Federal Court clarifies ambiguous "remittal" order issued by Full Court

The case involves alleged breach of confidentiality obligations by former employees

Federal Court clarifies ambiguous "remittal" order issued by Full Court

In a recent judgment, the Federal Court has clarified the meaning of an ambiguous "remittal" order issued by the Full Court.

In New Aim Pty Ltd v Leung (No 3) [2023] FCA 1295, the main issue before the court was the proper construction of a "remittal" order. In the underlying lawsuit, New Aim Pty Ltd, an online retailer, has accused former employees of breaching confidentiality obligations under the Corporations Act 2001 or contractual and equitable obligations.

The court granted interlocutory injunctions restraining the employees from using information claimed by New Aim as confidential. The information pertains to the identities and contact details of New Aim's suppliers.

The court later discharged the interlocutory injunctions and put a modified form of injunction in place. The Full Court allowed New Aim's appeal against the orders of the primary judge and set aside his orders as they related to New Aim's claims against its former employees, the respondents.

The Full Court also made a "remittal" order, stating that "the matter be remitted for retrial." New Aim argued that the order provides a new trial, as contemplated by s. 28(1)(f) of the Federal Court of Australia Act 1976.

On the other hand, the respondents asserted that the order provides that the proceeding be remitted for further hearing and determination as contemplated by s.28(1)(c) of the Federal Court Act.

The Federal Court explained that if it grants a new trial, as contended by New Aim, the trial starts again de novo so that parties can abandon existing issues and raise new ones. The parties are not bound by how they conducted the original trial, and they may improve their case by leading new evidence or making new arguments. If the same issues arise in both trials, the judge at the second trial is not hampered by any decision at the original trial.

On the other hand, if a proceeding is remitted for further hearing and determination, as contended by the respondents, that hearing will be conducted as a continuation of the first trial, with all the limitations of such a course.

To interpret the ambiguous order made by the Full Court, the Federal Court referred to the surrounding circumstances. Ultimately, the court concluded that the construction contended for by New Aim is preferred.

The court explained that a "retrial" seems to more closely resemble a "new trial" as provided in the act than a trial intended to be a continuation of the first one. Furthermore, the primary judge's errors went to the heart of the claims, so it seemed improbable to the court that the judge to whom the proceeding was "remitted" would have been intended to be circumscribed in the way that s. 28(1)(c) provides.

Accordingly, the court said that the proper construction of the orders made by the Full Court is an order according to s.28(1)(f) of the Federal Court Act granting a new trial.

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