While a clause which sought to shift the burden for proving that information is not confidential from the discloser to the recipient came very close to ousting the jurisdiction of the courts, it was not a substantial fetter on the party to have the Court determine the truth, because the party which bore the onus would be able to discharge that onus. Any attempt to reverse an onus of proof should be very carefully drafted, to ensure the Court’s jurisdiction is not supplanted.
Mr Batson entered into an Employee Intellectual Property Agreement (EIPA) with Pet Tech Pty Ltd (Pet Tech). The EIPA contained confidentiality and non-competition clauses including the following: ”I have the burden in any dispute of showing that information is not JobReady Solution’s [Pet Tech’s trading name] confidential information” which sought to shift the onus of proof from Pet Tech to Mr Baston.
Pet Tech purported to terminate Mr Batson’s employment contract for conduct issues. Mr Batson sued for wrongful dismissal and the proceedings were settled. Pet Tech then sought an order that Batson be restrained from using confidential information and deliver any such documents back to Pet Tech.
Young AJ noted that there was no reported authority on whether a provision in a contract which purports to shift the onus of proof in civil proceedings will be void as ousting the jurisdiction of the court. However, Young AJ:
- referred to Dobbs v National Bank of Australasia in which the High Court highlighted the distinction between negative restrictions upon the right to invoke the court’s jurisdiction (which have always been invalid as being against public policy) and positive provisions giving efficacy to the award of an arbitrator or independent expert where the court would normally adjudicate (which the law does not discourage). However, his Honour noted that the current scenario did not fit squarely into either category;
- noted that it is at least arguable that a contractual provision that places a substantial fetter on the right of recourse to the courts is equally as bad as an express prohibition against going to court; and
- found that while the clause shifting the onus of proof in relation to confidential information from Pet Tech to Mr Baston came very close to ousting the jurisdiction of the Court (as it virtually means that anything Pet Tech says is confidential must be accepted by the Court unless the contrary is proved), it was not a substantial fetter on the Court determining the truth of the matter because the party who bore the onus (Mr Baston) was still at liberty to discharge it.
The proceedings were ultimately dismissed on the basis that Pet Tech had failed to identify with specificity the confidential information said to have been disclosed and there was insufficient material to show that such information was in Mr Batson’s possession.
See the case.