ICAP Australia Pty Limited v BGC Partners (Australia) Pty Limited [2005] FCA 130 (18 February 2005)

ICAP Australia Pty Limited v BGC Partners (Australia) Pty Limited [2005] FCA 130

EMPLOYMENT -- Employees resigning without notice - whether inducement to breach contract of employment - "springboard" or "headstart" principle – special services

INJUNCTION – interlocutory – restrain from employing - serious question – balance of convenience – probability of injunctive relief at final hearing

Corporations Act 2001 (Cth) – ss 182, 183 and 1324

Barnes v Addy (1874) LR9ChApp 244 referred to
Capgemini US LLC v Case [2004] NSWSC 674 applied
Consolidated Paper Industries Pty Limited v Matthews [2004] WASC 161 referred to
Curro v Beyond Productions Pty Limited (1993) 30 NSWLR 337 referred to
Faccenda Chicken Limited v Fowler & Ors [1986] 1 All ER 617. referred to
Industrial Rollformers Pty Limited v Ingersoll-Rand (Australia) Limited [2001] NSWCA 111 referred to
Lumley v Wagner [1852] EWHC J96 (Ch); (1852) 42 ER 687 referred to
O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 applied
Saltman Engineering Co Limited v Campbell Engineering Co (1948) 65 RPC 203 referred to
Terrapin Limited v Builders’ Supply Co (Hayes) Limited (1967) RPC 375 referred to
Thomas Marshall (Exports) Limited v Guinle [1979] 1 Ch 227 referred to
United States Surgical Corporation v Hospital Products International Pty Limited (1983) 2 NSWLR 157 referred to

ICAP AUSTRALIA PTY LIMITED v BGC PARTNERS (AUSTRALIA) PTY LIMITED AND ORS
N 115 of 2005

JACOBSON J
SYDNEY
18 FEBRUARY 2005

BETWEEN:	ICAP AUSTRALIA PTY LTD (ACN 002 216 944) Applicant
AND:	BGC PARTNERS (AUSTRALIA) PTY LIMITED (ACN 092 873 099) First Respondent MARK WEBSTER Second Respondent MARTIN O'BRIEN Third Respondent STEPHEN KENT Fourth Respondent BILLY EL-AKHRAS Fifth Respondent JOHN GAVIN DOUGLASS Sixth Respondent GAYE LOUISE ANABLE, RODNEY CRAIG BROWN, JUSTIN BUCHANAN, BEN ELLBOGEN, JAMES FAY, ROBERT GRIECO, GRANT KULL, CHRIS MAYHEAD, MICHAEL ROCHE, GLEN SOUTHEREN, ADAM JOHN TURNBULL, LLOYD WILCOX Seventh to Eighteenth Respondents ADRIAN FERNLEY Nineteenth Respondent MURRAY HETHERINGTON, ANTHONY HERBERT, MATTHEW GRANT, MARK MIKOLAITIS Twentieth to Twenty-Third Respondents
JUDGE:	JACOBSON J
DATE OF ORDER:	18 February 2005
WHERE MADE:	SYDNEY

1. The first respondent, by itself and its servants and agents, be restrained, until the conclusion of the trial of this matter or further order of the Court, from inducing or procuring any breach of a contract of employment between ICAP Australia Pty Limited (‘ICAP’) on the one hand and any of its employees in Australia who continued to provide services to ICAP as at 4:00pm on 28 January 2005 on the other including but not limited to any breach of a term requiring the employee to continue to provide services as an employee during the specified notice period in their employment contract.

2. The fifth respondent, by himself, his servants and agents, be restrained, until the conclusion of the trial of this matter or further order of the Court, from using, copying, distributing, or in any other way dealing with the documents comprising the information in Schedule B to the Orders made by Justice Hely on 28 January 2005 ("Schedule B Information").

3. The fifth respondent, by himself, his servants and agents, be restrained, until the conclusion of the trial of this matter or further order of the Court, from removing, deleting, destroying, overwriting, manipulating, or altering in any way the information in Schedule B to the Orders made by Justice Hely on 28 January 2005 in his possession, custody or control, including copies stored on any personal, laptop, notebook or other computer, hard disk drive, floppy disk, Compact Disk, Digital Versatile Disk, tape drive or other device capable of storing or recording data or information by mechanical or electronic means ("Computer or Storage Device") in his possession custody or control.

4. The sixth respondent, by himself, his servants and agents, be restrained, until the conclusion of the trial of this matter or further order of the Court, from using, copying, distributing, or in any other way dealing with the documents comprising the information in Schedule C to the Orders made by Justice Hely on 28 January 2005 ("Schedule C Information").

5. The sixth respondent, by himself, his servants and agents, be restrained, until the conclusion of the trial of this matter or further order of the Court, from removing, deleting, destroying, overwriting, manipulating, or altering in any way the information in Schedule C to the Orders made by Justice Hely on 28 January 2005 in his possession, custody or control, including copies stored on any personal, laptop, notebook or other computer, hard disk drive, floppy disk, Compact Disk, Digital Versatile Disk, tape drive or other device capable of storing or recording data or information by mechanical or electronic means ("Computer or Storage Device") in his possession custody or control.

7. Pursuant to s 50 Federal Court of Australia Act 1976 (Cth), access to Exhibit ICAP4 is restricted to the parties and the external solicitors and counsel for the parties.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

BETWEEN:

ICAP AUSTRALIA PTY LTD
(ACN 002 216 944)
Applicant

AND:

BGC PARTNERS (AUSTRALIA) PTY LIMITED
(ACN 092 873 099)
First Respondent

MARK WEBSTER
Second Respondent

MARTIN O'BRIEN
Third Respondent

STEPHEN KENT
Fourth Respondent

BILLY EL-AKHRAS
Fifth Respondent

JOHN GAVIN DOUGLASS
Sixth Respondent

GAYE LOUISE ANABLE, RODNEY CRAIG BROWN,
JUSTIN BUCHANAN, BEN ELLBOGEN, JAMES FAY, ROBERT GRIECO, GRANT KULL, CHRIS MAYHEAD, MICHAEL ROCHE, GLEN SOUTHEREN, ADAM JOHN TURNBULL, LLOYD WILCOX
Seventh to Eighteenth Respondents

ADRIAN FERNLEY
Nineteenth Respondent

MURRAY HETHERINGTON, ANTHONY HERBERT, MATTHEW GRANT, MARK MIKOLAITIS
Twentieth to Twenty-Third Respondents

1 The applicant ("ICAP") seeks interlocutory injunctive relief inter alia restraining the first respondent ("BGC") from employing 20 persons who were employed by ICAP in its broking business in Sydney. The applicant also seeks interlocutory relief against some of the other respondents to the proceedings. I will refer to this below.

2 Hely J granted ex parte injunctions on 28 January 2005 but only until 31 January 2005. On that date certain of the respondents, by consent, but without admissions, gave undertakings to the Court which continued up to 16 February 2005. The hearing of the interlocutory application commenced on 16 February 2005 and, on that day, I granted injunctive relief while the hearing of the interlocutory application continued.

3 The essential facts can be stated quite shortly. On 17 January 2005, 14 employees of ICAP resigned en masse from their employment. The employees comprised the entire futures desk at ICAP’s Sydney office. Their resignations were delivered in a plastic envelope to the company secretary of ICAP by the third respondent, Mr O'Brien. Mr O'Brien was the head of the "futures desk". The 14 employees resigned without any prior notice and refused to work out the notice periods in their respective contracts.

4 There is evidence that on the morning of 17 January 2005, ICAP’s telephones simply did not ring except for one minor instance. This is further evidence of the co-ordinated nature of the contact which took place and points strongly in favour of an inference that the clients of ICAP were contacted prior to 17 January 2005 as part of a co-ordinated plan to take business away from ICAP.

5 On or before 17 January 2005, all of the employees had entered into contracts of employment with BGC. The contracts provided that the provisions of the agreement come into effect on the date of the contract but that employment would commence when the employee was free to do so. The contracts contained indemnities by BGC against liabilities to ICAP arising out of legal proceedings brought by ICAP in respect of the employees commencement of duties with BGC.

6 On the morning of 28 January 2005, five further employees of ICAP walked out. Four of them were employed at the "swaps desk". The fifth was employed at the "bonds desk".

7 ICAP is the Australian subsidiary of the ICAP Group which carries on business internationally in broking services between banks. It claims to be a worldwide leader in the business.

8 In its Sydney office, ICAP’s business is conducted from a number of desks including a futures desk, a swaps desk and a bonds desk.

9 BGC does not have a broking operation in Australia apart from what appears to be a minor line of business.

10 BGC is a subsidiary of the Cantor Fitzgerald Group of companies which carries on business internationally in competition with the ICAP Group.

11 The evidence before me on this application suggests that the employee walk-outs of 17 and 28 January 2005 were the consequence of a well orchestrated raid on ICAP’s business, in particular on its futures desk.

12 BGC has yet to file evidence in the proceedings but on the material before me, BGC did not have employees in Australia to establish a broking desk. The position before 17 January 2005 was that ICAP had an established business whereas BGC did not.

13 Moreover, ICAP’s evidence establishes a serious question to be tried that BGC induced the 20 employees to walk out of their employment with ICAP in breach of their existing contracts of employment.

14 Upon the evidence to date it would appear that the second respondent, Mr Webster, who was up until about 19 January 2005 a director of ICAP, and Mr O'Brien, as head of the futures desk, were the agents of BGC who induced many of the employees to breach their contracts.

15 The fourth respondent, Mr Kent, who was a director of ICAP until 18 January 2005, also appears to have been involved in the recruitment. However his efforts to entice a senior employee, Mr McMurdy, were unsuccessful.

16 The fifth respondent, Mr El-Akhras, was a senior employee in the IT department of ICAP. He resigned and walked out as an employee on 18 January 2005. The evidence establishes that Mr El-Akhras is required by BGC to set up their IT operations. IT services are an essential part of a broking business.

17 Mr El-Akhras would appear to be ideally placed to set up BGC’s IT services along the lines of those in operation at ICAP.

18 Shortly before Mr El-Akhras’ departure from ICAP, he emailed himself a number of documents which would appear to have been intended to assist him in his new employment.

19 ICAP seeks orders restraining Mr El-Akhras from using those documents. ICAP also seeks orders restraining Mr El-Akhras from removing or altering the information on his computer.

20 Mr El-Akhras consents to those orders but he does not consent to more extensive orders which are sought by ICAP for the purpose of accessing imaging and analysing all of the information on his computer and its hard drive.

21 The sixth respondent, Mr Douglass, was a member of ICAP’s futures desk. There is evidence that before his departure he sent two documents by email to an address believed to be associated with him.

22 ICAP seeks similar orders against Mr Douglass to those sought against Mr El-Akhras. Mr Douglass agrees to the orders restraining him from using the documents and from removing or deleting information on his computer. He opposes the more invasive orders.

23 Although BGC did not file evidence, it would appear from material put in cross-examination to Mr Lockhart, the CEO of ICAP, that the wave of resignations may have come about as a consequence of actions taken by an ICAP Group company in Hong Kong.

24 It would appear from what I have heard in a very preliminary way that Mr Webster was particularly upset about what occurred in Hong Kong because of the apparent impact that this had on Mr Webster's position with ICAP. It also appears that at least some ICAP employees sympathised with Mr Webster and that this had an impact upon morale in the workplace at ICAP.

25 On 14 December 2004 or 15 December 2004, Mr Webster handed Mr Lockhart a letter dated 14 December 2004 in which he alleged that his contract of employment had been repudiated by ICAP and that he accepted the repudiation. He did not formally resign from his directorships until 19 January 2005 although he effectively left ICAP’s employ on or about 15 December 2004.

26 The events which took place in Hong Kong, the departure of Mr Webster, and the effect thereon upon the workplace morale in ICAP’s Sydney office are matters which will have to be explored at a final hearing.

27 They do not excuse inducement of breach of contract if that is what indeed occurred but the full circumstances will need to be considered before findings can be made. Moreover, the events in all their detail will bear upon the quantum of any damages which may be awarded.

28 The effect of what took place on 17 January 2005 and 28 January 2005 is that ICAP does not have a futures desk. It has also lost four members of its swaps desk. The four employees included Mr Mikolaitis who was the head of the swaps desk and Mr Heatherington who was the second most senior person.

29 Mr Mikolaitis resigned on 30 December 2004 but was serving out his notice period before he walked out on 28 January 2005 with the three other employees.

30 A number of other employees remain on ICAP’s swaps desk, but there is evidence of a substantial fall off in the volume of business since the departure of Mr Mikolaitis and Mr Heatherington and the other employees on 28 January 2005.

31 The twentieth employee to leave is Mr Fernley. He was a member of ICAP’s bonds desk. He was the only member of that desk to depart. He resigned on 19 January 2005 and walked out on 28 January 2005.

32 By contrast with ICAP’s position, BGC is now in a position where it has an entire futures desk, namely, the ICAP futures desk employees (or former employees) on contract and ready to man the desk as soon as they are free from legal restraint.

33 BGC has also obtained the contractual entitlement to Mr El-Akhras’ services on the same basis, so as to enable BGC to establish the necessary IT services to conduct a broking business.

34 What is more, BGC is in a position to conduct the business of a futures desk free from competition from ICAP; at least on the evidence thus far before me, and at least until such time as ICAP is able to re-establish a futures desk.

35 BGC pointed to evidence that some futures trades had been conducted by ICAP through its New Zealand arm since the events in question. BGC also pointed to the international nature of ICAP’s business and the potential to conduct the business through other international offices, such as London.

36 I do not consider that this submission should be given much weight notwithstanding the concessions obtained on cross-examination of Mr Lockhart, He was unable to offer evidence as to what business might have been done through offices apart from New Zealand.

37 It seems to me that the short answer to this is that the ability to conduct business out of the Sydney office must be of some value. I would ask, rhetorically, why else BGC seeks to establish a broking business in Australia? There is considerable tension in the proposition that BGC can take the entirety of ICAP’s Sydney futures desk while suggesting that ICAP is not really disadvantaged because it can simply redirect the business through other international offices.

38 On the evidence before me to date, the adverse impact on ICAP’s futures business seems obvious.

39 The evidence of the business conducted through New Zealand is that the value of the transactions is negligible. There is also some evidence, as I have said, of a downturn in swaps business, although the evidence covers only a short period.

40 Mr Lockhart, the CEO of ICAP, gave evidence that it will take at least six months from 17 January 2005 to rebuild the futures desk and make it competitive with BGC.

41 In the substantive proceedings, ICAP seeks injunctive relieve which would have the effect of restraining BGC from employing the ICAP employees until 31 July 2005.

42 ICAP submits that there are three serious questions to be tried which would ground interlocutory relief, and it says that the balance of convenience favours the grant of relief.

43 First, ICAP says that there is a serious question that BGC induced the ICAP employees to breach their employment contracts by walking out without notice.

44 Second, ICAP contents that the springboard principle stated in Saltman Engineering Co Limited v Campbell Engineering Co (1948) 65 RPC 203 ("Saltman"), Terrapin Limited v Builders’ Supply Co (Hayes) Limited (1967) RPC 375 ("Terrapin"), and United States Surgical Corporation v Hospital Products International Pty Limited (1983) 2 NSWLR 157 ("Hospital Products"), ought to permit the Court to mould injunctive relief to prevent BGC from obtaining an unjustifiable headstart which it would otherwise obtain by virtue of inducements of breach of contract and knowing involvement in contravention by officers of ICAP of the provisions of ss 182 and 183 of the Corporations Act 2001 (Cth) ("the Act").

45 ICAP calls in aid the provisions of s1324 of the Act to seek relief from BGC for BGC’s alleged knowing involvement in the breaches of the Act by the ICAP employees.

46 Third, it is said that the ICAP employees breached their fiduciary duties to ICAP and that BGC apparently had some involvement in this. The submission was not at the forefront of the application but presumably relied upon one or other of the limbs of Barnes v Addy (1874) LR9ChApp 244, although that was not mentioned in argument.

47 It is plain that in a practical sense the decision to grant or refuse interlocutory relief in the present case will determine the substance of the claim for injunction. This is because ICAP seeks injunctive relief pending the final determination of the proceedings. After some debate between the parties about the possibility of an early final hearing I do not consider that a trial date could be set until after 31 July 2005.

48 It follows in those circumstances that I must evaluate the strength of ICAP’s case for final relief in order to determine where the balance of convenience lies. See Kolback Securities Limited v Epoch Mining (1987) 8 NSWLR 533 at 536.

49 Whilst I have said there is a serious question that BGC induced breaches of contract, the strength of the case at the present stage of the proceedings rests on inferences to be drawn from the events of 17 January 2005 and 28 January 2005 and, of course, from the fact that all employees have signed contracts with BGC.

50 The indemnities in the BGC employment contracts and the events surrounding the signing of those contracts point in favour of inducement of breach of contract as contended by ICAP.

51 But the question which arises on the interlocutory application is not so much the strength of the prime facie case of inducement but whether there is a probability, to a sufficient degree, that at the trial of the action injunctive relief will be ordered. See Castlemaine Tooheys Limited v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153 ("Castlemaine Tooheys").

52 There, Mason CJ also drew attention to the need for an applicant to show that it will suffer irreparable injury for which damages will not be an adequate remedy and, of course, that the balance of convenience favours the grant of an injunction.

53 The difficulty which is immediately apparent in ICAP’s claim is that the contracts which it held with four members of the futures desk contained notice provisions entitling them to give one month's notice of termination of their contracts. These persons are, Mr Fay, Mr Brown, Mr Southeren and Mr Buchanan.

54 In my opinion, the resignations tendered by those employees on 17 January 2005 amounted to notice under their contracts. I do not consider that any degree of formality was required and they must be taken to have given notice on that date, albeit that they refused to continue to serve during the notice period.

55 Thus, the employment of Messrs Fay, Brown, Southeren and Buchanan came to an end on 17 February 2005.

56 Moreover, two further employees of the futures desk, the fourteenth respondent, Mr Mayhead, and the eighteenth respondent, Mr Wilcox, also have short periods of notice in their contracts of employment with ICAP. The notice period in each case expires on 26 March 2005.

57 It was not put to me that there are any contractual restrains in any of the contracts which would preclude the employees from working with BGC after the expiration of their contracts with ICAP.

58 It would seem to me to follow that by no later than 26 March 2005, and indeed perhaps today, BGC has the ability to put together a nucleus of a team which would commence to work on its proposed futures desk.

59 Three other former members of ICAP’s futures desk have periods of notice which expire in May and June 2005. They are Ms Anable, Mr Turnbull and Mr Kull.

60 Thus, before the date of the final hearing a total of nine former members of ICAP’s futures desk will be free of contractual restraints precluding them from working for BGC. Again, there was no suggestion of post-contractual restraints applicable to the employees whose contracts expire in May and June.

61 It follows that, subject to what was submitted in relation to the springboard principle, there is no real likelihood of injunctive relief on a final basis against nine of the fourteen members of ICAP’s futures desk.

62 There seems little doubt, at least on the evidence to date, that BGC would obtain a substantial headstart over ICAP by reason of the recruitment of ICAP’s futures desk employees in the circumstances which I have outlined above. In Hospital Products, at 229 – 230, the New South Wales Court of Appeal said that in a footnote to the argument in the UK Court of Appeal in Terrapin, Roxburgh J is recorded as having said the following about the decision in Saltman:

63 After reviewing the authorities on the springboard principle, the New South Wales Court of Appeal in Hospital Products said at 233:

64 ICAP relies on the principles stated above as authority for the proposition that BGC ought to be placed under a special disability for the period necessary to enable ICAP to re-establish its futures desk so as to ensure that BGC does not get an unfair start. ICAP submits on the authority of what was said in Hospital Products that a suitable injunction could be moulded to ground such relief. ICAP also submits that this relief could extend not merely to those employees whose contracts continue after 31 July 2005 but, indeed, to the four employees whose contracts have already expired as well as those whose contracts expire on 26 March 2005 and in May and June 2005.

65 That proposition seems to me to be a surprising one, but the short answer to it is that I do not consider that the authorities establish that the springboard doctrine extends beyond the field of confidential information. At least, I am not satisfied that there is a sufficiently strong arguable case to warrant this matter forming the basis for injunctive relief having regard to the principles stated by McLelland J in Kolback Securities.

66 I should observe that in the present case, apart from the particular items of what may be confidential information taken by Mr El-Akhras and Mr Douglass, it is not suggested that there is any other species of confidential information sufficient to meet the test stated by the High Court in O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 at 328; see also Industrial Rollformers Pty Limited v Ingersoll-Rand (Australia) Limited [2001] NSWCA 111 at [78] ("Ingersoll").

67 As to the information sent by Mr El-Akhras and Mr Douglass to their home computers, there was no explanation as to why it was said that the information contained in those documents is confidential. I am not satisfied that in any event, the sending of that information would of itself be sufficient to warrant an application of the springboard principle in the present case. Moreover, there is no basis for me to conclude that the documents, even if they contained confidential information, have been misused. ICAP has already sought and obtained orders requiring Mr El-Akhras and Mr Douglass to file and serve affidavits stating what they have done with the documents. In compliance with those orders both respondents filed affidavits explaining their positions and confirming that no one, including them, has accessed the documents and that they consent to the documents being permanently deleted by ICAP.

68 So far as the gravamen of the case that was put on behalf of ICAP, it was not suggested that the line was crossed between the distinction that exists between information which forms part of an employee's stock of general knowledge and information which can be fairly regarded as the property of the employer: see Consolidated Paper Industries Pty Limited v Matthews [2004] WASC 161 at [77] and Faccenda Chicken Limited v Fowler & Ors [1986] 1 All ER 617.

69 ICAP relied on Ingersoll as authority for the proposition that the springboard principle has been recognised outside the field of confidential information. Reference was made in particular to the observations of Giles JA at [182] - [184].

70 However, in my opinion Giles JA merely referred to the springboard principle in those paragraphs for analogical support to read down the terms of a contractual restraint of trade under the Restraint of Trades Act 1976 (NSW).

71 Hartley’s Limited v Yukich [2002] VSC 368 ("Yukich"), on which ICAP also relied, does not in my view assist ICAP because it turns substantially upon a restraint on the use of confidential information.

72 It is true that in Yukich, McKechnie J restrained the defendant in that case from employing a number of employees of the plaintiff until after the termination of their contracts of employment. In doing so his Honour referred to a passage from Thomas Marshall (Exports) Limited v Guinle [1979] 1 Ch 227 at 243 in which Megarry VC rejected the doctrine of automatic determination of the employees obligations to his or her employer. Nevertheless, it seems to me that the question of whether ICAP can obtain orders having the effect of preventing BGC from employing persons whose contracts have yet to expire from working for BGC, turns on whether the services are special services.

73 ICAP relied on the principle of "special services" referred to by the New South Wales Court of Appeal in Curro v Beyond Productions Pty Limited (1993) 30 NSWLR 337 at [346] - [347] to support the proposition that an injunction will be granted under the doctrine in Lumley v Wagner [1852] EWHC J96 (Ch); (1852) 42 ER 687. However, I am not satisfied that there is a strong case that the services of any of the employees on the futures desk or of the members of the swaps desk are special services. The same applies to Mr Fernley.

74 The effect of the authorities appears to be that the doctrine of special services has thus far been confined to persons in the entertainment and sporting fields. Campbell J referred to the authorities in Capgemini US LLC v Case [2004] NSWSC 674 at [21] – [24].

75 His Honour said at [29] that the absence of a person from the work team would be a decided disadvantage to the employer in that case but it would not make performance of the contract impossible. In my view the same can be said in the present case.

76 Whilst it may take at least six months to replace the entirety of the futures desk it is not established that it would be impossible to hire, or deploy staff from other centres, to work on the futures desk.

77 The following propositions seem to me to be fatal to ICAP’s claim for interlocutory relief. First, the springboard doctrine does not apply outside the field of confidential information or at least there is not a sufficiently strongly arguable case that the doctrine applies. Second, the employees of the futures desk do not fall within the doctrine of special services or again, there is not a sufficiently strong arguable case to that effect. Third, the same applies to the employees of the swaps and bonds desks.

78 Once it becomes plain that six employees of the futures desk are free to work for BGC by 26 March 2005, the balance of convenience strongly favours the refusal of injunctive relief.

79 I do not consider that the alternative ways in which ICAP put the serious question alters the result. As to ss 182, 183 and 1324 of the Act, it has not been demonstrated how these sections can be relied upon to ground an injunction which would prevent BGC from retaining the services of former employees of ICAP after the term of their employment with ICAP has expired.

80 It seems to me that even if s 1324 of the Act would otherwise be enlivened, I would refuse relief on discretionary grounds, in particular, because I can see no basis for preventing the employment of persons whose terms of employment with ICAP have or will shortly expire.

81 It was not explained how the serious question framed in terms of a breach of fiduciary duty and participation in it advances ICAP’s case beyond the difficulties to which I have referred.

82 Finally, I do not see that ICAP has established that damages are not an adequate remedy. ICAP has had, at least until 17 January 2005, an established futures desk business. The business was built up over about three years from 2001. ICAP also had and continues to have, though perhaps in truncated form, the business it conducts through its swaps and bonds desks.

83 I see no reason why ICAP should not be able to calculate the quantum of its claim in the ordinary way when the matter comes on for hearing. Nothing in Mr Lockhart's evidence satisfied me that ICAP would not be able to determine the measure or quantum of its loss. BGC apparently intends to defend any claim for damages for inducement of breach of contract. The matter is, of course, at a very early stage but I note that ICAP’s claims include a claim for exemplary damages. I would observe, but of course only in a preliminary way upon the material so far placed before me by ICAP, that if BGC is unsuccessful the damages could be substantial.

84 I turn then to the list of orders sought in draft short minutes of order placed before me by counsel for ICAP. I will use the numbers in the draft orders and deal with them seriatim. Order 5 seems to me to be appropriate because it relates only to employees in Australia who continued to provide services to ICAP as at 4 p.m. on 28 January 2005. There is, as I have said, an arguable case of inducement of breach of contract by BGC through its agents and I am therefore of the view that there is a sufficient threat to induce further employees to breach their contracts and I would therefore make order 5.

85 For the reasons I have given above, I will not make order 6. Order 7 was not pursued. For the reasons I have given above I would not make order 8. Order 9 seems to me to be superfluous in view of the fact that I have made the order which was sought in paragraph 5. The same applies to order 10. Orders 11 and 12 are directed at Mr Kent. Whilst there is evidence of his attempt to entice Mr McMurdie to leave the employ of ICAP, I do not think there is sufficient evidence of an ongoing threat to warrant making orders 11 and 12. Orders 13 and 14 were not pursued.

86 The fifth respondent, Mr El-Akhras, consents to orders 15 and 16 and I will therefore make those orders. Orders 17 and 18 do not seem to me to be called for. They are draconian orders which seem to me to be in the nature of a fishing expedition. As I have said, an affidavit has been filed by Mr El-Akhras. Discovery will no doubt be ordered in due course. I will not make orders 17 and 18. The sixth respondent, Mr Douglas, consents to orders 19 and 20 and I will make those orders. The observations which I have made about the orders sought in 17 and 18 apply to orders 21 and 22 and I will not make those orders.

87 Finally, I should make an order that the application for interlocutory relief be otherwise dismissed. The appropriate order is that the applicant pay the costs of the interlocutory application.

88 I will make an order under s 50 of the Federal Court of Australia Act 1976 (Cth) that access to exhibit ICAP4 be restricted to the parties and the external legal advisers to the parties and that it not otherwise be made available.

Counsel for the Applicant:	Mr J Marshall and Ms E Collins

Solicitor for the Applicant:	Minter Ellison

Counsel for the 1^st Respondent:	Mr S Rushton SC and Mr M R Elliott

Solicitor for the 1^st Respondent:	Horton Rhodes

Counsel for the 2^nd – 23^rd Respondent:	Mr N Hutley and Mr S J Burchett

Solicitor for the 2^nd – 23^rd Respondent:	Clayton Utz

Date of Hearing:	16-17 February 2005

Date of Judgment:	18 February 2005

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 115 of 2005

JUDGE:	JACOBSON J
DATE:	18 February 2005
PLACE:	SYDNEY