Garner v Central Innovation Pty Limited

• Jurisdiction: Australia Federal only
• Judgment Date: 21 April 2022
• Neutral Citation: [2022] FCAFC 64
• Date: 21 April 2022
• Court: Full Federal Court (Australia)

Federal Court of Australia

Garner v Central Innovation Pty Limited [2022] FCAFC 64

Appeal from:	Central Innovation Pty Ltd v Garner (No 4) [2020] FCA 1796
File number:	NSD 69 of 2021
Judgment of:	CHARLESWORTH, STEWART AND HALLEY JJ
Date of judgment:	21 April 2022
Catchwords:	INDUSTRIAL LAW – appeal from decision of primary judge that judgment and verdict be entered in favour of respondents in respect of 36 customers lost due to actions of appellant – whether primary judge wrongly departed from the case pleaded by the appellant – whether primary judge erred in finding that respondents established loss or damage – whether primary judge made erroneous findings as to the taking or removal of confidential information by the appellant – whether primary judge made erroneous findings as to the credibility of the evidence given by the appellant – whether primary judge made erroneous findings in assessing the alleged loss or damage – reflective loss principles – principles relevant to breach of fiduciary duties – where no material non-compliance with the rule in Browne v Dunn – appeal dismissed
Legislation:	Corporations Act 2001 (Cth) s 500 Evidence Act 1995 (Cth) s 140
Cases cited:	Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 Banque Commerciale SA, en liquidation v Akhil Holdings Limited (1990) 169 CLR 279 Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356 Boardman v Phipps [1967] 2 AC 46 Briginshaw v Briginshaw (1938) 60 CLR 336 Browne v Dunn (1893) 6 R 67 Carter v Federal Commissioner of Taxation (2020) 279 FCR 83 Central Coast Council v Norcross Pictorial Calendars Pty Ltd [2021] NSWCA 75; 391 ALR 157 Central Innovation Pty Ltd v Garner (No 4) [2020] FCA 1796 Commonwealth Securities Ltd v South Pacific Securities Pty Ltd [2003] NSWCA 199 Devries v Australian National Railways Commission (1993) 177 CLR 472 Flightdeck Geelong Pty Ltd v All Options Pty Ltd (2020) 280 FCR 479 Fox v Percy (2003) 214 CLR 118 Francuziak v Minister for Justice (2015) 238 FCR 332 George Fischer (Great Britain) Ltd v Multi Construction Ltd [1995] BCC 310; 1 BCLC 260 Gerber Garment Technology Inc v Lectra Systems Ltd [1997] RPC 443 Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 Jones v Dunkel (1959) 101 CLR 298 Lee v Lee (2019) 266 CLR 129 Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; 261 ALR 382 NRM Corporation Pty Ltd v Australian Competition and Consumer Commission [2016] FCAFC 98 Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204 Stefanovski v Digital Central Australia (Assets) Pty Ltd [2018] FCAFC 31; 368 ALR 607 Sullivan v Trilogy Funds Management Ltd (2017) 255 FCR 503 Vale v Sutherland (2009) 237 CLR 638 Warren v Coombes (1979) 142 CLR 531 Willoughby v Clayton Utz [2005] WASC 47; 193 FLR 373
Division:	Appeal Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs:	254
Date of hearing:	12 August 2021
Counsel for the Appellant:	Ms L De Ferrari SC
Solicitor for the Appellant:	AJH Lawyers
Counsel for the Respondents:	Mr I Jackman SC with Mr R Jedrzejczyk
Solicitor for the Respondents:	SD Commercial Lawyers

ORDERS

		NSD 69 of 2021
BETWEEN:	GARY GARNER Appellant
AND:	CENTRAL INNOVATION PTY LIMITED (ACN 123 240 362) First Respondent ; INTERCAD PTY LTD (ACN 072 666 016) Second Respondent

order made by:	CHARLESWORTH, STEWART AND HALLEY JJ
DATE OF ORDER:	21 April 2022

THE COURT ORDERS THAT:

1. The appeal is dismissed with costs.

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

REASONS FOR JUDGMENT

THE COURT:

1. These reasons concern an appeal from orders of a judge of this Court made on 16 December 2020, giving effect to reasons published on that date: Central Innovation Pty Ltd v Garner (No 4) [2020] FCA 1796 (J).

2. The proceedings before the primary judge concerned allegations of misuse of confidential information obtained by the appellant, Mr Gary Garner, during an employment relationship with one or other of the respondents, Central Innovation Pty Ltd and Intercad Pty Ltd, and in the course of his subsequent employment with a competitor of the respondents, N C Cadcam Systems Pty Ltd (NCCS), now in liquidation.

3. The grounds of appeal are summarised at [58] – [63] below.

4. For the reasons that follow, all of the grounds are rejected.

5. The appeal should be dismissed with costs.

Factual Findings

6. The following facts found by the primary judge are relevant to a resolution of this appeal. Most of them are not subject to challenge.

The CI Group

7. The respondents are part of a group of companies that operate collectively under a business umbrella called the CI Group. Intercad is, and has been since 12 January 2016, a wholly-owned subsidiary of Central Innovation. One or more of the members of the CI Group advise customers in the design, manufacturing and construction industries about optimising their design processes and systems, and supplying them with three dimensional computer aided design and drafting software (3D CAD software). The CI Group employs just under 150 people, approximately 42 of whom perform work for Intercad.

SolidWorks software

8. The 3D CAD software and related services supplied by one or more of the members of the CI Group came from SolidWorks Corporation (formerly called SolidWorks Inc), a United States-based company and subsidiary of French company Dassault Systèmes. Dassault Systèmes is one of the largest developers of 3D CAD software in the world. SolidWorks has captured approximately 50% of the Australian 3D CAD software market.

9. Customers who purchase SolidWorks’ 3D CAD software from one of SolidWorks’ resellers acquire both a perpetual licence for the software and a 12-month subscription to software updates. During the subscription period, the reseller also provides technical support, and is known as a “Value Added Reseller” (VAR). A customer of a SolidWorks VAR may have more than one software subscription. At the end of each subscription period, which may or may not be synchronised as...