Willie Grant is the Sales Director of Down Under Drams - an importer of high-quality whiskies from around the world. It is a niche supplier (so far exclusive in Australia but not elsewhere in the world) of a unique drop known as 'Hebridean Gold', which is sourced from a little-known distillery on the remote Scottish island of Wee Toddy. This fact is not well known in the general marketplace, and Down Under Drams' MD and owner, Johnnie Williams, has repeatedly emphasised to all his senior staff that the Wee Toddy source is confidential information and must be treated as such.

Willie sees an opportunity in the industry, leaves 'Down Under Drams' and sets up his own whiskey importing business - Magic Malts. Shortly thereafter, having travelled to Wee Toddy, he starts flooding the Australian market with a new expression - 'Islanders Joy', which he has sourced from the Wee Toddy distillery. It tastes just like 'Hebridean Gold' but it retails for considerably less.

Johnnie Williams is outraged and desperate to sue Willie, whom he believes is in breach of both his implied common law contract term of confidentiality (there is no written confidentiality covenant) and s. 183 of the Corporations Act 2001. That section provides, in summary, that a person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to either gain an advantage for themselves or someone else or cause detriment to the corporation.

DISCUSSION QUESTIONS

1 What will Johnnie be required to show before his threatened actions can succeed?

2 What difference might a written confidentiality covenant have made?

3 Could Down Under Drams have imposed a post-employment restraint preventing Willie competing with it anyway?