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Alanco Australia Pty Ltd v Higgins [2010] FCA 1484

by Hilary Kincaid 10. January 2011 14:23

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Facts

The plaintiff obtained an ex parte search order under Order 25B of the Federal Court Rules which directed the second and third directors to permit a search party to enter the premises of the third respondent and remove computer hard discs and other visible evidence of confidential information of the plaintiff: [1].

The plaintiff alleged that the defendants, including former company officers of the plaintiff, breached their duties of good faith and loyalty owed pursuant to the Corporations Act 2001 (Cth) under s 181 and s 182. Claims were also made against the former officers and their new employer, the third defendant, in common law and equity and for breach of confidence: [4].

Following execution of the search order, an application was brought by the plaintiff for the plaintiff’s solicitors to be relieved from the undertaking given to the court not to disclose to officers of the plaintiff the contents of documents obtained in executing the search order: [22].

The second and third defendants opposed the application on the basis that such orders would permit the delivery of commercially sensitive material to a trade rival in circumstances where it had not yet been shown to be necessary: [33].

McKerracher J observed that disclosure may be necessary to allow directors of a company to make important decisions on the company’s behalf concerning whether or not and, if so, how, to proceed to trial: [22].

However, especially in the case of trade rivals, a very clear case needs to be shown to justify ordering release of the search material at a relatively early stage in the litigation, beyond the professional adviser and independent expert, direct to the trade rival: [42].

Outcome

McKerracher J held that the plaintiff had not established that such disclosure was necessary at this stage, as the matters upon which the solicitor’s wished to seek instructions could be addressed through alternative means that did not require the disclosure of the third defendant’s confidential information to the plaintiff: [43]-[46].

The plaintiff’s motion was dismissed.

Relevant paragraphs of Ford

[9.010]

Tags:

Ford's Principles of Corporations Law



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