MS Stock Contracting & Anor v AUX Venture & Anor [2011] NTSC 08

 

PARTIES:                                         MS STOCK CONTRACTING PTY LTD

                                                         (ACN 098 710 715)

 

                                                         And

 

                                                         FLY FOX PTY LTD (ACN 132 028 276)

 

                                                         v

 

                                                         AUX VENTURE PTY LTD

                                                         (ACN 135 481 140)

 

                                                         And

 

                                                         WAINWRIGHT, Jennifer Helen

 

TITLE OF COURT:                           SUPREME COURT OF THE NORTHERN TERRITORY

 

JURISDICTION:                               SUPREME COURT OF THE TERRITORY EXERCISING TERRITORY JURISDICTION

 

FILE NO:                                          124 of 2010 (21037722)

 

DELIVERED:                                   1 February 2011

 

HEARING DATES:                           23 December 2010

 

JUDGMENT OF:                              BARR J

 

CATCHWORDS:

 

Supreme Court Rules, r 32.03, 32.03(1)

 

Derby & Co Ltd v Weldon (No 8) [1990] 3 All ER 762; [1991] 1 WLR 73; G. Breschi & Son v A.F.T. and Ors [1988] VR 109; Jones v Dunkel (1959) 101 CLR 298; Moorgate Tobacco Co Ltd v Phillip Morris Ltd [No 2] (1984) 156 CLR 414; RPS v R [2000] HCA 3; (2000) 199 CLR 620

 

Meagher, Gummow and Lehane’s “Equity - Doctrines and Remedies”, Fourth Edition, Butterworths Lexis Nexis Australia, 2002, authors R P Meagher, J D Heydon and M J Leeming. 

 

REPRESENTATION:

 

Counsel:

    Plaintiff:                                      D Robinson SC

    Defendant:                                    A Young

 

Solicitors:

    Plaintiff:                                      Clayton Utz

    Defendant:                                    Ward Keller

 

Judgment category classification:    C

Judgment ID Number:                       Bar1101

Number of pages:                             15


IN THE SUPREME COURT

OF THE NORTHERN TERRITORY

OF AUSTRALIA

AT DARWIN

 

MS Stock Contracting& Anor v AUX Venture & Anor [2011] NTSC 08

No. 124 of 2010 (21037722)

 

 

                                                     BETWEEN:

 

                                                     MS STOCK CONTRACTING PTY LTD (ACN 098 710 715)

                                                         First Plaintiff

 

                                                     AND:

 

                                                     FLY FOX PTY LTD (ACN 132 028 276)

                                                            Second Plaintiff

 

                                                     AND:

 

                                                     AUX VENTURE PTY LTD

(ACN 135 481 140)

                                                         First Defendant

 

                                                     AND:

 

                                                     JENNIFER HELEN WAINWRIGHT

 

CORAM:     BARR J

 

REASONS FOR JUDGMENT

 

(Delivered 1 February 2011)

 

 

[1]       The first and second plaintiffs have applied by summons on originating motion for an order pursuant to Rule 32.03(1) of the Supreme Court Rules that the first defendant, by an appropriate officer, and the second defendant, attend before the Court to be orally examined in relation to the description of a person referred to in paragraph 56(a) of the affidavit of Mark Scott Sullivan sworn 6 November 2010. The plaintiffs intend to commence a proceeding against that person, but are unsure as to his or her identity. 

Background to the application

 

[2]       Mark Scott Sullivan is a pastoralist, and is the sole director of the first and second plaintiff companies. The second plaintiff is the registered proprietor of a leasehold pastoral property situated near Mataranka and known as Flying Fox Station. Mr Sullivan lives at Flying Fox Station. Through the second plaintiff, Mr Sullivan acquired Flying Fox Station in about October 2003.

[3]       It would appear that Mr Sullivan's financier at all relevant times was the ANZ Bank. Through that bank connection, Mr Sullivan met Jennifer Wainwright, the second defendant and sole director of the first defendant. Ms Wainwright previously worked for the ANZ Bank as an assistant to the manager of the Agribusiness Division responsible for the accounts of Mr Sullivan and the second plaintiff.

[4]       From time to time in connection with her work with the ANZ Bank, Ms Wainwright visited Flying Fox Station, and at some time prior to late 2007, Mr Sullivan and Ms Wainwright became involved in an intimate personal relationship. Ms Wainwright’s evidence is that the relationship commenced in April 2007 and continued until July 2009.  

[5]       While the relationship was in existence, Mr Sullivan involved himself in a pastoral partnership with another person.  That pastoral partnership ultimately dissolved in late 2009, and Mr Sullivan and his companies then needed to refinance in the wake of the dissolution.

[6]       Although by late 2009 Mr Sullivan and Ms Wainwright were no longer in the close personal relationship described, Mr Sullivan contacted Ms Wainwright to ask if she would be able to assist him to prepare a refinancing application to the ANZ Bank on his behalf and on behalf of one or both of the plaintiff companies.

[7]       It is unnecessary to go into great detail about what then happened. In short, Ms Wainwright provided some assistance in relation to the refinancing application to the ANZ Bank, and Mr Sullivan and Ms Wainwright then fell into dispute as to whether Ms Wainwright was entitled to remuneration for the assistance she provided. The dispute led to litigation. On 27 July 2010, the first defendant commenced proceedings against the first plaintiff in the District Court of Queensland at Rockhampton claiming $91,875 as monies alleged due and owing under a contract for services, alternatively as a claim in quantum meruit.

[8]       The first plaintiff denies the entitlement of the first defendant in the Queensland District Court proceedings. Those proceedings are still pending.

 

Events of 2 September 2010

 

[9]       As at 2 September 2010, Mr Sullivan maintained an e-mail account for the plaintiff companies, msstock@skymesh.com.au. The Internet service provider for that e-mail account was the entity Skymesh.

[10]     There were two ways in which a person could access e-mails sent to that email address: either through the Microsoft Outlook program on Mr Sullivan’s personal computer, or through the Skymesh Internet website, the latter (known as ‘remote access’) requiring the person to enter the e-mail address and applicable password.

[11]     On the plaintiffs’ case, an unknown person accessed the plaintiffs’ e-mail account remotely, that is, through the Skymesh Internet website, on 2 September 2010 between 09:43:46 hours and 10:54:51 hours. The affidavit evidence is not absolutely clear as to whether the account was opened for the whole of that period of in excess of one hour, or as to whether more limited access was taken within the overall specified time period. I refer to paragraphs 47 and 50 of the affidavit of Mark Scott Sullivan sworn 6 November 2010. However, the plaintiffs’ application was conducted without objection on the basis that the account was opened and being accessed, if not actually read, for the whole of the period, and for present purposes I will assume that that was the case.

[12]     The relevance of the account being opened and accessed for a period in excess of one hour was that, logically, a greater number of the available documents could have been opened and read over the extended period.

[13]     Mr Sullivan has deposed to the fact that the remote access was not by him, and as to his belief that it was by an unauthorised third party who had knowledge of his Web mail access password or who was able to circumvent the password requirement in some way.

[14]     Of particular concern to Mr Sullivan is the fact that the data or documents on his computer and e-mail system at the time of the unauthorised third party access included confidential communications between Clayton Utz and himself in relation to, inter alia, issues in dispute in the Queensland District Court proceedings. They included a letter marked ‘confidential’ dated 27 August 2010 and an e-mail dated 1 September 2010. Copies of those items of correspondence, redacted to leave only the stated reference and formal parts, were put into evidence without objection, and I conclude that they probably related to issues in the Queensland District Court proceedings (or other contentious issues between the parties) because they were marked "Aux Venture Pty Ltd v MS Stock Contracting Pty Ltd” and "Aux Venture v MS Stock". 

The identity of the unauthorized third party

 

[15]     There is evidence which connects Ms Wainwright with the unauthorised third party access taken on 2 September 2010. Indeed, the evidence suggests that it was Ms Wainwright herself who took unauthorised third party access on 2 September 2010, and not some other third party who might have then relayed the information to Ms Wainwright. I now summarize the evidence.

[16]     On 2 September 2010, at 9:19 a.m., Ms Ball of Clayton Utz, the solicitor having conduct of Mr Sullivan's commercial affairs, wrote to Mr Sullivan by e-mail sent to the above e-mail account to inform him that the Territory Revenue Office had upheld an objection against an unfavourable stamp duty assessment, the result being a refund to Mr Sullivan (or the first plaintiff company) of $271,804.50.

[17]     At 11:49 a.m. that day, Ms Wainwright sent an e-mail to Ms Ball, referring to having tried to ring Mr Sullivan without success and concluding:  "Maybe he had a windfall today and he thinks he’ll use that money to fly his Clayton Utz crew to Rocky …". [The reference to "Rocky" is, I assume, to the city of Rockhampton.]

[18]     At 12:16 p.m. that same day, Ms Wainwright sent a further e-mail to Ms Ball saying: "A little birdy tells me he's getting his Stamp Duty back …".

[19]     Mr Sullivan's evidence is that he had not told anybody except his father about the refund of stamp duty. Mr Sullivan’s further evidence, received without objection, is that he contacted his father, Bill Sullivan, who in turn informed Mr Sullivan that he had not told anybody about his son’s stamp duty refund.

[20]     The question then arose as to how Ms Wainwright had obtained the knowledge which her remarks to Ms Ball indicated she had obtained. Investigations were undertaken by Mr Sullivan, and the unauthorised access referred to in paragraph 11 came to light.  Ms Wainwright became a suspect.

[21]     On 14 October 2010 Clayton Utz wrote to the solicitors acting for Ms Wainwright in the Queensland District Court proceedings stating, inter alia:-

"... there are compelling reasons to believe that Ms Wainwright and your client have obtained information confidential to our client through unauthorised access to data held on our client’s computer and e-mail system. This includes confidential and privileged information relating to the conduct of our client’s defence in this proceeding."

[22]     The letter referred to the concern of Mr Sullivan that Ms Wainwright had become aware of the stamp duty refund on the very same morning Clayton Utz had received the letter from the Territory Revenue Office referred to above. The letter reiterated concern that the party who had taken unauthorised access would have had access to advices from Clayton Utz relating to the issues in dispute in the Queensland District Court proceeding, and the issue of costs between the same parties in relation to the setting aside of a Notice of Demand.

[23]     On 14 October, the same day as the Clayton Utz letter, Ms Wainwright’s solicitors replied to Clayton Utz in these terms, formal parts omitted:-

"Ms Wainwright is presently travelling by motor vehicle in southern Queensland and has intermittent mobile telephone access.

 

We are instructed that the comments from Ms Wainwright to Ms Ball ... were not based on any information in Ms Wainwright's possession resulting from access to your client's e-mail account. Our client does not intend disclosing the party who made that information available to her." [underline emphasis added]

[24]     By letter dated 15 October 2010, Clayton Utz replied to Ms Wainwright’s solicitors, referring to the first plaintiff's entitlement to commence proceedings to obtain orders for the return of confidential information and to restrain any further "conduct" (which I understand to have meant any future use or misuse of the confidential information). Clayton Utz pointed out to Ms Wainwright’s solicitors that Ms Wainwright was "a person who has knowledge of facts tending to assist in the ascertainment of the description of the person against whom the proceedings should be commenced." 

[25]     In her affidavit sworn 21 December 2010, Ms Wainwright asserted (or admitted, depending on how her statement is characterized) that during the course of her relationship with Mr Sullivan, he asked her to set up the Skynet e-mail account with an access password he supplied to her. She said that, with Mr Sullivan’s knowledge, she regularly accessed the Skynet e-mail account using the password which Mr Sullivan supplied to her. She did not admit that she accessed the Skynet e-mail account on 2 September 2010. Indeed, the admission as to regular access with the knowledge of Mr Sullivan was confined by my ruling to the course of the relationship.

The application

[26]     Rule 32.03 of the Supreme Court Rules permits recourse to pre-action discovery to identify a defendant for the purpose of being able to commence a proceeding against that defendant.

[27]     Rule 32.03(1) reads as follows:-

“Where an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person (in this rule called the person concerned) and it appears that a person has or is likely to have knowledge of facts, or has or is likely to have or has had or is likely to have had in his possession a document or thing, tending to assist in the ascertainment of the description, the Court may order that the person, and in the case of a corporation, the corporation by an appropriate officer, shall:

(a) attend before the Court to be orally examined in relation to the description of the person concerned; or

(b) make discovery to the applicant of all documents which are or have been in his or its possession relating to the description of the person concerned.”

[28]     As mentioned earlier in these Reasons, the first and second plaintiffs have applied for an order that the first defendant by an appropriate officer and the second defendant attend before the Court to be orally examined in relation to the description of the person, identity said to be unknown, against whom the plaintiffs intend to commence a proceeding. It appears that the only proposed examinee would be Ms Wainwright, in her dual capacity as the second defendant and as the sole director and shareholder of the first defendant.

[29]     The plaintiffs contend that, once the identity of the person who took the unauthorized remote access is disclosed, they intend to commence against that person a proceeding of the kind referred to by Deane J in Moorgate Tobacco Co Ltd v Phillip Morris Ltd [No 2][1], namely an action in equity for relief to prevent an actual or threatened abuse of confidential information. The learned authors of Meagher Gummow and Lehane[2] deal with "documents improperly obtained" at paragraph [41-130], where they point out that the jurisdiction in equity applies not only to privileged documents improperly obtained but extends to cases where a privileged document has been inadvertently disclosed on discovery and (in either case) an injunction is sought to require the return of all copies and to forbid the use of the information contained in or derived from the documents.

[30]     For present purposes, I am of the view that there is an arguable cause of action available to the plaintiffs against, at least, the person who took unauthorised remote access to the plaintiffs’ e-mail account on 2 September 2010, such action to ensure that the confidentiality of privileged documents is safeguarded.

[31]     Mr Young, in detailed written submissions, questioned whether the plaintiffs have a cause of action in the circumstances presently disclosed by the evidence. He has highlighted those matters which the plaintiffs would need to establish in order to succeed, and in respect of which there are or may be deficiencies. In my view, however, it would not be appropriate for me on this application to consider in detail the elements needed to be established by the plaintiffs in their intended action, and the evidence they might bring in support. Indeed, it is undesirable that I canvass the merits of the intended action further to the considerations set out by me in the preceding two paragraphs.

[32]     The plaintiffs’ purpose for the proposed examination would include to ask Ms Wainwright to identify the person who is "the little birdy" referred to by her in paragraph 18 of these Reasons, and/or "the party" whose identity Ms Wainwright refused to disclose on 14 October 2010, as referred to in paragraph 23 of these Reasons.  

[33]     However, Mr Young submitted that there is no real uncertainty about the identity of the person who took unauthorised remote access to the plaintiffs’ e-mail account on 2 September 2010. He argued (without making any specific admission to this effect on behalf of Ms Wainwright) that the evidence establishes that the person who accessed Mr Sullivan's e-mail account was obviously Ms Wainwright, and that this Court should not make the order sought because the purpose of the rule is to identify, or sufficiently describe, a defendant against whom a proposed cause of action lies[3]; and that in the present case the defendant is already sufficiently identified.

[34]     It seems to me that if I am able to be satisfied on the balance of probabilities that Ms Wainwright was the person who took unauthorised remote access on the day in question, then I should not grant the plaintiffs’ application, since the proposed oral examination would be unnecessary.

[35]     The evidence that Ms Wainwright herself perpetrated the unauthorised access consists of (1) her evidence that she set up the relevant e-mail account and (in the past) regularly accessed the account using the access password supplied to her by Mr Sullivan, thus demonstrating her ability to access the account, and (2) the fact that she was apparently aware of the stamp duty refund on 2 September 2010, within an hour or so of Clayton Utz having notified Mr Sullivan about the refund. Further, in paragraph 8 of the affidavit sworn by Ms Wainwright on 21 December 2010, she deposed as follows:-

"I am unaware of the identity or existence of any third party who has or who may have had unauthorised access to the e-mail account or to any of the material mentioned in the affidavit of Sullivan."

[36]     I take the reference to “any third party” by Ms Wainwright in this context to mean anyone other than herself. I therefore understand Ms Wainwright to be saying, in effect, that there was no third party. This is expressed or implied by her denial of knowledge (awareness) of both the identity and existence of any third party.

[37]     Paragraph 8 of Ms Wainwright’s affidavit was a recantation – albeit somewhat oblique - of the two suggestions contained in the defendants’ solicitors’ letter to Clayton Utz dated 14 October 2010, namely that Ms Wainwright had not herself had access and that the stamp duty information had been communicated to Ms Wainwright by some other party.

[38]     Having considered the evidence connecting Ms Wainwright herself to the unauthorised third party access, I am of the opinion that a Jones v Dunkel[4] inference may properly be drawn from the fact that Ms Wainwright did not deny in her affidavit that it was she who had had access on 2 September 2010. As Menzies J said in Jones v Dunkel:-

“ … where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference."[5]

[39]     In the present case, Ms Wainwright might have given evidence to prove a contrary or different position to the one in which she is ‘the perpetrator’. However, she did not deny in her evidence that she took access herself and, although she did not admit that she did (possibly because of fear of criminal prosecution[6]), she effectively excluded the possibility that any third party was involved, thus leaving herself as sole perpetrator.

[40]     I appreciate that it is arguable that a Jones v Dunkel inference might not be available in the somewhat unusual situation of this case, where the ‘adverse’ inference is partly helpful to Ms Wainwright in that it helps her resist the oral examination which the plaintiffs seek. However, be that as it may, the inference I draw here is still unfavourable to Ms Wainwright in general terms.

[41]     I find on the balance of probabilities for the purpose of this application that Ms Wainwright took unauthorised access on 2 September 2010 in the circumstances referred to in paragraph 11 of these Reasons.

[42]     I would therefore dismiss the plaintiffs’ application in so far as it seeks the oral examination of any person.

[43]     I am unable to make any finding on the balance of probabilities as to whether Ms Wainwright opened and read the documents referred to in paragraph 22 of these Reasons.

[44]     I would propose to dismiss also the second part of the plaintiffs’ application (the application for discovery of documents in aid of identifying a defendant), but I am not sure that that part was fully argued before me and I will hear further submissions in the event that it is still pursued.  

[45]     In relation to costs, there are good reasons why the unsuccessful plaintiffs should have their costs of the application. It would appear that the defendants brought this application on themselves by Ms Wainwright’s own conduct.  Further, the second defendant’s affidavit was not served until on or after 22 December 2010. The matters deposed to by her had to be contrasted and possibly reconciled with the denials and assertions contained in the defendants’ solicitors’ letter to Clayton Utz dated 14 October 2010. The relevant admissions and other evidence in the second defendant’s affidavit (on which I have ultimately relied to refuse the plaintiffs’ application) were very carefully drafted. Indeed, the admissions were so oblique that their full effect was only identified after Mr Young made it clear in Court on 23 December 2010 that the evidence properly enabled a finding that it was Ms Wainwright who took the unauthorized third party access.

[46]     My preliminary comments on costs notwithstanding, I will hear the parties on the issue of costs and as to the other specific orders I should make to reflect the decision contained in these Reasons.   

 



[1]     (1984) 156 CLR 414 at 437-438

[2]     Meagher, Gummow and Lehane’s “Equity - Doctrines and Remedies”, Fourth Edition, Butterworths Lexis Nexis Australia, 2002, authors R P Meagher, J D Heydon and M J Leeming. See also Derby & Co Ltd v Weldon (No 8) [1990] 3  All ER 762; [1991]1 WLR 73; and Hooker Corp Ltd v Darling Harbour Authority (1987) 9 NSWLR 538 at 544 – both cases referred to at para [41-130] of Meagher, Gummow and Lehane. 

 

[3]     See G. Breschi & Son v A.F.T. and Ors [1988] VR 109, per Gobbo J.  

[4]        (1959) 101 CLR 298 at 312

[5]    A statement quoted with approval by the joint judgment of the High Court in RPS v R [2000] HCA 3; (2000) 199 CLR 620 at [26]

 

[6]        See NT Criminal Code s 267B. Clayton Utz referred to a possible offence against this section in its letter dated 14 October 2010, exhibit “MSS-11” to the Affidavit of Mark Scott Sullivan sworn 6 November 2010.