Secure Logic Pty Limited v Paul William Noble (No. 3)

1. [1]

   The Secure Logic group of companies supplies information security services to the IT industry, to protect the integrity of their clients’ data. The plaintiffs are all members of the Secure Logic group. The first and third defendants are former employees of the Secure Logic group. The plaintiffs contend in these proceedings that the first defendant, Mr Paul Noble, and the third defendant, Mr John Pankhurst, diverted the Secure Logic group’s confidential information and they seek permanent injunctions against its potential misuse.

2. [2]

   Mr Noble and Mr Pankhurst deny that they diverted or are misusing any of the Secure Logic group’s confidential information. Mr Noble cross claims against the plaintiffs for entitlements he claims are due to him under his employment contract and for misleading and deceptive conduct associated with his becoming an employee of the Secure Logic group. The plaintiffs contest his Cross-Claim and a similar one from Mr Pankhurst.

3. [3]

   The first plaintiff, Secure Logic Pty Limited is the principal Australian holding company in the group (and is therefore referred to in these reasons as “SL Australia”). The second third and fourth plaintiffs are subsidiaries of SL Australia. The second plaintiff, Secure Logic Technologies Pty Limited (“SL Technologies”) holds the intellectual property of the group. The third plaintiff, Secure Logic Singapore PTE (“SL Singapore”) is incorporated in the Republic of Singapore. SL Australia acquired the fourth plaintiff, Plush Hosting Pty Ltd (“Plush Hosting”), from the third defendant, Mr Pankhurst, during the events the subject of these proceedings.

4. [4]

   For convenience of reference in these reasons, unless it is necessary to distinguish among them, the four plaintiffs will be treated collectively as the Secure Logic group and referred to merely as “Secure Logic”.

5. [5]

   SL Singapore employed Mr Noble between 30 June 2015 and 3 June 2016. Mr Noble discharged the duties of his employment whilst located in the Republic of Singapore between June 2015 and February 2016, when he returned to Australia. Secure Logic claims that his departure from the group some four months later was triggered by discoveries that he had misapplied its confidential information. Secure Logic commenced proceedings against him on 15 June 2016 and obtained interlocutory injunctive relief against him on 17 June 2016.

6. [6]

   Secure Logic contends that Mr Noble took steps in April, May and June 2016 to download a wide range of its confidential information onto his work laptop computer and then onto his personal laptop, in order to misuse that information for his own purposes after he left the group. Secure Logic further contends: that when it commenced these proceedings, seeking relief including the return of Mr Noble’s work laptop and his personal laptop; that he wilfully destroyed his personal laptop and an associated hard drive; and that he did so with knowledge of impending orders for the return of those items, so their contents would not be submitted to forensic analysis. Secure Logic argues that the Court should infer from this act of intentional destruction that Mr Noble had wrongfully misapplied and intended to misuse the group’s confidential information.

7. [7]

   Mr Noble admits to the destruction of his personal laptop and the hard drive. He claims the destruction has an innocent explanation. He denies any intent to thwart the Court’s proposed orders or that the destruction of these items evidences any intent on his part to misuse the plaintiffs’ confidential information. Moreover, Mr Noble argues that because the plaintiffs have brought no other proceedings against other persons to whom the confidential information may have been distributed, that there is now no continuing threat of potential misuse of their confidential information and as a result a permanent injunction should not be granted to give long term effect to the interlocutory relief originally granted against Mr Noble.

8. [8]

   Secure Logic contends in reply that a permanent injunction should be granted. Secure Logic contends that one consequence of Mr Noble’s denial of information through the destruction of the personal laptop and hard drive was to make proceedings against any other parties both problematic and speculative.

9. [9]

   Mr Noble’s Cross-Claim alleges that the Chief Executive Officer of Secure Logic, Mr Santosh Devaraj, made representations that Mr Noble would be issued with a substantial shareholding in SL Singapore, which it was represented would be worth at least $10 million in the near to medium term.

10. [10]

    Mr Noble’s employment agreement created some odd forensic stances. Mr Noble undoubtedly signed an employment agreement with SL Singapore on 30 June 2015. But despite this, Mr Devaraj maintained throughout his evidence that Mr Noble had not signed any contract of service with SL Singapore, and that he always provided services to SL Singapore as an independent contractor. But this proved to be an eccentric position. Secure Logic formally admitted on the pleadings that a contract of service existed between SL Singapore and Mr Noble.

11. [11]

    Mr Noble further cross claims that he has not been paid his proper entitlements under his employment contract, due to Secure Logic’s failure to fully pay his wages, to fully pay his other entitlements, and to issue to him the shares in SL Singapore to which he says the employment contract entitles him, quite apart from the representations he says were made to him.

12. [12]

    In answer to Mr Noble’s Cross-Claim, the plaintiffs have offered to pay the disputed wages. But they dispute that Mr Noble has any right under his employment contract to other entitlements or to an issue of shares in SL Singapore or SL Australia.

13. [13]

    On 19 May 2016 Mr Noble gave notice through his then lawyers, Carroll & O’Dea, to Secure Logic’s lawyers, McCabes Lawyers Pty Ltd (“McCabes”), that these various matters that were ultimately included in the Cross-Claim, if persisted in, would result in the repudiation of Mr Noble’s employment contract.

14. [14]

    Secure Logic did not meet the demands of the 19 May 2016 letter. Carroll & O’Dea replied on 3 June 2016, purporting to accept SL Singapore’s repudiation of the employment contract and to terminate it. Whether or not Mr Noble’s allegations of SL Singapore’s breach of the employment contract are sustained, his act in terminating the employment contract on 3 June 2016 is accepted by SL Singapore as the de facto end of the employment relationship.

15. [15]

    Secure Logic’s own in-house expertise in IT security adds an unusual twist to this confidential information case. When Mr Devaraj became suspicious in May 2016 that Mr Noble may be misusing Secure Logic’s confidential information he authorised other employees of Secure Logic to conduct covert surveillance of Mr Noble’s work laptop, personal laptop and a personal website which Mr Noble operated through his family company Peach Tree Bay Pty Ltd (“Peach Tree Bay”), the second defendant.

16. [16]

    Mr Noble contends that Mr Devaraj and Secure Logic contravened the Workplace Surveillance Act 2005 (the “WS Act”), s 19 by authorising this covert surveillance and that all evidence gathered against him that is traceable to that surveillance was illegally obtained and is now not admissible in evidence against him. Secure Logic’s evidence included material that Mr Noble contended was illegally obtained. The Court reserved Mr Noble’s rights in relation to Secure Logic’s use of the allegedly illegally obtained material. The Court indicated that it would rule upon its admissibility in the final judgment. All parties accepted that this was the more convenient procedural course rather than giving a judgment on the admissibility of the material followed by a further round of submissions.

17. [17]

    Mr John Pankhurst, the third defendant, was a controlling shareholder and an employee of Plush Hosting, when Secure Logic was seeking to acquire it in June/July 2015. Secure Logic claims that Mr Pankhurst also acquired its confidential information which substantially overlaps with the information alleged to have been received by Mr Noble and it seeks permanent injunctions against him as well.

18. [18]

    SL Technologies owns some of Secure Logic’s intellectual property, which is sought to be protected by these proceedings. Plush Hosting also owned part of that intellectual property. By the time the proceedings were commenced, Secure Logic’s takeover of Plush Hosting was complete and Plush Hosting had become a wholly owned subsidiary company of SL Australia.

19. [19]

    The proceedings were conducted over 12 days in July/August 2019, at which time the Court recorded its detailed credit findings in relation to all the witnesses. Directions for written submissions were made after the hearing. Written submissions were served and spoken to in oral submissions on 15 November 2019.

20. [20]

    Mr M.R. Elliott SC and Mr S.J. Hallahan of counsel, instructed by McCabes, appeared for the plaintiffs. Mr B. DeBuse of counsel, instructed by Laxon Lex Lawyers, appeared for the first and second defendants. The third defendant, Mr J.R. Pankhurst, appeared in person. The Court was much assisted in its final analysis of the case by the detailed submissions provided by the parties to these proceedings.

21. [21]

    These reasons are structured into two parts. The first is a detailed narrative of the Court’s findings and an analysis of the claims for relief in Secure Logic’s Amended Statement of Claim. The second part is a separate narrative of the Court’s findings and an analysis of the claims for relief on Mr Noble’s Cross-Claim. For convenient legal analysis, the parties’ submissions separated out the factual narrative related to the Cross-Claim from the factual narrative on the Claim. Although convenient, this has the disadvantage that it does not deal with the parties’ conduct in its historical context. Although Mr Noble engaged in breaches of confidence and conduct designed to thwart imminent orders of this Court, a proper understanding of the context shows that frustration was building in him over time in part due to a series of sub-optimal management decisions at Secure Logic. The Court has nevertheless adopted the parties’ division of the facts into two narratives to make the substantial volume of the material more manageable. In the result, there is a slight degree of overlap between the two narratives.

22. [22]

    This is the Court’s third judgment in these proceedings. In the court’s first judgment the Court found that Mr Noble had waived client privilege over certain Carroll & O’Dea file notes and certain communications between Mr Noble and another lawyer advising him on 16 June 2016: Secure Logic Pty Limited v Paul William Noble [2019] NSWSC 991. Another judgment was also delivered during the hearing, dealing with a further issue of alleged waiver of client privilege: Secure Logic Pty Limited v Paul William Noble (No. 2) [2019] NSWSC 1057.

23. [23]

    The Court’s observations as to the credibility of witnesses are generally made where those witnesses appear in the narratives. But observations as to the credibility of the principal actors, being Mr Devaraj, Mr Noble and Mr Pankhurst, appear immediately below.

24. [24]

    Mr Devaraj. Mr Devaraj was an intelligent and considered witness. He has a ready mastery of his business environment and its risks. He had good foresight of the implications of the answers that he gave to questions. He considered what he was saying before giving his answers. He was meticulous in drawing and maintaining distinctions consistent with his beliefs about the case he was advancing on behalf of Secure Logic. He gave clipped, often “yes” or “no”, answers and did not generally add unnecessary, or spontaneous, detail to his responses.

25. [25]

    Mr Devaraj tended to take a precise and narrow approach in answering questions. He was reluctant to admit he had controlling power over the affairs of SL Australia. But all his conduct suggested that he did.

26. [26]

    Mr Devaraj mostly presented as a detached, clinical and cool businessman who managed his enterprise with professional pride in the specialised service it offered the market. One of the few times he showed much animation in the witness box was when he was being asked about the data breach in which Mr Noble participated. He appeared to be deeply affected by the event: possibly because of its potential to damage his and Secure Logic’s professional reputation.

27. [27]

    Mr Devaraj’s credibility is in part to be judged from his attitude to Mr Noble. Mr Devaraj was incapable of giving Mr Noble credit for any achievement at Secure Logic. Nor could he admit that he could be indebted to or obliged to Mr Noble in any way. This was accurate where Mr Devaraj was dealing with Mr Noble’s more exaggerated claims. But at other times his refusal to give any credit to Mr Noble’s actions seemed to be motivated by little more than his abiding distaste for Mr Noble.

28. [28]

    Mr Devaraj was not prepared to acknowledge any prior friendship with Mr Noble. He found it difficult to do so. He appreciated that such an acknowledgement might assist Mr Noble’s misleading and deceptive conduct case. But that case fails for other reasons and the issue is less significant than the energy given to it by Mr Devaraj and Mr Noble. But Mr Devaraj was keen to contest it at the level of lack of friendship. In this he was demonstrably wrong. This feature of his evidence also made the Court cautious about his general reliability. Although he was a more reliable historian than Mr Noble.

29. [29]

    Mr Devaraj could write charmingly engaging emails when he wanted something. But he could equally be clipped and brief when it suited him. His habitual composure masked a determined personality adept in strategic calculation. This side of Mr Devaraj is well illustrated when, in May 2016, Mr Noble came under his suspicion for breaching his obligations of confidence to Secure Logic, he quickly authorised surveillance of Mr Noble by the insertion of what is known as “key logger” software (because it tracks keyboard keystrokes for an external observer) into Mr Noble’s work laptop. Mr Devaraj was determined to hunt out irrefutable evidence of Mr Noble’s malfeasance. In doing so, he did not consider whether he or others that he was directing in this task within Secure Logic might contravene the WS Act.

30. [30]

    Mr Noble. Mr Noble was ultimately an unreliable witness who was prepared to give untruthful evidence when he thought it would serve his advantage. He shaped up ready for the contest with his cross-examiner. At first he weaved nimbly ahead of his cross-examiner’s questions. But as the cross-examination wore on, his answers, especially about the destruction of his personal laptop and the hard drive hard drive, became less and less credible. Close questioning forced him to put dubious patches on parts of his story to maintain a shield of respectable coherence for it. But in the end his account became a mixed patchwork of fact intermingled with convenient untruths.

31. [31]

    Mr Noble took a strategically defensive approach to his cross-examination. He often crafted his answers into calculated imprecision to give himself room to move in future cross-examination. At other times he could give what appeared to be very precise answers, yet he qualified them with words such as “at that point in time”.

32. [32]

    He appeared acutely conscious of being trapped into an answer that he would later regret. He deployed a range of devices to avoid being corralled too closely by his questioner. Sometimes he stalled for time and asked questions back to deflect the questioner from his course and to gain thinking time. At other times he replied, “I don’t recall”, when the Court suspects he did recall. He sought to change definitive answers already given, to “I don’t recall”. And he would sometimes answer questions with an unexpected qualification that would avoid the question and answer being used against him.

33. [33]

    But when forced into a corner, Mr Noble was often reluctant to admit the obvious, if he feared it may damage his case. He became so cautious about answering questions on one occasion that he expressed doubt about what it turned out was part of his own affidavit evidence-in-chief. By the time he gave evidence, it was clear that Mr Noble strongly disliked Mr Devaraj. This was in part due to this litigation, but it probably ultimately derived from their different personalities. It is not surprising they ultimately fell out. In contrast to cautious strategy-minded Mr Devaraj, Mr Noble revealed a more spontaneous disposition. Detailed credit findings about Mr Noble are made throughout these reasons.

34. [34]

    Mr Pankhurst. Mr Pankhurst presented himself as an amiable avuncular figure who was there to help everyone. But when his conduct was questioned, he could not give a reasonable account of events that was inconsistent with the case Secure Logic was making against him. Mr Pankhurst was not a reliable witness on important contentious issues, where his self-interest was at stake.

35. [35]

    Mr Pankhurst was not the author and driving force in creating a new business after leaving Secure Logic in April 2016 but, as the Court’s later findings show, he was happy to go along with what others were creating to see whether there might be any benefit for him. Mr Pankhurst was alert to easy financial opportunities that fell across his path, but he was not a builder of businesses.

36. [36]

    Mr Pankhurst was accused of giving a secret commission of $10,000 to Mr Noble. The objective evidence pointing to that conclusion was strong and demanded some explanation from him. His attempts to deflect that inference were unconvincing and improbable. But like many side issues in these proceedings, it is not a matter on which the Court is required to make detailed findings.

37. [37]

    In these reasons the Court makes findings of serious misconduct against Mr Noble and findings that are also critical of Mr Devaraj and Mr Pankhurst in a number of respects. Such findings raise special considerations for the Court. In its consideration, the Court has applied the principles in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] ALR 334; (1938) 12 ALJR 100; [1938] HCA 34 (“Briginshaw”) and has had regard to Evidence Act 1995, s 140(2). The Court does not lightly make findings that, on the balance of probabilities, a party to civil litigation has been guilty of serious misconduct, and the Court recognises that the strength of evidence necessary to establish such findings may vary according to the nature of what is sought: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd & Ors (1992) 110 ALR 449; (1992) 67 ALJR 170; [1992] HCA 66 at 170 per Mason CJ, Brennan, Deane and Gaudron JJ; see also Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 and Palmer v Dolman; Dolman v Palmer [2005] NSWCA 361.

38. [38]

    The following is a narrative of the relevant history in relation to the Amended Statement of Claim. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded. For reasons of economy this narrative does not always include reference to versions of the facts that have been rejected.

Secure Logic, Mr Devaraj and Mr Noble – 2013 to 2016

1. [39]

   Mr Devaraj incorporated SL Australia in 2008. He is and has been a director of the company since its incorporation. He is the majority shareholder of its 10,000 issued shares. Mr Devaraj caused SL Technologies to be incorporated in 2013. Mr Devaraj has been a director both of SL Australia and SL Technologies since their incorporation.

2. [40]

   Throughout most of the commercial history of both SL Australia and SL Technologies, Mr Deepak Singh was the most senior manager of these two companies. Mr Singh’s private company owned shares in SL Technologies. Mr Singh was a careful witness who gave accurate evidence to the best of his recollection. He attempted to give the best evidence he could of events he witnessed. The contest between Mr Noble and Mr Devaraj seemed remote to him. He remained at Secure Logic at the time of the trial. He was loyal to Mr Devaraj and to Secure Logic but not so much that he was prepared to distort his evidence to assist them.

3. [41]

   At the time of the hearing, Secure Logic had offices in Sydney, Singapore, China and Malaysia. Its companies employed some 70 staff spread throughout these various offices.

4. [42]

   By 2014 Secure Logic had developed into an established provider of information security services to state and federal governments and to financial and other commercial organisations. It continued to conduct that business during the period of 2014 to 2016 spanning the events the subject of these proceedings. The description below of Secure Logic’s business is commonly expressed in the present tense but describes the nature of that business in the 2014 – 2016 period.

5. [43]

   Secure Logic offers services to assist public and commercial organisations to protect their information from unauthorised or accidental modification, loss, release, or impact on the safety and well-being of individuals. Secure Logic provides information and communication technology (“IT”) services to address the threat from hackers, disgruntled staff and imperfect security controls to the integrity of information held by an organisation, and thereby reduce damage to the organisation’s financial viability and reputation.

6. [44]

   A principal component of Secure Logic’s business is the provision of Managed Security Services, which are known in this industry as “MSS”. Secure Logic’s MSS allows its client organisations to outsource the management of their IT infrastructure and services. Secure Logic’s MSS service involves the provision of full-time monitoring and management of clients’ IT systems in Secure Logic’s Cyber Security Operations Centre (“CSOC”) with the objective of defending clients against external and internal threats. Secure Logic’s MSS included a helpdesk and the capacity to escalate security in real time to deal with a known incident.

7. [45]

   Secure Logic operates in a competitive market. Its main competitors in the provision of MSS are Verizon, Dimension Data, IBM and Telstra.

8. [46]

   Secure Logic also provides professional and technical services related to IT and anti-crime and asset recovery services. Its main competitors in the provision of these professional and technical services include Deloitte, PwC, Verizon and UXC. And its main competitors in anti-crime and asset recovery services are Trustwave, Firstwave Cloud Technology (“FirstWave”) and Control Case.

9. [47]

   Secure Logic has a range of Australian banks infrastructure companies and technology providers among its private clients. Its government clients include the NSW Electoral Commission (for secure platforms to host online voting in state elections), the NSW Department of Finance, Services and Innovation (to create secure IT services to be shared by all NSW agencies), the NSW Board of Studies (to protect Higher School Certificate systems and applications) and the NSW Crime Commission.

10. [48]

    During the events covered by these reasons, Secure Logic’s headquarters were in Pitt Street in the Sydney CBD and its Sydney-based regional director was Mr Singh.

11. [49]

    Throughout 2014, the NSW Government had engaged Peach Tree Bay to provide Mr Noble’s IT services. That year he represented the interests of the NSW Government in a major IT project, the development of a Data Centre Program (“GovDC”).

12. [50]

    The NSW Department of Finance, Services and Innovation had also been an important client of SL Australia up to 2014. In 2014 Mr Devaraj and Mr Noble met when they worked together on the GovDC. Mr Devaraj is strategic in everything he does. A good relationship with Mr Noble could only help Secure Logic. Mr Devaraj courted Mr Noble’s friendship.

13. [51]

    Mr Noble finished his role with the NSW GovDC program on Monday, 23 February 2015. That day he organised after work drinks. His guests included Mr Pankhurst and many staff of Secure Logic.

14. [52]

    SL Singapore employed Mr Noble from 1 July 2015 to 3 June 2016. In many ways, Mr Noble was a logical fit for Secure Logic. He had worked as an IT professional during the 1990s and 2000s both giving direct IT advice and assistance and managing teams of IT employees.

15. [53]

    Mr Noble worked as a Technology Consultant for NatWest Markets between February 1994 and 1997 in Hong Kong and Australia, including as the company’s Chief Information Office. The teams he managed at NatWest Markets addressed computer breakdowns and software malfunctions.

16. [54]

    He moved to Dimension Data and designed IT networks for banking and other customers. He then moved to Credit Suisse as a Specialist IT Consultant, charged with setting up a disaster recovery system to operate in the event the bank’s main IT systems were disabled. He designed and operated the system for Credit Suisse. And between 2003 and 2007, Mr Noble worked for JPMorgan Chase & Co in India and the UK, generally in the role of Lead Consultant in constructing disaster recovery platforms and data centres.

17. [55]

    Mr Noble decided to establish Peach Tree Bay in 2008 as a corporate vehicle to supply his IT services to clients. One of those clients was the NSW Government, to whom Peach Tree Bay provided services from 2008 to February 2015.

18. [56]

    By the time Mr Noble joined Secure Logic, he had well over 20 years of experience in the IT industry at the operational and strategic level. And he had extensive industry contacts. It was not difficult to see why in the first half of 2015 Mr Devaraj became interested in Mr Noble joining Secure Logic.

19. [57]

    In 2014 Mr Devaraj decided that he wanted to expand Secure Logic’s business into Singapore. He incorporated SL Singapore in 2014. Its issued share capital of 1,000 shares is held by SL Australia and SL Technologies.

20. [58]

    Mr Devaraj set up a legal structure to regulate the terms on which other investors might take interests in SL Singapore. On 23 June 2014 he arranged for execution of a deed between SL Singapore and SL Australia to govern relations between shareholders in SL Singapore (“the SL Singapore shareholder deed”). Relevant terms of the SL Singapore shareholder deed are discussed later in the factual narrative relating to Mr Noble’s Cross-Claim.

21. [59]

    Mr Noble and Mr Devaraj met through their respective functions at the NSW GovDC. Mr Devaraj is strategic. He developed a relationship with Mr Noble who represented the NSW Government's interests. A good relationship with Mr Noble would help Secure Logic. Mr Devaraj courted Mr Noble's friendship. Mr Devaraj denies that now but the Court accepts that is what happened. More detailed findings about this period appear in the factual narrative in relation to Mr Noble’s Cross-Claim set out later in these reasons.

22. [60]

    By February 2015, Mr Noble’s NSW government engagement was coming to an end. Mr Devaraj thought Mr Noble might become a useful part of Secure Logic so he began to entreat him to join the group. Draft employment agreements were exchanged, and meetings took place between February and June 2016. This ultimately led to Mr Noble and Mr Devaraj (on behalf of SL Singapore) signing an employment contract on 30 June 2015. Disputes about the employment contract are resolved in the later section of these reasons in the later section of these reasons dealing with Mr Noble’s Cross-Claim.

23. [61]

    Mr Noble’s employment contract with SL Singapore commenced on 1 July 2015. The day before he signed a written Non-Disclosure Agreement (“NDA”). Its object was to protect the confidential information of SL Singapore and its related corporate entities upon the commencement of Mr Noble’s employment. The terms of the NDA became an important part of the Confidential Information contest between the parties.

24. [62]

    The NDA, clause 1.1 defined “Confidential Information” in the following terms:

25. [63]

    The NDA, clause 2 creates the important operative obligations upon the employee to preserve and maintain the Confidential Information and not to misuse it:

26. [64]

    The NDA captures documents containing material derived from Confidential Information. Clause 3 – Notes creates obligations on the employee to constrain the misuse of Confidential Information or notes by others as follows:

27. [65]

    The NDA, clause 4 obliges the employee upon request to account for a return of confidential information and notes as follows:

28. [66]

    The NDA, clauses 7 and 8 provide for the post-employment operation of the agreement and for other miscellaneous matters:

29. [67]

    Neither party adduced evidence that the laws of New South Wales or the laws of Singapore are different with respect to any aspect of the NDA. The case was conducted according to the precepts of the laws of New South Wales, on the presumption that in the absence of the proof of the laws of Singapore being different, they are presumed to be the same: Neilson v Overseas Projects Corp (Vic) Ltd (2005) 223 CLR 331; (2005) 221 ALR 213; (2005) 79 ALJR 1736; [2005] HCA 54 and Blank v Commissioner of Taxation (2016) 258 CLR 439; (2016) 154 ALD 12; (2016) 338 ALR 533; (2016) 91 ALJR 14; (2016) 104 ATR 41; [2016] HCA 42.

30. [68]

    The parties contest the terms of Mr Noble’s employment contract with SL Singapore. Mr Noble contends he was employed upon the terms of a contract dated 1 July 2015 in typescript on the cover sheet, and signed by Mr Noble on 30 June 2015. Mr Noble’s account of the signing of the contract is accepted. It is recounted in more detail in the factual narrative in relation to the Cross-Claim. Only its terms relevant to Secure Logic’s breach of confidence claim are set out here.

31. [69]

    Mr Noble must accept the confidentiality terms of the employment contract for which he contends. Secure Logic uses its terms (in particular, clause 1.14) in its confidential information claim against him. Clause 1.14 of the employment contract relevantly provides:

32. [70]

    These obligations reinforced and complemented the obligations that Mr Noble had agreed to under the NDA.

33. [71]

    Mr Noble had introduced his friend Mr Pankhurst to Mr Devaraj a few years before 2015. Mr Devaraj had dealt with Mr Pankhurst and his company Plush Hosting in the intervening years.

34. [72]

    In July 2015, Mr Pankhurst owned all the shares in Plush Hosting. At the same time as Mr Noble’s employment with SL Singapore was being discussed with Mr Devaraj, they discussed the acquisition of Plush Hosting.

35. [73]

    Mr Pankhurst transferred his shares in Plush Hosting to SL Australia in July and August 2015. Secure Logic says that this occurred without Mr Pankhurst negotiating or signing any documents setting out the terms upon which that acquisition would occur. Mr Pankhurst became an employee of Plush Hosting (by then a subsidiary of SL Australia) pursuant to an employment contract he signed on 27 July 2015. Mr Pankhurst’s employment contract with Plush Hosting contained a confidentiality clause, the same as clause 1.14 as that in Mr Noble’s employment contract.

36. [74]

    SL Australia acquired 60 per cent of the issued shares in Plush Hosting in late June, early July 2015. On 28 July 2015, Mr Pankhurst signed his employment contract with Plush Hosting and on 3 August 2015 Mr Noble’s family company, Sanbru Pty Ltd ("Sanbru"), acquired the remaining 40 per cent of the issued shares in Plush Hosting and Mr Pankhurst ceased to be a director.

37. [75]

    Soon after Mr Noble executed his employment contract with SL Singapore, he travelled to Kuala Lumpur and commenced work to set up the CSOC, the security operations centre, there for SL Singapore. Mr Noble began to issue invoices to SL Singapore for the work he was performing for SL Singapore in Kuala Lumpur. Mr Devaraj was closely involved in directing Mr Noble to issue these invoices. But his directions to Mr Noble and their significance for Mr Noble's engagement by SL Singapore became contentious.

38. [76]

    Mr Devaraj professed to be unhappy with Mr Noble’s work in Kuala Lumpur. If Mr Devaraj really was dissatisfied with Mr Noble’s work in Kuala Lumpur there is little objective evidence to support his dissatisfaction. If Mr Devaraj was disappointed with Mr Noble’s performance he did not take the steps that one might expect in such circumstances. For example, there is no evidence of Mr Devaraj setting time and quality standards for the construction of the CSOC in Singapore, setting the outcomes that were expected and then seeking to monitor Mr Noble’s conduct against these parameters. There is no reason to believe that Secure Logic does not have efficient and mature operating systems. None of them were overtly deployed to hold Mr Noble to account for his performance in Kuala Lumpur.

39. [77]

    Mr Noble ceased work in Kuala Lumpur and returned to work for Secure Logic in Australia in February 2016. Mr Devaraj says that he was recalled to Australia due to his substandard performance in setting up the CSOC in Kuala Lumpur. Mr Noble says that he wanted to come back to Australia due to uncertainty about the basis upon which he would be paid and the delays that had already occurred in payment to him. Findings concerning these competing explanations for Mr Noble's return to Australia are made in the narrative of facts in relation to the Cross-Claim below.

40. [78]

    Apart from one brief journey back to Kuala Lumpur, Mr Noble was Sydney-based from mid-February 2016. Mr Singh had taken over developing the CSOC in Kuala Lumpur. Mr Noble had very little day-to-day work related to Secure Logic in Asia although he was an employee of SL Singapore. And in Australia he only had one or two projects to work on.

41. [79]

    Mr Noble was unsure about what work he would be doing in Australia for Secure Logic and he began to feel that his future with the group was uncertain. Upon his return to Australia there does not appear to have been a single occasion where his future role with Secure Logic was formally redefined, or renegotiated. Rather the issue appeared just to drift.

42. [80]

    Mr Noble handed over responsibility for the Kuala Lumpur operations to Mr Singh. He sent a handover email to Mr Singh on 10 February 2016, copied to Mr Devaraj. Under the heading “Malaysia Activities” he passed on to Mr Singh a written record of a handover meeting which had taken place between the two of them covering an immense range of ongoing activities in the Kuala Lumpur office of SL Singapore. It covered everything from contracts with Austrade, distribution of information to key stakeholders, local regulatory compliance issues, computer hardware installation and budgets, balance-sheet issues furnishings and fit out and signage. Mr Noble also covered forthcoming client presentations, business opportunities, risk issues and suggestions about focus for the weeks ahead and major events planned in the calendar for 2016. The email attempts to execute a smooth transition of operations in Kuala Lumpur to Mr Singh.

43. [81]

    On Monday, 22 February 2016, Mr Noble’s friend, Mr Fergus Brooks, left Secure Logic. That day Mr Brooks sent Mr Devaraj a detailed handover summary, entitled “Handover Report – Fergus Leaving”, which contained information about the principal Secure Logic clients that he managed and their revenue and pricing prospects for Secure Logic.

44. [82]

    The following Friday, 26 February 2016, Mr Devaraj announced to all staff at Secure Logic that Mr Brooks had resigned. Mr Devaraj acknowledged that Mr Brooks “has played a significant role in establishing Secure Logic from a start-up to a company that has achieved enormous success” and that this was due to “all the talent and effort Fergus has demonstrated over years in multiple roles as Jack of all trade[s]”.

45. [83]

    Mr Brooks gave evidence about operational issues at Secure Logic and his dealings with Mr Noble. But he had a very poor memory of events. He had had a bicycle accident about a month before the hearing and had hit his head and sought treatment for a head injury. He said that his memory had been “sketchy” since then. Wherever possible he preferred to avoid answering questions. He was not strongly committed to giving a full account of remembered facts in evidence. The Court had difficulty relying upon his version of events on any contentious issue, unless it was corroborated by other objective or credible evidence or it was in substance an admission.

46. [84]

    Looking ahead, after Mr Brooks left Secure Logic, he took a position as the National Practice Leader – Cyber Risk at AON in May 2016. As he and Mr Noble were friends, they stayed in touch after he left Secure Logic. In his new role at AON, Mr Brooks considered AON either establishing or having access to a 24/7 call centre and he had discussions with personnel from FirstWave about that issue.

47. [85]

    Mr Brooks was asked about his having discussions with Mr Noble about Mr Noble leaving Secure Logic and moving to FirstWave. Mr Brooks’ response to this line of questioning was “not that I remember”. But if such discussions had taken place Mr Brooks is likely to have remembered them. Their close friendship was such that it is likely that such discussions took place. Mr Noble had been a groomsmen at Mr Brooks’ wedding.

48. [86]

    Mr Brooks corroborated in cross-examination one aspect of Secure Logic’s case which the Court accepts. In his general introduction to his handover report “Handover Report – Fergus Leaving”, Mr Brooks explains “I have added specific leads to the proposals I was responsible for with each account, they are all in SharePoint.” SharePoint was Secure Logic’s electronic document storage and retrieval system.

49. [87]

    Mr Brooks agreed in cross-examination that his practice at Secure Logic was to put final successful proposals and contracts for which he was responsible into SharePoint and he backed up all other documents upon which he worked onto the Secure Logic G drive. Draft and incomplete proposals would be archived in a folder described as the “Fergus folder” in the G-drive. The origins and use of the ‘Fergus folder” is explained later in these reasons. Mr Brooks says such incomplete proposals were not necessarily placed in SharePoint. Final proposals and agreements would go into SharePoint and could also be found on the G drive.

50. [88]

    Mr Brooks’ evidence confirmed that Mr Devaraj gave instructions for proposals when completed and successful to go into SharePoint. Whilst the theme of Mr Brooks’ affidavit was that Mr Devaraj had suggested or recommended that documents be placed on SharePoint, he accepted in cross-examination that this was a standing instruction. This evidence is corroborated by email instructions from Mr Devaraj in June 2015 instructing staff “please make sure all proposals and documents are on SharePoint”. Although this preceded Mr Noble’s employment with Secure Logic it is likely that Mr Devaraj continued to give such instructions.

51. [89]

    For Mr Noble the departure of such a good friend as Mr Brooks from Secure Logic was one less tie to the organisation. That, together with Mr Pankhurst’s subsequent departure from Secure Logic, loosened whatever attachments Mr Noble had at Secure Logic. Remuneration disputes with Mr Devaraj finally drove Mr Noble away.

52. [90]

    By February/March 2016, Mr Noble claimed SL Singapore was behind in its invoice payments to him. He was becoming frustrated at the situation. Not only was Mr Noble concerned about non-payment of his invoices but he began to raise issues concerning the delivery of shares to him under his employment contract. This dispute led to growing distrust between Mr Noble and Mr Devaraj. This dispute is covered in more detail in the factual narrative in relation to the Cross-Claim.

53. [91]

    On 22 April 2016, Mr Devaraj met with Mr Pankhurst. Mr Devaraj had come to the view that Mr Pankhurst had been disloyal to Secure Logic and confronted him with allegations of misconduct. Dissatisfied with Mr Pankhurst’s answers, Mr Devaraj placed him on suspension pending an investigation. Mr Devaraj also suspended Mr Alexi Katsamaclis, another employee of Secure Logic. The Court’s findings below deal with evidence in relation to Mr Katsamaclis.

54. [92]

    On 28 April 2016 Mr Devaraj convened an officewide meeting at the Sydney office of Secure Logic. He called all staff together to advise them that Mr Pankhurst and Mr Katsamaclis had been suspended and that no one should communicate with them. The meeting was a logical consequence of their suspension.

55. [93]

    Mr Devaraj especially wanted to contain the consequences of Mr Pankhurst’s apparent disloyalty. Mr Devaraj’s directions to the Secure Logic staff was clear: no one was to communicate with Mr Pankhurst or Mr Katsamaclis. The Court accepts Mr Devaraj’s evidence that he said to everyone in attendance that “Mr Pankhurst and Mr Katsamaclis were on suspension, that an investigation into their conduct was being carried out, that no one should communicate with them and any contact should be reported to their managers or [Mr Devaraj]”. Mr Devaraj knew how to make himself clear and did so on this occasion.

56. [94]

    Mr Noble claims he did not get that message. Mr Noble at first denied that Mr Devaraj spoke at this meeting, saying that it was Mr Singh who conducted it. But he agrees he attended an office meeting that day in which Mr Pankhurst’s suspension was mentioned. But he says that he could recall no direction being issued not to contact Mr Pankhurst. Mr Noble claimed that after the meeting he still believed he could contact Mr Pankhurst about work matters.

57. [95]

    It is difficult accept this. Mr Noble could not have failed to hear Mr Devaraj‘s instruction that he should not contact Mr Pankhurst or Mr Katsamaclis. But by then Mr Noble’s loyalty to Secure Logic had gone. He probably attended this meeting with little inclination to listen to Mr Devaraj.

58. [96]

    And Mr Noble’s account of this meeting is implausible. Contrary to his account, Mr Singh was not at the meeting. And Mr Noble was ultimately uncertain in denying that Mr Devaraj was present at a meeting Mr Noble would have expected him to attend. Mr Noble repeated in cross-examination that he was “confused” about the meeting. It is likely that he knew he was at the meeting but was reluctant to admit that because of its consequences for the legitimacy of his subsequent dealings with Mr Pankhurst.

59. [97]

    But even if contrary to these findings Mr Noble had not attended the meeting, he was aware of the reasons for Mr Pankhurst’s suspension. Mr Noble admitted that he was aware from about this time both that Mr Pankhurst had been suspended because of a serious breach of professional conduct and that his suspension was because he was associated with a new business. Even if, contrary to the Court’s findings, Mr Noble had not attended the meeting, he was aware of the reasons for Mr Pankhurst’s suspension. That alone should have been enough for him to realise that he should not be communicating with Mr Pankhurst about Secure Logic’s information.

60. [98]

    By early May 2016 Mr Noble believed that his future lay with leaving Secure Logic and taking a job with FirstWave, an international cloud computing and cyber security company with operations in Australia. In April 2016 Mr Noble had discussed with the Australian CEO of FirstWave, Mr Steve O’Brien, about the possibility of taking up a position with FirstWave as designated Chief Operating Officer – Strategic Execution. By early May Mr Noble and Mr O’Brien were exchanging communications suggesting a consensus that Mr Noble could be employed at FirstWave at a base salary of $230,000, a $50,000 bonus and participation in FirstWave’s share option plan.

61. [99]

    Mr Noble’s correspondence with FirstWave reveals much about his attitude to Secure Logic at the time. In an email on 2 May Mr Noble said to Mr O’Brien that “I really am very keen to get things moving on this so that I can escape with my reputation intact from the organisation I am currently with”. On 4 May Mr Noble told Mr O’Brien by email that he was “very keen” to meet Mr Drew Kelton, the Chairman of FirstWave, to “discuss how we could work together to grow the business”. He also offered to “tee-up that meet with Fergus”, a meeting being proposed with Mr Brooks.

62. [100]

    Mr Noble remained keen to go to FirstWave. But he wanted clarity as to the terms on which FirstWave proposed to engage him. In another email on 9 May, Mr Noble expressed to Mr O’Brien that he was “keen to move to FirstWave”. But in a reference to his stalled negotiations with Mr Devaraj he said to Mr O’Brien “on the face of it I’m good to go but having been caught out once I would appreciate a bit of detail around the rest of the offer”.

63. [101]

    It was not incompatible with Mr Noble’s obligations to Secure Logic for him to have discussions with Mr O’Brien about taking employment at FirstWave. Secure Logic had failed to pay him causing him to want to move on. But his discussions with Mr O’Brien take on a different light when it is seen that at this time he assisted FirstWave in its dealings with AON to the probable disadvantage of Secure Logic.

64. [102]

    But despite Mr Noble’s positive emails to Mr O’Brien, under cross-examination he diminished his credibility by persistently refusing to concede that he wanted to move to FirstWave in May 2016. He also had trouble conceding that his working relationship with Secure Logic had come to an end by that time, despite what he had said in his own affidavit in chief to the same effect. He tried to characterise his statements to Mr O’Brien as not genuine and part of a “negotiation”. But his email sentiments were likely to have been genuine. They expressed such keenness to go to FirstWave that they were unlikely to have been a negotiating tactic: in a negotiation, he should have been playing hard to get.

65. [103]

    Secure Logic propounds a case that once Mr Noble decided to leave Secure Logic in early May 2016, he deliberately sought to promote his own advantage to Secure Logic’s disadvantage in four separate avenues of conduct in the first two weeks of May. Each of these avenues is analysed in more detail in the sections below. The four avenues of alleged misconduct are the following:

    1. (1)

       Mr Noble secretly assisted Mr Pankhurst and Mr Katsamaclis to act against Secure Logic after they had themselves been suspended for misconduct (“the Pankhurst/Katsamaclis conduct”);

    2. (2)

       Mr Noble secretly assisted Mr Pankhurst, whilst he was suspended by sending him Secure Logic’s recently created customer contacts list (“the JP Prospects conduct”);

    3. (3)

       Mr Noble copied from SL Australia’s server and onto his work laptop, and then onto his personal laptop, a substantial quantity of Secure Logic’s business records, known in these proceedings as the “Fergus Folder”, which he could then have at his disposal once he had left Secure Logic (“the Fergus Folder conduct”); and

    4. (4)

       In anticipation of securing employment with FirstWave, Mr Noble assisted FirstWave by introducing it to a business opportunity with AON that Mr Noble was only aware of through his employment by Secure Logic, and then helping FirstWave in its dealings with AON (“the FirstWave/AON conduct”).

66. [104]

    All this alleged misconduct occurred in May 2016 until some of it was discovered and Mr Noble’s employment was terminated. The Court concludes that Secure Logic’s case of Mr Noble’s alleged May 2016 misconduct is made out and that his attempts to answer to it should not be accepted.

67. [105]

    In May 2016 Mr Noble secretly assisted Mr Pankhurst and Mr Katsamaclis to act against the interests of Secure Logic after they had been suspended from their duties at the group.

68. [106]

    Events leading to the suspension of Mr Pankhurst and Mr Katsamaclis explain how Mr Noble’s subsequent assistance to them was likely to damage Secure Logic.

69. [107]

    Secure Logic’s Cyber Risk Assessment Tool. In the second half of 2015 Mr Katsamaclis had responsibility at Secure Logic for developing a product called a “cyber risk assessment tool”. By about September/October 2015 the product was in an advanced state of preparation. Secure Logic’s objective with its cyber risk assessment tool was to position Secure Logic in the then-developing cyber security insurance market. By 2015 Secure Logic had become aware that both insurers and companies seeking insurance cover in Australia were becoming increasingly interested in analysing cyber risk levels: that is the probability that their IT systems may come under cyber-attack. Secure Logic’s cyber risk assessment tool was designed to take advantage of this rapidly growing marketplace.

70. [108]

    As its name suggests the cyber risk assessment tool allowed an enterprise to test its cyber risk to better calibrate its insurance coverage relevant to that issue. Secure Logic proposed offering the cyber risk assessment tool online free of charge, from which it would then attract broader interest in its range of cyber security products.

71. [109]

    In October and November 2015 Mr Katsamaclis and another business development manager at Secure Logic, Mr Ricky Gallagher attended symposiums and insurance industry conferences to promote the risk assessment tool. Mr Katsamaclis also gave presentations in conjunction with insurance industry representatives. Feedback from these events allowed Secure Logic to fine tune the operation of the assessment tool to the needs of the marketplace. Under the guidance of Mr Singh for technical assistance, Mr Katsamaclis and Mr Gallagher began promoting the cyber risk assessment tool to the insurance industry generally.

72. [110]

    By November 2015 Mr Katsamaclis was meeting with senior insurance industry executives from Chubb Insurance Co. of Australia (“Chubb”) with a view to forming a partnership with them in the use of the assessment tool. After this meeting with Chubb, Mr Katsamaclis emailed Mr Devaraj and Mr Singh on 7 November reporting about potential partnership opportunities with Chubb in Secure Logic’s assessment tool. He gave a point by point explanation of what needed to be done to improve the assessment tool to take advantage of “opportunities for Secure Logic to work closely with Chubb worldwide as a trusted cyber partner”.

73. [111]

    Mr Pankurst and Mr Katsamaclis Arouse Suspicion. As a business development manager Mr Katsamaclis was on the sales side of Secure Logic’s business, not the technical side. In November 2015 another employee of Secure Logic on the technical side, Mr Kevin Cobby, who had a role in developing the cyber risk assessment tool, alerted Mr Devaraj about what he regarded as an unusual pattern of conduct by Mr Katsamaclis. Mr Cobby reported that Mr Katsamaclis had been probing him for information, about the development of the assessment tool and who had access to its source code.

74. [112]

    In January 2016, some Secure Logic clients began informing Mr Devaraj that during ordinary business hours, whilst apparently on Secure Logic’s business, Mr Katsamaclis and Mr Pankhurst were letting it be known they had developed Secure Logic’s cyber risk assessment tool and a “3Si Secure” modular suite of services. It was reported to Mr Devaraj that Mr Katsamaclis and Mr Pankhurst had said they were looking for funding to develop it further in a partnership with a Mr Nick Elsmore and a Mr Nigel Scott. Mr Elsmore is the former owner of an information security consulting company, SIFT. And Mr Scott was a friend of Mr Pankhurst in the information security industry.

75. [113]

    Acting on this information, Mr Devaraj instructed Mr Anton Guzhevskiy, Secure Logic’s Managed Services Manager, to investigate the contents of the Outlook calendars of Mr Katsamaclis and Mr Pankhurst. Mr Guzhevskiy did so, and Mr Devaraj discovered that those two employees had together held regular meetings with clients, even though they were responsible for different accounts and were pursuing different leads with customers. This raised Mr Devaraj’s suspicions. During Mr Guzhevskiy’s check on Mr Katsamaclis’ Outlook calendar he saw on Mr Katsamaclis’ desk documents relating to a new cyber-security business. He brought these documents to Mr Devaraj’s attention.

76. [114]

    An Investigation Commences. From this information Mr Devaraj authorised Mr Guzhevskiy to conduct a review of the emails being transmitted to and from Mr Katsamaclis’ work laptop. That review revealed the following communications that demonstrated Mr Pankhurst and Mr Katsamaclis were developing a business competing with Secure Logic’s.

77. [115]

    The first was an email dated 3 April 2016 from Mr Scott to Mr Katsamaclis enclosing a draft presentation for a new unnamed enterprise providing “multi-faceted cyber risk assessment and management services”. The contents of this presentation coincided with the information given to Mr Devaraj that Mr Katsamaclis was reported as publicising the fact that he was developing a cyber risk assessment tool with Mr Scott. The email referred to previous discussions between them on the project. The draft presentation drew heavily upon many features of the cyber risk assessment tool that Secure Logic was developing. The presentation emphasised the cost and frequency of data breaches, the growth in cyber-related insurance, misconceptions resulting in businesses under insuring for cyber risk and the advantages of the cyber risk assessment tool in accurately evaluating cyber risk.

78. [116]

    The presentation proposed what it called a Security Services Broker Model or “SSB Model”. The SSB Model involved a security services broker service to do the following: manage a client’s cyber protection software, monitor the client’s cyber protection systems, and acquire appropriately calibrated cyber risk insurance to cover losses from probable data breaches. The SSB Model overlapped with Secure Logic’s cyber risk assessment tool but built upon the same idea and developed it further as part of the SSB Model. Importantly, both the SSB Model and Secure Logic cyber risk assessment tool were crafted to address much the same marketplace: companies that needed cyber risk insurance, and their insurers.

79. [117]

    Mr Guzhevskiy discovered another email dated 3 April 2016 from Mr Scott to a Mr Steven Dujin and Mr Katsamaclis attaching a background briefing in relation to a cyber security business. Though not a document that Mr Katsamaclis had created the background briefing gave a role in the new business to Mr Katsamaclis as a business development manager. But it is to be inferred from the email, which called for further discussion, that Mr Katsamaclis was a participant in its development both before and after 3 April 2016. The background briefing also mentions a Mr Dougal Hawkes, who had recently resigned from employment at Secure Logic. The email also points to the involvement of Mr Pankhurst in the new enterprise. Of course, Mr Scott, Mr Elsmore and Mr Hawkes were free to develop this new business, but as full-time employees of Secure Logic, Mr Pankhurst and Mr Katsamaclis were not.

80. [118]

    Mr Guzhevskiy discovered more. Several emails to and from Mr Katsamaclis, Mr Scott and Mr Dujin between 3 and 5 April show that Mr Katsamaclis was an active organiser of meetings for this new enterprise and was having input into its structure and his future role within it.

81. [119]

    Mr Pankhurst was involved too. He is not an addressee or sender in the primary circle of emails among Mr Katsamaclis, Mr Scott, and Mr Dujin. But on 4 April Mr Katsamaclis forwards the background briefing document from Mr Scott to Mr Pankhurst, both using their personal email addresses. All subsequent correspondence among these parties that goes to Mr Pankhurst and Mr Katsamaclis uses their private email addresses, rather than their Secure Logic email addresses. It is to be inferred they did not want Secure Logic to know about these communications.

82. [120]

    Mr Pankhurst’s deeper involvement in this new enterprise competing with Secure Logic is to be inferred from a range of further evidence. On 4 April Mr Katsamaclis emailed Mr Pankhurst and others about holding an “official first meeting for all those involved” at Mr Katsamaclis’ home. The proposed agenda for the meeting includes “company structure for new project”, “roadmap and roles”, “propose kickoff date”, and the “overall business model”.

83. [121]

    On 8 April further emails to similar effect but with some emphasis upon investment funding, circulate among these same parties, excluding Mr Pankhurst. But Mr Pankhurst continues to receive emails, from which it may be inferred that he has, and is perceived by the others in the circle to have, a continuing interest in the development of this new enterprise. On 18 April Mr Scott emails Mr Pankhurst and Mr Katsamaclis about the sales pitch he plans to make the following day to a potential investor into the new enterprise.

84. [122]

    Mr Devaraj concluded from these discoveries that Mr Katsamaclis and Mr Pankhurst, were covertly constructing a new enterprise with Mr Scott, Mr Dujin and others using Secure Logic’s cyber risk assessment tool as a launching pad to compete against Secure Logic. The close conceptual similarities evident between the new enterprise’s SSB Model and Secure Logic’s cyber risk assessment tool is a basis to infer that a combination of Mr Hawkes, Mr Katsamaclis and Mr Pankhurst and used Secure Logic’s idea to seed the development of this new enterprise in which they had a financial stake.

85. [123]

    Other evidence tendered during the proceedings confirms Mr Devaraj’s conclusions in April 2016. Mr Pankhurst and others had established a business to be operated through a company called Cyber Risk Assurance Pty Ltd, a wholly owned subsidiary of Cyber Risk Assurance Group Pty Ltd. Mr Pankhurst and his wife are shareholders in Cyber Risk Assurance Group Pty Ltd.

86. [124]

    An information memorandum prepared for Cyber Risk Assurance Group Pty Ltd about 12 months later in November 2017 identified the business objectives of the new enterprise. Its purpose was to promote a cyber risk assessment tool and related cyber risk assessment services. The November 2017 information memorandum described Mr Pankhurst, Mr Dujin and Mr Hawkes as the co-founders of the business.

87. [125]

    The “Background to the Company” in the information memorandum links the foundation of Cyber Risk Assurance Group Pty Ltd with the April 2016 period Mr Pankhurst was at Secure Logic:

88. [126]

    In April 2016, whilst an employee of Plush Hosting, a Secure Logic subsidiary, Mr Pankhurst co-ordinated with Mr Dujin and others to establish the business of Cyber Risk Assurance Group Pty Ltd, centred around a cyber risk assessment tool and other related products in direct competition to Secure Logic.

89. [127]

    Secure Logic Suspends Mr Pankhurst and Mr Katsamaclis. All that had come to Mr Devaraj’s attention led him to suspend Mr Pankhurst on full pay until further notice on the basis that he “may have engaged in inappropriate conduct”, whilst an investigation took place into matters that “could constitute serious misconduct”. This was done by a Secure Logic HR department letter of 28 April 2016. Another letter the same day commenced that investigation. It alleged Mr Pankhurst had used Secure Logic’s confidential information to establish a competing business in concert with the persons associated with Cyber Risk Assurance Group Pty Ltd Pty Ltd and sought frank answers to this allegation. Secure Logic also suspended Mr Katsamaclis with similar communications.

90. [128]

    Mr Pankhurst’s 29 April reply to Secure Logic’s allegations admitted nothing. Further correspondence ensued. Mr Pankhurst’s final contemporaneous (10 May) reply to Secure Logic’s allegations was nothing if not a forthright denial of misconduct.

91. [129]

    This denial was false. It is unclear if Mr Pankhurst “attend[ed] meetings” for the purposes of creating a business in competition with Secure Logic. But it is undoubted that he had “contact with…persons” for that purpose. Mr Pankhurst did not then admit the contact and seek to give it an innocent explanation.

92. [130]

    Mr Pankhurst’s Explanation Unravels. But during the hearing Mr Pankhurst had to deal with the digital evidence against him. In his opening address he began to propound an innocent explanation for his contact with the other promoters of Cyber Risk Assurance Group Pty Ltd Pty Ltd. In his opening submissions, Mr Pankhurst told the Court that in April 2016 Mr Scott was conducting market research into the creation of a cyber risk insurance agency, that would be given a right by an insurer to underwrite product and that it “had nothing to do with cyber risk tools”; Mr Pankhurst explained that he was aware of this, and had discussed it with Mr Scott, in his capacity as a business development manager at Plush Hosting. Mr Pankhurst said that he was involved because he thought there was an opportunity for Secure Logic to provide services in that area.

93. [131]

    Mr Pankhurst further explained that this research into a possible cyber risk insurance agency led to Mr Scott concluding by 18 April 2016 that it was “a waste of time basically”, and not worth exploring further. He suggested this conclusion was supported by the terms of the email from Mr Scott to Mr Pankhurst and Mr Kastamaclis of 18 April that is referred to earlier in these reasons.

94. [132]

    Mr Pankhurst completed his explanation by referring to his late April meeting when Mr Devaraj suspended him based on the email traffic with Mr Scott and the others. Mr Pankhurst said that he had admitted to Mr Devaraj at this meeting that he had been in discussions with Mr Scott, but that he told Mr Devaraj it was only for the limited purpose of looking into a possible cyber risk insurance agency, a purpose that had been exhausted by 18 April.

95. [133]

    But Mr Pankhurst’s explanation cannot be accepted. It is inconsistent with the contemporaneous documentary evidence. The April 2016 emails do not just propose market research into a potential cyber insurance agency. The new enterprise described in these emails was offering a cyber risk assessment like Secure Logic’s. The 18 April email from Mr Scott to Mr Pankhurst does not indicate the business was going to be “a waste of time”. Rather it indicates development of the business would continue and that the task of attracting investors was in present focus.

96. [134]

    Mr Pankhurst’s explanation does not account for he and Mr Katsamaclis keeping information about the new enterprise away from Secure Logic at the time. The April 2016 emails’ use of personal email addresses, and not Secure Logic email addresses, is a puzzling procedure if this new enterprise was really an opportunity for Secure Logic.

97. [135]

    Moreover, the Court accepts Mr Devaraj’s evidence that at the meeting where he suspended Mr Pankhurst that Mr Pankhurst did not offer this innocent explanation to him or anyone else at Secure Logic. The Court accepts that Mr Pankhurst then “denied any involvement whatsoever”. This is consistent with the way Mr Pankhurst communicated with Secure Logic in writing at the time. If Mr Pankhurst had an innocent explanation for the April 2016 emails, it is surprising that he did not advance it immediately when he was accused. The Court does not accept his belated innocent explanation. Mr Pankhurst’s willingness to advance what must have been a falsely constructed explanation for those April 2016 emails diminished his credibility.

98. [136]

    Mr Noble Assists Mr Pankhurst and Mr Katsamaclis. As soon as Mr Pankhurst was suspended, he alerted Mr Noble. On 29 April Mr Noble emailed Mr Pankhurst with a draft response to the allegations against Mr Pankhurst, adding advice as to how Mr Katsamaclis should respond to Secure Logic’s allegations against him.

99. [137]

    Mr Noble wanted to cover his involvement. He instructed Mr Pankhurst to convey any advice to Mr Katsamaclis as though it had just come from Mr Pankhurst, not from Mr Noble. The 29 April email suggested a response for Mr Katsamaclis to send to Secure Logic. The draft expressly denied Secure Logic’s allegations against Mr Katsamaclis and accused Secure Logic of defamation.

100. [138]

     At a general level, it was not necessarily inappropriate for Mr Noble to assist other employees of Secure Logic in managing any HR issues that they had with the company. But here Mr Noble’s assistance was of a different character: he was helping Mr Pankhurst and Mr Katsamaclis to propound a misleading response to Secure Logic’s allegations which furthered Mr Pankhurst’s and Mr Katsamaclis’ covert conduct in competition with Secure Logic and contrary to the duties they owed to Secure Logic to act in its interests.

101. [139]

     But if Mr Noble truly thought that Secure Logic had wrongly accused Mr Pankhurst and Mr Katsamaclis, he could have raised the matter directly with Mr Devaraj. He did not; indicating he was not convinced Mr Pankhurst and Mr Katsamaclis were blameless.

102. [140]

     These communications do not alone prove that on 29 April Mr Noble was fully aware of the extent of Mr Pankhurst’s and Mr Katsamaclis’ conduct against Secure Logic. But Mr Devaraj had told Mr Noble at least that Mr Pankhurst had been suspended due to a serious breach of professional conduct. Mr Noble had not seen Secure Logic’s evidence grounding their suspension. He could not then make an informed judgment whether their suspensions were justified. Secure Logic criticises Mr Noble’s assistance to these two at that time. But if Mr Noble had been given and accepted an innocent explanation by Mr Pankhurst and Mr Katsamaclis it may not necessarily have been wrong of him to assist them in their dealings with Secure Logic.

103. [141]

     But the real question is what Mr Noble knew about Mr Pankhurst and Mr Katsamaclis’ conduct at that time. That becomes evident from subsequent correspondence. At this stage Mr Noble’s use of private email addresses at least tends to indicate that his communications with Mr Pankhurst and Mr Katsamaclis would not have met Mr Devaraj’s approval.

104. [142]

     Under cross-examination Mr Noble gave an unusual and implausible explanation for his communications with Mr Katsamaclis at this time. He said that he was concerned that Mr Devaraj was bullying staff at Secure Logic. He said Mr Katsamaclis was not trustworthy but that he was taking Mr Katsamaclis’ side to improve the way in which Secure Logic treated its staff, who were being bullied by Mr Devaraj and others.

105. [143]

     That explanation is not accepted. First, it makes little sense. If Mr Noble did not trust Mr Katsamaclis, it is difficult to understand why, in the absence of Secure Logic’s evidence, he would give enough credence to Mr Katsamaclis’ story to propound a denial of Secure Logic’s claims. And an employee he did not trust is hardly the kind of person that Mr Noble would choose to use to reform Mr Devaraj’s alleged tendency to bully staff.

106. [144]

     The better explanation is that by late April Mr Noble no longer felt any loyalty to Secure Logic and was prepared to assist both Mr Pankhurst and Mr Katsamaclis covertly against Secure Logic’s interests. Correspondence soon afterwards revealed Mr Noble was aware how deeply Mr Pankhurst and Mr Katsamaclis were working against Secure Logic’s interests.

107. [145]

     Mr Noble’s loyalty to Secure Logic had undoubtedly expired no later than 2 May 2016. That day Mr Noble sent an email to Mr Pankhurst attaching a client contact list of SL Australia, the so called “JP Prospects” document.

108. [146]

     This overt act of disloyalty was a watershed moment. By then Mr Noble was tired of what he perceived as Secure Logic’s disloyalty to him, through its failure to pay him what he regarded as his proper entitlements. Mr Noble must have realised the end was probably coming for him soon. Mr Noble denied any such consciousness at that stage. But his denials are not credible. Mr Noble’s decision to send the JP Prospects document to Mr Pankhurst revealed that Mr Noble’s loyalty to his employer had entirely dissolved but Mr Noble did not care anymore.

109. [147]

     Mr Noble tried to defend his conduct in sending out the JP Prospects document. He contested the issue at several levels. Digital evidence prevented him denying that he had sent the document out. So, in cross-examination he took the position that the document was mostly his or Mr Pankhurst’s and that Mr Devaraj had added very little to it. But that was no answer to Secure Logic’s contention that the JP Prospects document was a detailed list of potentially valuable client contacts constructed with hours of input from Mr Pankhurst, Mr Noble and Mr Devaraj whilst they were all working for Secure Logic. Sourced from the plaintiffs’ client information, produced by the plaintiffs’ employees working on the plaintiffs’ time, apparently for the plaintiffs’ purposes, it was clearly the plaintiffs’ confidential information. And Mr Noble knew that when he sent it to Mr Pankhurst.

110. [148]

     Mr Noble emails Mr Pankhurst on 2 May 2016. The JP Prospects document attached to the email that Mr Noble sent Mr Pankhurst on 2 May 2016 contained a lengthy list of Secure Logic’s current and prospective clients together with their contact details. It was a valuable document for facilitating contact with these clients.

111. [149]

     In early May 2016 Mr Pankhurst had an interest in Secure Logic’s customer contacts list. Having been suspended he knew that his employment by Secure Logic was about to come to an end. He was discussing with Mr Scott setting up a business similar to Secure Logic’s. Secure Logic’s customer contact list would accelerate its development. Mr Pankhurst could not advance a legitimate explanation for his interest in the list at this time. Mr Noble could not justify why he sent it to Mr Pankhurst at the time.

112. [150]

     Mr Noble and Mr Pankhurst intended to keep this communication from Secure Logic. Mr Noble sent the 2 May email from his private Peach Tree Bay email address to Mr Pankhurst’s private email address. And in the short term they succeeded in this objective.

113. [151]

     Mr Noble’s defence. Mr Noble read affidavits that defended his conduct in sending the 2 May email. But the difference between those affidavits and what he ultimately admitted in cross-examination warrants an adverse assessment of his credibility.

114. [152]

     Mr Noble variously deposed to beliefs: that the JP Prospects document was Mr Pankhurst’s property, not confidential information of Secure Logic and was in any event of little value, as it was only created from Mr Pankhurst’s contacts as “mailshot” for a magazine article.

115. [153]

     But in cross-examination Mr Noble ultimately conceded the opposite of these claimed beliefs. He accepted that several employees of Secure Logic had created the JP Prospects document which was Secure Logic’s confidential customer contact list. He conceded that he had recently come to understand that although some of Mr Pankhurst’s information had gone into the JP Prospects document, that the circumstances of its creation meant that it was Secure Logic’s property. He also conceded that the JP Prospects document, containing as it did contact information, was valuable to Secure Logic’s business.

116. [154]

     Creating the JP Prospects document – January/February 2016. Mr Devaraj initiated the construction of the JP Prospects document in January 2016. Its construction started when Mr Devaraj wanted to distribute as a marketing exercise, an article about Secure Logic in a forthcoming edition of the Government Technology Review. Mr Devaraj and Mr Noble instructed a junior Secure Logic employee, Mr Gallagher, to form a list of current and potential clients of Secure Logic for this purpose.

117. [155]

     The exercise started with Mr Noble emailing Mr Gallagher on 11 January 2016 asking him to create a list of “the top 50 people” to whom Secure Logic would like to have the magazine articles delivered. Mr Noble suggested that Mr Gallagher ask each of Mr Devaraj, Mr Singh, Mr Giorgiutti, Mr Brooks, Mr Pankhurst and Mr Katsamaclis for a list of “who they think should be targeted” and then aggregate that into a master list with full address details and removing any duplication. Essentially the idea was to draw upon contacts of Secure Logic’s senior employees to create a comprehensive contact list.

118. [156]

     The JP Prospects list was selective. It represented the judgment of its authors as to who were the “top” people to be “targeted” by Secure Logic. Mr Noble’s own involvement in instructing others to create the list is a basis to infer that he must have known that it was not just a list of Mr Pankhurst’s contacts but represented the collective judgment of Secure Logic staff about Secure Logic’s top actual and potential contacts.

119. [157]

     Mr Pankhurst contributed many names on the JP Prospects document contacts list. But others also contributed names in the cooperative process that Mr Noble initiated, and Mr Gallagher organised.

120. [158]

     By the end of January 2016 Mr Noble’s own contemporaneous emails showed that he appreciated the value of the JP Prospects list to Secure Logic. On 31 January, Mr Noble emailed Mr Gallagher about the developing list and warned Mr Gallagher to be “careful to BCC everyone or send it individually as we do not want everyone to see the list”. Later the same day Mr Noble furthered the email conversation, saying “probably should turn this into a spreadsheet for future use – there are some big hitters in here so don’t mess them around!”

121. [159]

     The JP Prospects document was finalised in early February. On 1 February 2016, Mr Gallagher emailed Mr Noble with a draft list, which was organised under the names of the contributors to the list to that point, Mr Pankhurst, Mr Devaraj and Mr Noble, and who remained the main contributors to it. Mr Noble replied to Mr Gallagher pointing out the significant overlap (due to their common work areas) between his list and Mr Devaraj’s list: “Santosh’s list is my list…ask him who the key ones are and research them”.

122. [160]

     Mr Noble and Mr Devaraj had many NSW Government contacts in common. But Mr Noble strangely said in cross-examination that this was “incorrect”. Mr Noble discreditably continued to maintain that the names on the list were just his own contacts and not Mr Devaraj’s. But back on 11 January Mr Noble had instructed Mr Gallagher to get Mr Devaraj’s list and had discussed Mr Devaraj’s list since. Mr Noble sought to deny Mr Devaraj’s input to the list, because Mr Noble’s case was that the list was Mr Pankhurst’s. But that was never sustainable.

123. [161]

     On 3 February 2016 Mr Gallagher emailed Mr Noble clearly pointing out that Mr Devaraj had added several names to the list himself and attaching the latest draft of the contacts list entitled, “JP’s Prospects and customers (00000002).xlsx”, an Excel spreadsheet, a title that gave rise to the name given to the list in these proceedings.

124. [162]

     Mr Noble was not prepared to concede that he opened the attachment to this 3 February email to look at the list. The Court infers that Mr Noble must have looked at it because he had an important role in overseeing the development and finalisation of the list. But Mr Noble’s denial is explained on the basis that Mr Noble did not want to admit knowledge inconsistent with his case that the JP Prospects document was Mr Pankhurst’s creation. At one stage Mr Noble called his management of the preparation of the list “a very minor task”. Even if that were correct, and the Court does not accept that was his perspective, it was a task for which he was nevertheless responsible.

125. [163]

     On 8 February 2016 Mr Gallagher sent Mr Noble an email which attached what he described as “the latest contact details and email send out list”, a description which notified Mr Noble of the inherent value of the list to Secure Logic. In the same email Mr Gallagher updated Mr Noble on the progress of the mailout which was taking place by reference to entries on the list that he had highlighted in blue. He stated, “Do you want to highlight some more in another colour, and I can research their addresses?”.

126. [164]

     With some reluctance in cross-examination, Mr Noble ultimately conceded there was no reason why he would not have opened the attachment. And he undoubtedly did, because later the same day Mr Noble responded to Mr Gallagher attaching another copy of the JP Prospects document after adding yellow highlighting on some names. And the names Mr Noble had highlighted included names in the contacts both under Mr Pankhurst’s contributed portion of the list and under Mr Devaraj’s contributed portion of the list. Therefore, Mr Noble’s highlighting work on the JP Prospects document must have brought home to him the contribution to the document made by persons at Secure Logic other than just Mr Pankhurst.

127. [165]

     Although slow to concede it, Mr Noble saved the version of the JP Prospects document that he had emailed to Mr Gallagher on 8 February 2016 to his work laptop, after opening and viewing the document. Mr Noble suggested that he might not have chosen where to save it onto his work laptop, and that he might have just saved it to a default location on the work laptop, but it was there nevertheless and was later copied onto his personal laptop in circumstances that are explained later in these reasons.

128. [166]

     The JP Prospects document: Secure Logic’s confidential information. Multiple indicators point to the JP Prospects document being Secure Logic’s confidential information and that Mr Noble was aware that it was. The JP Prospects document was valuable to Secure Logic to market and promote itself in order to generate revenue for itself, by identifying key individuals at the businesses of prospective clients. It had been generated by work of Secure Logic employees in the course of their employment. It was handled in a confidential manner by those employees, but for the criticised conduct by Mr Pankhurst and Mr Noble the subject of these proceedings. And for these several reasons, it would be valuable to a competitor of Secure Logic.

129. [167]

     It was quite a struggle for cross-examining counsel, Mr Elliott SC, to get Mr Noble to accept the obvious value of the JP Prospects document to Secure Logic. This struggle reflected poorly on Mr Noble’s credibility. Despite Mr Noble’s attempts to downplay it, the list quite obviously had the characteristics referred to in the previous paragraph of these reasons. The struggle eventually led to Mr Noble: agreeing that he thought that creating the JP Prospects document was a “good idea”; and, accepting that a reason the JP Prospects document was valuable was that such a list did not already exist within Secure Logic.

130. [168]

     Mr Noble, Mr Pankhurst and the 2 May email. The only differences between the version of the JP Prospects document that Mr Noble attached to his 8 February 2016 email to Mr Gallagher and the version that Mr Noble attached to the email he sent to Mr Pankhurst on 2 May 2016 are that the latter version no longer has the yellow highlighting on the customer names, and there are some very minor spacing differences in the text. But there are no differences of substance between the two versions.

131. [169]

     Mr Noble reluctantly and by slow steps accepted in cross-examination, in relation to the JP Prospects document attached to the 2 May email that he was aware of the following matters: it had been created for the purposes of Secure Logic’s business; it had been created from information provided by people working for Secure Logic; it was not a list of Mr Pankhurst’s target customers; and it was not to be shared with anyone outside of Secure Logic.

132. [170]

     Mr Noble had saved the latest version of the JP Prospects document to his work laptop on 8 February 2016. When he prepared his 2 May 2016 email to Mr Pankhurst, he found the same well-developed version of the document on his work laptop and attached it to the email.

133. [171]

     Mr Pankhurst was aware the JP Prospects document had been created in February 2016 and of the principal characteristics that made it Secure Logic’s confidential information. He knew that work had gone into it from persons working at Secure Logic other than himself and that it represented Secure Logic’s actual or potential customers.

134. [172]

     It is likely Mr Pankhurst asked Mr Noble to send him the JP Prospects document in late April or early May 2016. Mr Pankhurst was interested in setting up a new business and the document would supercharge that process. The document was communicated to Mr Pankhurst covertly. Mr Noble sent the document with minimal explanation and no reply was sent back by Mr Pankhurst expressing surprise at receiving the document and asking for something different. There must therefore have been some conversation between the pair in which this document was requested and was agreed to be sent.

135. [173]

     Mr Noble could not give a sensible consistent account of any conversation between the pair that was inconsistent with these inferences. At one stage he tried to advance a conversation with Mr Pankhurst in which Mr Pankhurst said to him that the list that was sent was “the wrong one” but without his being able to express any clear idea is to what the right one was.

136. [174]

     But this conversation did not take place. It was a convenient invention of Mr Noble’s, unsupported by any objective contemporaneous material. Nor could Mr Pankhurst explain why he would be asking Mr Noble for Mr Pankhurst’s own list of contacts, which he presumably already had. The Court infers that on 2 May Mr Pankhurst got from Mr Noble what he asked for, the JP Prospects document and that Mr Noble was by then sufficiently disengaged from Secure Logic that he was quite prepared to provide just what Mr Pankhurst had requested.

137. [175]

     The Fergus Folder conduct spans a period commencing in approximately February 2016. Mr Noble copied from SL Australia’s server and onto his work laptop, and then onto his personal laptop, a substantial quantity of Secure Logic’s business records held loosely in the “Fergus Folder”. Secure Logic’s case was that Mr Noble did this so that could then have the information in the folder at his disposal once he had left Secure Logic.

138. [176]

     The Confidential Documents in the Fergus folder. In his final weeks at SL Singapore Mr Noble copied many of Secure Logic’s business records from its main IT server into a folder he named the “Fergus” folder on his work laptop. He later transferred this material onto a personal laptop.

139. [177]

     The documents in the Fergus folder were confidential to Secure Logic. Apart from evidence to that effect from Mr Singh, which is accepted, this can readily be inferred from their contents. The Fergus folder comprised approximately 80 electronic sub-folders. Each sub-folder contained documents relating to an SL Australia customer. Among these documents for each customer were: Secure Logic’s business and sales proposals, its service offerings (actual and potential), its actual and proposed pricing and terms and conditions for the delivery of services to that customer, service history reports, price lists relevant to products and services for that customer, and the design methodology and framework for goods and services on offer from Secure Logic to potential customers, tailored to their individual circumstances. This was valuable information in the hands of a competitor in the same market as Secure Logic.

140. [178]

     Mr Noble’s defence did not admit this material was confidential, pleading only the general issue in response. To assist in trial management the Court required a more detailed pre-trial response from Mr Noble which resulted in an admission in July 2019 that the documents selected Mr Singh’s evidence and most of the Fergus folder were likely to be confidential to Secure Logic. These admissions should have been made much earlier.

141. [179]

     Creating the Fergus folder on the work laptop. Mr Noble’s original account of how he created the Fergus folder on his work laptop was controversial. It was ultimately broken down in cross-examination, further damaging Mr Noble’s credibility.

142. [180]

     Mr Noble’s primary account was that Mr (Fergus) Brooks created the Fergus folder, in late February 2016 shortly before Mr Brooks left his employment at Secure Logic. The main elements of that account were the following. The documents in the Fergus folder were transferred to Mr Brooks’ work laptop from a folder that Mr Brooks had maintained on the ‘G’ drive of SL Australia’s main IT server. Mr Noble asked Mr Brooks to transfer to him the proposals and documents only of Mr Brooks, not of others. Mr Noble could not work out how to transfer the material onto his work laptop, so he asked Mr Brooks to do so which he did. Mr Noble did not attempt to access and copy the documents out of SharePoint, SL Australia’s main database of client information. He did not know where Mr Brooks had copied the documents onto his (Mr Noble’s) work laptop and had forgotten about this material on his work laptop as at May 2016.

143. [181]

     Important background to Mr Noble’s explanation is that SharePoint was a dedicated and password protected database SL Australia maintained, including in respect of all its clients. Part of this database was structured into individual client folders and contain material very like that that was found in the Fergus folder.

144. [182]

     Mr Brooks did not corroborate Mr Noble’s account. The objective and other reliable evidence is inconsistent with Mr Noble’s account and the Court does not accept it. Mr Noble’s positive account is comprised of events unsupported by evidence. It is likely to be an invention, and not the product of confusion on his part.

145. [183]

     Prior to May 2016 Mr Noble accessed the client folders in SharePoint and copied their contents into the Fergus folder on his laptop. This is so for several reasons. And no reliable evidence points to Mr Brooks assisting Mr Noble.

146. [184]

     First, the contents of Mr Brooks’ folder on the G drive are not consistent with Mr Noble’s account. The Court accepts that Mr Brooks put completed proposals for the clients he was working on into SharePoint. Everything that was associated with the work that he was personally doing for SL Australia was backed up into the “G” drive in a folder called “Fergus and user backup”. His draft proposals to clients would remain in the G drive folder and final proposals would be copied into SharePoint but would also be left in his backup G drive folder.

147. [185]

     But in contrast, the Fergus folder on Mr Noble’s work laptop contains many client sub-folders for clients outside Mr Brooks’ client portfolio. The Fergus folder cannot have been created just from Mr Brooks’ personal folder on the G drive. Its contents must have come from somewhere else. The Court accepts Mr Devaraj’s evidence that client files in the Fergus folder came from the entire Secure Logic client base, not just the clients in Mr Brooks’ client portfolio. Mr Brooks had only worked on less than a quarter of the clients in the Fergus folder. SharePoint is the likely source of these client files in the Fergus folder. Mr Noble had access to the Australian section of SharePoint from time to time and knew that SharePoint was where proposals and other client documents were stored.

148. [186]

     Second, Mr Brooks could not have personally transferred the documents from his G drive onto Mr Noble’s work laptop. Mr Brooks left SL Australia at the end of February 2016. Some documents in the Fergus folder were created in March and as late as 25 April 2016. Mr Noble is likely to be responsible for transferring the documents onto his work laptop after Mr Brooks left Secure Logic and SharePoint is the likely source.

149. [187]

     The Court does not accept Mr Noble was unaware of the location and contents of the Fergus folder on his work laptop and had by May 2016 forgotten about the creation of that folder. But Mr Noble tried to make a case that he could not have accessed SharePoint to extract these documents because SharePoint did not work very well and his access to it was limited.

150. [188]

     But even if Mr Noble’s case about SharePoint’s deficiencies has some substance, despite those deficiencies, no likely source other than SharePoint has ever been identified for the client subfolders in the Fergus folder, and no agent other than Mr Noble with some access to SharePoint has been identified as the likely transferor of those files.

151. [189]

     Mr Noble’s case of problems in using SharePoint did not undermine the role of SharePoint as one of Secure Logic central accessible computer operating systems. On instructions from senior management Sharepoint was widely used within Secure Logic in 2015 and 2016, by Secure Logic employees with authorised password access, including Mr Noble. And Mr Noble placed copies of his own proposals to clients in SharePoint. He was aware of instructions from Mr Devaraj to put all proposals and documents onto SharePoint. Mr Noble could point to a few SharePoint failures, but they fell well short of generating widespread employee distrust of SharePoint. If SharePoint performed as badly as Mr Noble claims it is difficult to see why Secure Logic continued to use it without any major revision throughout those years. And there is no documentary evidence of Mr Noble, a senior employee within the group, calling for its overhaul on the grounds that it was dysfunctional.

152. [190]

     The contents of the Fergus folder sustain further inferences about its probable purpose in Mr Noble’s hands. Why would Mr Noble retain Secure Logic information on his work laptop that was well beyond either his or Mr Brooks’ immediate needs at Secure Logic? Mr Noble did not give any clear explanation which the Court can accept.

153. [191]

     Mr Noble said he thought he would be responsible for creating proposals for new and existing clients of Secure Logic in the future, and the work that Mr Brooks had done for customers in the past would provide a “valuable reference source”.

154. [192]

     That explanation not persuasive. Creating proposals was not a frequent part of Mr Noble’s job at Secure Logic. If he needed to create proposals he could ask Mr Devaraj or Mr Singh for the necessary data access. Copying almost the whole of a password protected customer database onto his work laptop, which could easily be lost or stolen, was not a reasonable response to a theoretical problem which was unlikely to occur for Mr Noble, who knew by April 2016 that his future at Secure Logic was limited.

155. [193]

     The best fit inference for these facts is that Mr Noble deliberately captured the data in the Fergus folder to use in the cyber security industry after he left Secure Logic. This inference is further strengthened by Mr Noble’s subsequent handling of the Fergus folder. Mr Noble created the Fergus folder in a personal documents folder on his work laptop. He later transferred the Fergus folder onto his personal laptop. He did not delete the Fergus folder from his personal laptop. He deleted the Fergus folder from his work laptop before returning it to Secure Logic.

156. [194]

     One act of disloyalty implies others. And they soon followed. On 9 May 2016 Mr Noble sent an email to Mr John-Paul Burgess of FirstWave, one of Secure Logic’s competitors. By then Mr Noble was already thinking about possible future employment with FirstWave. In early May 2016 Mr Noble wanted to please Mr Burgess. Mr Noble sent Mr Burgess information and offered his assistance concerning a proposal that FirstWave was then contemplating to provide services to AON in the field of cyber risk.

157. [195]

     Mr Noble contested that this was an act of disloyalty. He sought to downplay FirstWave’s role as a competitor of Secure Logic and was dismissive of the value of the information he was providing to FirstWave. But Secure Logic’s analysis of these events is correct. Mr Noble was trying to ingratiate himself with Mr Burgess for Mr Noble’s future financial benefit.

158. [196]

     On 2 May 2016, the same day that Mr Noble emailed the JP Prospects document to Mr Pankhurst, he also emailed Mr O’Brien of FirstWave stating, as these reasons have earlier indicated, that he was “keen to get things moving”, adding rather presciently, that he wanted to “escape with my reputation intact from the organisation currently with”. Mr Noble’s 2 May email toyed with Mr O’Brien about potential titles for himself when he was to join FirstWave and engaged in the kind of humorous banter that was only possible in the context of well-advanced discussions about Mr Noble joining FirstWave.

159. [197]

     Mr Noble and Mr O’Brien then exchanged the emails on 4, 8 and 9 May 2016 already described, negotiating the terms of Mr Noble’s employment with FirstWave. During these discussions Mr Noble also pointed FirstWave towards a potential new customer, Mr Fergus Brooks, who was by then employed at AON.

160. [198]

     In several emails on 4 May Mr Noble arranged a meeting on 5 May so that he could introduce Mr Brooks to Mr O’Brien, a meeting that took place. By early May Mr Brooks and Mr Noble had already discussed a proposal going to AON for a 24 x 7 cyber incident response centre or CSOC. Though still in SL Singapore’s employment Mr Noble diverted this business opportunity away from Secure Logic to FirstWave. Mr Noble conducted this correspondence on his private email account. Mr Noble’s decision not to inform anyone at Secure Logic of this opportunity further confirms that by then he had abandoned all his employee loyalty to Secure Logic.

161. [199]

     Mr Noble helped FirstWave capture this opportunity. He curated FirstWave’s marketing pitch to AON for a CSOC and through Mr Brooks helped to align AON’s and FirstWave’s financial expectations about how a transaction between them would be remunerated if it proceeded. On 8 May Mr Burgess at FirstWave emailed Mr Noble, copied to Mr O’Brien, seeking advice from Mr Noble about how to improve a draft proposal from FirstWave to AON for the provision of IT management services. On 9 May Mr Noble replied to Mr Burgess, setting out what “we need” in order to show that FirstWave’s proposal was “the best option” for AON and making suggestions to FirstWave based on the services that Secure Logic was already providing to its clients. This correspondence shows that Mr Noble already saw himself as working in FirstWave’s interests. But in cross-examination he at first repeatedly denied this overwhelming inference from the emails, further damaging his credibility.

162. [200]

     Mr Noble continued to advise FirstWave after it had contacted AON about its proposal. On 12 May Mr Burgess emailed Mr Noble, forwarding his email exchange with AON seeking Mr Noble’s “help on broad costing parameters, etc”. Mr Noble gave his help. Responding to Mr Burgess later that day Mr Noble gave comprehensive advice about how to set up, cost and charge appropriately for setting up a CSOC that would meet AON’s needs, stating “we should have that to make sure we don’t go too low”. Mr Noble also laid the pathway for FirstWave by sounding out Mr Brooks about the commercial terms AON might accept from FirstWave.

163. [201]

     Mr Noble’s explanation. Mr Noble’s attempts to explain away these emails did his case more harm than good. His opening case was that in dealing with Mr Brooks at AON he was just assisting a colleague in the industry and any incidental benefit to FirstWave “was not in anticipation of employment” and in any event Secure Logic is not competing in the market to provide the services to AON. But the emails are quite inconsistent with that characterisation.

164. [202]

     In cross-examination Mr Noble abandoned several positions that had been taken in his affidavit evidence. He advanced the idea he was not keen to move to FirstWave. But in the face of the email correspondence he eventually accepted this was incorrect and that he was keen to show his potential value to FirstWave, as he was in truth planning a move across to FirstWave. Mr Noble also accepted, as could not be disputed, that SL Australia already ran a CSOC in Sydney to provide the first point of call for clients suffering a cyber security incident. This was the very service AON wanted and Mr Noble accepted it could have been supplied by Secure Logic and that Mr Devaraj and Mr Singh would have been interested in pursuing the opportunity with AON.

165. [203]

     The Court does not accept any of Mr Noble’s explanations on this subject that do not contain admissions against interest. One of those admissions against interest was that he accepted that his conduct was inconsistent with the duties he owed to SL Singapore, but he engaged in it anyway.

166. [204]

     Once Mr Pankhurst was suspended Mr Devaraj began to watch Mr Noble closely. Mr Devaraj knew that Mr Noble and Mr Pankhurst were very friendly. He suspected they might try to contact one another. Mr Devaraj authorised Mr Guzhevskiy to take information from Mr Noble’s work laptop and place it on a USB stick for analysis, after hours without Mr Noble's knowledge. This was the first step in a course of surveillance that continued until Mr Noble discovered it two weeks later on 24 May.

167. [205]

     Mr Guzhevskiy gave evidence in Secure Logic’s case. He has a bachelor’s degree in computer science from far Eastern State University in Vladivostok in the Russian Federation. He was a plainly competent operator and took a technical, direct and pragmatic view of the IT tasks that Mr Devaraj requested of him. Within the framework of those tasks he was both precise and reliable. He was not very forthcoming about why he thought he was undertaking investigations into Mr Noble’s computer. He saw the task as just carrying out orders and did not consider any wider implications. He was honest and reliable in his answers. The Court accepts his evidence.

168. [206]

     From its commencement Mr Noble was kept in the dark about Secure Logic's surveillance of him. And all Mr Devaraj’s instructions to Mr Guzhevskiy to monitor Mr Noble were kept secret.

169. [207]

     Mr Devaraj disclaimed any knowledge of the WS Act. Secure Logic made no application to a Magistrate under WS Act, s 23 for authorisation to conduct surveillance on Mr Noble. Whether this surveillance contravened the WS Act is a matter which, at least for civil purposes, is in issue.

170. [208]

     During the period 11 to 17 May Mr Noble continued to demand payment for his outstanding invoices and his shares. But he made no further progress. In the meantime, Mr Pankhurst’s employment was terminated, and Mr Noble provided further assistance to Mr Burgess.

171. [209]

     By late April to early May 2016 Mr Noble was often absent from Secure Logic’s offices. It was unclear to Mr Devaraj at times what work Mr Noble was doing for Secure Logic. Mr Noble was making excuses for his regular non-attendances, including sickness in late April. There was not much face-to-face contact between them. On 16 May 2016 Mr Devaraj wrote to Mr Noble an email saying “seems like you are not [in the] office most of the time. Are you in today?” The lack of face-to-face contact is not surprising given the state of communications about Mr Noble’s remuneration.

172. [210]

     On 18 May 2016, Secure Logic’s surveillance of Mr Noble reached another level. Mr Devaraj directed Mr Guzhevskiy to access Mr Noble's work laptop and install the key-logger program into the computer. Mr Noble was unaware of this. It was done so he would remain unaware of it. The key-logger program provided an active form of real-time surveillance of Mr Noble’s use of his work laptop.

173. [211]

     Conflict came to the surface on 19 and 20 May 2016. On 19 May Mr Noble’s solicitors, Carroll & O'Dea, sent a letter of demand to Mr Devaraj asserting that Secure Logic had repudiated Mr Noble's employment contract.

174. [212]

     The following day, 20 May, Mr Noble attended at the Pitt Street offices and discovered all his meetings for the day had been cancelled without prior notice to him. His services were not required. 20 May was Mr Noble’s last day at Secure Logic’s Pitt Street offices.

175. [213]

     On 22 May 2016 Mr Noble purchased a new laptop for personal use, an Apple MacBook. He had not needed a personal laptop before this. He seemed content up until then to use his work laptop. Importantly, he purchased the personal laptop before he became aware of the key-logger program, or of the extent of surveillance already deployed against him. Secure Logic contends that by the time he purchased this computer he was preparing to take confidential information from his work laptop and put it on a personal laptop, which is what he ultimately did. But the purchase of the personal laptop is a strong basis to infer that he did not believe he would have the work laptop for much longer.

176. [214]

     By this time Mr Noble knew that he would not be at Secure Logic very much longer. He had not been paid for his services for several months and a significant debt remained outstanding to him. He appreciated that he would soon be likely to have to give his work laptop back and he needed a computer for his own purposes.

177. [215]

     Mr Noble immediately copied everything on his work laptop across to his personal laptop. All the Secure Logic data on his work laptop was copied over, including the Fergus Folder. Mr Noble’s account is that he knew that he was thereby acting beyond Secure Logic’s policies about the authorised handling of Secure Logic data. He explained, “I discovered I was in that situation”. He says that he decided to “remediate” situation by deleting personal data from the work laptop. But he says that “if I had stayed on the personal laptop deleting the Secure Logic [data] then things would have been different”.

178. [216]

     The Court does not accept that Mr Noble deleted any significant amount of personal information from the work laptop or that he deleted any Secure Logic data from the personal laptop before its destruction. It can be accepted that the personal laptop was purchased for his own purposes because he knew he would soon be giving back his work laptop upon the ending of his employment in the near term. But because he was aware that his connection with Secure Logic would soon be severed there was no legitimate reason for him to transfer any Secure Logic data onto the personal laptop, particularly data which was in a discrete file such as the Fergus folder. The most straightforward and simplest approach for Mr Noble at this point for retaining his personal data that was on his work laptop, was to transfer that data over to his personal laptop and delete it from his work laptop. That would also ensure that it was unavailable to others when his work laptop was returned.

179. [217]

     As an IT professional, Mr Noble knew it was not difficult to copy his personal files on the work laptop onto a storage system and then onto a personal laptop. At one point in his cross-examination he accounted for the transfer of all Secure Logic data onto the personal laptop as an unintended artefact of the Apple “Wizard option” he chose when setting up the new MacBook personal laptop. But if the transfer was just an innocent mistake generated by the Wizard, Secure Logic was well equipped with technical staff to assist him to correct the error. But he did not seek their assistance.

180. [218]

     Mr Noble never satisfactorily explained why he did not take this simple path of transferring the personal information over and deleting it from the work laptop, or asking Secure Logic technical staff for help. One other attempted explanation Mr Noble gave was that the course he took allowed him to transfer software that he had installed onto the work laptop across to the personal laptop. But that cannot be accepted. Mr Noble would not have been able to use Secure Logic’s software licences after he left. He would have had to obtain his own licences to use that software and install the software separately on his personal laptop in any event.

181. [219]

     Mr Noble knew he had alternatives about transferring personal information from the work laptop to the personal laptop. The correct inference for Mr Noble making the choice he did was that he wanted to retain all Secure Logic’s data that was held on his work laptop after he left Secure Logic.

182. [220]

     Mr Guzhevskiy’s investigations using the key-logger program gave Secure Logic enough information about Mr Noble's private email accounts for Mr Devaraj to decide to go further. He directed Mr Guzhevskiy on Secure Logic’s behalf to access Peach Tree Bay’s domain and to cause the domain to automatically forward emails from Mr Noble's private email address paul@peachtreebay.com to an email address Mr Guzhevskiy had created for Secure Logic’s surveillance purposes, noble666@gmail.com. Mr Noble was unaware this was happening.

183. [221]

     Mr Devaraj describes this as putting a “forward” on Mr Noble’s personal email account. Both Mr Devaraj and Mr Guzhevskiy confirmed that Mr Devaraj gave this instruction to Mr Guzhevskiy. Upon receipt of the instruction, Mr Guzhevskiy visited the home page on Mr Noble’s personal email account on https://www.crazydomains.com.au and there accessed the account of Peach Tree Bay, at the address http://peachtreebay.com. Mr Guzhevskiy then enabled all emails sent to Mr Noble’s personal email account to be forwarded to p-noble666@gmail.com. Mr Devaraj’s evidence downplayed the extent of this forward. He explained in evidence-in-chief that as a result of the “forward” that the personal email account only forwarded two emails over a period of 45 minutes after p-noble666@gmail.com was created and that both of those emails were spam or junk emails. Mr Guzhevskiy says that he then deleted the p-noble666@gmail.com email account and that as a result, none of the forwarded emails are in existence or in the possession, custody or control of Secure Logic or Mr Guzhevskiy.

184. [222]

     To the extent Mr Devaraj’s and Mr Guzhevskiy’s narrative contains admissions, the Court accepts it. And the Court accepts that the email account was opened, and emails were forwarded. The Court accepts that by the time these proceedings were sufficiently advanced for discovery to take place that this account had been deleted. But the Court does not accept either Mr Guzhevskiy or Mr Devaraj’s evidence as to the limited use of this account. There is no clear objective evidence that such a limited number of emails were forwarded. Mr Noble’s case did not establish the volume of the material forwarded. Evidence of limits on the volume are not accepted. All that can be said is how far the use of the “forward” went is an open question.

185. [223]

     But on the same day, at about 3pm, Mr Noble installed antivirus software as part of his configuring the personal laptop for use. That installation immediately displayed a warning. Malware or spyware had been detected. This made Mr Noble suspicious.

186. [224]

     Mr Noble followed up the antivirus detection warnings he had encountered when configuring his personal laptop. He discovered the key-logging program on the personal laptop, capturing his personal information including privileged communications, which were being emailed to Mr Guzhevskiy at guzhevskiy@gmail.com. Mr Noble then investigated his work laptop. This confirmed that a key-logging program was also operating on that laptop. Mr Noble suspected that Secure Logic had hacked into his personal laptop.

187. [225]

     The same day Mr Noble received an alert email indicating that the Peach Tree Bay domain for email to paul@peachtreebay.com had been accessed from a machine that did not belong to him. He investigated the unauthorised access to the Peach Tree Bay account domain and discovered the on forwarding to noble666@gmail.com, an email account he did not recognise. He immediately disabled the forwarding function.

188. [226]

     On 25 May 2016, McCabes communicated to Carroll & O’Dea advising them that Secure Logic had determined to suspend Mr Noble until further notice, pending investigation into his conduct. The letter made allegations that Mr Noble had misused Secure Logic’s confidential information. It also sought particulars of the amounts Mr Noble alleges that Secure Logic owed him.

189. [227]

     Mr Noble took further legal advice from Carroll & O’Dea about the surveillance measures he had discovered. A principal area of his concern was the potential capture of privileged communications between Mr Noble and Carroll & O’Dea. At the same time Carroll & O’Dea assisted Mr Noble with his money claims against Secure Logic. They wrote back to McCabes on 27 May 2016 disputing Mr Noble’s alleged misconduct and seeking payment of his outstanding invoices.

190. [228]

     On 30 and 31 May 2016, at Mr Noble’s direction, Ferrier Hogson independently took full forensic images of both the work laptop and the personal laptop. Mr Noble signed the laptops into Ferrier Hodgson and picked them up on 1 June. In doing this Mr Noble took Carroll & O'Dea's advice to preserve information on the two computers as fully as possible, a course which was consistently reflected in Carroll & O'Dea's legal advice throughout Mr Noble's engagement of them. In Mr Noble’s mind the forensic images would be useful in anticipation of reporting a crime to the Australian Federal Police and for commencing civil litigation against Secure Logic for the surveillance intrusion into his computer.

191. [229]

     The forensic image taken by Ferrier Hodgson was a comprehensive image of everything on the hard drive. It is to be contrasted with less comprehensive images which Mr Noble took himself just before the personal laptop was destroyed nearly three weeks later, on 17 June.

192. [230]

     When Mr Noble received the laptops back, he attempted to secure the personal and company information on the work laptop by encrypting the drive and changing the passwords. He did this to try and secure his personal information, and to preserve evidence of what appeared to him to be the commission of a crime by whoever had installed the key-logger program. But due to Mr Noble’s less than perfect technical competence what he did to the work laptop made it inoperative by him and appears to have encrypted the data on its drive. The Court accepts that he did not use the work laptop after he received it back from Ferrier Hodgson on 1 June.

193. [231]

     Carroll & O’Dea wrote two letters to McCabes on 3 June. In the first they communicated that Mr Noble accepted Secure Logic’s claimed repudiation of the employment agreement. Carroll & O’Dea had asserted the repudiation in their letter of 19 May 2016. The 3 June letter then terminated Mr Noble's employment contract with Secure Logic based on that repudiation. Secure Logic denies any repudiation on its part but all sides in these proceedings accept that Mr Noble’s employment came to an end on 3 June.

194. [232]

     Carroll & O’Dea’s second letter of 3 June complained of what he described as “serious breaches of Mr Noble’s privacy”. The letter explained how Mr Noble had discovered the key-logger program (AOBO Key-logger for Mac) had been installed on Mr Noble’s personal laptop and was sending logs of those keystrokes to guzhevskiy@gmail.com. That letter complained that the material sent to guzhevskiy@gmail.com contained the following: (1) Mr Noble’s personal and business-related email correspondence, (2) websites Mr Noble visited and the passwords he used in respect of his web-based accounts, including http://peachtreebay.com, (3) details of Mr Noble’s personal and financial activities, and (4) privileged correspondence between Mr Noble and Carroll & O’Dea.

195. [233]

     The letter revealed that Mr Noble had also discovered the same key-logger program on the work laptop. The letter also revealed that Mr Noble had discovered the unauthorised use of the website management console for http://peachtreebay.com, giving full access to Mr Noble’s personal email accounts. The letter expressed the belief that Secure Logic was likely to be responsible for the last of these interventions because the incursion had come from an IP address located in Australia and hosted by TPG, the internet service provider used by Secure Logic.

196. [234]

     The letter asked McCabes to declare “clearly and unequivocally” whether Secure Logic was responsible or involved in the installation of the key-logger programs on Mr Noble’s work laptop and personal laptop, the unauthorised access of the Peach Tree Bay website and its associated email address and to declare any other unauthorised access to Mr Noble’s personal accounts, by 8 June. The letter then turned to the subject of Mr Noble’s work laptop and said the following:

197. [235]

     But Carroll & O’Dea’s letter did not give much away about how Mr Noble had dealt with Secure Logic’s data in the previous few weeks. The letter did not reveal that Mr Noble had copied Secure Logic’s confidential data from the work laptop onto his personal laptop, even though the personal laptop was an important subject of the letter. Nor did the letter reveal that Mr Noble had deleted the Fergus folder from the work laptop before it was forensically imaged, nor that there was a forensic image available on the hard drive of the personal laptop. Whilst no doubt Carroll & O’Dea advised Mr Noble not to make admissions at this point, Mr Noble’s aim was to keep this information from Secure Logic for as long as possible. Indeed, Secure Logic remained unaware of that until after the commencement of proceedings.

198. [236]

     Mr Noble’s case offered criticism of Secure Logic for not commencing proceedings for another 12 days. Such criticism is misplaced. Putting a confidential information case with the complexities of this one in proper order could not be done overnight.

199. [237]

     On 14 June 2016 McCabes wrote to Carroll & O'Dea alleging that Secure Logic had reason to believe that Mr Noble had misused confidential information. McCabes requested an undertaking from Mr Noble by 10am on 15 June that he would not misuse any Secure Logic confidential information.

200. [238]

     Carroll & O'Dea replied to McCabes Lawyers advising that Mr Noble was not prepared to provide the signed undertaking requested.

201. [239]

     When the requested undertaking was not forthcoming, the plaintiffs commenced these proceedings on 15 June 2016. They filed a Summons in Court before Bergin CJ in Eq, sitting as the Duty Judge. Mr Phillips of counsel appeared for the plaintiffs, instructed by Mr Jones of McCabes. Mr Doughman attended Court on behalf of Mr Noble and both Mr Phillips and Mr Doughman addressed the Court.

202. [240]

     The Summons sought an order in the same terms as the undertaking which Mr Noble had declined to give to the plaintiffs, referred to above.

203. [241]

     Mr Doughman addressed the Court. He said that Mr Noble had stated that the key-logger spyware was “also on his personal laptop, which he used for work quite consistently”. The Court infers Mr Noble gave Mr Doughman those instructions. But by this time, Mr Noble was in Court himself. What Mr Doughman put to the Court was undoubtedly on Mr Noble’s instructions. That is what the Carroll & O’Dea 3 June letter had alleged. It had not yet been refuted.

204. [242]

     The form of the substantive interlocutory orders that the plaintiffs sought against Mr Noble were the legal framework against which Mr Noble destroyed his personal laptop and a Seagate storage drive that Mr Noble used in conjunction with his personal laptop. Mr Noble had retained a competent solicitor, Mr Doughman, who the Court accepts conveyed the substance of these claimed orders to him.

205. [243]

     Prayer for relief 6 of the Summons sought the following restraint against Mr Noble and the other defendants, Peach Tree Bay and Mr Pankhurst:

206. [244]

     Prayers for relief 7(a) and (b) then provided for the delivery up of the material referred to in prayers 6(b), (c) and (d) to the plaintiffs’ solicitors (Prayer 7(a)) and a wider claim for the delivery up of a broad array of IT hardware to the independent computer expert, Mr Nick Klein. Prayers 7(a) and (b) were in the following terms:

207. [245]

     Prayer for relief 7 also sought affidavits of compliance with the orders (7(c)), affidavits revealing the identity of the recipients of confidential information (7(d)), and provided for the non-destructive computer forensic tools and methods of the independent computer expert (7(e)).

208. [246]

     Bergin CJ in Eq surveyed the issues between the parties and directed focus to Mr Noble’s work laptop and personal laptop. Mr Doughman outlined to her Honour the history of the matter, including the contention that the key-logger program had been installed without Mr Noble’s consent on both his work laptop and his personal laptop, which Mr Doughman immediately identified as an alleged breach of the WS Act.

209. [247]

     Mr Doughman submitted as part of the history that Mr Noble had declined to return “the laptop” on the basis that it contained serious evidence of breaches of privacy and breaches of Mr Noble’s right to client privilege. But Mr Doughman indicated to her Honour that Carroll & O’Dea were holding the computer in safe custody with a view to it going to a third party. But he reported to her Honour that Carroll & O’Dea had offered on behalf of Mr Noble to return “the laptop” if “the plaintiffs gave consent to the laptop being forensically wiped”, because it contained his personal data as well. Mr Doughman said his client was prepared either to delete the data on the laptop or hold the laptop in safe custody until the matter was resolved.

210. [248]

     The discussion before her Honour often did not distinguish between the personal laptop and the work laptop. Reference was most commonly made to the work laptop. Her Honour suggested a solution to the impasse that the work laptop could be held by an independent party “for the time being whilst the dust settles”. Later her Honour went off the bench and encouraged the parties to talk to one another on the basis that the work laptop could be produced and remain with Carroll & O’Dea while negotiations took place to see who else would have custody of it. The adjournment was not productive. Mr Phillips reported the parties had had “some short discussions” and were “very close” but no orders were as yet agreed.

211. [249]

     During the period of the short adjournment, Mr Doughman and Mr Jones discussed a regime for the delivery up of the laptops to an independent expert for imaging. During that discussion Mr Doughman said to Mr Jones, concerning Mr Noble’s personal laptop, “he uses it regularly, including to communicate with us”. In reply, Mr Jones communicated the plaintiff’s insistence, “we want that personal laptop to be delivered up. I don’t imagine your client would need to be without it for long. As soon as an image has been created, it can be returned to him.”

212. [250]

     Mr Jones obtained further instructions that the independent expert would only need the personal laptop for between 24 and 48 hours. He conveyed this information to Mr Doughman.

213. [251]

     Her Honour adjourned the matter to 4 July before the Registrar in Equity, suggesting the matter could be referred to the Duty Judge that day if required. She then invited the parties to file short minutes of order with her chambers “within the next 24 hours”. Her Honour offered to “look at them in chambers”. The Chief Judge in Equity directed the parties to file short minutes of order within 24 hours by agreement. McCabes then emailed Carroll & O'Dea attaching proposed short minutes of order. Her Honour indicated that the orders would be made in chambers and the parties would be “at liberty to restore if there is a problem”. Thus the parties left the Courtroom that day knowing that short minutes of order would be filed within 24 hours and that some time not long afterwards her Honour would make interlocutory orders in chambers.

214. [252]

     Mr Jones sent the draft short minutes of order to Mr Doughman at 7.17pm on 15 June in both clean and marked-up form. The standard interlocutory orders sought in the short minutes of order (Orders 2 and 3) were in substantially identical terms to prayers for relief 6 and 7 of the Summons.

215. [253]

     The proposed short minutes of order, if executed, would have required the delivery up of the personal laptop to the Court for analysis. Mr Noble admitted he was aware of this. Going into 16 June he was conscious that everything on his work laptop, then his personal laptop, would be open for independent investigation.

216. [254]

     Mr Noble agreed that Mr Doughman had made him aware that on 15 June 2016 Secure Logic wanted an order for the delivery up of his personal laptop and he agreed that he did not want to give it to them. But then a curious exchange occurred when Mr Noble was in cross-examination by Mr Elliott SC. The subject was raised of his willingness to give the personal laptop up to an independent expert:

217. [255]

     Mr Noble was attempting to convey that he did not understand at the time that the personal laptop would be going to an independent expert. He confirmed this in a subsequent passage of evidence. The Court does not accept this testimony. Mr Doughman’s explanations to Mr Noble were very clear as to the fact that Secure Logic was proposing that the personal laptop go to an independent expert for imaging and could then be returned to him. Mr Noble could have neither forgotten, nor misunderstood, Mr Doughman’s explanations. Mr Noble was here discreditably denying memory of Mr Doughman’s explanation: an explanation that he knew would be embarrassingly inconsistent with parts of his rationale for destroying the personal laptop on 17 June.

218. [256]

     The cross-examination moved to Mr Noble’s understanding on 15 June of the time for which the personal laptop would be with the independent expert. The issue had been discussed between Mr Jones and Mr Doughman on 15 June. The Court accepts that Mr Doughman had informed Mr Noble that the laptop was to be with the expert for a matter of days. But in the following passages of cross-examination Mr Noble once again discreditably denied what he must have remembered about what Mr Doughman had told him on this subject:

219. [257]

     Mr Noble knew from his own solicitor that the proposal was that the independent expert would keep the personal laptop for a few days.

220. [258]

     Mr Doughman could not get instructions from Mr Noble before early afternoon on 16 June. At 2.12pm, he wrote back to Mr Jones, indicating that “we are still in the process of reviewing these short minutes”. He communicated that Carroll & O’Dea were experiencing “unexpected difficulties in dealing with briefed counsel on the short minutes” and requested an extension of time for the provision of the short minutes of order to the following day, by 4pm, Friday 17 June 2016.

221. [259]

     This was not satisfactory to McCabes. Within the hour they contacted the Chief Judge in Equity’s Associate, who at 3.01pm notified the parties that the matter was listed at 10am before her Honour on Friday, 17 June.

222. [260]

     By 3pm on 16 June, Mr Noble knew that Secure Logic was pressing ahead with orders for production for both the work laptop and personal laptop and associated hard-drives. For the next 19 hours, until 10am on 17 June, the focus of the events shifts entirely to Mr Noble and his advisors. The period is closely packed with Mr Noble’s activity.

223. [261]

     Mr Noble says that he began to form the view that “it would be best to simply destroy the personal laptop’s hard drive”. He claims that his reasoning was that this would avoid any further accusation “that I retained Secure Logic’s confidential information”. A secondary purpose he advanced was that it would “ensure no personal data was transmitted by the key-logger or other unauthorised programs”.

224. [262]

     There are obvious flaws in this reasoning. Destruction would certainly serve the purpose of avoiding further accusations of retention of confidential information. But it was not the only way of avoiding such accusations. Giving up the personal laptop to an independent expert would serve the same purpose.

225. [263]

     Mr Noble could not have genuinely acted upon the second reason. If he was truly motivated to ensure that no personal data was transmitted by key-logger or unauthorised programs, then he would not have used the personal laptop. Alternatively, if the mischief of the key-logger program had been prominent in his thoughts, retention of the personal laptop was the strongly advisable course, in order to prove Secure Logic’s involvement in the mischief.

226. [264]

     Something other than these two reasons must have been driving Mr Noble’s desire to destroy the personal laptop.

227. [265]

     Whether Mr Noble used his personal laptop between Ferrier Hodgson’s imaging of the hard drive of the personal laptop on 30 May and its destruction on 17 June is a key to his conduct on the afternoon of 16 June and the morning of 17 June. This issue is now considered before the narrative of those events.

228. [266]

     Mr Noble did not want to give up his personal laptop. His evidence-in-chief defending that decision stated he was currently using the personal laptop. He explained that he wanted to obtain the personal laptop so, “I can still have a computer to use including so that I could continue to correspond with my solicitor by email”.

229. [267]

     The Court accepts this part of Mr Noble’s evidence. It is consistent with what Mr Noble told Mr Doughman. And Mr Doughman conveyed the same message to Mr Jones on the afternoon of 15 June. Before any secondary motivation emerged for Mr Noble to underplay the destruction of his personal laptop, he had little reason not to tell Mr Doughman the truth. As will be seen below, he reinforced that view in his affidavit of 24 May 2017. It is probable that he did use his personal laptop. The evidence does not suggest that he had any other computer available to him for personal correspondence, including with his solicitor.

230. [268]

     Mr Noble’s affidavit of 24 May 2017 replies to an affidavit of Mr Jones of 3 March 2017. In Mr Noble’s affidavit (at [79]) he agrees with Mr Jones that he was not inclined to consent to the surrender of his personal laptop for the reasons, including (at [79](a)), “so I still had a computer to use, including so that I could continue to correspond with my solicitor by email." And Mr Noble conceded in cross-examination that it would have been his memory at the time that he swore the affidavit. Mr Noble’s admission is to be accepted: that this was his motivation and that he said as much to Mr Doughman.

231. [269]

     Shortly after this, Mr Noble contradicted himself by saying of using the personal laptop, “I don't think I used it at all”; reasoning that “If I had, it would have been knowing that it was under surveillance, and I would have been very careful with what I did”.

232. [270]

     Then he contradicted himself again. When it was suggested to him that he did not want to hand over the personal laptop because he was using it to communicate with his solicitors, he strangely answered, “I'm not sure that that's correct”. Yet he had given this explanation both to Mr Doughman on 15 June and in his 24 May 2017 affidavit. This evidence was unsatisfactory and very damaging to Mr Noble’s credibility. His cross-examination on this subject is further analysed below.

233. [271]

     On 17 June 2016, Bergin CJ in Eq made orders for Mr Noble to put on an affidavit explaining the circumstances in which his personal laptop was destroyed. These orders were later amended on 22 June 2016. His affidavit in compliance referred to the discovery of the key-logger program on his personal laptop and the work laptop and gave an account of a recommendation by his lawyers that forensic images be taken at that point by Ferrier Hodgson. He explained at that time his motivation for taking the forensic copy of the machines was in order to report a crime and to commence civil litigation. He stated:

234. [272]

     He then explained that he encountered technical difficulties in attempting to encrypt the drive and to change the passwords and had further concern that he may not have successfully disabled the key-logger program. He then explained that his attempt to reverse his encryption efforts were unsuccessful so far as the work laptop was concerned:

235. [273]

     Secure Logic submitted that Mr Noble had asserted to the Court in his compliance affidavit that he had not used his personal laptop between the time that it was forensically imaged and its destruction. But a close reading of the affidavit shows that that contention is not correct. The affidavit only refers to non-use of the work laptop.

236. [274]

     When Mr Noble was cross-examined on this subject, he initially confirmed his earlier evidence that he continued to use the personal laptop after discovering the key-logger program and “he wanted to keep the personal laptop rather than to hand it over”, so that he “still had a computer to use”.

237. [275]

     But Mr Noble’s answers on this subject were discreditably inconsistent. When asked to confirm his instructions to Mr Doughman about why he wanted to keep his personal laptop, Mr Noble said “honestly, that entire period my memory is very sketchy”. Mr Noble was obfuscating at this point. He knew his use of his personal laptop was a weakness.

238. [276]

     The Court infers from Mr Noble’s own cross-examination, from what was said to the Chief Judge in Equity, and from the inherently likely course of events from his retention of his personal laptop that he continued to use it up until the time of its destruction on the morning of 17 June. He could advance no credible reason for objecting to it being given to the proposed Court-appointed expert computer analyst, who was independent of Secure Logic, and who would only need it for a few days. Placement with a Court-appointed independent expert was neither risky nor inconvenient for Mr Noble. And Mr Noble ultimately accepted that no good reason could be identified for keeping the personal laptop away from an independent expert, if he had nothing to hide.

239. [277]

     Secure Logic submitted that the proper inference from Mr Noble’s reluctance to give up the personal laptop was that analysis of its hard drive would be likely to reveal vast quantities of Secure Logic’s business records. Secure Logic submitted Mr Noble wanted to keep these records for himself to exploit them in the future.

240. [278]

     Secure Logic’s submission should be accepted. There is no other credible explanation for Mr Noble’s determination to keep the personal laptop away from safe independent expert scrutiny.

241. [279]

     This inference is strengthened when the timing of the destruction is considered. During his cross-examination, the Court explored with Mr Noble the question of why the destruction occurred at the precise time that it did: before Court on the morning of 17 June. The Court asked Mr Noble whether he was “concerned it [the personal laptop] would have to be delivered up to under the Court orders?” Mr Noble replied, “I was expecting an unacceptable regime to be agreed by my lawyers, yeah.”

242. [280]

     Mr Elliott SC, counsel for Secure Logic, resumed his cross-examination and secured admissions from Mr Noble about his state of mind at the time that he authorised the destruction of the personal laptop at Payam Data Recovery (“Payam”). The Court accepts Mr Noble’s admissions against interest as constituting an accurate statement of Mr Noble’s state of mind when the destruction occurred:

243. [281]

     Mr Noble’s last answer should be interpreted as a concession that he was acting deliberately with a view to frustrating a potential order of the Court. But he is saying that his actions are defensible because he had received legal advice that it was permissible for him to do so. But whether his actions are truly defensible in part depends on whether he had any genuine belief in the security that the legal advice he received would give him.

244. [282]

     But he cannot have had such a genuine belief. As will be seen below, Mr Noble chose not to tell Mr John Giorguitti his understanding demonstrated by these answers that an unacceptable order for the delivery up of the laptop was likely to made against him on 17 June. He withheld this information from Mr Giorguitti, which he appreciated was relevant. He must have appreciated that the corresponding advice from Mr Giorguitti, without the benefit of that critical information, was given without proper foundation in the true facts and was unlikely to be reliable.

245. [283]

     Mr Noble conferred with Mr Doughman and other solicitors from Carroll & O’Dea on the afternoon of 16 June 2016. The firm’s advice pressed upon him the course of delivery up of his personal laptop. Advice such as this was inevitable in the circumstances. Mr Doughman was aware that the following morning the Court was likely to make some order such as those being proposed by McCabes. Carroll & O’Dea’s advice was the correct and responsible advice in the circumstances. But Mr Noble did not accept it.

246. [284]

     Mr Doughman recorded the events of 16 and 17 June 2016 in a detailed file note. His file note included a summary of his conference with Mr Noble about mid-afternoon on 16 June. The Court accepts his file note and his evidence as a faithful account of that conference.

247. [285]

     The purpose of the conference was to obtain Mr Noble’s instructions on “our version of the proposed short minutes of order”. The aim of Carroll & O’Dea was to have orders made that would set out a regime for the protection of both Secure Logic’s information and Mr Noble’s information and would permit some but not all of the devices in Mr Noble’s possession to be produced by Court order. At the end of the conference the agreed strategy was that Mr Noble, through counsel and Carroll & O’Dea, would contest an order for the delivery up of the personal laptop but would offer instead the Ferrier Hodgson forensic image of the laptop taken on 30 May. Mr Noble was insistent that counsel would be briefed to appear for Mr Noble the following day.

248. [286]

     Mr Doughman was certain that he advised Mr Noble in conference that he should retain the personal laptop. He said to him “I’m sure our advice to him would have been to stay the course, don’t do anything that would prejudice the integrity of the evidence”.

249. [287]

     Mr Doughman neatly summarised in his testimony the effect of the strategy that had been agreed in conference, as follows:

250. [288]

     Once Mr Noble was notified of the relisting of the proceedings on 17 June, he decided that it “would be best to simply destroy the hard drive on the personal laptop”. But he did not tell Mr Doughman of that decision. He did not tell Mr Doughman, because he did not need to do so. Mr Noble acknowledged that Mr Doughman had conveyed to him at the conference that Mr Doughman’s “opinion was to – was to not do anything. So, I already know his opinion”. It was very clear to Mr Noble, as he conceded, that Mr Doughman “had advised against” destruction or wiping of the computer.

251. [289]

     Mr Noble did not raise the intention he was forming about the personal laptop with Mr Doughman because he knew Mr Doughman would be against it. Not only did he not tell Mr Doughman of his changing intentions about the destruction of the computer, he also did not tell Mr Doughman that he was going to seek a second opinion.

252. [290]

     Mr Noble’s email early the following morning commences with the words “as discussed I asked for an opinion from another lawyer”. In relation to securing a second opinion, the Court does not accept that there was such a discussion. Mr Doughman does not recall it and Mr Noble’s evidence is not reliable on this subject.

253. [291]

     Mr Doughman pressed this advice on Mr Noble several times. As at June 2016, Mr Doughman had suffered a recent bad experience with a client who had destroyed evidence in an employment case. Consequently, he was careful to warn his present client, Mr Noble, that the integrity of the existing digital evidence in his possession should be preserved.

254. [292]

     A striking feature of this picture is that Mr Doughman was a plainly competent solicitor who had given sound advice to his client, who was likely to inspire trust in his client and who believed that his client trusted him. But when his advice conflicted with Mr Noble’s perception of his own interests, Mr Noble was quite prepared to discard quality advice and pursue less well-informed advice that suited his purposes. Mr Doughman had had detailed involvement with Mr Noble’s affairs for weeks, had provided Mr Noble valuable information about the WS Act and had conducted appropriately calibrated correspondence with McCabes. Mr Doughman was aware of everything that had been said in Court on 15 June and had received and made draft changes to the short minutes of order on which Secure Logic would be moving the following morning, 17 June. Mr Noble’s abandonment of Mr Doughman’s well briefed professionalism in favour of Mr Giorgiutti’s selectively briefed but competent informality, indicates Mr Noble was aiming to get the advice that he wanted.

255. [293]

     Mr Noble did not tell Mr Doughman that he was getting a second opinion. Mr Noble’s evidence to the contrary is not accepted. Mr Noble appreciated that the advice he wanted to secure was different from the advice Mr Doughman was giving him. He had already concealed from Mr Doughman his desire to destroy the hard drive hard drive of his personal laptop. Moreover, Mr Doughman’s file note indicates that the agreed strategy for the following day did not include Mr Noble obtaining a second opinion. Mr Doughman’s reaction the following morning when he received a 3.14am email from Mr Noble (see below for detail) is consistent with him not having been told the previous afternoon that Mr Noble was obtaining a second opinion. Mr Doughman saw it as “a bolt from the blue”.

256. [294]

     And the conversation Mr Noble says he had with Mr Doughman on the afternoon of 16 June about obtaining a second opinion is implausible. Mr Noble says that when he told Mr Doughman he was getting a second opinion that Mr Doughman responded simply by saying “Yup. Okay. Understood. Let me know”. Such a conversation does not ring true. On Mr Noble’s version Mr Doughman did not ask when or from whom Mr Noble would be getting the advice. Nor did he stress the obvious importance of getting the advice before 10am the next day, so Mr Doughman would know where he stood with his client and with the Court. Mr Noble added to his evidence that he identified Mr John Giorgiutti as the source of the alternative advice when speaking to Mr Doughman. But that is hardly consistent with the email that he sent at 3:14am on 17 June, which did not identify Mr Giorgiutti but simply referred to him as “another lawyer”. The Court does not accept any of Mr Noble’s evidence about this conference with Mr Doughman.

257. [295]

     The Court accepts Mr Doughman’s evidence that the receipt of the 3.14am email was the first time that Mr Doughman became aware that Mr Noble had obtained a second opinion or was intending to obtain a second opinion. Moreover, it is unlikely that Mr Doughman would have taken lightly the news that his client, Mr Noble, might be obtaining advice which might put both the client and Mr Doughman in the same type of jeopardy that Mr Doughman had been in a short while before with another client. Mr Doughman would have been very keen to avoid a re-run of such unpleasantness. Mr Doughman’s quick response the following morning is consistent with his surprise at news of a second opinion. Although Mr Doughman’s email in reply at 7.12am does not dispute Mr Noble’s “as discussed”, there was hardly time that morning for Mr Doughman to express his disagreement with everything his client had said. Mr Doughman’s reply email covered the main issue of avoiding the destruction of evidence, as the occasion demanded.

258. [296]

     Mr Noble did not want to deliver up his personal laptop. He sought alternative advice that he hoped would be more accommodating of his objectives. Mr Noble had a long-standing friendship with Mr Peter Giorgiutti, and through Peter, with his father, Mr John Giorgiutti. By 2016 Mr Noble had a good friendship with Mr John Giorgiutti. The Giorgiutti and Noble families would meet socially once or twice a year at Mr John Giorgiutti’s home.

259. [297]

     It was easy for Mr Noble to contact Mr John Giorgiutti. Mr Noble had his mobile phone number. Mr Noble rang him and arranged a meeting late on 16 June.

260. [298]

     Mr Giorgiutti gave evidence in Secure Logic’s case. He was a highly credible and reliable witness. To the extent that his evidence differs from that of Mr Noble the Court accepts Mr Giorgiutti’s evidence. For someone called in at very short notice to take part in the events of 16 and 17 June 2016, Mr Giorgiutti had a surprisingly good memory. He was able to give a comprehensive account of the legal advice that Mr Noble sought from him and that he gave to Mr Noble. Mr Giorgiutti was a witness of truth, who attempted honestly to assist the Court with his genuine recollection of what had happened between himself and Mr Noble.

261. [299]

     In seeking alternative advice Mr Noble was not solely motivated by a desire to get accommodating advice about the destruction of his personal laptop. By then Mr Noble was obsessed about Secure Logic’s covert surveillance of him. He thought that Secure Logic had committed a crime and he wanted it exposed.

262. [300]

     Secure Logic challenged that this was any part of his motivation for seeking alternative legal advice at that time. Two things drove Mr Noble’s conduct: (1) his fear of giving up his personal laptop, because of what it might expose; and (2) his conviction that Secure Logic had contravened the WS Act, to which Carroll & O’Dea had alerted him. The first of these was the predominant driver of his conduct.

263. [301]

     But Mr Noble’s conviction that Secure Logic had contravened the WS Act does not itself explain his seeking alternative advice. He had originally retained Carroll & O’Dea because of the firm’s expertise in employment law. Staying the course with Carroll & O’Dea was the logical way to bring Secure Logic to account for what he believed was its misdeeds.

264. [302]

     Mr Noble’s account of why he went to Mr Giorgiutti at this precise time is most obviously explained by his anticipation that orders for production of the personal laptop would be made the next day. But when asked why he was motivated to seek alternative advice at all, he said that from his perspective the matter had changed from a “contractual…employment matter to a criminal matter” and he did not believe that Carroll & O’Dea were “handling it well”. But the difficulty with that explanation is that Carroll & O’Dea had been asserting on Mr Noble’s behalf that Secure Logic had been engaged in criminal activity as early as their 3 June letter to McCabes.

265. [303]

     Mr Noble also sought to explain the need to seek alternative advice based on Mr Doughman’s allegedly substandard performance in Court on 15 June. But there is no contemporaneous documentary evidence that Mr Noble was unhappy with Mr Doughman’s performance, nor does such a concern appear in Mr Noble’s account of his conversations with Mr Doughman. Moreover, such a concern is not borne out by the transcript of 15 June which shows that Mr Doughman did everything on 15 June that could be expected of an experienced solicitor in his position.

266. [304]

     Mr Noble claims that he was attracted to Mr Giorgiutti as a legal advisor because of Mr Giorgiutti’s prior experience as the principal solicitor with the NSW Crime Commission. But this is not accepted. Mr Noble did not go to Mr Giorgiutti just to pursue the finer points of a prosecution of Secure Logic. As his conversation with Mr Giorgiutti (see below) shows, he was more concerned about getting advice allowing him to destroy the personal laptop.

267. [305]

     Mr Giorgiutti gave advice to Mr Noble after 5.30pm on 16 June. The advice suited Mr Noble’s purposes. It authorised him to do what he wanted: to destroy the personal laptop. Mr Noble’s approach to briefing Mr Giorgiutti with the facts was to focus upon Secure Logic’s surveillance of him rather than to focus on Secure Logic’s claim against him for the misuse of confidential information.

268. [306]

     Mr Noble told Mr Giorgiutti that Secure Logic had hacked into his personal laptop and that he had arranged the hard drive to be imaged. This bare skeleton of information did not equip Mr Giorgiutti to give adequate advice. The important factual elements that might have inclined Mr Giorgiutti to give advice that coincided with Mr Doughman’s advice were all absent. Mr Noble did not disclose the following matters to Mr Giorgiutti: that Secure Logic was claiming Mr Noble had improperly obtained confidential information; that Secure Logic had commenced proceedings to enjoin Mr Noble from misusing confidential information; that Secure Logic would be seeking orders the following day for the delivery up of the personal laptop that Mr Noble had told Mr Giorgiutti Secure Logic had hacked; that Mr Noble had a large quantity of Secure Logic’s business records on his personal laptop; and that the forensic image of the personal laptop that Mr Noble had mentioned to Mr Giorgiutti had been obtained some weeks before and that Mr Noble had used the personal laptop in the meantime.

269. [307]

     The Court infers that Mr Noble made a deliberate choice not to give Mr Giorgiutti this information. Mr Noble well knew that to give Mr Giorgiutti this information would be likely to generate the kind of legal advice that Mr Noble did not want to hear.

270. [308]

     Mr Noble’s account is consistent with Mr Giorgiutti being told of these proceedings and the orders Secure Logic was seeking to obtain the following day and that Mr Giorgiutti’s resulting advice was that the personal laptop should be destroyed “so that they can’t accuse you of retaining any of their data”. But Mr Giorgiutti did not have enough information to be able to give such advice and the Court does not accept Mr Noble’s account that he gave such advice to Mr Giorgiutti.

271. [309]

     Mr Noble attributes to Mr Giorgiutti the idea of getting the hard drive “mechanically shredded”. Mr Noble says that he expressed reluctance to Mr Giorgiutti about shredding the hard drive because of the cost and was told in reply by Mr Giorgiutti, “you’ll spend a lot more on lawyers because they’ll have an argument over whether or not the data is gone if you only delete it”. The Court does not accept Mr Noble’s evidence that any of this was said to or by Mr Giorgiutti.

272. [310]

     Mr Noble refused to agree in cross-examination that he had sought out Mr Giorgiutti’s advice because he did not like the advice Mr Doughman was giving him. But that is the proper inference that should be drawn.

273. [311]

     McCabes responded to Carroll & O’Dea’s 3 June key-logger letter at 6.52pm on 16 June. In this letter, McCabes denied on behalf of Secure Logic the allegations of breach of WS Act, s 16 or that Secure Logic had engaged in any “covert surveillance” prohibited by the Act. McCabes’ 16 June letter referred to the employment agreement that Secure Logic has:

274. [312]

     The letter also referred to Secure Logic’s Security Awareness and Acceptable Use Policy at Annexure A to Secure Logic’s Information Security Policies and Procedures. The policy states:

275. [313]

     In a carefully worded letter, McCabes then said of the work laptop:

276. [314]

     The letter dealt with the allegations concerning the personal laptop. In response, McCabes conveyed their instructions that Secure Logic was not involved in and did not authorise the installation of the key-logger program on the personal laptop and expressly denied the allegation.

277. [315]

     As to the allegations concerning the Peach Tree Bay website, the letter referred Carroll & O’Dea to Mr Devaraj’s explanation in his affidavit of 15 June, the account is set out and rejected earlier in these reasons except insofar as it contains admissions.

278. [316]

     Mr Noble described the McCabes letter of 16 June as another reason for him destroying the personal laptop and Seagate drive. McCabes admitted in their letter that Secure Logic had put the key-logger program on the work laptop but denied hacking into the personal laptop. This is important information that Mr Noble did not up to that point know. He had reason to suspect that the key-logger program might have been inserted into his personal laptop, but he did not know for sure.

279. [317]

     Mr Noble claimed that after reading the McCabes letter he did not believe Secure Logic’s denial. He said he was concerned if what McCabes had said was correct, that his personal laptop may have been hacked by a third party. He claimed this brought him to the conclusion that it would be better to destroy the hard drive, and that this was the catalyst for him meeting Mr Giorgiutti later that afternoon. This cannot be correct. He had seen Mr Giorgiutti at 5.30pm. McCabes’ 16 June letter did not arrive until 6.52pm.

280. [318]

     Apple Macintosh computers, such as Mr Noble’s Macbook Pro laptop, contain “Time Machine” software which enable a backup of much of the information on the hard drive of the personal laptop to be made with the aid of an external storage drive. Mr Noble says that after receiving the advice of Mr Giorgiutti that he could destroy the computer, he set about making a Time Machine backup so that at a later date, when he had a new computer, he would be able to restore his personal information from the Time Machine backup onto the new computer and then destroy the storage device which contained the backup.

281. [319]

     The Time Machine backup has real technical limitations. Mr Noble’s IT experience made him aware of these limitations. And these limitations mean that even if the Time Machine backup had been taken on 16 June, it would not provide any real defence for him. A Time Machine backup does not show what documents have been deleted from the computer’s hard drive and does not show what devices have been connected to the computer. This means that if the Time Machine backup had been taken on 16 June Mr Noble could have exported data from the personal laptop onto an external drive after the backup and before the destruction of the hard drive and the Time Machine backup would not show that the copying had occurred. Moreover, he could delete information on the personal laptop on the Time Machine backup which would not show the deleted documents or what had been done with them.

282. [320]

     Another of Mr Noble’s explanations for destroying the hard drive on the personal laptop was to blunt any further accusation that he had retained Secure Logic's confidential information. He says he relied upon Mr John Giorgiutti’s advice that destroying the hard drive would avoid an argument over whether he still had Secure Logic’s data.

283. [321]

     This cannot have been a genuine account by Mr Noble of his actual reasoning processes at the time. The explanation is inconsistent with Mr Noble’s conduct. After Mr Noble’s conversation with Mr Giorgiutti, Mr Noble says that he proceeded to make a Time Machine backup of what was on the personal laptop including all the Secure Logic files and records. Secure Logic dispute that Mr Noble made the backup on 16 June. Mr Noble’s testimony can be accepted presently for the purpose of analysis only.

284. [322]

     Destroying the hard drive on the personal laptop would not mean that he could truthfully say from then on that he did not have Secure Logic’s data and information. Once Mr Noble conceded that he still had Secure Logic’s information as a result of the Time Machine backup, Mr Elliott SC put to him in cross-examination the central contradiction arising from these facts:

285. [323]

     The making of the Time Machine backup is inconsistent with Mr Noble’s account that the reason he accepted Mr Giorgiutti’s advice that destruction could be justified on the basis that it afforded Mr Noble a defence that he did not have any of Secure Logic’s data. The defence was immediately undermined by the Time Machine backup. This inconsistency in Mr Noble’s case was never resolved.

286. [324]

     Mr Noble attempted to use the Time Machine backup in his defence. His case is that he executed the Time Machine backup on 16 June and that his doing so at that time proves that he was prepared to copy all the material on the hard drive of the personal laptop just before its destruction.

287. [325]

     There are two difficulties with this explanation. As has been explained above, the first of these difficulties is that the Time Machine backup, unlike the Ferrier Hodgson image, is not a complete image of the whole of the computer’s hard drive. It would not have shown whether any of Secure Logic’s data had been exported to another device after 30 May and before the Time Machine backup was taken.

288. [326]

     The second more fundamental difficulty is that the Court does not accept that Mr Noble has established that the Time Machine backup took place on 16 June. As a result of a contest of expert and other evidence it should be inferred that the Time Machine backup most probably occurred on 10 June and did not occur thereafter.

289. [327]

     As a result of the Court’s orders a forensic image of the Time Machine backup was preserved and placed into the hands of Mr Nigel Carson a forensic computer expert with KordaMentha. Mr Carson undertook an investigation on behalf of Secure Logic of several matters including the Time Machine back up, which revealed it was made on 10 June 2016, some six days earlier than Mr Noble says that it was taken. The Court accepts Mr Carson’s evidence that the backup was taken on 10 June not 16 June. Mr Carson could find little evidence of activity on related devices on 16 June and could not identify any Time Machine backup on 16 June.

290. [328]

     Mr Carson’s affidavit was sworn on 1 February 2018. After it was made available to Mr Noble, he served an affidavit of 1 July 2019 stating that on or about 1 June 2016 “in the course of investigating interference with the work laptop the date was adjusted” either by himself or by someone at Ferrier Hodgson. His contention was that there had been a manual adjustment to the timeclock in the computer, which explained the discrepancy between Mr Carson’s finding that the Time Machine backup had occurred on 10 June and his contention that he had executed the backup on 16 June.

291. [329]

     Mr Noble’s theory of a manual adjustment of the timeclock is not persuasive. Mr Noble did not advance a plausible explanation as to why the timeclock adjustment was necessary or who made the adjustment. No corroborative evidence was called from Ferrier Hodgson. Mr Noble said that the Ferrier Hodgson mistake probably occurred when Ferrier Hodgson personnel were imaging the work laptop. But if that is correct is difficult to see how that would alter the timeclock on the personal laptop. Moreover, the internal data shows that the Time Machine backup is recorded as having occurred, whatever day it occurred, between 3.09am and 7.18am on the day in question. That is not the time during the day that Mr Noble says that he was undertaking a backup – which was said to be at about 8pm on the evening of 16 June.

292. [330]

     Mr Noble knew in June 2016 that the Time Machine backup was not as good as a forensic image of the personal laptop's hard drive. He knew that he could have taken a forensic image of the personal laptop's hard drive on or around 16 June, but he did not do so. This would have been a better way of preserving in his defence evidence that he had not accessed Secure Logic’s data. His explanation for not taking a forensic image was that the hard drive had “barely changed” since the taking of the previous forensic image on 30 May. But this contradicts the other evidence which the Court accepts that Mr Noble used his computer after 30 May. And the Court does not accept his evidence that the hard drive had “barely changed”.

293. [331]

     Apart from preparing the Time Machine backup, when he got home on the evening of 16 June after seeing Mr Giorgiutti, Mr Noble prepared a draft email to Mr Doughman. This draft was completed by 8.06pm when, using the pseudonym “John Doe”, Mr Noble sent it to Mr Giorgiutti for comment. In substance this draft email is very similar to the one which was actually sent seven hours later to Mr Doughman. Mr Noble asked Mr Giorgiutti to “please check the email below that I was going to send my lawyer tonight”. He also reported to Mr Giorgiutti that he had found “a place in North Sydney and talked to them” and they can “provide certificates of destruction”.

294. [332]

     Mr Giorgiutti replied promptly by 9:08pm. Mr Giorgiutti’s reply strongly reinforces Mr Giorgiutti’s version of the discussion that he and Mr Noble had held only a few hours before. Mr Giorgiutti said:

295. [333]

     Mr Giorgiutti seemed to believe from what Mr Noble had told him that Secure Logic was attempting to damage the GovDC. There is no basis in any of the evidence in these proceedings to support such a contention. But the Court infers that that is what Mr Noble had Mr Giorgiutti believe. As can be seen below, the final version of Mr Noble’s 3.14am email to Mr Doughman did include this additional allegation. And the allegation was without substance. Secure Logic already had the relevant access codes to the GovDC and rights to access it as Secure Logic was servicing the GovDC under contract at that time. Nor did Mr Noble’s work and personal laptops have access to the GovDC.

296. [334]

     The Court does not accept Mr Noble had a concern about any hacking into the GovDC. If Mr Noble’s concern was genuine, he could readily have reported it to the personnel he knew there, to the police or just surrendered both his laptops to the Court.

297. [335]

     Mr Noble raised the spectre of hacking into the GovDC into the email to Mr Doughman, and claimed in answers to the Court that he was “very concerned” about hacking although he said “I do not recall the specifics of my genuine concerns”. If he had genuine concerns about such a serious matter he would have been able to give a better account of the specifics but he was not. In substance he ultimately agreed in cross-examination that he had exaggerated this concern.

298. [336]

     Relevant events started very early on 17 June. Mr Noble emailed Mr Doughman at 3.14am telling him that he intended to destroy the personal laptop. Mr Noble never explained to the Court’s satisfaction why this email was sent at this unconventional time. The emailed provided as follows:

299. [337]

     Although Mr Noble had received Mr Giorgiutti’s reply email of 9.08pm, he did not send the final email incorporating Mr Giorgiutti’s suggested amendments on to Mr Doughman until 3.14am. Fairness to and openness with his solicitor, Mr Doughman, who was to appear for him at 10am the next day, would suggest a quick forwarding to Mr Doughman of the alternative advice that Mr Giorgiutti had given him.

300. [338]

     But instead it took six hours. Secure Logic submits that Mr Noble deliberately delayed sending this email until he could be confident that Mr Doughman would not read it until the following morning. Secure Logic submits that Mr Noble did not want to risk receiving a call or a reply email on the evening of 16 June, because that would deny him the defence that Mr Giorgiutti’s was his last legal advice before destroying the hard drive on his personal laptop.

301. [339]

     Mr Noble could not satisfactorily explain the delay. Mr Giorgiutti suggested amendments to Mr Noble’s existing draft that would only have taken a few minutes. Mr Noble explained the delay by suggesting “I was not completely convinced that I was going to send the email quite yet, I think”. He said it was quite a “dramatic” email and he thought he would not click “send” straight away. Instead he said he just fell asleep and that he only sent the email later when he awoke shortly after 3am.

302. [340]

     The Court does not accept this evidence. Mr Noble was likely to be alert, as he was actively managing simultaneous instructions to two lawyers. 9pm was not particularly late. And he does not apologise to Mr Doughman in the 3.14am email for falling asleep, nor does he otherwise contemporaneously confirm that is what happened. The better view is that he wanted to keep Carroll & O’Dea at a safe distance out of reach, while he destroyed the hard drive and the Seagate drive, using Mr Giorgiutti’s advice as his defence.

303. [341]

     At approximately 7am, Mr Noble left home, took his children to school north of the Harbour, drove across the bridge to Circular Quay, then caught the train and returned to North Sydney to engage an expert service to destroy the hard drives.

304. [342]

     At 7.12am, when Mr Noble was probably driving, Mr Doughman read and responded to Mr Noble’s email of 3.14am. This email informed Mr Doughman that Mr Noble had obtained legal advice inconsistent with Mr Doughman’s, and that Mr Noble was likely to destroy the personal laptop and the Seagate drive. Mr Doughman felt duty-bound to deter Mr Noble from this course. His 7.12am email reflects that intent:

305. [343]

     Mr Doughman does not make a practice of giving out his personal mobile telephone number to his clients. But he made an exception on this occasion because he wanted to make it as easy as possible for Mr Noble to contact him.

306. [344]

     But Mr Noble says that he did not read that email until much later that morning, once he had access to Wi-Fi. Then, using his son’s computer he settled into a cafe back in the Supreme Court precinct after 10.40am. The Court accepts this evidence. But the important issue is not when Mr Noble first read this communication. It is whether he had the means to download and read it before 9am and deliberately did not take advantage of those means.

307. [345]

     Shortly before 9am on 17 June Mr Noble was admitted into the premises of Payam in North Sydney. Payam specialises in the recovery or destruction of data from computer hard drives, mobile phones and other digital devices. Mr Noble’s instructions to Payam were to destroy the disk drive and storage device of his personal laptop and the Seagate drive.

308. [346]

     Payam destroyed the hard drive and the whole logic board of the personal laptop. The hard drive in this Mac computer was embedded in the logic board. Destruction of one meant destruction of the other.

309. [347]

     Payam’s receipt shows that it charged Mr Noble $20 for the service, considerably cheaper than the $800 that Mr Noble claims had concerned him as the likely expense of destruction when speaking to Mr Giorgiutti. The Payam receipt also shows that the destruction was completed by 9:59am. Mr Noble says, and the Court accepts, that the destruction of the two drives was completed between 9am and 9:15am. And 9:59am was probably just the time of data entry of the transaction at Payam. A Payam employee provided a certificate to Mr Noble and charged him the $20, probably no later than 9:30am. He was probably at Payam for no more than half an hour and was on his way by taxi to the Supreme Court by shortly after 9:30am.

310. [348]

     Mr Noble did not make to or receive from Mr Doughman any telephone calls before he left Payam. He started to make calls when he was in a taxi travelling from Payam at North Sydney back to the CBD. He must have anticipated that his 3:14am email would have severely disrupted the plans for Court that Mr Doughman thought he had made with Mr Noble the previous afternoon. Any reasonable person in Mr Noble’s position, having sent the 3:14am email, must have expected Carroll & O’Dea to make early and sustained attempts to contact him that morning.

311. [349]

     Mr Noble chose to remain incommunicado before about 9:30am with one accidental exception. Directly after Mr Doughman sent his email, he did just what might be expected: he tried to telephone Mr Noble. He had Mr Noble’s mobile number. He tried several times from his own mobile. He tried again later from Carroll & O’Dea’s office telephones. He left a voicemail message urging Mr Noble not to delete anything from his personal laptop and asking him to call back.

312. [350]

     Mr Noble did not answer Mr Doughman. Nor did he send any text message to Mr Doughman. Mr Noble had his mobile phone with him. There is no objective evidence that there was anything wrong with Mr Noble’s mobile phone that morning such that he was unable to access voicemail. Indeed, he was able to contact Mr Doughman by mobile phone after 9:30am and tried to do so. He must have known that Mr Doughman would be trying to contact him by every means possible that morning. And about 9:15am after the drives had been destroyed he accidentally took a telephone call when he was still at Payam from a number that he did not recognise, which turned out to be Mr Doughman’s secretary. He only answered this call because he did not recognise the number.

313. [351]

     There is contemporaneous evidence of the content of this call in an email that Mr Doughman sent to counsel, Mr Kelly, at 8:56am forwarding the short minutes and saying that the personal laptop had been “wiped”. This email does not refer to the destruction of the hard drive:

314. [352]

     This message was all Mr Doughman and counsel had to go on about the fate of the personal laptop and the Seagate drive before they went to Court. They were entitled to believe as a result that the personal laptop still existed, but all confidential information had been deleted from the hard drive. They conducted the case before the Chief Judge in Equity that day consistently with that belief. They did not find out until later that the personal laptop had been destroyed. Mr Noble did not come up to Court. Mr Doughman is uncertain as to the extent of the telephone conversations that he had with Mr Noble during the day but the Court infers that Mr Doughman did not get clear instructions during the day that the hard drive had been destroyed. Although Mr Noble’s 3:14am email threatened destruction, Mr Doughman was entitled to believe that his 7:12am reply would have some effect on the client and that the computer had only been “wiped”.

315. [353]

     The Court does not accept that Mr Noble was unable to access the email communications from Mr Doughman. Mr Noble said that because of his suspicions of hacking he had disabled access to emails on his own mobile phone. He only had access to emails by Wi-Fi using his son’s computer and he did not get access to Wi-Fi until he arrived at the Supreme Court. But even if that evidence is accepted, he could not explain why he could not access a personal hotspot on his phone. And a brief pause at one of the many cafes on his way from North Sydney station to Payam was another option to give him Wi-Fi access had he really wanted it. And he could have telephoned or sent a text message to Mr Doughman at any time. Instead he delayed communicating.

316. [354]

     Mr Noble went to Mr Giorgiutti to get advice that was different from Mr Doughman’s. Mr Noble had no reason to believe that Mr Doughman’s advice had changed overnight. The proper inference to be drawn is that Mr Noble avoided speaking with Mr Doughman before he arranged for the personal laptop hard drive and Seagate Drive to be destroyed.

317. [355]

     Mr Noble ultimately made the following concessions in cross-examination by Mr Elliot SC:

318. [356]

     The Court infers from this concession and from the other circumstances identified here that Mr Noble’s objective in destroying the two drives when he did before Court on 17 June and before communicating with Mr Doughman was to prevent any argument taking place in Court about whether the personal laptop should be delivered up and to prevent the Court making orders for its delivery up.

319. [357]

     The IT industry’s description of what Payam did to Mr Noble’s laptop and Seagate Drive, namely “mechanical shredding”, conjures up an accurate image of the process. Neither the hard drive nor the logic board was able to be reconstructed after the mechanical shredder had been applied. This in turn meant that it was no longer possible to trace the manner in which Mr Noble had dealt with Secure Logic’s data on his personal laptop and the external drive in the 18 day period between Ferrier Hodgson’s imaging on 30 May and their destruction on 17 June.

320. [358]

     Mr Noble never refuted to the Court’s satisfaction the obvious inference that during that 18 day period he could readily have copied Secure Logic’s data onto an external storage device such as the Seagate drive and from there he could readily have transferred the data elsewhere.

321. [359]

     Mr Noble’s conduct in destroying the trail of evidence that would potentially show such a transfer is a strong basis to infer that such a transfer probably occurred. If Mr Noble had nothing to hide, he would not have destroyed either the personal laptop or the Seagate drive. Moreover, the survival of both would have placed him in a position successfully to defend Secure Logic’s allegations against him.

322. [360]

     Mr Noble’s motivation to destroy these two devices was strong. His decision to destroy the devices could only be executed after he overcame two other strong countervailing forces acting upon him. The first countervailing force was Mr Doughman’s powerfully delivered advice to Mr Noble not to destroy the devices. The cogency with which Mr Doughman presented his advice is exemplified in the way he delivered his oral evidence to this Court, with clear confidence in what he had said to the client. It is exemplified in his first-opportunity response to Mr Noble’s 3.14am email. It is also exemplified in the terms of Mr Doughman’s contemporaneous file note of his advice to Mr Noble.

323. [361]

     The second countervailing force was even stronger: Mr Noble’s well-developed aversion for Secure Logic. The Court has found that by late May 2016 Mr Noble had an abiding concern that Secure Logic had committed criminal offences by spying on him. If Mr Noble had not destroyed the devices, he could have readily provided them to investigating and prosecuting authorities to assist them in propounding a criminal case against Secure Logic. Mr Noble was motivated in June 2016 to advance a criminal case against Secure Logic. By the time of the hearing both his own evidence and the case he presented to this Court showed that motivation persisted. Mr Noble’s motivation for destroying the devices must have also been sufficiently powerful to have trumped his desire to have Secure Logic brought to account for what he believed was an egregious contravention of the WS Act.

324. [362]

     Mr Noble’s various inconsistent explanations for destroying the personal laptop and Seagate drive further strengthen the inference against him that he probably exported data out of these devices and destroyed them so his breach of confidence could not be discovered. The Court has found that he was untruthful in these explanations. Why did he need to be untruthful? If he had not exported data out of these devices and he was actuated by honest motives, his story should have been consistent and he only had to be candid.

325. [363]

     Secure Logic submits that the Court should infer that Mr Noble probably used his personal laptop to export data into the Seagate drive and from there he exported it onto another device or other devices. Secure Logic submits that he did this to use the material as he saw fit in future business adventures, including as an employee of FirstWave. These inferences are all available and the Court draws them because they are by far the best explanation of all Mr Noble’s conduct. Mr Noble was looking to become an employee of FirstWave but that was not his only option. But even if these specific inferences are not drawn, at a general level the Court infers that Mr Noble believed that retaining Secure Logic’s data would be to his long-term advantage should he continue to operate in the IT industry, which was his most probable future career trajectory.

326. [364]

     Mr Noble never directly admitted that he used personal laptop during the period after the Ferrier Hodgson imaging on 30 May. But according to Mr Doughman, who the Court accepts, Mr Noble did tell Mr Doughman on 15 June that he wanted to keep the personal laptop rather than hand it over so he “still had a computer to use”. And Mr Noble himself thought that that his telling Mr Doughman that, “sounds right”. Among other things Mr Noble said to Mr Doughman that that he wanted to continue to send and receive emails from him from the personal laptop. This expresses an intent to use the personal laptop from which actual use is to be inferred.

327. [365]

     Mr Noble’s other explanation for destroying the hard drive on 17 June was that he was afraid of being spied on by Secure Logic and its destruction would put an end to its surveillance of him. But this explanation cannot be sustained. Being a victim of Secure Logic’s spycraft, intrusive though it had been in Mr Noble’s case, was not a main driving concern of his at the time.

328. [366]

     Mr Noble knew that he had disabled the key-logger software that had been detected by his installation of the antivirus software on 23 May. He said that this did not reassure him, because he did not know what other spyware Secure Logic had embedded into his personal laptop.

329. [367]

     But the Court does not accept this explanation. By 16 June he had already used a simple countermeasure to Secure Logic’s spyware that had apparently satisfied him for over three weeks before 16 June. He says he simply turned off his personal laptop and ensured that it was not connected to the internet or to Wi-Fi.

330. [368]

     The Court does not accept that he did turn off his personal laptop and disconnected it from Wi-Fi between 23 May and 16 June. Rather the Court infers from his other evidence that he was using his personal laptop. But his own account of having switched off the laptop is inconsistent with his professed concern about Secure Logic continuing to spy on him.

331. [369]

     The most probable explanation that fits Mr Noble’s conduct in destroying the personal laptop and the Seagate drive is that he wanted to disable Secure Logic from verifying whether or not he had taken data off the personal laptop, including the Fergus folder and the JP Prospects document, before he destroyed the hard drive. He denied this explanation when it was put to him. But in the Court’s analysis it is the best fit explanation for his state of mind at the time of the destruction. His disposal of the personal laptop and Seagate drive would destroy any evidence that a storage device had been connected to the personal laptop and the Fergus file or the JP Prospects document had been exported from the personal laptop.

332. [370]

     After Mr Noble left Payam, his taxi to the CBD was delayed in traffic. When he was in the taxi, Mr Noble received a text message from Mr Doughman at 10.23am, suggesting that they both meet up at a cafe near the Supreme Court. Mr Noble arrived at the cafe at 10.40am, where he accessed the cafe's free Wi-Fi and read Mr Doughman’s 7.12am email.

333. [371]

     Whilst he was at the cafe, he emailed Mr Giorgiutti at 11:42am in the following terms:

334. [372]

     Mr Noble knew that what he had done was directly contrary to Mr Doughman’s advice. He correctly anticipated Mr Doughman’s displeasure at his conduct. But Mr Noble’s email revealed to Mr Giorgiutti for the first time that something may have been said to a Court that should have put a brake upon the destruction of the hard drive. This appeared to alarm Mr Giorgiutti, who replied within the hour in understandably defensive terms, confirming how narrowly Mr Noble had briefed him the previous evening:

335. [373]

     Whilst Mr Noble sat in the cafe the contest continued in the Chief Judge in Equity’s Duty List. The proceedings were conducted in accordance with the agreed strategy of trying to offer up the Ferrier Hodgson forensic image and to delay production of the personal laptop.

336. [374]

     Orders were made at the end of the day requiring Mr Noble to deliver up the personal laptop and the work laptop and any other storage devices. The orders made were close to the draft sent by Secure Logic’s counsel to her Honour the previous evening. They included orders (Order 4) requiring Mr Noble to provide by 28 June an affidavit deposing as to the identity of every person or entity to whom Mr Noble had provided copies of any of Secure Logic’s claimed confidential material and the identity and location of every computer and data storage device on which the confidential material had been stored together with information about the use to which the material had been put and the date of its use.

337. [375]

     At the end of the day on 17 June Mr Doughman emailed Mr Noble summarising some of the day’s events and expressing his frustration at the turn of events and the difficult position in which Mr Noble had placed his lawyers that day:

338. [376]

     Mr Noble was still corresponding with Mr Giorgiutti. On Sunday 19 June he emailed him, apparently in reply to Mr Giorgiutti’s 17 June email inquiring about whether an undertaking had been given to the Court. Mr Noble denied he had by then given any undertaking to the Court, which was correct. But he did record contemporaneous evidence of what he must have told Mr Doughman. He said that he had expected to be able to replace the hard drive and then get the machine restored by the forensic expert but acknowledged this was now impossible because of the destruction of the main logic board. He went on, showing his reluctance to reveal that the personal laptop had been mechanically shredded:

339. [377]

     On 21 June, Carroll & O’Dea wrote to McCabes formally declaring that the personal laptop had been destroyed and could not be produced and in answer to the Court’s order of 17 June.

340. [378]

     Even then, Mr Noble hesitated before revealing the true position. His initial thought was that another machine could be bought and transferred into the case of the original personal laptop. However in considering that, he realised that an expert “would be able to spot the changes made”. The fact that Mr Noble would even consider such a device says much about his approach and attitude at this time.

341. [379]

     In response to that revelation the matter was relisted, and Mr Noble prepared his 24 June 2016 affidavit in order to seek to explain to the Court why the personal laptop had been destroyed in the face of the application for an order for its delivery up, and why he had allowed orders to be made for its delivery up at a time when it had been destroyed.

342. [380]

     On 21 June, Mr Noble provided the work laptop and a number of storage devices to Klein & Co for analysis in partial compliance with the Court's orders. He provided another old ASUS laptop to Klein & Co on 27 June.

343. [381]

     Mr Noble's conduct on the morning of 17 June breached his relationship with Carroll & O'Dea. He had either deliberately disobeyed their advice, or at the very least, put himself in a position in which he could not receive advice he did not want to hear.

344. [382]

     Carroll & O'Dea declined to act for him further. Mr Doughman provided a debriefing note to file at the conclusion of the firm's instructions on 23 June 2016. It became an important document in the proceedings. It was reliable in every way. It clarified the nature of the advice the firm had given to Mr Noble. And it has helped found the Court’s inferences about what Mr Noble was told by Carroll & O’Dea on 16 June 2016.

345. [383]

     In conclusion, the findings made here are inconsistent with Mr Noble’s final submissions in defence of Secure Logic’s confidential information claim. Mr Noble advances in final submissions versions of the facts that are not supported by the Court’s findings. For example, he challenges the need for any protection for the JP Prospects document. He resists the inference that it was inappropriate for him to send the JP Prospects document out to Mr Pankhurst, when he did. He maintains the version of the creation of the Fergus Folder that the Court has rejected. He does not answer the case against him that he assisted FirstWave against the interests of Secure Logic in an area where he would have expected FirstWave to be a competitor with Secure Logic. And Mr Noble’s final submissions do not analyse the full course of events leading to his destruction of the personal laptop and Seagate drive that have been detailed in these reasons.

346. [384]

     Mr Noble objected to some of the evidence that Secure Logic relied upon in its principal claim. These reasons now turn to explain why that evidence has been admitted and taken into account in the Court’s earlier reasoning.

347. [385]

     These reasons will then consider Secure Logic’s claims for relief against Mr Noble, Peach Tree Bay and Mr Pankhurst. This is followed by consideration of Mr Noble’s Cross-Claim.

348. [386]

     Mr Noble contends some of the documentary evidence listed in Exhibit 1 relied upon in Secure Logic’s case was acquired improperly or, in contravention of Australian law and should not be admitted into evidence without the Court exercising a discretion to admit the material under Evidence Act, s 138.

349. [387]

     Evidence Act, s 138(1) and (3) provide as follows:

350. [388]

     Mr Noble’s case was that the critical confidential material in Secure Logic’s case had been obtained improperly or in contravention of an Australian law. Secure Logic contended that all the material it relies upon in the proceedings had been obtained by lawful means.

351. [389]

     Resolution of this contest requires an examination of how the material Secure Logic tendered had been obtained and then whether s 138(1) is attracted.

352. [390]

     The most convenient approach to this analysis is to give an overview of Secure Logic’s impugned conduct and whether it contravenes any Australian law. Then the Court examines how Secure Logic’s evidence was sourced.

353. [391]

     In May 2016, Secure Logic engaged in three separate types of information gathering from Mr Noble. First, beginning on 10 May 2016 Mr Devaraj directed Mr Guzhevskiy to take copies of documents from Mr Noble’s work laptop onto a USB device which Mr Guzhevskiy gave to Mr Devaraj (“the 10 May conduct”). Mr Guzhevskiy copied documents onto this USB, including the “Fergus folder”. There was further conduct of a similar character, discussed below, after 10 May. But, for convenience, this is all called “the 10 May conduct” in these reasons.

354. [392]

     Second, on 18 May 2016 Mr Devaraj directed Mr Guzhevskiy to conduct further surveillance by installing the key-logging program onto the work laptop (“the 18 May conduct”). The key-logger program operated on the work laptop until Mr Noble discovered and disabled it.

355. [393]

     Third, using some of the information gathered by the key-logging software, Mr Devaraj directed Mr Guzhevskiy on 23 May 2016 to access the Peach Tree Bay domain server to set up the automatic forwarding of emails from Mr Noble’s private email account to an email account Mr Guzhevskiy controlled (“the 23 May conduct”).

356. [394]

     Mr Noble submits that this impugned conduct involved contraventions of the WS Act. But a close reading of the WS Act is required in relation to the allegations of contravention that Mr Noble makes here.

357. [395]

     The WS Act regulates the circumstances in which surveillance of employees can take place at workplaces in this State. The central command in the WS Act prohibits “covert surveillance” of an employee without a “covert surveillance” authority: WS Act, s 19. An employer can apply to a Magistrate under WS Act, Part 4, Division 2 for the issue of a covert surveillance authority to authorise particular surveillance that the WS Act otherwise prohibits.

358. [396]

     The term “covert surveillance” is defined as “surveillance of an employee while at work for an employer carried out, or caused to be carried out by the employer and not carried out in compliance with the requirements of Part 2”: WS Act, s 3. Relevantly an employee is “at work” when the employee is “at a workplace of the employer” whether or not actually performing work or “at any other place while performing work for the employer”: WS Act, s 5.

359. [397]

     In the WS Act, s 3 “surveillance” is defined to mean three types of surveillance, “camera surveillance”, “computer surveillance” and “tracking surveillance”. Only “computer surveillance” is relevant here and it is defined as follows:

360. [398]

     Importantly the WS Act meaning of “surveillance”, so far as “computer surveillance” is concerned, is the use of “software or other equipment” that “monitors or records” the “information input or output, or other use” of a computer. Thus, forms of surveillance that may fall within the ordinary English meaning of the word “surveillance”, but which do not fall within this definition, are not covered by the WS Act.

361. [399]

     Reading the words of that definition closely is most important for the resolution of the issues between the parties in this part of this case. Critical words in the definition are the words “software” that “monitors or records”. The word “records” imports the idea of the taking of a continuous recording of the operation of the computer under attention. The Macquarie dictionary definition of the relevant meaning of the word “monitors” is “to check, observe, or record, the operation of (a machine etc…) without interfering with the operation”. This combination of words conveys that surveillance is conducted by “software” that “monitors or records”, the idea being the software tracks the operation of the computer by the user.

362. [400]

     But that is not what Mr Guzhevskiy did in the 10 May conduct. As Mr Guzhevskiy explained in his first affidavit sworn on 16 February 2017, and then elaborated in his second affidavit of 18 July 2019, between 9 and 10 May and 23 May he accessed Mr Noble’s work laptop directly or remotely on a number of occasions and copied data from Mr Noble’s work laptop either to his own laptop or to a USB and then gave the data to Mr Devaraj and Mr Singh to conduct a detailed review. Mr Guzhevskiy logged into Mr Noble’s work laptop using his administrator privileges, examining what was on the hard drive of the computer and then taking a copy of various folders and files. Mr Guzhevskiy did that manually either by inserting a USB or accessing the computer by remote access software. He then downloaded information from the computer onto a USB.

363. [401]

     This does not contain the necessary element of continuous monitoring or recording that is imported within the definition of “computer surveillance” and therefore was not “surveillance” within the WS Act meaning. Mr Noble’s submissions seek to make much of the fact that on occasions after 10 May Mr Guzhevskiy used remote access software to copy data from Mr Noble’s work laptop. But in the Court’s view that is no more significant than when Mr Guzhevskiy inserted a USB into the work laptop and copied data onto it. USB and computer software were also deployed when Mr Guzhevskiy’s copying took place by physically inserting a USB. It would be surprising if Mr Guzhevskiy’s 10 May conduct were a contravention of the WS Act; what he did was very like the investigative method used by employers in many confidential information cases that barely warrants criticism. The WS Act is directed at a different mischief: the continuous recording of employees’ activities without their consent.

364. [402]

     The 10 May conduct led to Mr Singh sending material being supplied to McCabes on 20 May and 8 June. None of that material or the information derived from it was obtained as a result of a contravention of the WS Act. It is not suggested that the 10 May conduct contravenes any other legislation. Nor is the obtaining of the material improper in the context of Mr Noble’s employment contract, which gave Secure Logic the right to “view” as it deems appropriate “all data that is sent or received electronically by you”: clause 1.22.

365. [403]

     The 18 May conduct is in a different category. The installation of the key-logger program into the work laptop involved the use of software to “monitor or record” the use of the computer and because of its continuous tracking of Mr Noble’s computer usage it is “computer surveillance” within the WS Act.

366. [404]

     To avoid the prohibition in WS Act, s 19, an employer can remove surveillance proposed to be conducted from the definition of “covert surveillance” by obtaining authorisation under the requirements of WS Act, Part 2, which provides for the notification of workplace surveillance to employees. The level of notification varies depending on the kind of surveillance. But all forms of WS Act “surveillance” of an employee must not commence without prior notice in writing to the employee: WS Act, s 10. WS Act, s 10 provides:

367. [405]

     The WS Act, s 12 imposes a requirement additional to section 10, prohibiting computer surveillance unless there is a relevant policy concerning computer surveillance in place and the employee has been notified in advance of the policy. Both matters were in issue in respect of the 18 May and 23 May conduct. WS Act, s 12 provides:

368. [406]

     Upon its proper construction, WS Act, s 12 imposes a requirement that is additional to WS Act, s 10. Compliance with WS Act, s 12 is not a substitute for compliance with WS Act, s 10. An employer such as Secure Logic must satisfy both these provisions. This case has been conducted at times as though compliance with WS Act, s 12 is sufficient on its own. That is not correct. The parties contested whether Secure Logic had complied with s 12, arguing about the content of Secure Logic surveillance policies and whether Mr Noble had notice of them. But the Court does not need to make findings about Secure Logic’s WS Act, s 12 compliance.

369. [407]

     Secure Logic’s more fundamental problem is that it is not in contest that it did not give notice to Mr Noble in conformity with s 10 before the 18 May conduct commenced. At Mr Devaraj’s direction, Mr Gushevskiy secretly installed the key-logger software on Mr Noble’s work laptop and used it to monitor and record Mr Noble’s activity without seeking Court authorisation under the WS Act. Prima facie all Secure Logic’s use of the key-logger program after 18 May 2016 was a contravention of WS Act, s 19. And any documents or information sourced from the use of the key-logger program could not be admitted into evidence. But as will be seen Secure Logic submits that it is not relying upon any material derived from the key-logger program, and this appears to be correct.

370. [408]

     The 23 May conduct is described earlier in these reasons under the heading “Mr Devaraj Escalates Surveillance but Is Detected”. By the time the 23 May conduct occurred Mr Noble was no longer at work. 20 May was his last day at work. The 23 May conduct was not workplace surveillance although it was surveillance of an employer by an employee. By that date Mr Noble was not “at work” within WS Act, s 5, as he was not performing any work for Secure Logic, his meetings having been cancelled.

371. [409]

     WS Act, s 16 prohibits surveillance of employees using work surveillance devices while the employee is not at work. Section 16 provides:

372. [410]

     The definition of “work surveillance device” in s 16(2) is “a device used for surveillance of the employee when at work for the employer”. It is doubtful that installation of the forward in the Peach Tree Bay domain constitutes a "work surveillance device". But of greater concern is that the 23 May conduct involved a direct, deliberate, unauthorised external interference into the Crazy Domains domain servers which hosted Peach Tree Bay’s website. The evidence available about the 23 May conduct would establish some of the elements of an offence under Crimes Act 1900, s 308H, or the Criminal Code Act 1995 (Cth), s 478.1(1). Criminal Code Act, s 478.1 provides:

373. [411]

     The 23 May conduct appears to constitute “unauthorised access to or modification of restricted data held in a computer”. Whether “unauthorised access” to “restricted data” took place depends on what Crazy Domains access control systems Mr Guzhevskiy had, at Mr Devaraj’s direction, to penetrate in order to cause these emails to be forwarded. Mr Urquhart’s expert evidence is a basis to infer that Mr Guzhevskiy would have had to use usernames and passwords, to negotiate an access control system, before modifying a Crazy Domains server in Western Australia hosting Peach Tree Bay’s website.

374. [412]

     This Court does not have the task in these proceedings of determining whether the 23 May conduct did constitute an offence under s 308H or s 478.1(1). Elements of intent have not been examined. Secure Logic, Mr Devaraj and Mr Guzhevskiy vigorously oppose such a conclusion.

375. [413]

     But leaving these considerations aside, the depth of the unauthorised interference into Mr Noble’s private affairs evidenced in the 23 May conduct and the possibility of Mr Noble’s communications with his lawyers being captured through it, means that any evidence gathered as a result would be “improperly” obtained within Evidence Act, s 138(1): see Robinson v Woolworths Ltd (2005) 227 ALR 353; (2005) 64 NSWLR 612; (2005) 158 A Crim R 546; [2005] NSWCCA 426.

376. [414]

     But as will be seen, Mr Noble is not able to demonstrate that any material being tendered in evidence by Secure Logic has been obtained through the 23 May conduct. This is not surprising, as Secure Logic was by 20 May already briefing its solicitors with material based on the 10 May conduct and the 18 May conduct. Further consideration of the consequences of the 23 May conduct is unnecessary.

377. [415]

     Much of Mr Noble’s submissions were focused upon material that was said to have been derived from the key-logger program. But Secure Logic’s analysis of the material to which objection is taken (see Exhibit 1) disclaims any reliance upon material from the key-logger program. That analysis, which the Court accepts, is briefly outlined below.

378. [416]

     Mr Noble’s submissions take objection to two main categories of documents. They are the following:

379. [417]

     It is convenient to give these two categories of documents separate conventional names. The documents in category (a) above were Exhibit SD-3 to Mr Devaraj’s affidavit of 15 June 2016. They will be described in these reasons as the “SD-3 documents”. The documents referred to in category (b) above are located on USB sticks exhibited to Mr Carson’s affidavits of 30 July and 9 August 2019 (being tabs 7, 8, 9 and 10 in Exhibit D). For convenience they will be referred to in these reasons as the “Carson documents”. Mr Carson undertook analysis of the work laptop and the forensic image of the personal laptop after Mr Noble delivered them up pursuant to this Court’s orders.

380. [418]

     To the extent that Exhibit 1 describes other documents they may be classified into these same two categories or are derived from documents in these categories.

381. [419]

     The Carson documents include all the SD-3 documents, and some other documents. A table was provided with Secure Logic’s submissions in reply of 21 October 2019 marked “Annexure A”. That table conveniently identifies which of the documents fall outside the scope of Mr Noble’s objection or whether, for example, the documents were the subject of admissions by Mr Noble.

382. [420]

     The provenance of the SD-3 documents may be shortly explained. They were obtained by SL Australia through Mr Guzhevskiy looking on Mr Noble’s work laptop while he was still in the employment of SL Singapore and downloading material from that work laptop as part of the 10 May conduct. None of that conduct involved any impropriety or contravention of an Australian law. This material was not obtained using the key-logger program. This is self-evident for example from the dating of the emails within the SD-3 documents, which were all sent and received in early May 2016. The Court accepts Mr Guzhevskiy’s evidence that he had located and copied the SD-3 documents off the work laptop before activating the key-logger program. Indeed, the key-logger program was only activated for a short period between 18 and 24 May, before Mr Noble discovered it.

383. [421]

     The Carson documents fall into two categories. The first category is sourced from Mr Carson’s examination of Mr Noble’s work laptop. The second category is sourced from Mr Carson’s examining the forensic images of the personal laptop. Mr Noble delivered up the material in both these categories under the Court orders. Both the categories of Carson documents were therefore obtained lawfully under the Court’s processes.

384. [422]

     As to the first category of Carson documents, obtained from the work laptop, that device was delivered to Mr Carson as a result of Court orders. The order was based on employment contract clause 1.13 that on termination of employment the employee “will be required to return all company property… Including…equipment…documents and computer desks”. The employment contract is a sufficient basis, on its own, to support Secure Logic’s relief to put this material from the work laptop into Mr Carson’s possession for forensic analysis.

385. [423]

     As to the second category of Carson documents, the forensic image of Mr Noble’s personal laptop was obtained by Secure Logic through the Court’s orders which were in turn based on Mr Noble’s contractual (clause 1.14) and other obligations of confidence. They were not derived from material obtained either using the key-logger software consequent upon the 18 May conduct or from material obtained consequent upon the 23 May conduct.

386. [424]

     Finally, because of the conclusion reached here the Court does not have to consider the balancing exercise required in Evidence Act, s 138(1) to consider the admission of this material. But even if some key-logger sourced material was to have been included in the material objected to in Exhibit 1, looked at as a whole the material is of high probative value, it bears upon central issues in the case, and any improperly sourced material would be very minor in extent. The material objected to has been admitted into evidence.

Secure Logic’s Claims for Relief

1. [425]

   This section first considers Secure Logic’s claims for relief against Mr Noble and Peach Tree Bay, followed by its claims against Mr Pankhurst.

2. [426]

   Secure Logic seeks relief against Mr Noble both in contract and in equity. Secure Logic’s prayers for relief seek orders: (1) for the enforcement of Mr Noble’s contractual promises not to misuse information of Secure Logic, and alternatively (2) an injunction restraining Mr Noble from breaching the equitable obligation of confidence that he owed to Secure Logic. And Secure Logic seeks consequential orders for the destruction of all copies of the JP Prospects document, and all copies of the documents from the Fergus folder. Each of these claims for relief will be dealt with in turn.

3. [427]

   The Claim Based on the NDA. The Court has found that the 30 June 2015 NDA is contractually binding between SL Singapore and Mr Noble, independently of the existence and content of his employment contract with SL Singapore. The NDA is expressed in terms that are independent of any employment contract or other commercial arrangement between the two.

4. [428]

   Many features of the NDA point to its independent contractual operation. The NDA was separately signed by the parties, notwithstanding an intention to enter into a separate employment contract the same day. The NDA expresses itself as applying beyond the termination of any employment contract. The NDA expresses itself as benefiting Secure Logic entities other than SL Singapore. Nothing in the NDA contradicts its separate operation in parallel to the employment contract, although the NDA adds obligations to an employee in the position of Mr Noble.

5. [429]

   The NDA definition of “Confidential Information” is set out earlier in these reasons under the heading, “The Non-Disclosure Agreement – 30 June 2015”. The NDA protects the confidential information of all the plaintiffs. It is enforceable by SL Singapore on behalf of all members of Secure Logic.

6. [430]

   The next question is what information in Mr Noble’s possession qualifies as Confidential Information within the meaning of the NDA. Both the Fergus folder in the JP Prospects document qualify as “Confidential Information” within the NDA.

7. [431]

   The Court’s findings support the conclusion that documents in the Fergus Folder fall within the NDA’s definition of Confidential Information. The Fergus folder documents were all created by employees or officers of Secure Logic or persons engaged to create them for Secure Logic. Moreover, they all relate to the business affairs of the Secure Logic group of companies and their clients.

8. [432]

   The Court’s findings also support the conclusion that the JP Prospects document qualifies as “confidential information” of SL Australia. It was a document created by and for Secure Logic, and contains information relating to the business affairs of the Secure Logic group of companies and their clients.

9. [433]

   In the NDA Mr Noble undertook the following obligations: to preserve and maintain in confidence the Confidential Information (clause 2.1); not to use the Confidential Information other than in connection with his employment with Secure Singapore (clause 2.1); to immediately upon request return all Confidential Information (clause 4.1); not to use any Confidential Information to assist any business or activity similar to the business of Secure Singapore or any of its related companies (clause 5.1).

10. [434]

    Mr Noble breached these obligations under the NDA in the following ways. First, Mr Noble’s transfer of the information in the Fergus folder onto his work laptop and then onto his personal laptop for his own purposes, for his later use should he leave Secure Logic. The Court has found that this use of the Fergus folder was not to serve Secure Logic’s business purposes. This transfer of the Fergus folder information was a breach of clauses 2.1 as it did not serve to maintain and protect Secure Logic’s confidence in the information. Moreover, Mr Noble’s transfer of this information was for his own advantage and not in connection with his employment of SL Singapore in breach of NDA, 2.1. Mr Noble’s transfer of the information in the Fergus folder onto the two laptops was also to enable Mr Noble to use the information as he chose when later in a role which competed with the business of Secure Logic, in breach of NDA clause 5.1.

11. [435]

    Mr Noble did not immediately return his copies of the Fergus folder stored on his work laptop and his personal laptop when their return was requested. Mr Noble’s refusal to comply with these requests meant that Secure Logic had to commence these proceedings to seek their return. Indeed Mr Noble never returned all the information on the personal laptop or the Seagate external drive. This conduct was in breach of NDA, clause 4.1.

12. [436]

    Mr Noble sent the JP Prospects document to Mr Pankhurst, an employee who he knew was suspended and being investigated for having an association with a business competing with Secure Logic. This failed to preserve and maintain in confidence the document in breach of NDA, clause 2.1. Moreover, this conduct was also a use of Confidential Information as defined in the NDA other than in connection with his employment with SL Singapore in breach of NDA, clause 2.1.

13. [437]

    The Court has concluded Mr Noble was not performing any work for Secure Logic in sending this email but was providing support to Mr Pankhurst to further Mr Pankhurst’s business or activity that was similar to the business of SL Singapore in breach of NDA, clause 5.1.

14. [438]

    Injunctive relief. Secure Logic seeks orders restraining further breaches of Mr Noble’s obligations under the NDA to prevent further misuse of its Confidential Information as defined under the NDA.

15. [439]

    The applicable law may be shortly stated. A breach of a negative stipulation in a contract such as the NDA provides a prima facie basis for the grant of an injunction and once a breach of such a stipulation is established such an order will ordinarily be made: Doherty v Allman & Dowden (“Doherty v Allman”) (1878) 3 App Cas 709; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; (2001) 185 ALR 152; (2001) 76 ALJR 246; [2001] HCA 70; Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40.

16. [440]

    Secure Logic has established a breach of what are in substance negative stipulations in the NDA, stipulations that the counterparty Mr Noble not misuse information for purposes other than those of Secure Logic.

17. [441]

    This is not a case where the Court can be confident that those breaches are at an end and will not be repeated, so that a continuing permanent injunction is no longer appropriate. The strongest arguments for continuation of the present interlocutory injunction are Mr Noble’s vigorous opposition to Secure Logic’s claim for relief in this part of the case in circumstances where the Court has found he has destroyed evidence that might reveal that he is continuing to use Secure Logic’s confidential information. The Court is not confident that without a continuing injunction that Mr Noble will not continue to engage in conduct in breach of the NDA.

18. [442]

    The case for the grant of injunctive relief is strengthened by the Court’s findings as to the serious and deliberate character of Mr Noble’s breaches of the NDA and his calculated attempts to hide them. For example, Mr Noble secretly provided advice and services to FirstWave a competitor of Secure Logic when Secure Logic still employed him. And Mr Noble has repeatedly woven a complicated web of untruthful explanations to further conceal what he has done with Secure Logic’s confidential information. Without a continuing Court order Mr Noble could not be trusted not to misuse any confidential information that may remain in his possession. The deterrence of a continuing injunction, with the sanctions for breach which accompany it, is necessary.

19. [443]

    Mr Noble argues that Secure Logic cannot demonstrate that he has breached his NDA obligations, so that an injunction should not be granted against him. But Mr Noble’s breaches of the NDA are clear, as is indicated above.

20. [444]

    Further, Mr Noble argues that an injunction should not go against him because there is no evidence of Secure Logic seeking relief against any other person who may have received its confidential information from Mr Noble. The argument goes that in the absence of third parties being pursued for misuse of the confidential information the Court should infer that there is no present danger of such misuse.

21. [445]

    This argument is circular. It assumes its conclusion in its premise. It assumes that the explanation for Secure Logic failing to commence proceedings against third parties is that there is no misuse of information by Mr Noble. It then infers that the failure to commence proceedings demonstrates that there is no misuse of information by Mr Noble.

22. [446]

    But the circularity is readily broken by posing an equally probable explanation for Secure Logic failing to commence proceedings against third parties: that is that the destruction of the two drives on 17 June deprived Secure Logic of the means by which it could proceed against third parties. Without evidence of where Mr Noble exported any confidential information Secure Logic is disadvantaged in not knowing where to start to identify third parties against whom proceedings might be brought.

23. [447]

    Moreover, Secure Logic obtained interlocutory injunctive relief quickly, in mid-June 2016, before Mr Noble commenced working for FirstWave in July 2016. Mr Noble had little opportunity to use the information before the injunction was granted. Secure Logic has not contended that Mr Noble did not comply with the interlocutory injunction and there is no evidence that he is in contempt of Court interlocutory orders. But all that proves is that Mr Noble appears to comply with Court orders. That is not a basis for dissolving the injunction, because it does not establish what Mr Noble might do in the absence of a Court order.

24. [448]

    Another relevant consideration is the age of the confidential information. Ordinarily a defendant such as Mr Noble might argue that almost 5 years have passed since the original interlocutory injunction was granted and that the confidential information that it protected may have ceased to be worthy of protection because over time it would have lost commercial value and significance.

25. [449]

    But such an argument is not persuasive here. Both the Fergus folder and the JP Prospects documents contain a list of potential client contacts which are likely to persist as an available commercial resource for a long time. Although the value of addresses and business contacts would diminish over time, they are likely to be of continuing commercial significance for some years to come.

26. [450]

    Mr Noble further argues that an injunction should not be granted because Secure Logic has not identified the confidential information with enough precision. The Fergus folder and the JP Prospects documents are sufficiently well identified and were ultimately conceded to be confidential information. But an injunction crafted in wider terms is justifiable here. The breach of the contractual provision in the NDA having been established, one important basis of the grant of the injunction is the Doherty v Allman principle, which allows the injunction to be expressed in terms that replicate the generality of the contractual provision breached, rather than to define the confidential information with any greater precision such as might be expected in Equity’s exclusive jurisdiction.

27. [451]

    The Court will impose permanent restraints in a form consistent with Mr Noble’s general contractual obligations under the NDA.

28. [452]

    And there is no real issue here about the certainty of the obligations imposed by the final injunction proposed. It is in similar terms to the interlocutory injunction already granted and which has been in place since 17 June 2016.

29. [453]

    Breach of the alleged employment contract. The Court has also found that Mr Noble was employed under an employment contract as he contended. He has taken advantage of that employment contract in his case against Secure Logic.

30. [454]

    Secure Logic also deploys parts of the employment contract against him. The employment contract, clause 1.14 headed “Confidentiality” provides:

31. [455]

    Despite the differences in forms of expression clause 1.4 creates substantially the same obligations upon Mr Noble as those identified above in NDA clauses 2.1 and 5.1.

32. [456]

    The confidential information referred to in the employment contract refers primarily to the confidential information of SL Singapore. But as SL Singapore readily interchanged confidential information with other entities in the Secure Logic group the preservation of the confidential information of SL Singapore implicitly involves the preservation of the confidential information of the other Secure Logic companies.

33. [457]

    Mr Noble has also breached these confidentiality provisions in the employment contract. The employment contract founds the same arguments for a final injunction based on Doherty v Allman principles as does the NDA.

34. [458]

    The Equitable Obligation of Confidence. Independent of Secure Logic enforcing contractual promises it has a sound case for the grant of an injunction in Equity’s exclusive jurisdiction to restrain a breach of the equitable obligation of confidence. Both the Fergus Folder and the JP Prospects document contain information shared with Mr Noble in circumstances of confidence or was information which he had secretly appropriated to himself in circumstances that he knew to be a breach of confidence.

35. [459]

    Equity binds Mr Noble neither to disclose nor otherwise use both classes of that information: Moorgate Tobacco Co Ltd v Philip Morris (1984) 156 CLR 414; (1984) 56 ALR 193; (1984) 59 ALJR 77; [1984] HCA 73. Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39; (1980) 32 ALR 485; (1980) 55 ALJR 45 at 50.

36. [460]

    Destruction Orders. Orders should also be made for Mr Noble to destroy all copies of the documents in the Fergus Folder and any version of the JP Prospects document. The destruction of the two drives on 17 June has left Secure Logic and the Court uncertain as to what has happened to Secure Logic’s confidential information. Mr Noble’s testimony is not a reliable basis for concluding that he no longer holds Secure Logic’s confidential information. An order for destruction is an appropriate measure of additional security for Secure Logic in the face of such uncertainty.

37. [461]

    It is unclear on the Court’s findings what relief, if any, is available against Peach Tree Bay. The Court will hear submissions about that issue when final short minutes of order are being considered.

38. [462]

    Secure Logic’s case against Mr Pankhurst is very similar to the case brought against Mr Noble. Findings have been made in the narrative events about Mr Pankhurst’s conduct, which establish that he too dealt with Secure Logic’s confidential information. Like Mr Noble he denied dealing with Secure Logic’s confidential information and defended the proceedings throughout.

39. [463]

    The Court’s findings in relation to Mr Pankhurst show that he has misused Secure Logic’s confidential information for his own advantage. The Court infers from his conduct that he could not be relied upon to honour either his contractual or equitable obligations of confidentiality owed to Secure Logic unless an order of this Court was in place requiring him to respect those obligations.

40. [464]

    The Court has found that Mr Pankhurst was communicating with Mr Dujin, Mr Scott, Mr Katsamaclis and others in the first half of 2016 for the purpose of setting up a business to compete with SL Australia. At the time he dealt with these persons he was still an employee of Plush Hosting which was by then a wholly owned subsidiary of SL Australia. This Court has also concluded that in May 2016 Mr Pankhurst arranged with Mr Noble to obtain Secure Logic’s confidential customer contacts lists from Mr Noble. He did this to further his object of setting up a competing business with SL Australia and he continued to do it after Plush Hosting had suspended him and was proposing to terminate his services.

41. [465]

    The Court has also found that Mr Pankhurst’s plans and discussions with the other parties matured into the foundation of the Cyber Risk Assurance Group, a proposed competitor with Secure Logic, including in the development and offering of a cyber risk assessment tool.

42. [466]

    The Court has also found that Mr Pankhurst untruthfully continued to deny his involvement with the Cyber Risk Assurance Group and otherwise gave false and unreliable evidence on a variety of matters.

43. [467]

    This conduct is a breach of Mr Pankhurst’s obligations under his NDA and his employment contract that parallel those under which Mr Noble was obliged. On Doherty v Allman principles an injunction will lie against Mr Pankhurst. The material to which he gained access to misuse was inherently confidential and will also justify the grant of an injunction in Equity’s exclusive jurisdiction to enforce his equitable obligation of confidence.

44. [468]

    As with Mr Noble, the Court will also order that Mr Pankhurst destroy all versions of the JP Prospects document in his possession.

Mr Noble’s Cross-Claim

1. [469]

   Mr Noble brings a Cross-Claim for damages for misleading and deceptive conduct and for breach of contract against Secure Logic. The initial legal contest concerns what kind of contract was made between them on 30 June 2015.

2. [470]

   Mr Noble maintains that he signed a form of employment contract on 30 June 2015 and gave it to Mr Devaraj. This form of employment contract presents on its face as a traditional contract of service. But Mr Noble did not receive back from Mr Devaraj a copy of this document countersigned on behalf of Secure Logic. And soon after 30 June, Secure Logic gave Mr Noble directions to invoice Secure Logic in the manner of a contractor, which he did, rather than insist on being paid a salary as was contemplated by the terms of the signed document.

3. [471]

   Secure Logic’s pleadings accept that Mr Noble commenced employment with SL Singapore in the position of Chief Operating Officer, based in Malaysia. But in evidence Mr Devaraj denied Secure Logic was bound in any way by the form of employment contract signed on 30 June 2015. He adhered to the position that the arrangement between Mr Noble and SL Singapore was that Mr Noble would invoice the Secure Logic group and that salary payments would only be made once his contract was seen to conform with local laws and regulations in Kuala Lumpur, or Singapore. According to him, no contract of service was established between SL Singapore and Mr Noble on 30 June 2015.

4. [472]

   But Secure Logic made a forensic decision to accept the application of the employment contract despite Mr Devaraj’s apparent disdain for the document. Secure Logic therefore does not propound some of Mr Devaraj’s own evidence on this subject. The decision taken forensically on Secure Logic’s behalf was correct: the Court finds that the 30 June 2015 document was binding as an employment contract.

5. [473]

   The Court’s findings in relation to the issues raised on the Cross-Claim are set out together here in a narrative form that is similar to the earlier narrative relating to the issues of breach of confidence. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded. Once again for reasons of economy, this narrative does not include reference to versions of the facts that the Court has rejected.

6. [474]

   Mr Noble and Mr Devaraj negotiated the employment contract at a time that they were in a close professional and personal relationship. Mr Devaraj denied he and Mr Noble were then close friends. A contest about whether they were friends leading up to the making of the employment contract preoccupied the parties. But the contest did show that Mr Devaraj was, for his own reasons, prepared to adhere to an incorrect version of events to repel a case that he had engaged in misleading and deceptive conduct.

7. [475]

   Mr Devaraj and Mr Noble initially met in May 2013 and caught up with one another regularly during their advisory work for the NSW Government. Mr Noble gave Mr Devaraj informal advice about how better to secure NSW Government contracting work. Mr Noble introduced Mr Devaraj to Mr Brooks and Mr Pankhurst and advised Mr Devaraj about purchasing a luxury yacht. Mr Noble contends that Mr Devaraj shared confidential personal information about Mr Devaraj’s family with Mr Noble. Mr Noble even claimed that Mr Devaraj asked him to be ready to take responsibility for Mr Devaraj’s family if anything happened to Mr Devaraj. But having seen Mr Devaraj give evidence the Court finds that the sharing of that kind of information and the making of that kind of request is unlikely, and the Court does not accept it. Notwithstanding that, by mid-2014 their relationship was a close one both professionally and personally.

8. [476]

   This conclusion is well supported by Mrs Emer Noble’s evidence on the subject, which the Court accepts. She recalls five family trips out on Mr Devaraj’s boat between December 2013 and July 2014. And she recalls two lunch occasions at Mr Devaraj’s house during the same period. She also recalls going to marinas with both her husband and Mr Devaraj, so her husband could advise Mr Devaraj about the purchase of a luxury boat.

9. [477]

   And it is supported by evidence of Mr Shane Lee, which the Court accepts. Mr Lee is a media and marketing professional who met Mr Noble as a result of their children going to the same school. Mr Lee recalls a lunch at about the time of their meeting at which Mr Devaraj said to Mr Lee, “I look up to Paul. He has a lot of experience. I see him as a friend.” Mr Lee accompanied Mr Devaraj and Mr Noble to several lunches and outings in Mr Devaraj’s boat. During the boat trips Mr Devaraj said to Mr Lee, gesturing to Mr Noble, “I trust this guy. I do not trust many people but he’s been a good friend to me both professionally and personally.” Mr Lee communicated to Mr Noble the comments Mr Devaraj had made about him.

10. [478]

    In August 2014 Mr Devaraj made a gift to Mr Noble of an engraved Mont Blanc pen. He wanted to give Mr Noble the “best pen” that could be found for Mr Noble’s birthday. This also suggests a close relationship. Mr Devaraj said that he did not give Mr Noble such a pen. But the Court accepts Mr Noble’s account of these events and that of his executive assistant, Ms Bradley, to the extent that they differ from Mr Devaraj’s.

11. [479]

    Another contest between the two was whether Mr Noble had travelled in June 2014 to Singapore with Mr Devaraj to facilitate business development for the benefit of Secure Logic. Mr Devaraj disputed this and said that their being in Singapore at the time was a mere coincidence. But the Court accepts that Secure Logic originated arrangements for them to be there together. And a coincidence in them being in that city seems unlikely. They were working closely together for the NSW Government and a mutually beneficial trip such as this seems probable.

12. [480]

    Secure Logic had paid for the trip. Mr Noble had been included as part of the organisation of the trip, strongly indicating that Mr Noble and Mr Devaraj being in Singapore together was not a coincidence. Mr Devaraj took the position that Mr Noble had somehow coerced him into purchasing the flights. And then maintained his evidence that the trip was a coincidence. But Mr Devaraj arranged to fly Mr Noble business class to Singapore, implying he was there for the business purposes of Secure Logic.

13. [481]

    Ms Bradley confirmed Mr Devaraj made a list of contacts for Mr Noble to meet in Singapore in June 2014. And she further confirms that Mr Devaraj and Mr Noble meeting in Singapore was not just a coincidence. But Mr Devaraj had her book Mr Noble flights to and from Singapore.

14. [482]

    Secure Logic strongly attacked Ms Bradley’s credibility. The attack failed. Ms Bradley stood her ground against a firestorm of accusations about her personal conduct as an employee of Secure Logic. She candidly admitted certain things and denied others. To the extent she denied misconduct the Court accepts her denials. None of what was put against her diminished her credibility. It was surprising that an employee who Mr Devaraj long trusted as his personal assistant would suffer the reputational attack that Secure Logic directed at her.

15. [483]

    Mr Noble visited Mr Devaraj’s family home at Dover Heights on the evening of 15 January 2015. There is a dispute as to whether Mr Noble stayed overnight that evening. To the extent that the dispute needs to be resolved the Court accepts Mr Noble’s evidence that he did stay overnight: both men drank a considerable amount that evening and Mr Noble’s text messages to his wife confirm that an overnight stay is likely.

16. [484]

    During the evening Mr Noble and Mr Devaraj talked extensively about the future growth of Secure Logic and the rewards that could be derived from its growth. Mr Noble says that Mr Devaraj made statements to him to the following effect:

17. [485]

    Mr Noble says he undertook a calculation of what he could afford. He said “$168,000 take-home after tax would be the bare minimum, as long as expenses were covered so it was not costing me to travel or entertain”. He pointed out to Mr Devaraj that this was a substantial downgrade in pay compared to what he could get on the open labour market. Mr Noble says that Mr Devaraj then continued:

18. [486]

    This in turn led to Mr Devaraj expressing concern that Mr Noble’s apparent involvement in Plush Hosting might be a distraction for Mr Noble. Mr Noble assured him that it would not be distraction. Mr Devaraj then said,

19. [487]

    Mr Noble volunteered to speak to Mr Pankhurst and Mr Devaraj continued:

20. [488]

    But for Mr Devaraj saying that he would “personally guarantee” that Mr Noble would walk away with $10 million, Mr Noble’s account of what passed between him and Mr Devaraj on this occasion can be accepted. For reasons that are explained below about similar statements attributed to Mr Devaraj, it is quite unlikely that he would have been offering personal guarantees to Mr Noble.

21. [489]

    Secure Logic submits that it is implausible that Mr Devaraj would have made statements such as “you are taking my business to new heights”. But Mr Devaraj is quite capable of exaggerated and flowery language and this was probably said in a context where Mr Noble had been talking to Mr Devaraj on and off about ideas for Secure Logic and other matters in 2014.

22. [490]

    On 19 February 2015 Mr Noble and Mr Devaraj had another informal meeting about Mr Noble coming to Secure Logic, this time at the Haymarket Hotel in George Street Sydney. Mr Devaraj repeated some of what he had said in mid-January. But Mr Noble says he went further.

23. [491]

    Mr Noble says that Mr Devaraj handed him a draft organisational chart for the Secure Logic group and returned to the subject of Mr Noble gaining a return of $10 million from his involvement in the group. He says the conversation proceeded as follows.

24. [492]

    Mr Noble says that at various stages of this conversation where numbers were mentioned, he wrote on a Secure Logic draft organisational chart that was in front of him the following numbers and symbols: “300 with an arrow to 3%”, “60 with an arrow to 12 – 13%” and finally he says he circled and underlined the 12% he had just written on the organisational chart. The organisational chart bears such writing.

25. [493]

    Mr Devaraj disputes this conversation and that he wrote on parts of the organisational chart. Mr Devaraj says that the note was written during a conversation some years before on an unrelated topic. But the Court does not find Mr Devaraj’s explanation of the history of the markings on the organisational chart to be compelling. The Court generally accepts Mr Noble’s version of this conversation, at least as far as is described here.

26. [494]

    But Mr Noble says that Mr Devaraj and he continued as follows:

27. [495]

    Mr Noble then says that Mr Devaraj explained that Secure Logic was going to set up a holding company which would be partly owned by SL Technologies and by a family company of Mr Devaraj’s. Mr Noble says that Mr Devaraj further explained that he would be given shares in the holding company for the whole group, which would later relocate to Singapore for tax purposes. Mr Noble says that Mr Devaraj explained that he needed $60 million out of this enterprise to reinvest in his next venture and that apart from the $10 million to go to Mr Noble, the balance of the proceeds of selling the Secure Logic group could be divided among “whoever helps get me there”. Mr Noble further says that Mr Devaraj foreshadowed transferring Secure Logic’s intellectual property and subsidiaries to be part of SL Singapore, to reduce tax liability when the group was eventually sold. The Court accepts these things were said.

28. [496]

    Upon Mr Noble inquiring about the timeframe for all this, he says that Mr Devaraj continued.

29. [497]

    The Court accepts that conversations like, but not exactly like this, occurred between Mr Devaraj and Mr Noble at this time. Mr Noble’s testimony about aspects of these representations is supported by other witnesses whose evidence the Court also accepts.

30. [498]

    Mr Devaraj made statements to Mr Lee about Mr Noble taking a shareholding in Secure Logic. Mr Devaraj said to Mr Lee, “Paul’s coming on board and he’ll be a shareholder” and “He is going to have a piece of the business and we are going to conquer the world.” Although strongly cross-examined, Mr Lee stood his ground and adhered to his evidence that these conversations had taken place. The Court accepts him as a witness of truth. Mr Devaraj was prone to make exaggerated statements like this.

31. [499]

    But the representations that Mr Noble claims “we will provide you with 12% of the shares in the Singapore entity as a part of your package” were only part of what was said to him. The employment contract he signed on 30 June provided for the issue of a 12% shareholding in two steps: 6% upon the acquisition of Plush Hosting and another 6% based upon Mr Noble’s achievement of “specific individual and team” Key Performance Indicators (“KPIs”). The conditions for achieving these two steps must have been discussed at about the same time or afterwards and well before the signing of the employment contract, because Mr Noble did not dispute their later inclusion in the employment contract.

32. [500]

    Mr Devaraj can be exuberant, but he is not financially reckless. Although very optimistic about Secure Logic, he understood the uncertainties of business life and business forecasts. The Court does not accept that Mr Devaraj said that he would “personally agree to underwrite that $10 million”. And in the sentence “I personally guarantee you will receive at least $10 million in 12 to 18 months”, the Court accepts that everything was said except the words “I personally guarantee”. When the time came later to negotiate the employment contract, Mr Noble did not seek to stipulate for Mr Devaraj’s personal guarantee to be part of the contract or that Mr Noble would have a return of $10 million from the sale of his shares. Mr Devaraj did hold out the general prospect of Mr Noble having a return of about $10 million upon the sale of shares that would be issued to him in a Secure Logic entity as part of his employment contract but Mr Devaraj did not give a personal guarantee to that effect.

33. [501]

    There are other reasons to accept the general tenor of Mr Noble’s account of what Mr Devaraj said on this occasion about Mr Noble obtaining a shareholding interest in Secure Logic worth $10 million. Mr Devaraj said similar things to others about the benefits that Mr Noble would receive. One example was a conversation with Mr Peter Giorgiutti in December 2015, dealt with later in these reasons.

34. [502]

    On 6 March 2015 at the Mejico Restaurant on Pitt Street Sydney, Mr Noble and Mr Devaraj discussed the possible financial arrangements associated with his joining Secure Logic. After discussing their respective preferences in luxury motor vehicles, Mr Devaraj invited Mr Noble and his wife to Mr Devaraj’s child’s sixth birthday party and then Mr Devaraj proceeded:

35. [503]

    Mr Devaraj then changed the subject to consider a Sales Incentive Plan (or “SIP”) for Mr Noble, saying to him:

36. [504]

    More than once Mr Devaraj returned to the theme expressed here of Mr Noble accepting a salary that might be below market, but which was part of a package of incentives which taken together would compensate him well.

37. [505]

    Mr Noble and Mr Devaraj met on 20 March 2015 in the Secure Logic boardroom at Pitt Street Sydney. A conversation to the following effect took place between the pair:

38. [506]

    The conversation then moved to the subject of encouraging Mr Pankhurst to bring Plush Hosting into the Secure Logic group.

39. [507]

    Mr Noble and his wife attended Mr Devaraj’s child’s sixth birthday party on 21 March 2015. Their invitation indicated that Mr Devaraj regarded Mr Noble as a friend. Mrs Emer Noble thought at the time that her husband and Mr Devaraj “were clearly friends” and “that is why we were invited to the party”.

40. [508]

    Mr Devaraj’s personal assistant, Lauren Bradley, helped organise the party. During the party Mr Devaraj said to Mr Noble, “I am looking forward to you being on-board, you can see how important family is to me.” During the party, Mr Devaraj made statements to Mrs Noble that are consistent with the representations that he had made to Mr Noble in the weeks beforehand.

41. [509]

    At one point during the party he took Mrs Noble aside and began to discuss with her the way he was going to look after her husband once he came to work for Secure Logic:

42. [510]

    This episode made her feel uncomfortable: she thought Mr Devaraj was misusing this social situation. Mr Devaraj had no insight into this. He misjudged the moment, seeing it as another strategic business opportunity to persuade Mr Noble, through his wife, to join Secure Logic.

43. [511]

    Mrs Noble made her attitude to Mr Devaraj clear. She did not trust him. She pointed that out to her husband. But he did not act upon her opinion. Mrs Noble was intuitive and financially sophisticated. She thought Secure Logic had made an inadequate offer of remuneration that did not properly value her husband’s abilities. She judged that the veneer of empathy that Mr Devaraj was displaying towards her husband did not run very deep. As subsequent events were to prove, in this she was correct.

44. [512]

    On 19 April 2015 Mr Devaraj emailed Mr Noble the first two pages of a draft employment contract, containing the details of Mr Noble’s proposed remuneration and a draft mechanism for Mr Noble to take a shareholding interest in Secure Logic. Mr Devaraj had constructed the draft by cutting and pasting text out of an existing employment contract with another employee.

45. [513]

    The part of the contract that Mr Devaraj sent Mr Noble shows by then he knew that Mr Noble’s commercial focus was on an appropriate level of remuneration and taking a shareholding in Secure Logic. The draft also provides for the same structure as appears in the final agreement, of the issue of “600 shares representing 6% of the current issued shares in the company” contingent upon the acquisition of an interest in Plush Hosting. But it does not contain the feature in the final agreement of issuing “up to additional 600 shares representing 6% of the current issued shares in the company”, leading to a potential total 12% interest in the company. And the 19 April 2015 draft contains the same conditions that exist in the final agreement that the share issue is “conditional only on you entering into a shareholders agreement covering matters usual in such an agreement and subject to approval of the Board of Directors”.

46. [514]

    The commencement date of 1 March 2015 was put in the draft employment agreement forwarded to Mr Noble on 19 April 2015 in error. My Devaraj had copy/pasted the date from a previous employees’ contract.

47. [515]

    Mr Noble replied on 3 May 2015, raising issues concerning Mr Noble’s SIP and his prospective shareholding, as follows:

48. [516]

    The reply back from Mr Devaraj on 4 May dealt with Mr Noble’s three points as follows:

49. [517]

    On 11 May 2015 Mr Devaraj, Mr Singh and Mr Noble met for dinner at Manly. During the dinner Mr Devaraj emphasised that Mr Noble’s employment contract was to be “different to others as the shares are part of the group and not a part of the employee share scheme.” Mr Noble interpreted this communication as emphasising that the shares that Mr Noble would earn in Secure Logic under his proposed employment contract would represent a significant shareholding.

50. [518]

    Mr Noble ultimately signed his employment agreement with SL Singapore on 30 June 2015. The contract with SL Singapore reflected Mr Devaraj’s desire for Mr Noble to travel to Malaysia on behalf of Secure Logic. Negotiations between himself and Mr Devaraj intensified in the weeks leading up to that date. Controversy exists as to the signing on that day. By June 2015 Mr Noble’s prospective employment within the Secure Logic group was regarded as so assured that he was already based in Secure Logic’s offices in Pitt Street Sydney, where he would see Mr Devaraj daily.

51. [519]

    Mr Noble returned to familiar themes in the June 2015 negotiations. On 3 June 2015 he sent Mr Devaraj a lengthy email outlining a “Secure Logic 2015/16 Strategy”. The strategy notes included detailed business expansion ideas for Secure Logic both in Australia and Malaysia. This strategy document indicates an individual who is already well integrated into Secure Logic’s business and entrusted with information about that business so he can contribute strategy ideas for Secure Logic’s benefit. Mr Noble concluded his email noting his interest in, “[g]uarantee on SIP for the first 3 months” and “[c]ertainty around share ownership being in holding company” among other employment-related matters.

52. [520]

    Mr Noble held out for clear terms in his employment contract. Whatever had been represented to him, he wanted what he regarded as clarity in the contract. Soon after the 3 June email, Mr Noble and Mr Devaraj had a lengthy conversation at the White Rabbit café about the terms on which he might join Secure Logic. Mr Noble made clear that he was not prepared to leave his family and go to Malaysia without finalising the points raised in his 3 June email.

53. [521]

    Mr Devaraj promised him a final draft with relevant inclusions. Mr Noble says, and the Court accepts, that he was not prepared to accept employment from a small corporate group like Secure Logic without the promise of equity of a significant commercial value and that he would not have accepted pay below what he could have achieved elsewhere without the guarantee about the SIP.

54. [522]

    On 24 June 2015 Mr Devaraj met with Mr Noble and Mr Pankhurst to discuss Secure Logic’s acquisition of Plush Hosting. It was agreed at this meeting that in exchange for Mr Pankhurst undertaking a two-year employment contract with commission that Mr Pankhurst would sell 100% of Plush Hosting’s issued shares to Secure Logic for the nominal face value of those shares. Mr Devaraj initially only asked Mr Pankhurst for 60% of Plush Hosting’s issued shares. But Mr Pankhurst did not want to be left with a minority shareholding. He was content to exit control of Plush Hosting with a two-year employment contract and with the benefit of the commission on the larger customer base which would be likely to follow Plush Hosting’s absorption into the larger Secure Logic group.

55. [523]

    By late June 2015, Mr Noble was working out of Secure Logic’s Pitt Street offices, giving informal but valuable assistance to Secure Logic’s business operations before Mr Noble’s formal employment with Secure Logic started. An incident involving NTT Communications on 25 June 2015 illustrates this. On 25 June, Mr Devaraj received a complaint from NTT Communications about an aspect of Secure Logic’s service delivery. On 26 June, Mr Devaraj asks Mr Noble by email, “Paul, can you please chat with David and work out the strategy…it is quite critical the situation we are in…” Mr Noble had prior contact with the people who were raising complaints with Mr Devaraj so he drafted a response to the letter of complaint.

56. [524]

    Mr Noble attended Secure Logic’s offices on the morning of 30 June 2015. Lauren Bradley gave him a hard copy of the draft contract, which he reviewed. Mr Noble decided to make some minor amendments.

57. [525]

    By the middle of the day Mr Devaraj, Mr Palmer, Mr Singh and Mr Noble all went to lunch at a nearby Italian restaurant, Jamie’s Italian on Pitt Street. Mr Palmer and Mr Singh were called away on other pressing business. When they were alone together Mr Noble says he took the opportunity to raise with Mr Devaraj the parts of the contract which he thought required amendment. Mr Devaraj agreed with the changes he proposed.

58. [526]

    Mr Noble and Mr Devaraj return to the office. Mr Noble signed the NDA with which he had no issue. At about 3 PM Mr Noble went into Mr Devaraj’s office with the unsigned printed contract, when the following conversation took place between them:

59. [527]

    Mr Noble and Mr Devaraj made the changes hand in hand and each of Mr Noble and Mr Devaraj initialled them. Mr Noble then signed the final page of the contract and gave it to Mr Devaraj. Mr Noble did not keep a copy. Mr Devaraj had the only signed original.

60. [528]

    By now it was late in the day. As soon as the signing was completed Mr Devaraj proposed that they “go celebrate” saying, “I will email you a scanned copy of the contract”. It was about this time that the Court accepts Mr Noble telephoned his wife Emer and said to her “the contracts been signed. Santosh’s taking us out to celebrate”.

61. [529]

    Mr Noble and Mr Devaraj then gathered Mr Singh, Mr Palmer and Ms Bradley and went to the Mejico Restaurant. Mr Devaraj ordered champagne for this small gathering of employees, saying in a toast “to the future of Secure Logic, welcome aboard Paul!” The celebration moved on to the White Rabbit at about 5:30 PM where the rest of Secure Logic’s employees joined the celebration. Mr Noble’s official start date the following day was promulgated to all present. Ms Bradley confirms Mr Noble’s account of this event, which is the logical culmination of a signing that day as Mr Noble recounts.

62. [530]

    The terms of the employment contract relevant to the Secure Logic breach of confidence claim have been set out earlier in these reasons. Other terms relevant to Mr Noble’s breach of contract claim are set out here. SL Singapore was defined as “the Company” and Mr Noble as “the employee”: clauses 1.1 – Employer and 1.2 Employee. The employment contract throughout employs terms consistent with a contract providing for Mr Noble’s service as an employee of SL Singapore and sometimes interchangeably refers to SL Singapore as “the Employer” rather than “the Company”.

63. [531]

    Mr Noble’s precise role within Secure Logic was disputed in the proceedings. The form of the employment contract is partly responsible for this situation. Clause 1.3 Job Title provided in part:

64. [532]

    The clause then provided for the possibility of Mr Noble carrying out “additional or alternative tasks” as may be reasonably required of him. The version of the employment contract tendered in the proceedings did not contain a “Schedule” of his duties. And the structure of the Secure Logic group described by clause 1.3 is incorrect. SL Singapore is a subsidiary of SL Australia. But the term appears to have been crafted to foreshadow the idea that Mr Noble says he discussed with Mr Devaraj: that the group’s holding company would become Singapore-based before it was sold.

65. [533]

    Clause 1.4 provides for the date of commencement of Mr Noble’s “employment” in the following terms:

66. [534]

    Whatever “the handbook” referred to in this clause, it was not clearly identified and given to Mr Noble at the time. This is one many examples of Mr Devaraj’s inattention to the relevant detail of this contract which Mr Noble did not pick up at the time. But Mr Devaraj says that a staff handbook was given to employees and contractors. Mr Noble was a senior officer at Secure Logic. The Court accepts Mr Devaraj’s evidence that Mr Noble was given a staff handbook early in his employment.

67. [535]

    Clause 1.5 provides for Mr Noble’s base salary and an incentive plan (or “SIP”):

68. [536]

    Clause 1.6 provided for the issue of shares to Mr Noble upon the acquisition of Plush Hosting and according to KPIs. The clause is yet another example of inattention to detail; it contains internal mistakes and its KPIs were never agreed. It provides:

69. [537]

    Clause 1.10 provides for Mr Noble’s expenses reimbursement. The proper interpretation of its text was contested. Clause 1.10 is as follows:

70. [538]

    The employment contract provided (in clause 1.12) for termination without notice in the following circumstances:

71. [539]

    Upon termination of the employee’s employment, or at Secure Logic’s request the employee could be required to return all company property: clause 1.13.

72. [540]

    The legitimate reach of Secure Logic’s surveillance of Mr Noble’s Internet usage and email traffic was contested. Relevant to this issue clause 1.22 states:

73. [541]

    Secure Logic contends that Mr Noble’s misrepresentation case must fail in part because of the employment contract’s entire agreement clause 1.25, which provides:

74. [542]

    The employment contract contemplated the payment of a monthly salary of $14,000 SGD. Payments to Mr Noble were immediately varied to an invoicing arrangement, the significance of which was much disputed. The employment contract did provide, in clause 1.26, a mechanism for changes to terms and conditions. Secure Logic reserved “the right to make reasonable changes to any of your terms and conditions” but any changes “will be specified in writing” and minor changes of detail could be “effected by a general notice to employees”.

75. [543]

    The proceedings involved a contest about the execution of the employment contract’s counterparts. The employment contract provided that it could be “executed in multiple counterparts, each of which shall have the effect of an original” but the agreement would be binding “only upon execution of a counterpart by each of the parties”: clause 1.28. Mr Noble executed and dated the version of the employment contract in evidence on 30 June 2015. No copy of the employment contract signed by Mr Devaraj was put into evidence.

76. [544]

    A mistake appears in the employment contract. It assumes 600 shares equals 6 per cent of SL Singapore. This is explicable on the basis that Mr Devaraj effectively copy/pasted the document from a previous employee’s employment contract, which contained a reference to another company, Complicity Pty Ltd (“Complicity”), in which 800 shares represented 8 per cent of that company. Without doing his own legal checks Mr Devaraj seems to have assumed that the company in question here, SL Singapore, had the same number of shares as Complicity. This assumption was incorrect.

77. [545]

    Secure Logic’s acquisition of Plush Hosting from Mr Pankhurst provides the platform for the first issue of shares in SL Singapore to Mr Noble. The acquisition of Plush Hosting is otherwise peripheral to Mr Noble’s case. The term agreed between Mr Devaraj and Mr Noble in the employment contract (clause 1.6) was that within three months of Secure Logic acquiring 60% of the shares in Plush Holdings that shares would be issued to Mr Noble in SL Singapore subject to the other conditions set out in clause 1.6. This share issue to Mr Noble was said to be “as the consideration payable” in relation to the acquisition of 60% of the shares in Plush Hosting. It is not an issue that Secure Logic did indeed acquire 60% of the shares in Plush Hosting.

78. [546]

    Mr Peter Giorgiutti is the son of Mr John Giorgiutti, from whom Mr Noble was to seek legal advice on the evening of 16 June 2016. Mr Peter Giorgiutti had a conversation with Mr Devaraj in December 2015 about joining Secure Logic. This conversation confirms some of Mr Noble’s testimony about Mr Devaraj’s pre-contractual statements to Mr Noble.

79. [547]

    Mr Peter Giorgiutti met Mr Devaraj and Mr Noble in about May 2007, when they were all providing contract IT services to Westpac. Mr Noble invited him to work in the NSW GovDC team in 2008 to 2009. Mr Peter Giorgiutti and Mr Noble developed a personal relationship outside work during their time together providing services to Westpac. He also developed a friendship with Mr Devaraj after meeting him through the Westpac connection.

80. [548]

    Mr Peter Giorgiutti undertook a further period of work with NSW GovDC in about November 2013, when he re-established closer contact with Mr Devaraj. From then until 2015 he saw Mr Devaraj regularly in social settings with Mr Noble.

81. [549]

    He gave evidence by video-link from Singapore. He was cross-examined for about 15 to 20 minutes. Assessment of credibility in such circumstances is difficult. He demonstrated a somewhat defiant attitude to Mr Elliott SC, cross-examining on behalf of Secure Logic. And his friendship with Mr Noble was plain. Despite those aspects, he was a reliable witness. The Court does not accept he would invent evidence, as was suggested against him.

82. [550]

    Mr Devaraj called Mr Noble and Mr Peter Giorgiutti his “brothers” in workplace banter at GovDC. Mr Giorgiutti never came to work for Secure Logic but Mr Devaraj made many attempts to bring him on board. In 2015 in their work interactions he commonly joked with him “come work for me, we’re brothers”.

83. [551]

    In December 2015 after Mr Noble had been at Secure Logic for about six months, Mr Peter Giorgiutti had dinner and drinks with Mr Devaraj, Mr Gallagher and Mr Singh one evening when they had all happened to be in Singapore. During the dinner Mr Devaraj tried again to persuade Mr Giorgiutti, whose background is in sales, to become an employee at Secure Logic. After Mr Devaraj described the nature of the work Mr Giorgiutti could do at Secure Logic, the conversation proceeded:

84. [552]

    After this dinner Mr Peter Giorgiutti became more professionally involved with Mr Devaraj and introduced him to Mr Giorgiutti’s contacts in the security industry. But he never came to work for Secure Logic. He terminated his relationship with Mr Devaraj in June 2016, when he learned that Secure Logic had commenced these proceedings.

85. [553]

    Mr Devaraj says Mr Noble’s performance in Kuala Lumpur was below expectations. If Mr Devaraj had genuinely been unhappy with Mr Noble’s work performance in Kuala Lumpur, it is to be expected that Secure Logic would be able to point to some objective contemporaneous evidence of that disquiet. Mr Noble could have been performance managed or counselled about how he was falling short of expected standards. Mr Noble’s failures could have been the subject of email correspondence or planning meetings in Sydney. But Secure Logic’s case produces none of the usual corporate-based evidence of such failures.

86. [554]

    But by late 2015 Mr Devaraj decided that he wanted to bring Mr Noble back from Kuala Lumpur. And he seems also to have decided by early 2016 that he wanted to move Mr Noble away from the 30 June 2015 employment contract into an arrangement which did not involve the issue of shares in SL Singapore to Mr Noble.

87. [555]

    Mr Noble continued to expect that he would be issued shares in SL Singapore. When he returned to Sydney, he sought advice from his accountant about setting up a family trust in the expectation of obtaining an immediate allocation of 6% of the shares in his “current employer’s company” and a further 6% later.

88. [556]

    By mid-March 2016 Mr Noble believed Secure Logic was almost $50,000 behind in paying him. He was not paid after March 2016. This had a predictable effect: Mr Noble developed antipathy towards Mr Devaraj.

89. [557]

    Mr Noble formally confronted the issue of what was due to him by email on the morning of 14 March. Mr Noble emailed Mr Devaraj under the subject line “Outstanding Monies”, claiming that on the basis of his monthly base salary of $14,000 and a non-discretionary bonus of $3200 for each of the months from July 2015 to the end of March 2016, he had earned a gross amount of $169,320 but that Secure Logic was by then $48,846 behind in paying him. He asked Mr Devaraj to discuss these issues with him “before I create the next invoice”.

90. [558]

    But Mr Noble and Mr Devaraj did not meet to discuss this issue that morning. Their relationship was already tense. At 8.14am, Mr Devaraj replied without dealing with the substantive issues of outstanding entitlements Mr Noble had raised. Instead Mr Devaraj suggested that Mr Noble become an employee of Plush Hosting with retrospective effect to a fortnight earlier, “Paul, starting from 1st of March you will be part of [the] Plush payroll. Nicole will give you [the] amendment today.”

91. [559]

    About 45 minutes later, frustrated at Mr Devaraj’s failure to engage about his entitlements, Mr Noble requested a draft contract for his consideration, replying:

92. [560]

    Mr Noble then issued invoices for his salary and his non-discretionary expense allowance up to the end of February 2016. Neither of these invoices was paid.

93. [561]

    Mr Devaraj’s counter strategy was to sidestep the non-payment issue and suggest Secure Logic offer Mr Noble a new contract with Plush Hosting at a higher salary. Mr Noble resisted. He was interested in the terms of a new contract but only to see whether they might redress the underpayment. In his view Secure Logic was in dollar terms approximately two months behind in paying him. Mr Devaraj’s correspondence did not satisfy Mr Noble.

94. [562]

    On 16 March 2016, Secure Logic sent Mr Noble a letter of offer to novate his employment to Plush Hosting, with an increase of salary to $194,000. But the offer letter did not refer to Mr Noble acquiring a shareholding in SL Singapore or Secure Logic. Mr Noble did not agree to this arrangement.

95. [563]

    On 27 March 2016, Mr Devaraj sent an email to Mr Noble in which he asserted that “we” (i.e. the Secure Logic group) had no further obligations to fulfil, and expressed frustration that Mr Noble was refusing to “work with us as required to accommodate this change”. This was an attempt to coerce Mr Noble to transfer his employment to Plush Hosting by withholding his entitlements under the contract with SL Singapore.

96. [564]

    In response, Mr Noble reminded Mr Devaraj that he had not received his entitlements under his employment contract with SL Singapore, specifically the issue of a 6% shareholding within 3 months of the date of the contract and reimbursement of his expenses since commencement.

97. [565]

    On 29 March 2016, Mr Noble met with Mr Devaraj and Mr Devaraj witnessed Mr Noble’s signature on a trust deed. Mr Noble’s evidence was that a trust had been contemplated as the vehicle for holding his shares at least as early as February 2015.

98. [566]

    Mr Noble gave evidence to the effect that an agreement was reached in respect of his ongoing relationship with the plaintiffs and sent an email on 31 March 2016 outlining his understanding of the same.

99. [567]

    Meanwhile, Mr Devaraj had emailed his solicitors with the subject line “Pauls [sic] employment contract”, and received a response which made no reference to Mr Noble’s employment contract, but was entirely concerned with the trust deed that Mr Devaraj had witnessed on 29 March 2016.

100. [568]

     Mr Devaraj acknowledged that by 29 March 2016, he clearly understood that Mr Noble was pressing to receive shares and conceded that his solicitors could only have known of the connection between the trust deed and the employment contract if he had so informed them. In spite of his denials, Mr Devaraj was seeking legal advice because he was concerned about SL Singapore’s obligations under Mr Noble’s employment contract. The only area of concern was that by that stage, Mr Devaraj recognised the risk that Secure Logic generally, or at least SL Singapore and SL Australia, might have to make good the promise to issue shares

101. [569]

     By the end of March 2016 Secure Logic was going slow in paying Mr Noble. That was unlikely to happen to an employee as senior as Mr Noble without Mr Devaraj’s consent. If it had been an accident it would have been corrected. By March 2016 Mr Devaraj had decided that he no longer wished to honour the terms of the 30 June 2015 employment contract. If that meant angering or destabilising Mr Noble, Mr Devaraj was clear eyed about accepting that risk.

102. [570]

     Mr Noble continued to work at Secure Logic’s Sydney office until early April 2016. He was then asked to travel to Kuala Lumpur to work for Secure Logic again. Mr Noble was still seen as useful to the Secure Logic Group both in Australia and in Kuala Lumpur at that time.

103. [571]

     It is puzzling that Mr Devaraj would ask Mr Noble to return to Kuala Lumpur and undertake work there as late as April 2016, if Mr Noble’s prior technical and management performance there had been unsatisfactory. Mr Devaraj disputes Mr Noble's account of this period. But the Court accepts that Mr Noble was asked to return to Kuala Lumpur.

104. [572]

     Early on 3 May 2016 Mr Noble emailed Mr Devaraj attaching an invoice seeking the claimed arrears in his salary. Mr Noble’s email also requested the paperwork for the issue of shares to him and for the SIP, and a new draft contract.

105. [573]

     Later the same morning, Mr Devaraj emailed Mr Noble proposing to finalise the employment contract with SL Singapore, or in the alternative, to discuss “salary, expenses, reimbursement and SIP stuff” under a contract with Plush, upon clarification of the “threshold issues”. Mr Devaraj agreed that by “threshold issues” he was referring not only to the 16 March 2016 offer of employment with Plush Hosting (with a salary of $194,000 and a SIP), but also to Mr Noble’s entitlement to an equity of 6% under a contract with SL Singapore.

106. [574]

     On 19 May 2016 Carroll & O’Dea wrote to Secure Logic alleging that the non-payment of Mr Neville’s outstanding entitlements were repudiatory breaches of the employment contract and demanding payment of those entitlements by 5pm on 25 May 2016.

107. [575]

     Nothing was paid by 25 May. On Mr Noble’s behalf on 3 June 2016 Carroll & O’Dea accepted what it claimed was Secure Logic’s repudiation of the employment contract.

Mr Noble’s Claims for Relief

1. [576]

   Mr Noble cross-claims for damages in contract and for misleading and deceptive conduct. This section analyses each of those claims.

2. [577]

   Mr Noble’s contract claim alleges breach of contract and consequential damage in two broad categories: the first being claims for salary, expenses and bonuses, and the second being claims for shares in SL Singapore or SL Australia.

3. [578]

   Mr Noble claims that his employment contract with SL Singapore conferred upon him entitlements to salary, expenses and bonuses of the following five kinds, which he claims were not paid in full. It is not disputed that if his claims are valid that these amounts were not paid in full:

   1. (1)

      An annual base salary of $168,000 SGD (clause 1.5);

   2. (2)

      20 days of paid leave for each year of service (clause 1.8);

   3. (3)

      A non-discretionary amount of up to $3,200 SGD as a business development budget (clause 1.10);

   4. (4)

      Reimbursement of reasonable general expenses incurred in the performance of his duties (clause 1.10); and

   5. (5)

      Quarterly commission and a bonus of up to $100,000 SGD under a Sales Incentive Plan (SIP) (clause 1.5).

4. [579]

   He also claims that his employment contract with SL Singapore conferred upon him entitlements to an issue of shares in SL Singapore and to exchange those shares. His share-related entitlements were of the following three kinds:

   1. (1)

      The issue of shares representing 6% of the shareholding of SL Singapore within 3 months of the date of the contract, conditional upon the acquisition of 60% of Plush Hosting (clause 1.6);

   2. (2)

      The further issue of shares representing 6% of the shareholding in SL Singapore subject to meeting KPIs (clause 1.6);

   3. (3)

      The right to trade in shares in SL Singapore in exchange for shares in SL Australia (clause 1.6).

5. [580]

   Shares in SL Singapore were never issued to Mr Noble. Secure Logic contests Mr Noble’s claims in both these broad categories.

6. [581]

   Unpaid Annual Base Salary and GST. Mr Noble’s base annual salary under the employment contract was $14,000 SGD per month or $168,000 SGD per year. He was employed by SL Singapore for 11 months and three days from 1 July 2015 to 3 June 2016, namely $154,000 SGD ($14,000 x 11) + 3 days ($2100), totalling $156,100.

7. [582]

   He also claims he was entitled to one month’s notice of termination of employment. But the Court’s findings in relation to Mr Noble’s misuse of Secure Logic’s confidential information justify its termination of his employment without notice under employment contract, clause 1.12. He was in breach of material provisions of the employment contract, namely clause 1.14 relating to confidentiality. And he was guilty of wilful and deliberate behaviour that was inconsistent with the continuation of the employment contract. He is not entitled to any notice of termination. That limits his salary claim to 11 months and three days. All payments to him stopped in March 2016. Salary is due to him at least for April, May and early June 2016, although he was unpaid on account of other entitlements by that time.

8. [583]

   There is no issue in relation to the quantum of Mr Noble’s salary. But an issue arises between the parties about the correct way to account for the payment of GST. This arises because of Secure Logic’s request and then direction for Mr Noble to raise an invoice from Peach Tree Bay to Secure Logic for Mr Noble’s remuneration. As a result of following this practice Peach Tree Bay issued tax invoices adding GST and Secure Logic added the claimed amount of GST to its payments to Peach Tree Bay.

9. [584]

   Mr Noble submits that Peach Tree Bay’s claims for GST form no part of his salary and monies paid to him on account of GST should not be credited to Secure Logic as payments on account of his salary. Mr Noble further submits that GST is an obligation of Peach Tree Bay, not of himself as an employee and it is irrelevant to his receipt of benefits as an employee. In Mr Noble’s calculations of entitlement still due to him he treats GST separately and does not include it as a receipt to Mr Noble.

10. [585]

    Secure Logic submits that Mr Noble has been paid amounts in excess of his salary between 1 July 2015 on 3 June 2016 and that the overpayments are principally attributable to the amounts of GST that were claimed and paid in addition to the salary. Secure Logic submits that those overpayments should be credited in favour of SL Singapore in the calculation of the final amount due or from Mr Noble.

11. [586]

    GST should not be brought to account and counted as a payment by Secure Logic and a receipt by Mr Noble in the running account between them. Without inquiring further into the tax affairs of either Secure Logic or Peach Tree Bay the Court can assume that they each complied with their taxation obligations and that Secure Logic claimed from the ATO its payment of GST to Peach Tree Bay as an input tax credit and that Peach Tree Bay paid GST to the ATO in the amounts claimed in its tax invoices to Secure Logic. Thus, Secure Logic obtains a tax benefit and Peach Tree Bay a tax liability from the issuing and payment of the tax invoice. If GST is to be brought to account between Secure Logic and Mr Noble then the overall tax effect of the payment should also be brought to account, which is likely to neutralise or nearly neutralise the payment of GST in response to the invoice. Mr Noble and Peach Tree Bay can be treated as being in one interest for these purposes.

12. [587]

    In the result, Secure Logic’s payment of GST should not be treated as a payment by Secure Logic on account of Mr Noble’s salary in the calculation of the final amount of remuneration due to Mr Noble.

13. [588]

    Payment In Lieu Of Accrued Annual Leave. Mr Noble contends he was not paid annual leave entitlements upon termination. Mr Devaraj’s own evidence confirms non-payment and explains it on the basis that Mr Noble was a contractor and was therefore not entitled to be paid annual leave.

14. [589]

    Secure Logic concedes on the pleadings that Mr Noble was an employee, not a contractor. He is therefore entitled to be paid out his accrued annual leave. It has not been established that he has taken annual leave.

15. [590]

    Mr Noble worked for SL Singapore for 11 months from 1 July 2015 to 3 June 2016. It is not in issue that the accrued value of his annual leave over that period of 11 months is $12,831 SGD (which is equivalent to $13,491 AUD). Therefore this amount should be accounted for to Mr Noble's credit in the final calculations on his Cross-Claim.

16. [591]

    Nondiscretionary Business Development Budget. Mr Noble claims reimbursement of what he says was a nondiscretionary business development monthly budget of $3200 SGD.

17. [592]

    Secure Logic resists this claim. It submits as follows:

18. [593]

    Clause 1.10 is puzzling. It is not surprising that it has led to a contest of interpretations. Particularly puzzling is its use of the word “non-discretionary amount”. It raises the question as to whether the discretion is that of the employer or the employee. And just how a “non-discretionary amount” is to be accommodated within a proviso which also allows for other expenses “of a type generally approved by the company” is not clear. And although the clause does not refer to $3,200 SGD per month, the parties seem to have by their conduct interacted on the basis that they had made a supplementary agreement in June 2015 that this amount would be paid monthly. The Court will proceed on that basis.

19. [594]

    But in the Court’s view the interpretation of clause 1.10, proviso III, which best fits its overall language and the intent of the contract is that the description of an amount as “non-discretionary” was to tie Secure Logic’s hands so that it could not exercise a discretion to refuse to pay the amount on the basis that it did not ultimately serve the end of “business development”. In other words, the employment contract represents a contractual expression of trust in the employee that the amount will be spent in that way, without it being the subject of detailed audit and approval. That contractual expression of trust also means that the employee may decide in a particular month not to draw the whole $3,200 SGD, which explains the words “up to 3200 SGD”. This interpretation explains the clear difference in language with proviso I, which requires approval for expenses that would generally need to be approved by the company, or that need specific authorisation. None of the proviso III expenses requires approval.

20. [595]

    Thus, in the result Mr Noble is entitled under clause 1.10 to the amount of $3,200 SGD per month, which he is expected to spend to develop the business of Secure Logic. And in addition, he is entitled to general expenses that do not fit the description of “business development” but which would ordinarily meet general approval by Secure Logic or have otherwise been specifically authorised. This means that Mr Noble’s claim for $3,200 SGD per month succeeds and he should be credited with that amount up to the end of May 2016 in the final calculations of what is due to him.

21. [596]

    Reasonable General Expenses. Mr Noble also claims reimbursement of general expenses that he claims to have incurred in Malaysian Ringgit in August and September 2015 in Kuala Lumpur and other expenses incurred in Australian dollars between 1 July 2015 and the end of March 2016. He says that he has not yet received reimbursement for these expenses. The amounts Mr Noble claims on this account are conveniently extracted in the table below from Exhibit 16:

22. [597]

    Mr Noble relies upon Mr Singh’s evidence as to Secure Logic’s expense approval practice. That evidence was that Mr Noble would ordinarily submit his expenses by email. Mr Singh would review these expenses in the first instance, then he would send them to the accounts team for final review and approval. Mr Noble documented these expenses in Exhibit 9. Mr Singh had no occasion to raise an issue with “any specific expense” claimed by Mr Noble in the course of his employment at Secure Logic.

23. [598]

    It follows from the Court’s interpretation of clause 1.10 that Mr Noble is entitled to reimbursement of “reasonable general expenses” of a “type generally approved by the company” in addition to his receipt of a “non-discretionary amount”.

24. [599]

    To the extent that the expenses were incurred for the purposes of carrying out his functions as an employee of SL Singapore, Secure Logic says that it is prepared to pay for them. It says it has no legal obligation to do so because they have not been the subject of any approval of the kind required by proviso I of clause 1.10.

25. [600]

    Secure Logic’s analysis of the expense claims relied upon, accepts reveal that, of the total expenses claimed, an amount totalling $5,760.38 is for expenses incurred by Mr Noble for the purpose of carrying out his functions as an employee of SL Singapore. Secure Logic challenges the component of $4,669.66 of the claim for $7,851.67, accepting only $3,182.01 of that amount.

26. [601]

    But whatever Mr Noble’s credibility difficulties in other parts of this case, he was a reasonably good receipt and record keeper, as Exhibit 9 shows. The Court accepts that he had a history of acceptance of his claims from the accounts team. And a review of the expenses claimed indicates that they are all capable of being client-related expenses, including the airfares between Sydney and Kuala Lumpur. The Court will allow these expenses. Their lack of present approval seems to have been caused by the intervention of these proceedings.

27. [602]

    Quarterly Commission under the SIP. Mr Noble claims that in addition to his base salary he was entitled under clause 1.5 of the employment contract to participate in SL Singapore’s SIP. The employment contract, clause 1.5 traces out the features of this aspect of Mr Noble’s contractual entitlements.

28. [603]

    By clause 1.5 the SIP was described as “the variable component of Mr Noble’s compensation”, which was “estimated to be $100,000 SGD for 100% quota attainment”. It was to be paid as “a commission quarterly based and within two months of the end of each quarter”. Its subject matter was “on duties and project related objectives”. And “these”, meaning the “duties and project related objectives” would “be agreed within your first month of employment”. Coming as it does within clause 1.5, which sets an annual base salary, this variable component of Mr Noble’s compensation of $100,000 SGD should be construed as an annual entitlement.

29. [604]

    Although the language of clause 1.5 loosely refers to the payment to the employee of both a “commission” and a “bonus”, on a proper interpretation of the clause, both expressions refer to payment under the SIP which depending on how the payment was calculated could be either a “commission” or a “bonus”. The other more detailed requirements of clause 1.5 are analysed below.

30. [605]

    Mr Noble submits the following: that SL Singapore failed to provide him with the “duties and project related objectives” to be agreed, in an unambiguous and finalised form that was capable of being implemented; that SL Singapore failed to pay any SIP; and that SL Singapore should not be permitted to rely in its defence upon a failure to provide Mr Noble with a SIP plan or to clarify his KPIs to deny Mr Noble his legitimate clause 1.5 entitlements.

31. [606]

    Secure Logic submits the following: that clause 1.5 does not require SL Singapore to take any positive steps to enable a calculation and payment of a quarterly bonus it being a mere agreement to agree of the Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 kind; no breach of the clause is established; and no damage for breach can be proven.

32. [607]

    The applicable legal principles that govern this aspect of the parties’ contest were stated by the Court of Appeal in Silverbrook Research Pty Limited v Lindley [2010] NSWCA 357 (“Silverbrook”). In Silverbrook, Allsop P, Beazley JA and Hammerschlag J considered an employment contract similar to Mr Noble’s contract with Secure Logic. In that case, the contract provided that the employee, Ms Lindley, would be paid a salary of $210,000 annually to the employer, Silverbrook. The contract also provided that Silverbrook would set objectives each quarter against which Ms Lindley’s performance would be measured. If Ms Lindley met those objectives, then she would receive a performance bonus. But such a bonus would be “entirely within the discretion” of Silverbrook (clause 4.3). But Silverbrook never set those objectives, and Ms Lindley never received a performance bonus in her five years of employment. Upon resignation, Ms Lindley claimed damages for a loss of commercial opportunity due to her employer’s failure to set the objectives to review her remuneration.

33. [608]

    In Silverbrook Allsop P (with Beazley JA agreeing) stated the law relevantly as follows (at [2]):

34. [609]

    To assess such damages, the task is to “value that loss of opportunity or chance”: at [5]. Where the clause includes a broad discretion, a reasonable construction of the clause will not permit the employer to choose “arbitrarily or capriciously or unreasonably”: at [5]. The discretion is to be exercised honestly and in conformity with the contract ([5]-[6]) (see also Roderick v Washington H Soul Pattison and Company Limited (No 2) [2020] NSWSC 1224 at [260]).

35. [610]

    It is not an issue in this case that SL Singapore not only did not pay any SIP but it did not agree upon the “duties and project related objectives” upon which the commission or bonus would be paid. Secure Logic did not proffer any objectives to Mr Noble for his assent or negotiation. Secure Logic did not even attempt to prove it had taken such a step. As was the situation of the respondent employee in Silverbrook, Mr Noble was thereby denied the opportunity afforded by employment contract, clause 1.5. And in this case, as in Silverbrook, there is no call to assess whether on the balance of probabilities the employer would have taken some step to obtain the chance. The opportunity or chance that was agreed by clause 1.5 and to which Mr Noble was entitled, without more, was denied to him: Silverbrook at [4]. The task then becomes one to value that loss of opportunity or chance: Silverbrook at [5].

36. [611]

    Secure Logic deploys several arguments in reply. But most of its arguments against any award of damages in respect of SIP are answered by the application of the principles stated in Silverbrook. Before valuing the loss of opportunity or chance here those arguments should be briefly analysed.

37. [612]

    First, Secure Logic disputes Mr Noble’s breach case. Secure Logic contends that Mr Noble’s pleaded breach case does not reflect an obligation actually found in clause 1.5. His pleaded case is that SL Singapore did not provide an SIP template document that contained quarterly sales quotas.

38. [613]

    This is readily answered. It is an essential prerequisite of Secure Logic’s clause 1.5 obligation to agree upon “duties and project related objectives” that Secure Logic would have to advance some proposal answering the description “duties and project related objectives” whether in the form of a template or something else. But what is clear is that it did not provide any document or template of this type. Whether the document to be provided under clause 1.5 included quarterly sales quotas or not Mr Noble’s pleaded case sufficiently clearly alleges that to comply with clause 1.5 Secure Logic would have had to advance numerical objectives or targets that were framed on a quarterly basis and that it did not do so.

39. [614]

    Second, Secure Logic points out that clause 1.5 affords it a discretion: “may” pay a quarterly bonus but the clause also provides that SL Singapore “reserves the right for any reason to end or amend any bonus or commission scheme at any time”, making the clause an unenforceable agreement to agree. Secure Logic points out it leaves for future agreement the nature and extent of the targets against which the potential payment of any bonus might be assessed, and it contains no mechanism for the determination of those targets especially in the event of disagreement.

40. [615]

    Similar arguments were rejected in Silverbrook at [5] and [6]. The fact that an employment contract provides that the decision as to whether an employee should receive a bonus is “entirely within the discretion” of the employer should not be construed so as to permit the employer to withhold the bonus capriciously or arbitrarily or unreasonably. Nor should it be construed to give the employer free choice as to whether or not to perform a contractual obligation. The relevant discretion should be understood against the proper scope and content of the contract, this being a bargain for a bonus to be assessed against set objectives.

41. [616]

    Third, Secure Logic denies it breached clause 1.5. Secure Logic criticises the way that Mr Noble pleads his case; contending that even if it is accepted that a step in the process of seeking to reach agreement on objectives for Mr Noble’s SIP, SL Singapore complied with its obligations. It can be accepted that Secure Logic at least once provided a template document in blank to Mr Noble and invited him to complete it, based on his own assessment of what was realistic and appropriate for his SIP. Secure Logic says that the failure to reach agreement was caused by Mr Noble’s failure to advance the discussion by providing some proposed objectives. Secure Logic then speculates that Mr Noble probably failed to do this because he was not performing his duties and that he was not successful in his role in Asia, leading to his recall from Asia after only 7 months.

42. [617]

    There are several answers to this. Secure Logic as the employer under the employment contract proposing a SIP had a non-transferable obligation to set standards by which it would be obliged to pay a bonus. This is to be inferred from the fact that the SIP was based on “duties and project related objectives”; the employee did not design his own duties and the “project related objectives” with those of Secure Logic, not Mr Noble. Secure Logic cannot deflect the breach contention against it in this way. Moreover, Secure Logic’s theories as to why Mr Noble did not fill up a template are unfounded speculation.

43. [618]

    SIP Commission – Valuation. Mr Noble’s loss of opportunity or chance can be valued on the available evidence. Secure Logic submits that there is insufficient evidence to ground any such valuation. It puts the matter this way:

44. [619]

    This submission is contrary to Silverbrook (at [4]), which makes clear that in assessing damages for loss of chance of a bonus there is no requirement for the Court to assess whether on the balance of probabilities Mr Noble would have taken particular steps to obtain the chance. And the absence of evidence highlighted in Secure Logic’s submission is substantially accounted for by Secure Logic’s own breach of contract in failing to define duties and project related objectives conformable with clause 1.5.

45. [620]

    But the Court can value the loss of opportunity or chance here, rejecting the inference that Mr Noble failed to perform his duties in Malaysia and South-East Asia and that he was recalled because of that failure. The history of the period supports the inference that by August – September 2015 Mr Devaraj had two of his senior executives, Mr Noble and Mr Singh working in South-East Asia, Mr Noble in Kuala Lumpur and Mr Singh in Singapore. The focus of Mr Noble’s role was building the CSOC in Kuala Lumpur. The focus of Mr Singh’s role was growing Secure Logic’s business in Asia. Ultimately Mr Devaraj had to make a choice and by early 2016 when the CSOC was well underway, he preferred Mr Singh to run the overall Asian operations and bringing Mr Noble back to Australia was the logical course.

46. [621]

    Mr Singh offered some criticism of Mr Noble’s sales ability in Asia. He says Mr Noble lost the confidence of one of Secure Logic’s partners, Infinitium. But Mr Noble had overlapping geographical and client sales responsibilities, which was inherently likely to lead to friction between the two of them, which explains Mr Singh’s attitude. This was a less reliable aspect of Mr Singh’s otherwise satisfactory evidence and the Court does not accept his criticisms of Mr Noble’s performance.

47. [622]

    Moreover, neither Mr Singh’s nor Mr Devaraj’s criticisms are supported by contemporaneous documentary evidence. If Mr Noble was recalled in January 2016 as a failed project leader, as Secure Logic now claims, one would expect a recall on those grounds to generate its own terse email exchanges between Mr Devaraj and Mr Noble and to have led to Mr Noble being performance managed as soon as he got back to Australia.

48. [623]

    Some basic inferences can be drawn to enable valuation of Mr Noble’s lost opportunity. The estimated $100,000 SGD bonus was for 100% quota attainment to be paid quarterly. It is likely this would have been allocated at the rate of $25,000 SGD per quarter. Mr Devaraj’s dissatisfaction with Mr Noble only overtly emerged in Sydney in February March 2016. Bonus payments for the September and December quarters are likely to have been unimpaired by that dissatisfaction and bonus for the March 2016 quarter somewhat impaired by that dissatisfaction.

49. [624]

    Mr Noble’s likely “project related objectives” in the second half of 2015 would have been related to completion of the CSOC in Kuala Lumpur, itself a time-consuming task rather than sales objectives. Mr Noble’s own evidence, which is accepted on this issue, and his contemporaneous emails when returning to Australia, such as that of 10 February 2016 to Mr Singh, show substantial progress on the CSOC by that time and cooperation in moving it forward to completion in other hands.

50. [625]

    Some factors also point to Secure Logic having a motivation to be generous with Mr Noble in bonus allocation under clause 1.5. Although Mr Devaraj had an ulterior motive of trying to move Mr Noble onto a different contract with Plush Hosting, Mr Noble was offered a pay-rise under a proposed employment contract with Plush Hosting.

51. [626]

    And Mr Noble was generating income for Secure Logic and working long hours accruing a substantial amount of time in lieu. It is likely he would have come close to meeting any performance indicators had they been reasonably set and implemented.

52. [627]

    For these reasons the Court would allow him an SIP bonus of $20,000 SGD for the September 2015 quarter and $20,000 SGD for the December 2015 quarter and $10,000 SGD for the March 2016 quarter. These amounts should be factored into his calculation of loss.

53. [628]

    Mr Noble’s first claim is to an entitlement to an issue of shares representing 6% of the shareholding of SL Singapore within 3 months of the date of the contract, conditional upon the acquisition of 6% of Plush Hosting. A further 6% was said to be issued upon meeting agreed KPIs.

54. [629]

    But an important threshold issue at trial was the way that Mr Noble’s Cross-Claim was pleaded and what issues were fairly raised for determination on those pleadings. The relevant breaches of the employment contract are pleaded in paragraphs [38] and [39] of the Cross-Claim, being the major issue the initial 6% total shareholding in SL Singapore and the failure to implement KPIs to regulate Mr Noble’s eligibility for the second 6%.

55. [630]

    The pleading of breach was as follows:

56. [631]

    The pleading of the primary term said to have been breached, is in paragraphs [26] and [27] of the Cross-Claim:

57. [632]

    Secure Logic’s threshold point is that the clause that Mr Noble relies upon does not exist. This is not just an arid argument about pleadings. It is a question of what needed to be proved at trial and what issues Secure Logic was on notice that had to meet.

58. [633]

    As to the first 6% shareholding, Mr Noble claims that it was a term of the contract that Secure Logic Singapore would issue him with the equivalent of 6% of the shares in it as soon as possible, and in any event within three months.

59. [634]

    The express written term, clause 1.6, is not unqualified as the pleading alleges. Rather, the issue of the shares was conditional upon two matters (a) “subject to approval of the Board of Directors “ [of SL Singapore], and (b) Mr Noble entering into a shareholders’ agreement “covering matters usual in such an agreement”.

60. [635]

    The pleading and Mr Noble’s case in consequence do not attempt to prove that SL Singapore breached a contractual any duty to procure board approval, or breached a contractual duty to prepare and serve on Mr Noble a form of shareholders agreement that corresponds to the description “covering matters usual in such an agreement”.

61. [636]

    The issue of any shares the Mr Noble under clause 1.6 were conditional on both these matters. As a matter of fairness in the conduct of the proceedings, his case needed to engage directly with whether those conditions had been satisfied and, if they had not been satisfied, that their non-satisfaction was itself a breach of contract. This conundrum was largely avoided in Mr Noble’s case because of the pleadings extracted above avoided the problem of proof of these matters.

62. [637]

    Proof of these matters was not insubstantial. SL Singapore had a two-person board at all relevant times and unanimous approval was required for it to issue shares. If the case had been pleaded that that board had a duty to act reasonably to approve the issue of shares under clause 1.6, Secure Logic would have presumably fielded a case from both board members about how they would have approached the consideration of such a resolution. But no such contest was conducted in the proceeding.

63. [638]

    Equally, if his case was not just to be answered by contention that clause 1.6 is relevant only to an agreement to agree, Mr Noble bore the onus of establishing what the terms of a shareholders agreement were “covering matters usual in such an agreement”. That is a contestable issue which was not overtly contested in the proceedings, because of the shape of the pleadings and the conduct of the case in consequence.

64. [639]

    The Court is reluctant to decide this question on the pleadings. But this is a case where that must be done, because in response to the Cross-Claim Secure Logic has not prepared itself to meet issues about the satisfaction of those two conditions. And Mr Noble’s case has not adduced evidence of their satisfaction. Board approval was never obtained. No form of “usual” conditions was proven. So, clause 1.5 is not engaged.

65. [640]

    There is little doubt from the correspondence that Mr Noble proceeded in his dealings with Secure Logic in early 2016 on the basis that these matters were formalities and that he had an immediate entitlement to the first 6% of shares and an additional 6%. And regrettably that misunderstanding was not resolved at the time.

66. [641]

    Mr Noble’s case on the Cross-Claim that there was an obligation upon SL Singapore to issue two successive tranches of shares to him each of 6% without having to satisfy these two additional qualifications, must fail, firstly because such a clause has not been established. But even if the clause 1.6 is relied upon, the case must fail because the cross-claimant’s case has not proved that the conditions have been satisfied.

67. [642]

    Whilst this may seem a harsh result given the investment of time and resources in this part of the Cross-Claim, it is the only result which the Court finds acceptable that is consistent with fairness to both parties.

68. [643]

    Reserving the issue of board approval was contextually appropriate because the acquisition of Plush Hosting was incomplete. There was some limited contested evidence about the conditions of the completion of the Plush Hosting transaction. Secure Logic submitted that it the board approval provision was a mechanism by which any final decision about the issue of any shares to Mr Noble could be deferred until the outcome of the Plush Hosting acquisition was better understood. But such evidence is was called on that issue was not addressed to the core question that would have been raised by amended different pleadings about what would have been before the SL Singapore board when it came to approve the issue of shares to Mr Noble under clause 1.6.

69. [644]

    There is no doubt that Mr Noble never entered the shareholders agreement. Mr Devaraj sent him a Shareholders Accession Deed for the existing Secure Logic shareholders agreement. But whether he was obliged to enter that deed or some other form of deed to satisfy the condition in clause 1.6 is an open and unproven question.

70. [645]

    As to one incidental matter that may need otherwise to be resolved, clause 1.6 refers to the issue of a particular number of shares in SL Singapore, namely 600 shares. The Court accepts that this was a typographical error, and that 6% of the shares in SL Singapore at the time represented 60 shares. The error arose from Mr Devaraj using a precedent from another company which had a different number of shares. The percentage is more likely to be the correct figure than the number in this context.

71. [646]

    In light of these findings it is not necessary for the Court to consider issues concerning the quantum of shares in SL Singapore or their exchange for shares in SL Australia.

72. [647]

    Finally, it should be observed that Mr Devaraj signed an SL Singapore Shareholder Deed on behalf of both SL Singapore and SL Australia on 23 June 2014. Secure Logic argues that under the SL Singapore Shareholder Deed if Mr Noble had shares in SL Singapore issued to him and became entitled to sell them, the only consideration he could receive for them would be 100 per cent of their cost price. But Secure Logic argues that on Mr Noble’s own case the shares would have been issued to him for no consideration. So Secure Logic concludes the maximum consideration he would have derived for the transfer of his shares would have been nil.

73. [648]

    But none of this really takes the case forward. No one has established that the SL Singapore Shareholders Deed “covers matters usual in such an agreement" within clause 1.6, so it is irrelevant.

74. [649]

    Mr Noble’s Cross-Claim pleads for damages for misleading and deceptive conduct against SL Singapore, Mr Devaraj and SL Australia, respectively the first, second and third cross-defendants. The misrepresentation claim against SL Singapore and Mr Devaraj differs slightly from that against SL Australia.

75. [650]

    The primary misrepresentation claim is brought against SL Singapore and Mr Devaraj. A supplementary misrepresentation claim is brought against SL Australia.

76. [651]

    The misrepresentation claims arise out of a series of oral and written statements said to have been made by Mr Devaraj to Mr Noble between January and May 2015 in relation to two subjects, the first of which is claimed to be actionable in damages but the second of which is not said to be actionable. The misrepresentations are said to have caused him to enter the employment contract.

77. [652]

    The first subject of misrepresentation is the issuing of shares to Mr Noble in Secure Logic companies. These misrepresentations are said to have occurred on 16 January 2015 at Mr Devaraj’s home, and on 19 February 2015 at the Haymarket Hotel in George Street Sydney. What was said on these occasions is covered in the factual narrative above.

78. [653]

    The second subject of misrepresentation is Mr Noble’s participation in a SIP were he was to become an employee of a Secure Logic company. Mr Noble does not deploy the second subject as a basis for a damages claim but rather as a pre-contractual communication relevant to the proper interpretation of the employment contract.

79. [654]

    The representations in relation to the SIP is said to have occurred on 6 March 2015 at the Mejico restaurant in Pitt Street Sydney, on 20 March 2015 in the Secure Logic boardroom, and on 3 May 2015 and 4 May 2015 during negotiations. The Court’s findings as to what was said on these occasions is covered in the factual narrative above. But the SIP representations do not need to be considered further in Mr Noble’s misrepresentation claims

80. [655]

    Mr Noble pleads the misrepresentations upon which he relies in relation to the first subject in his Cross-Claim, paragraph 15 as follows:

81. [656]

    There were two aspects to the pleaded misrepresentations about the issuing of shares to Mr Noble. The first aspect is a benefit that Mr Noble would have 12% of the issued capital in SL Singapore (“the 12% representations”). The second is that on the sale of SL Singapore’s total issued shareholding, shares issued to Mr Noble would achieve a minimum sale price of $10 million (“the $10 million representations”).

82. [657]

    Mr Noble further contends that the representations are as to future matters and that the cross-defendants have not discharged their onus of showing that they had reasonable grounds for making the misrepresentations. Secure Logic and Mr Devaraj each deny making the representations alleged.

83. [658]

    Mr Noble also contends that with SL Singapore and Mr Devaraj as its agents, the third cross-defendant, SL Australia represented that Mr Devaraj would issue the shares contemplated by the employment contract, clause 1.6 and that SL Australia “would permit the substitution or trade of the shares [in SL Singapore] offered by [Mr Devaraj] for an equivalent number of shares in SL Australia”: Cross-Claim, [32] (“the share substitution” representations).

84. [659]

    Mr Noble argues that he relied upon all these representations and thereby lost the opportunity to have them included as terms of his settled employment contract with SL Singapore.

85. [660]

    The Representations. The Court accepts Mr Noble’s case that the 12% representations were made to him. But they were not made in the simple form of representation that is pleaded that he would receive 12% of SL Singapore. They must have been made in a form that was closer to the terms of the employment contract, clause 1.6.

86. [661]

    As to the $10 million representations, the Court’s findings in the factual narrative show that important parts of the $10 million representations were made but they did not include any personal guarantee from Mr Devaraj.

87. [662]

    And as to the share substitution representations, they are missing from the conversations that Mr Noble advances. Some conversation about this subject must have occurred but the best record of it is what is contained in the employment contract, clause 1.6.

88. [663]

    Reliance. Mr Noble’s reliance case is problematic. He alleges that he relied upon Mr Devaraj’s misleading representations and as a result did not insist on including appropriate terms in his employment contract to match the representations made. Mr Noble says that his reliance upon the representations meant he lost “the opportunity” to properly document the content of the promise as part of a binding employment contract.

89. [664]

    In this sense, Mr Noble’s case is something of a backup to the contract case. He submits that, if upon its proper construction the employment contract does not conform with the representations, he should have damages for the difference between what was represented to him and what was promised under the contract.

90. [665]

    But that case has difficulties. Mr Noble was aware the employment contract he was signing did not reflect the representations, but he proceeded nevertheless to sign it. The Court infers that in doing so he chose not to insist on greater conformity between the employment contract and the representations made to him. The Court does not accept that he lost an opportunity “to insist on proper and adequate documentation of the promise in a binding written employment contract”.

91. [666]

    Mr Noble’s case stresses his friendship with Mr Devaraj as a basis for his reliance on Mr Devaraj’s oral representations. Such a friendship existed. But that alone does not establish his reliance on either the 12% representations or the $10 million representations.

92. [667]

    Mr Noble did not obtain independent legal advice before finalising his employment contract. But his own account shows that he carefully requested several specific amendments to the document before he signed it. The employment contract covers the subject matter of the 12% representations. The Court infers that he was satisfied that the draft employment contract reflected the 12% representations and he was content to sign in that form.

93. [668]

    As to the $10 million representations, the employment contract nowhere mentions Mr Devaraj’s personal guarantee of a $10 million return to Mr Noble. This must have been obvious to Mr Noble upon his review of the draft. But he did not ask for the inclusion in the final form of the employment contract.

94. [669]

    Mr Noble regarded Mr Devaraj’s representation of a $10 million guaranteed return to Mr Noble as an exercise in exuberant puffery. Mr Noble well appreciated that Mr Devaraj, who he had known since 2013-14, was capable of episodes of exaggerated enthusiasm foreshadowing his own future commercial successes. Mr Noble had seen this more than once in social situations. Mr Noble (and his wife Emer both) had a level-headed and cynical judgment about Mr Devaraj’s more boastful statements. Neither of them really believed much of what he said.

95. [670]

    Mr Noble further submits that Mr Devaraj intended that Mr Noble rely upon the 12% representations and the $10 million representations in committing to employment with Secure Logic. He submits that Mr Noble’s reliance upon those representations is readily to be inferred from that intention and from Mr Devaraj’s communicated belief that the shares to be issued would have considerable market value. Moreover, his reliance is evidenced in his acceptance of a below-market salary, because he anticipated that part of his remuneration would be received in the form of shares.

96. [671]

    But whatever Mr Devaraj’s intentions, as to the 12% representations Mr Noble saw what was in the contract and that satisfied him. And as to the $10 million representations, a strong counter inference of nil reliance arises from Mr Noble’s failure to insist on Mr Devaraj’s personal guarantee of that in the final form of signed contract.

97. [672]

    As to the share substitution representations, the employment contract, clause 1.6 covers their subject matter. Clause 1.6 refers to “drag & tag along provisions” and to Mr Noble having a contractual entitlement to “trade in your allocated shares in the Company to gain equal number of shares in [SL Australia]”. The proper reliance inference concerning the share substitution representations is that, like the 12% representations, Mr Noble was prepared to rely upon what was in the contract rather than pre-contractual statements. This inference is reinforced by the disclaimer in the employment contract, at clause 1.25. Mr Noble said that he would have read clause 1.25 and that he had read the whole employment contract “very carefully”. He had refused to start work on leave for Malaysia without a contract, understanding that his “rights and entitlements, they are in the contract and nowhere else”.

98. [673]

    Mr Noble understood the effect of clause 1.25, which bound him as the rest of the employment contract bound SL Singapore. Clause 1.25 is in the circumstances of this case evidence of Mr Noble’s non-reliance on Mr Devaraj’s impugned pre-contractual conduct: Campbell v Back-Office Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610; (2009) 83 ALJR 903; (2009) 73 ACSR 1; [2009] HCA 25.

99. [674]

    Damages. Mr Noble advances his case for damages for misrepresentation as an alternative to his claim for damages in contract for the shareholding he claims he was promised under the employment contract. Mr Noble accepts in his final submissions that he could have done no better than an enforceable written contract which adequately reflected the representations made to him. He submits that his resulting loss of a chance is an entitlement to either 6% or 12% of SL Australia and that if he is not entitled to this outcome under the employment contract, clause 1.6 then he should have the shareholding equivalent as damages for misrepresentation.

100. [675]

     Mr Noble advances evidence that 6% of the shares in SL Australia should be valued at the least according to the expert Mr Mottershead in the amount of $241,656, or much more according to advice given by Morgan Stanley (Exhibit 15) about the potential for an IPO of SL Australia based on higher projected profits than Mr Mottershead had used. But considering the Court’s findings that no damages are recoverable for Mr Noble’s loss of opportunity to acquire shares in SL Australia, it is not necessary for the Court to consider the contest about the value of SL Australia’s shares.

101. [676]

     But Mr Noble’s formulation of his damages claim for misleading and deceptive conduct as an alternative to his contract claim faced other difficulties. Claims for $10 million for loss of an opportunity to acquire and realise shares in SL Australia are expectation losses, which are not ordinarily recoverable for misleading and deceptive conduct: Weatherill v Bartlett [2017] NSWCA 1754, at [22]. Central to all forms of recoverable loss for misleading conduct is the sustaining of “a prejudice or disadvantage as a result of altering his or her position under the inducement of the misleading conduct”: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; (1998) 158 ALR 333; (1998) 73 ALJR 12; (1999) ASAL 55-014; (1998) ATPR 41-665; [1998] HCA 69 at [46]. A more orthodox formulation of Mr Noble’s claim would have been for losses directly occasioned by entry into the employment contract, or for lost opportunities to deploy his skills elsewhere that was foregone by that entry.

Mr Pankhurst’s Cross-Claim

1. [677]

   Mr Pankhurst’s Cross-Claim brings actions for damages for breach of contract and damages for what he describes as “defamation and harassment”. The components of the claim fail for different reasons. The relevant parts of Mr Pankhurst’s employment contract claim Paragraph [13] of Mr Pankhurst’s Cross-Claim provides as follows:

2. [678]

   As to (a), Mr Pankhurst’s claim for 14 months’ pay fails because, as the Court’s findings show, Secure Logic’s dismissal of him was justified. His employment was terminated for misconduct under his employment contract, clause 1.12. His employment was terminable without notice because he engaged in serious misconduct that was “wilful, deliberate or neglectful behaviour that is inconsistent with the continuation” of his employment contract; also he breached a material provision of the agreement, namely his obligation under clause 1.14. He was properly dismissed, when he was dismissed. As there was no breach of contract in his dismissal, he is not entitled to damages for lost wages for the balance of his agreed term of employment.

3. [679]

   As to (b), Mr Pankhurst claims that he was not paid the $600 compensation for his transferring the 600 shares in Plush Hosting to Secure Logic. The claim seems to be on the basis that is entitled to the $1.00 per value of each of the shares being transferred. The consideration of the shares was nominal. It is not clear on the agreement made with Mr Devaraj that he would receive $1.00 per share or $1.00 for all his shares. Proof of what was paid on this account is uncertain.

4. [680]

   As to (c), Mr Pankhurst did not articulate the legal basis for his claim for “harassment”. Whether it could be framed as the intentional tort of assault, or some other intentional tort causing him harm, no such case is made out. The Court has not made any finding that Mr Devaraj intended Mr Pankhurst either personal or economic harm.

5. [681]

   To the extent Mr Pankhurst says he was defamed he did not articulate, except in the most general terms, the alleged defamatory matter upon which he was relying, nor did he articulate the imputations said to arise from the defamatory matter. But he complained about letters sent by Secure Logic to its customers, containing statements about him. He attached samples of those letters to his Cross-Claim.

6. [682]

   Those letters contain statements that were quite capable of bearing meanings that were defamatory of Mr Pankhurst. But as the findings in these reasons show, the statements made in the letters in question that convey defamatory meanings about Mr Pankhurst and referring to his misconduct are no wider or more serious than the findings that have been made in these reasons about his actual misconduct. Truth would be a complete defence to any action for defamation based upon this material. It is not necessary to consider this cause of action any further.

7. [683]

   As to (d), Mr Pankhurst’s claim for bonuses under the SIP has not been properly articulated or answered. The Court reserves it for further consideration in light of these reasons and the findings on the similar subject in relation to Mr Noble.

8. [684]

   The Court’s findings will allow the parties to propose detailed short minutes of order disposing of all the claims for relief and calculating the correct quantum of recovery on the Cross-Claim. The Court will direct the parties to agree on short minutes of order, or to advance competing short minutes of order.

9. [685]

   The Court has endeavoured to decide all the matters in dispute between these parties relevant to the determination of final relief. But if one or other party believes that any issue remains undetermined that is relevant to the grant of final relief that can be raised at the time of any contest about the final form of the orders.

10. [686]

    Secure Logic has been substantially but not entirely successful. This mixed result means that the parties may wish to put submissions as to costs. And a party may seek a special costs order. The Court’s orders will provide the parties with an opportunity to put submissions as to costs.

11. [687]

    Mr Noble’s conduct may have been a contempt of Court. These reasons will be referred to the Prothonotary, for the Prothonotary to consider whether any action for contempt of this Court should be taken against Mr Noble.

12. [688]

    Mr Devaraj authorised some surveillance of Mr Noble on behalf of Secure Logic. The Court has found that the surveillance that took place through the 18 May conduct was in contravention of the WS Act. But the Court’s findings raise the question of whether the 23 May conduct with respect to Peach Tree Bay’s email accounts may have been an offence under Crimes Act, s 308H, or Criminal Code Act, s 478.1. The statute of limitations with respect to any prosecution under the WS Act and Crimes Act, s 308(H) (see s 308H(4)) has expired for the relevant conduct.

13. [689]

    The Court cannot condone contraventions of Australian law. Whether offences have indeed occurred and whether further action is required is for others to investigate. The Court refers these reasons to the Commonwealth Attorney General for her consideration as to whether any further action should be taken against any person under Criminal Code Act, s 478.1 in respect of the 23 May conduct.

14. [690]

    Accordingly, the Court makes the following orders and directions:

    1. (1)

       The Court directs the parties by Friday, 25 June 2021 to bring in agreed short minutes of order to give effect to these reasons, and if agreement is not possible by that date, then the parties are to provide marked up short minutes of order showing their areas of disagreement by Friday, 2 July 2021;

    2. (2)

       The Court directs the parties to exchange any evidence on which they wish to rely in relation to costs by Friday, 18 June 2021;

    3. (3)

       The Court directs the parties to file and serve concise submissions in relation to the final form of orders and costs by Friday, 25 June 2021;

    4. (4)

       The Court directs the parties to file and serve concise submissions in reply in relation to costs by Friday, 9 July 2021;

    5. (5)

       List these proceedings at 9am on Friday, 16 July 2021 for any argument in relation to the final form of orders and costs; and

    6. (6)

       Grant liberty to apply.