City Site Solutions Limited v Liam Baker & Ors

Interim injunctions may be granted where the claimant shows a serious issue to be tried, damages are inadequate and the balance of convenience favours relief. For mandatory relief, the court should assess the risk of injustice and may require a high degree of assurance that the claimant will succeed.

Post-termination restrictions are enforceable where they protect legitimate interests and are no wider than reasonably necessary. Springboard relief requires unlawful use of confidential information, an existing unfair competitive advantage and a continuing risk that the advantage will persist without relief. Disclosure orders must assist enforcement or undoing harm and must not become an inquisitorial demand for a defendant’s entire wrongdoing.

The claimant employment business alleged that three former employees had misappropriated confidential information and joined a rival company established by the first defendant. It sought interim injunctions against the first and fourth defendants, including protection of confidential information, affidavit disclosure, device and account imaging, enforcement of post-termination restrictions and springboard relief.

The court also considered challenges concerning notice, the pleaded basis of the claim, the first defendant’s employment contract, alleged constructive dismissal, alleged unlawful access to personal email and the width of the restrictions. Consent orders resolved the claims against the second and third defendants. The central issues were whether interim relief was justified and what form it should take.

1. Interim relief. The American Cyanamid approach was applicable. The claimant had a serious issue to be tried, damages were inadequate and the balance of convenience favoured relief. The court also had a high degree of assurance that the claimant would establish its contractual and duty-based claims. The same conclusion followed under the more onerous approach for mandatory injunctions, because refusal carried the greater risk of injustice.
2. Contract and restrictions. The evidence justified the interim conclusion that the first defendant had worked under the September 2021 contract, including its confidentiality obligations and post-termination restrictions. The constructive dismissal case was not sufficiently compelling to displace that conclusion. The restrictions were sufficiently clear, protected legitimate interests and were likely to be shown to be no wider than reasonably necessary. They were enforced in modified form.
3. Confidential information and disclosure. Orders for preservation, delivery up and affidavit evidence were justified. The affidavit order was confined to information needed to give effect to the injunction or undo the alleged harm. Requirements to disclose all steps taken to establish a competing business, and all related contacts and solicitations, crossed into an impermissible inquisitorial exercise and were excluded.
4. Imaging and springboard relief. Focused imaging of devices and accounts was necessary to secure the claimant’s confidential information. Springboard relief required unlawful use, an unfair competitive advantage and an advantage continuing when relief was sought. Those requirements were met on the interim evidence, but relief was limited to one month after affidavit disclosure or further order and did not prohibit the fourth defendant from employing the first defendant.
5. Orders. Injunctive relief was granted in the approved modified form. Directions were given for a speedy trial. Costs between the claimant and the first and fourth defendants were reserved for determination on paper.