The Star Pty Ltd v AB

HIS HONOUR: These proceedings involve grave allegations of extortion of the plaintiff by the defendant somewhat explicable, but in no way excusable, by reference to the defendant’s domestic relationship with an employee of the plaintiff.

As the claims relate to confidential information and arise in a context in which there are undertones of domestic abuse, I will anonymise the names of the defendant (AB) and his partner (CD) and make appropriate suppression orders.

The plaintiff operates a casino located at Pyrmont, Sydney. Earlier this year, the defendant had applied for employment with the plaintiff. The defendant was in a relationship with CD, another person employed by the plaintiff.

On 7 April 2024, the defendant sent to the plaintiff a text message which is described by Adrian Borchok (Mr Borchok), General Manager of Investigations at The Star Entertainment Group Ltd (the parent company of the plaintiff), as the “blackmail message”. The message sought termination of CD’s employment with the plaintiff at the threat of exposure of confidential details of the plaintiff’s patrons. Having regard to what was contained or embedded in the message, it was considered by the plaintiff as a credible threat.

The plaintiff now seeks final orders to restrain the defendant from disclosure of the confidential details, consequent upon earlier interlocutory orders. For the following reasons, I am prepared to accede to that application.

The plaintiff is represented by Mr Afshar of counsel with Mr Emmerig of counsel. Mr Afshar has provided written submissions and I have also had the benefit of oral submissions from him.

On 10 April 2024, the plaintiff approached the then duty judge, Lindsay J, filing a summons which sought urgent interlocutory relief against the defendant.

On the plaintiff by its counsel giving the usual undertaking as to damages, Lindsay J ordered, up to and including 12 April 2024 or further order, that:

Suppression orders were made in relation to the confidential exhibits AB-1 and AB-2 to the affidavit of Mr Borchok. His Honour also made various procedural orders.

Later on 10 April 2024, the plaintiff’s solicitor, Matthew Lunney (Mr Lunney), served the summons, the affidavit of Mr Borchok (together with confidential exhibit AB-1) and a copy of the Court’s orders on the defendant by email. The documents were then sent to the defendant by express post on 11 April 2024.

Notwithstanding service of the documents on the defendant, the defendant did not appear on the return of the summons on 12 April 2024. On that date:

Further, delivery up and destruction orders were made in the following terms:

Proceedings were adjourned and listed before the Registrar at 9:30 am on 18 April 2024 for further consideration or directions.

On 18 April 2024, notwithstanding the service of orders upon him, the defendant did not appear at the listing. The Registrar made orders for the defendant to serve on the plaintiff any evidence in response by no later than 10 May 2024, and stood the proceedings over to 16 May 2024 for further direction or allocation to final hearing, as the nature of the case may require.

On 16 May 2024, despite the service of those orders upon him, the defendant again did not appear. The Court noted that the defendant was self-represented and had not served any evidence in reply, nor otherwise taken any step in the proceedings. The proceedings were listed before me for final hearing today, with an estimate of half a day. Finally, the Registrar ordered that the defendant be served with a copy of the orders and reserved all questions of costs.

The plaintiff relies upon:

As part of its operations, the plaintiff employs various persons tasked with detecting and investigating illegal and undesirable activities across The Star Group’s properties. In providing evidence in these proceedings, Mr Borchok has received certain information from other Star employees, including Judith Mckenzie (General Manager, People Partnership) and Jayden Murray (Talent Acquisition Partner). Certain information provided by Mr Borchok is based on information from Ms Mckenzie, Mr Murray, CD and his belief in what they had respectively stated to him.

Relevantly, s 140 of the Evidence Act 1995 (NSW) provides as follows:

I am mindful of the gravity of the matters alleged in the proceedings. Despite the fact that certain evidence has been provided on an information and belief basis (which was principally for the purposes of obtaining the interlocutory orders referred to earlier), it is nonetheless supported by contemporaneous and reliable documentary materials. In the circumstances, I consider that the evidence adduced provides a sufficient basis for findings to be made on the final hearing.

It is important to note that whilst Mr Borchok has described the message which is the catalyst for the proceedings as the “blackmail message”, it is a message. I am in no way dealing with any claim relating to any alleged criminal conduct by the defendant, and am simply dealing with the matter on the basis of a civil claim to restrain alleged access to and threatened misuse of confidential information.

On 8 April 2024, Mr Borchok participated in an interview with CD and was informed that: CD was in a relationship with the defendant; they were presently in the process of separating; and the defendant had been harassing and intimidating CD.

In the course of her employment with the plaintiff, CD has access to: a laptop provided by the plaintiff; a mobile device through which she has access to the plaintiff’s data; and a web-based application which I will refer to as the “Database”. The Database comprises an electronic repository of all information provided to the plaintiff by guests who attend one of the plaintiff’s leisure facilities, including: dates of birth; contact information; and address, bank and credit card details (Confidential Information).

The defendant has had some communications with Mr Lunney on and after 11 April 2024, as noted below. Other than those communications, the defendant has not participated in the proceedings and has not attended before the Court this morning.

In those circumstances, r 29.7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) relevantly provides:

UCPR r 29.7 provides a choice of one of two options when a “trial” is called on and a party is “absent”. A “trial” includes any hearing that is not an interlocutory hearing: s 3 Civil Procedure Act 2005 (NSW) (CPA).

A party fails to appear for the purposes of that rule if they have had adequate notice of the hearing and fail to attend, either personally or by a representative, or to provide the Court with an apparently credible explanation for their nonattendance: Ritchie’s Uniform Civil Procedure NSW at [29.7.2], citing Magjarraj v Asteron Life Ltd [2009] NSWSC 1433 at [22], NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681; (2012) 18 BPR 35,153 (Gregory), and Hill v Dunn [2019] NSWSC 419 at [8]-[21].

In Gregory, Hallen AsJ (as his Honour then was) observed that a party would not be found to be “absent” within the meaning of UCPR r 29.7 unless that party has knowledge or notice of the date of the trial: Gregory at [18]-[22]. However, in Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333, whilst accepting that natural justice must be observed, Peden J at [16] respectfully disagreed that UCPR r 29.7 requires a plaintiff to notify a defendant of the date of the trial in order for the defendant to be “absent” and the hearing to proceed.

In this case, it is not necessary to embark upon the debate about what constitutes “absence”. I am comfortably satisfied that the defendant is aware that the matter has been listed for hearing. The defendant has been notified of the initial approach to the Court and the orders made on that occasion, as well as on subsequent occasions, at least by email and in some instances by materials served at his address.

There is confidence that the email address used to notify the defendant is in fact his email address as (i) it was the address nominated by the defendant in his resume provided with his employment application to the plaintiff (which I will refer to below), and (ii) it is the same email address used by the defendant to communicate with Mr Lunney at least on 11 and 24 April 2024, as noted below.

In 2022, CD commenced full-time employment with the plaintiff in a managerial position pursuant to a written contract of employment.

In her position, CD is responsible for certain things which involve having access to certain material, including the Confidential Information.

In January 2024, the defendant applied for a position with the plaintiff. One of the specific questions on the application form was: “Have you been charged or convicted of any criminal offence?”. The defendant’s response to that question was “No”. That response was, as I note below, false. Further, his application form did not disclose any of the criminal history which I set out below.

On or about 13 February 2024, the plaintiff offered the defendant employment subject to the successful completion of probity checks, which included a national police check. Thus, the offer was a conditional offer.

The (conditional) offer of employment made by the plaintiff to the defendant on 13 February 2024 attached a form of employment agreement which, inter alia, set out the defendant’s expected duties during his employment with the plaintiff (if employment were to eventuate). Those duties included complying with all reasonable directions and instructions given to the employee by the plaintiff and using the employee’s best endeavours to protect and promote the interests of the plaintiff.

The agreement also had express provisions dealing with confidentiality. The agreement noted that, as a consequence of any proposed employment with the plaintiff, the employee would have access to a range of information which is confidential to the plaintiff and its related companies, including commercially sensitive information, client and customer lists and, relevantly, all other information obtained from the plaintiff or in the course of the proposed employee’s employment that is by its nature confidential information or identified to the employee as confidential, in whatever form that information exists.

Further, the employment agreement provided that, on termination of employment, the employee must return to the plaintiff all property belonging to the plaintiff in the employee’s possession or control, including all confidential information in whatever format.

I consider it likely that the defendant would have either read or at least scanned the significant provisions of the employment agreement. Although those provisions were not the subject of any concluded agreement as between the plaintiff and the defendant, had he read the full employment agreement, the defendant would have had an understanding of the sort of information the plaintiff regarded as confidential.

On or about 19 February 2024, the defendant completed a Liquor & Gaming NSW probity form in order to obtain a casino special employee licence for his position. That form also provided the defendant with an opportunity to expressly disclose any criminal charges and findings of guilt. While the defendant completed the form in handwriting, the part of the form which required him to list such matters was left blank by him.

At least at that point of time, the defendant’s completion and submission of that form prima facie establishes that he would have been proceeding on the basis that he was progressing to being employed with the plaintiff on the terms of the agreement, including the requirements regarding confidentiality, as proffered by the plaintiff, even though ultimately no employment contract was entered into.

On 27 February 2024, the plaintiff received the results of the defendant’s national police check. The results disclosed a number of offences, including recent offences for dishonestly obtaining property by deception, driving whilst disqualified, using a vehicle displaying an altered numberplate and stating a false name to police officers. Previously, the defendant had also been convicted of stealing a motor vehicle and breaching a family violence interim intervention order (or a number of such orders).

On 28 March 2024, following receipt of the defendant’s probity checks, the plaintiff elected not to proceed with the offer of employment to the defendant.

On 7 April 2024, Mr Murray received a text message from the defendant which threatened to disclose personal and confidential information of the plaintiff’s patrons, including the Confidential Information that I have referred to above, unless the plaintiff terminated CD’s employment. That message is what was described as the blackmail message.

The message is as follows:

The defendant then sent screenshots of what appeared to be patron information obtained from the Database.

On 8 April 2024, Mr Borchok contacted the defendant. As his first attempted telephone call was not answered, he sent a text message to the defendant. Mr Borchok gives evidence of an exchange of text messages which then proceeded as follows:

On 11 April 2024, Mr Lunney received an email from the defendant, in response to the service of the summons and other documents on him the previous day, as follows:

On 24 April 2024, Mr Lunney received an email from the defendant as follows:

On 6 May 2024, Mr Lunney sent an email to the defendant which provided him with a summary of the status of the proceedings and noted that the proceedings were next listed before the Court on 16 May 2024:

As at 15 May 2024, Mr Lunney had not received any communication from the defendant as to his evidence in response or compliance with the mandatory injunction orders made by the Court.

Following the orders made by the Registrar on 16 May 2024, Mr Lunney sent an email to the defendant in which he set out a copy of the orders.

Mr Lunney gave evidence of the further correspondence which ensued as follows:

The position as at 31 May 2024 was that Mr Lunney had not received any communication from the defendant as to his compliance with the mandatory injunction orders.

The last email communication that Mr Lunney received from the defendant was on 24 April 2024.

For the purposes of the interlocutory hearing, Mr Borchok believed, based on his inquiries, that it is likely that the defendant obtained, without authorisation, the Confidential Information by accessing the Database through CD’s mobile device. In the context of the interlocutory hearing, Mr Borchok expressed his concern that the defendant’s access and possession of the Confidential Information, without authorisation, would result in him carrying out the conduct threatened in the blackmail message and threatened again during his telephone conversation with the defendant on 8 April 2024. Mr Borchok expressed concern that the unauthorised disclosure of the Confidential Information had the potential to cause the plaintiff’s patrons physical, financial and emotional harm.

There is nothing to suggest that, for the purposes of the final hearing, Mr Borchok has formed any different view regarding his concerns for the matter.

According to Mr Borchok, the plaintiff has obligations under the Privacy Act 1988 (Cth) to protect the personal and sensitive information of its patrons.

The plaintiff’s claim in respect of confidentiality does not arise out of any employment relationship with the defendant.

Mr Afshar contended that the Confidential Information was confidential as between the plaintiff and CD. He submitted that the defendant is a third party who accessed that material in circumstances where he had no right to access it, and currently is in possession of assets, data and property to which he has no right or title.

Protection of private or confidential information may arise by statutory provisions or under the general law. The basis for the plaintiff’s claim in respect of confidentiality was said to arise under the general law.

An obligation of confidentiality can be recognised even if there is no particular relationship between the parties and no deliberate misfeasance, but where a person receives information that, by virtue of the circumstances in which it is received, he or she knows or ought to know is confidential: Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWCA 430; (2012) 295 ALR 348 (Armstrong) at [100] per Campbell JA (Macfarlan JA agreeing), citing inter alia Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 (Guardian Newspapers) at 281 per Lord Goff of Chieveley.

In Guardian Newspapers, Lord Goff stated the following at 281:

There is a general equitable jurisdiction to grant relief against an actual or threatened abuse of confidential information which does not involve any tort or any breach of some express or implied contractual provision. Its rational basis does not lie in proprietary right, rather in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained. Relief is available if the information in question has “the necessary quality of confidence about it” and it is significant, not necessarily in the sense of being commercially valuable but in the sense that the preservation of its confidentiality or secrecy is of substantial concern to the plaintiff: Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438 per Deane J (with whom Gibbs CJ, Mason J, Wilson J (each at 421) and Dawson J (at 446) agreed); [1984] HCA 73.

The necessary elements which must be established to succeed in a claim of breach of the equitable obligation of confidence were set out by Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customers (Vic) (1987) 14 FCR 434 at 443; [1987] FCA 266 and recently restated by Stern JA (White JA and Simpson AJA agreeing) in Filby v TEG Live Pty Ltd [2023] NSWCA 320 at [112] (see also Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21; (2010) 265 ALR 281 at [39]):

Even if there is no entrusting of confidential information by A to B in circumstances of confidence, there can sometimes be an obligation of confidence that attaches to information that is inherently confidential or private if that information is illegally or surreptitiously obtained, or is come across in the street, or is received unsolicited: Armstrong at [100], citing inter alia Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 (Lenah) at [34]-[36] per Gleeson CJ, [123] per Gummow and Hayne JJ (Gaudron J agreeing), [169]-[170] per Kirby J, [223], [306] per Callinan J (dissenting as to the result).

Further, Mr Afshar drew to the Court’s attention the decision of Slattery J in HWL Ebsworth Lawyers v Persons Unknown [2024] NSWSC 71 (HWL Ebsworth). In that case, his Honour observed that “theft of confidential records coupled with an attempted extortion will readily give rise to a sound action for breach of confidence, and the case for the grant of injunctive relief will often be ‘overwhelming’ in such cases”: HWL Ebsworth at [30], citing XXX v Persons Unknown [2022] EWHC 2776 (KB) at [35] and [40], in turn citing PML v Persons Unknown [2018] EWHC 838 (QB) at [13].

In this case, the “theft” or unauthorised access of the plaintiff’s material is not by a person unknown. Nonetheless, the extent of the Court’s jurisdiction is very broad and, as is evidenced from the decision in HWL Ebsworth, extends to courts in appropriate cases being able to restrain even “persons unknown”.

Confidential information may include information as to the personal affairs and private life of the plaintiff: e.g. Breen v Williams (1996) 186 CLR 71 at 128 per Gummow J; [1996] HCA 57.

Where the nature of the information sought to be protected is private information that is personal, the foundation for the protection afforded is based on human dignity and autonomy: Lenah at [43] per Gleeson CJ, [125] per Gummow and Hayne JJ; see also Farm Transparency International Ltd v New South Wales [2022] HCA 23; (2022) 403 ALR 1 at [159] per Gordon J (citing OBG Ltd v Allan [2008] AC 1 at [275]), [225], [231] per Edelman J (citing Lenah at [43], [125]).

The Confidential Information the disclosure of which has been sought to be restrained, and the material to be delivered up, has in my assessment been identified with sufficient specificity. The blackmail message does not provide all of the information accessed. Rather, the screenshots following the message provide only “some examples” of the information accessed.

The plaintiff is not aware of the extent of the Confidential Information which the defendant has accessed. Nonetheless, the blackmail message discloses that the defendant has had access to a secure URL within the Database. Potentially all, or at least a very substantial part, of the plaintiff’s Confidential Information regarding its patrons is able to be accessed by that secure means.

Without descending into detail, the following may be noted about the images which followed the blackmail message sent by the defendant (as identified by Mr Afshar):

Information of a corporation per se is one thing. Private information of individuals, patrons and customers that is held by a corporation is another. The fact that the information in question is not information of the personal details of the plaintiff per se, but rather the personal details of the plaintiff’s patrons which it holds, does not preclude a finding that the information may have the necessary quality of confidence.

I consider that the information accessed by the defendant has the necessary quality of confidence as is required to ground final relief.

The Confidential Information was not provided by the plaintiff to the defendant. The evidence discloses that the information was seemingly obtained by the defendant, without authorisation, by accessing the Database through CD’s mobile device. There is not the faintest suggestion that that was consensual on the part of CD or the plaintiff. Indeed, the defendant himself, in his 24 April 2024 email, expressly exonerates CD from anything to do with the matter.

It must have been self-evident to the defendant that the information was confidential. At least for the reasons that I have stated above, there are, apart from any inference that may arise out of his receipt of the employment agreement under cover of the letter dated 13 February 2024, other matters I now enumerate which, taken together, support that finding. First, the nature of the material, being the personal details of the plaintiff’s patrons. Secondly, the circumstances in which the defendant accessed the material without consent. Thirdly, the material accessed bears the URL noted above, which contains the word “secure”. Fourthly, the tenor of the defendant’s blackmail message, including (a) his reference to the customers’ continued privacy, (b) his threat of exposure and (c) the demand linked to the threat of exposure, re-enforces a very strong inference that the defendant must have realised that the information was private and confidential.

The defendant’s communications with Mr Lunney on 11 and 24 April 2024 contend that his actions in accessing the Confidential Information occurred while he was heavily intoxicated with alcohol and drugs. He asserted that his actions took place in a drug-induced depression.

The defendant has not, at least expressly, indicated that he has deleted the information. He simply says “nor I have [sic] any information on anyone”. That is at odds with the blackmail message that he sent on 7 April 2024. The defendant has not proffered any formal proof or comfort to the plaintiff that he has deleted the Confidential Information which he has accessed. He has not complied with the orders for delivery up previously made by the Court.

The defendant has a history of making false responses to requests for disclosure of important information, which I have recited earlier in the context of his employment application to the plaintiff.

In all the circumstances, I am satisfied that actual or threatened misuse of the information is established.

The relief sought to make the interlocutory injunction permanent was said to be pursuant to s 66 of the Supreme Court Act 1970 (NSW).

It is important to understand what is meant by a “permanent” or “perpetual” injunction.

A permanent or perpetual injunction is intended permanently to prevent infringement of parties’ rights and is made after a final determination of the rights of the parties has taken place: e.g. Court Forms, Precedents & Pleadings Vic (LexisNexis) at [35,001], citing Halsbury’s Laws of England (4th ed), vol 24 (1979), Injunctions, at [903].

However, whilst there is no general power to change or dissolve an order regularly made and entered, the Court has power to stay or suspend the operation of an order, including a “permanent” injunction, even after a final hearing and even though the order for the injunction has been passed and entered: e.g. Permewan Wright Consolidated Pty Ltd v Attorney-General (NSW) (1978) 35 NSWLR 365 (Permewan Wright) at 367F per Reynolds JA. The stay or suspension of the operation of an injunctive order may be done by the Court on a basis analogous to staying the execution of a judgment: Permewan Wright at 367F.

Injunctive relief is not necessarily equitable relief. Its basis may be statutory. However, where equitable relief is given, the Court may suspend the operation of an order that has been entered so as to ensure that the result of an equity suit never causes unconscionable harm: Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201; [2007] NSWCA 104 (Australian Hardboards) at [140] per Young CJ in Eq (as his Honour then was) (dissenting as to the outcome of the appeal). The power to suspend is said to be limited to “extreme cases”: Australian Hardboards at [140].

In addition, the Court has power, by an appropriate order, to ensure that its order does not operate after the statutory basis on which it was made ceases to exist: Permewan Wright at 374E-F per Mahoney JA; see also Commonwealth Scientific and Industrial Research Organisation v Perry (1988) 53 SASR 538.

There are cases in which interlocutory injunctions are given in respect of information that is commercially sensitive, yet permanent injunctions are not ultimately issued. The nature and quality of the information that is characterised as “confidential” and the character of the relationship as between the parties are matters which inform whether or not the Court will accede to a claim to permanently restrain a defendant from misuse of information.

Where the confidential information in issue is of a highly private or sensitive nature, a permanent injunction against its disclosure may be justified: G E Dal Pont, Law of Confidentiality (2nd ed, 2020, LexisNexis) (Law of Confidentiality) at [15.5], citing as an example Australian Football League v Age Co Ltd (2006) 15 VR 419; [2006] VSC 308 in which Kellam J ordered permanent injunctions restraining the defendants from publishing or otherwise disseminating any material identifying any player in the plaintiff’s league who had given positive drug test results. Such information stands in contrast to confidential commercial or technical information which may eventually enter the public domain, for which a permanent injunction is generally less likely to be issued: Law of Confidentiality at [15.6].

In the circumstances of this particular case, the Confidential Information relates to the personal data of the plaintiff’s patrons or customers. I am satisfied that the Confidential Information is of a sufficient highly private or sensitive nature so as to justify issuing a permanent injunction.

In Re Rosie (No 2) [2022] NSWSC 1750, I addressed the relevant provisions of the Court Suppression and Non-publication Orders Act 2010 (NSW) (CSNPO Act) at [360]-[374] as follows:

The Court may make a suppression or non-publication order on one or more of the following grounds pursuant to s 8(1) of the CSNPO Act:

In the circumstances of this case, I am satisfied that the suppression orders sought are justified, at least pursuant to ss 8(1)(a), (c) and (e).

The plaintiff sought an order that the defendant pay its costs on the indemnity basis.

The basis for that application was twofold:

Costs are in the discretion of the Court, subject to the CPA, rules of Court and any other Act: s 98(1)(a) CPA.

In my view, the circumstances of the defendant’s actions which gave rise to the cause of action need to be distinguished from his actions or inactions in relation to the proceedings.

It is evident from the history that I have recited above that the defendant has had minimal involvement in the proceedings.

I do not regard the matter as being one in which indemnity costs are warranted, at least in the circumstance that there is nothing about the defendant’s involvement in the proceedings that has necessarily prolonged the proceedings, given rise to wastage or has proceeded upon the basis of false allegations – matters which to my mind would ordinarily warrant an order for indemnity costs.

On the other hand, the offer contained in the email from Mr Lunney to the defendant dated 16 May 2024 was an offer to resolve the matter on the basis of consent to the relief sought in prayer 10 of the summons, which is an order that the plaintiff has been successful in obtaining, and an order that there be no order as to costs to the intent that the defendant would bear such, if any, costs as he has himself incurred.

It is evident that, at the time that the offer was made, the plaintiff had incurred costs of some substance in the proceedings. The offer was open for acceptance until 5 pm on Friday 24 May 2024.

The costs order that I will make is that the defendant pay the plaintiff’s costs of the proceedings calculated on the ordinary basis up to and including 5 pm on Friday 24 May 2024, and thereafter on the indemnity basis.

The Court makes the following orders.