AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD v. CHEN, KUEI MEI(ALSO KNOWN AS KEMY CHEN)

HCA 1674/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1674 OF 2014

_____________

1.  On 29 August 2014 Mimmie Chan J granted to the plaintiff an interim injunction which ordered the defendant not to use or disclose, other than for personal reasons, any confidential information acquired by her in the course of her employment by the plaintiff bank, which was specified in the order and related to customers of the bank which she had uploaded onto her personal e‑mail record from her employee’s e‑mail record. The order also repeated the non‑solicitation clause in her contract of employment.

2.  The matter came before me on 25 September 2014 and I continued the injunction after hearing argument from both sides and reviewing the affidavit evidence.  I said that I would also give reasons, in brief, for my decision.  One of my motives for this was to lend some aid to a swift termination of this litigation in the interests of the defendant who has in my view, as I expressed to Mr Frederick Chan, her counsel, no defence to the plaintiff’s claim on her own evidence, and is in need of firm, realistic advice.

3.  The defendant commenced work with the ANZ Bank in 2010.  By the time she ceased to be so employed, in June/July 2014, she had attained the position of Senior Relationship Manager.  She had in fact been employed by the Royal Bank of Scotland whose Hong Kong operations were acquired by the plaintiff bank following the ABN/AMRO takeover/merger.

4.  By letter dated 24 June 2014 she gave notice of her resignation; a one month period of notice operated, and she was placed on “garden leave” for that interim. 

5.  Subsequent to that, the plaintiff ascertained that she had sent confidential information to her personal e‑mail address without authorisation.  As a result, on 29 July 2014, the plaintiff dismissed her summarily, with effect from 24 July 2014, on the grounds of her misconduct.  The letter was in fact written confirmation of the decision communicated to her orally on 24 July in a telephone conference with six bank employees including the Head of Legal Asia, Benjamin Payne.

6.  During that conference she gave oral promises to the effect that she had not transmitted any of the confidential information to any other destination, e‑mail or otherwise, that no one else had access to her e‑mail account, she had not copied any of the confidential material, had not contacted any of the customers of the ANZ Bank and had not divulged any of the material to anyone else.

7.  She then made a written statement signed by her and dated 24 July 2014, the day of the telephone conference.  It was an admission of having forwarded confidential customer information to her personal e‑mail account having, she wrote, “inadvertently violated the company’s data protection policy.”  How this could have been done inadvertently, given the clear policy of the plaintiff bank, is somewhat puzzling.  I will deal with this later.  She confirmed in writing the oral promises she had made in the conference and concluded that her “ill‑conceived behaviour was indeed inappropriate.”  Later she added:

“I deeply regret and sincerely apologise for the inconvenience caused to the company.”

The original statement was in Chinese but the English translation is agreed by the parties.

8.  On the strength of this unequivocal admission the Bank drafted a statutory declaration for the defendant to make.  This was entirely reasonable and indeed a prudent course to take so that the bank could fully protect itself in respect of its customers whose confidential data had been compromised, and its regulatory body which would require to be assured that the bank had taken all proper and necessary steps to prevent or limit any consequential damage, and acquaint its customers with the facts of the situation.

9.  Unfortunately the defendant was not willing to make the sworn declaration after consulting solicitors.  If she was advised not to be sworn to it, that was bad advice.  If for some reason she decided of her own accord, to resile from the essence of her written statement of admission, that was a serious error of judgment which set in train this litigation which she could so easily have avoided. 

10.  Eventually she offered to be sworn to a form of statutory declaration which she had, perhaps on advice, amended to exclude quite unnecessarily, content which simply reflected her own earlier admissions.  This amended form fell far short of what the bank required to show that it had acted effectively to meet its obligations.

11.  Mr Frederick Chan, for the defendant, sought to suggest that the plaintiff’s proceedings, and the steps it took to insist on the swearing of a statutory declaration were quite unnecessary and even unreasonable because the defendant had already made promises and given undertakings which met all that the bank needed. Furthermore, her signed written statement of admission was inaccurate in a number of respects, and it was necessary for her to amend substantially the proposed statutory declaration.  Her affidavit made this contention in the most general of terms.

12.  When I asked Mr Chan in what respects the defendant maintained her written admission was inaccurate or misleading, he replied that he was unable to give evidence “from the Bar table”.  This reply I found quite surprising.  I was not asking him to give evidence but merely to indicate what parts of that written admission she wished to change, modify or correct.  He was unable to do so falling back upon the generality of her contention.

13.  He also sought to place reliance upon the factual matrix and part of the judgments in the English Court of Appeal decision in Caterpillar Logistics Services (UK) Ltd v Huesca de Crean [2012] EWCA Civ 156, referred to as the Caterpillar case.  A careful consideration of the headnote in that decision makes it clear that its factual matrix in all material respects was so far removed from the case which I am considering that I find it to be of no assistance to me at all.

14.  The plaintiff prepared a chronology for this hearing.  I had considered it before the hearing together with other papers. I asked Mr Chan, at the outset, whether he agreed that chronology, particularly covering the period 3 June 2014 to 29 July 2014.  Although understandably keen to embark upon his argument for the plaintiff, he did in fact concede that it was an accurate statement of the activity between those dates.

15.  Because I regard those events and facts of crucial significance, I will set them out with comments on them in the relevant timescale:

(1) 3 June 2014.  The defendant signed a consent form for an agency to contact the plaintiff bank for information about her in respect of her new job with the Royal Bank of Canada.

[She had clearly planned to leave the plaintiff bank]

(2) 5/6 June 2014.  The defendant sent 9 e‑mails relating to over 400 of the customers of her existing employer, to her personal e‑mail address from her work e‑mail address.

[This was 2/3 days after taking a step in relation to her new job. It was in breach of her contract employment – viz “Never e‑mail confidential or restricted information to their personal e‑mail account.” It was also the subject of other e‑mail reminder directives to staff although she contends she was not aware of them. Most importantly there can be no reasonable justification for e‑mailing such information to her personal e‑mail when she was about to leave the employer. The only reasonable inference is that she intended to have this information available for her personal use after her employment ended].

(3) The defendant is on block leave for the 2 working weeks immediately following the above transfer.

(4) 25 June 2014.  The defendant gave notice of resignation.

[This was 3 weeks after the above transfer of confidential information in breach of her contract.]

(5) 26 June 2014.  Told she was on gardening leave.  Reminded of continuing contractual obligations including those relating to confidential information.

[She does not remove, delete or destroy any of the information transferred by her 3 weeks earlier.]

(6) 10 July 2014.  The plaintiff discovered the transfers made by her on 5/6 June.

(7) 22 July 2014.  The defendant is informed of this discovery.

(8) 22‑24 July 2014.  She is asked to explain and to sign a statutory declaration.  Summarily dismissed.

(9) 28 July 2014.  The defendant sends e‑mail to the plaintiff containing a written signed statement of admission of her breaches.

16.  Subsequently there were exchanges between the plaintiff’s solicitors and the defendant’s solicitors concerning the statutory declaration.  The upshot is the statutory declaration substantially amended and deleted by or on behalf of the defendant which falls far short of the plaintiff’s needs as I have referred to earlier.

17.  Although I was concerned at this stage only with whether, applying all the proper criteria and law, I should continue the interim injunction, the picture is so clear‑cut on the basis of the defendant’s own actions and documents that I am able to say that she has no defence to the plaintiff’s application or claims.  I make this clear in the hope that it will aid finality to this litigation.  I make no comment on the defendant’s proceedings in the Labour Tribunal but mature thought needs to be brought to bear on the defendant’s behalf.