to the “source code of ORION and its supporting application” it still fails to identify with any particularity the confidential information that is said to comprise the source code. That is so even though the Applicants are able to identify at least one aspect of the source code (the source code for the application on the ‘fat client’) which is not the subject of the claim. Further, insofar as Confidential Annexure A purports to describe “the components of the ORION source code”, it continues to do so in abstract terms that lack the precision required to enable the Respondents to meaningfully respond to the claim.

2. Second, the ASOC continues to make no attempt to identify the disclosure or use of the alleged confidential information which is said to constitute an actionable misuse by the Respondents. In particular, it continues to make no attempt to connect any of the allegations from which a misuse of confidential information is said to be able to be inferred with any particular confidential information of the Applicants. The new allegation does not even relate specifically to the Respondents (bearing in mind there were approximately 20 employees of USS that worked on the development of CORE) and is expressed in such a vague and indirect fashion...