Vickery J has struck out parts of a statement of claim for misuse of confidential information and ordered that the plaintiff’s solicitors and barristers who have had access to the information be barred from continuing to act in the proceeding.

DC Payments is suing Next for misuse of confidential information. The two companies compete in supplying ATM machines to retail, convenience and hospitality venues and Next was set up by some disgruntled ex-employees from DC Payments.

Next’s General Manager, Bosma, emailed a spreadsheet of its customers to 2 other employees: Solomon and Whale. Like Bosma, Whale had been an emploee of DC Payments too. Somehow, Bosma’s email to Whale went to his old account at DC Payments. DC Payments’ General Counsel recognised the mistake and instructed her staff not to look at it, but to delete it. However, the email and the spreadsheet were included in DC Payments’ discovery and eventually information from the spreadsheet found its way into Annexures identifying misused confidential information in DC Payments’ Amended Statement of Claim and some particulars.

Next has successfully sued to have those parts of the pleading struck out for misuse of its confidential information.

DC Payments sought to argue that the information was not confidential as it could discover who Next’s customers were by going around to the shops and venues to see which ATMs were installed and by whom. That might seem questionable as use of the spreadsheet saved DC Payments all the time and trouble of going through such an exercise. Further, the judgment indicates that the information used from the spreadsheet was very much more detailed than just the identity of the customers. The Master Customer List constituted by the spreadsheet included some 26 categories of information in addition to the customer’s name, address and ACN/ABN. These included details such as the names and contact details of the customer contacts, the customer’s bank account details, the Next sales agent responsible for the customer, the number of transactions made a month through the ATM at the customer’s site, the rebates payable to the customer and the maximum withdrawls authorised for the ATM.

It would appear that DC Payments did not admit it had used the confidential information to prepare the Schedules and particulars in the amended pleadings. However, Vickery J found there must have been misuse. Essentially, the Schedules and particulars included information which corresponded to the information in the spreadsheet, including information about the Next sales representative for the customer which was not in the public domain, and DC Payments did not advance any evidence to explain how it had sourced the information.

Vickery J therefore ordered that the Schedules and particulars incorporating Next’s confidential information be struck out. This was ordered even though his Honour considered that DC Payments could have obtained the information in question through “well drafted interrogatories”. His Honour accepted that the relevant principle was that DC Payments should not gain any advantage from its breach of confidentiality. In addition, it was ordered to delete any electronic copies of the Master Customer List and destroy any documents which contained information derived from it.

Further, as noted above, Vickery J ordered that DC Payments’ solicitors and counsel who had access to the confidential information could no longer act for it in the proceeding:

Any lawyer or person within the organisation of any firm of lawyers engaged by DC Payments, or any counsel retained on behalf of DC Payments, who has seen or directly or indirectly made use of the Master Customer List, should be retrained from continuing to act or work for DC Payments in this litigation.

Presumably, armed with his Honour’s judgment, the first job for DC Payments’ new lawyers will be to draft the well-crafted interrogatories foreshadowed by his Honour. It will be interesting to see if such an application would be rejected by the potential exclusion through s 138 of the Evidence Act 2008 (Vic) as, perhaps, his Honour warned at [83].

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DC Payments Pty Ltd v Next Payments Pty Ltd [2016] VSC 315