Whangarei steel fabricators Donovan Group descended on a new start-up established by former general manager Haemish Reid armed with a High Court order to seize all evidence of confidential information and customer data allegedly taken by Mr Reid when he left Donovan Group four months previously.
The High Court was told Mr Reid left Donovan Group in May 2018. He had been employed for over six years. Donovan designs, manufactures and constructs steel-framed buildings under its Coresteel brand. When giving notice, Mr Reid said he wanted to ‘take a new direction and face new challenges’. Donovan Group alleges this new direction involves setting up in direct competition using confidential information taken from the company. The High Court was told Mr Reid set up Smartsteel Buildings Ltd in conjunction with former Donovan roofing sub-contractor, Brett Waldron. Smartsteel was established at the time Mr Reid was giving notice. Donovan Group alleges Mr Reid and Smartsteel are using confidential information about its client database, suppliers, pricing and construction methods all in direct breach of a confidentiality clause in Mr Reid’s employment contract. Evidence was given of client information on Mr Reid’s company smartphone being manipulated before the phone was surrendered when he left. There was also evidence of critical information on the company’s database being deleted.
Justice Toogood ruled Donovan Group had a strongly arguable case that Mr Reid, Mr Waldron and their companies were making use of confidential information. Donovan Group claims the actions of Mr Reid and Mr Waldron amount to conversion of confidential information and conspiracy by unlawful means to damage its business. Justice Toogood authorised Donovan Group to seize without notice any equipment and electronic records they held containing confidential information. Ongoing use of this information was prohibited.
In the last twelve months, Donovan Group appointed to its board directors resident in Australia and Hong Kong.
Donovan Group NZ Ltd v. Reid and others – High Court (19.10.18)
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