ACT court orders Canberra's cyber security firm Dreamtime Supply to pay Steadfast ICT Security $1.18m

A recent ACT Supreme Court judgment states that the misdeeds were led by Dreamtime Supply employee Gareth Peak and director David Glavonjic between September 2018 and January 2019.

At the time, the men were the general manager and director, respectively, of Bungendore's Steadfast ICT Security where they copied the latter's information - including intellectual property, security products and licences - to Dreamtime.

The campaign also included poaching other Steadfast employees and directing clients to do business with Dreamtime instead.

The University of Canberra, Department of Parliamentary Services, Indigenous Business Australia, Department of Agriculture and Australian Fisheries Management Authority were just some of the clients.

At the time, Dreamtime and Steadfast had an outsourcing agreement related to particular IT services that the former obtained by participating in the Australian Government's Indigenous Procurement Policy.

The significant amount of Steadfast's information being transferred came after Peak and Glavonjic rejected an offer to legitimately acquire Steadfast.

Both men put in concerted efforts to dishonestly copy information to Dreamtime, which included Peak making a "transition" project document for it.

Nenad Stefanovic and Lachlan Watt, former Steadfast employees and now working at Dreamtime, were also aware of the plan and helped implement parts of it.

Despite being told to get legal advice, Peak continued adding confidential Steadfast information to his transition project with his efforts directed to the "running down of Steadfast".

After Stefanovic's job was terminated, Peak was put on notice about his own role, prompting him to try to cover his digital tracks by deleting material, including communications, on Steadfast's computers.

He continued taking more confidential information until early January 2019 when he wrote a disingenuous email to Steadfast accepting his redundancy.

MORE NEWS

Evidence during court proceedings included 26,000 pages of documents, forensic analysis of computer records, numerous witnesses involved in both companies and the individual defendants' online messages.

In his recent judgment after a May hearing, Justice David Mossop said most of the blame was with Peak, whose conduct was "thoroughly dishonest and in flagrant breach of his obligations to his employer".

He said Peak's transition project was "highly incriminating" and his approach "appears to have been enabled by a sense of entitlement".

"He perceived that Steadfast's success was due to him, describing the business as 'my baby'," he said.

"However, that sense of entitlement was completely at odds with his legal obligations."

Justice Mossop described Peak as an "unreliable witness" and his admissions of dishonesty were made only because the documentary evidence compelled him to do so.

"His affidavit evidence attempted to paint a completely unrealistic picture of his conduct," he said.

As for Glavonjic, Justice Mossop described him as unimpressive.

"He had a broad-brush salesman's story to tell, which suggested much less involvement in Mr Peak's actions against Steadfast than the documentary material and other evidence discloses," he said.

Justice Mossop said Stefanovic appeared to have performed the role of "loyal deputy and co-conspirator" when it came to implementing Peak's plans.

He said Peak significantly influenced Watt, the most junior of the Steadfast employees.

"His approach to his legal responsibilities towards his employer was substantially shaped by the environment created by Mr Peak and hence reflected an inadequate understanding of the requirement for honesty and fidelity in relation to his employer," he said.

Justice Mossop said paying back the profits was the most appropriate remedy because it most accurately responded to Peak's conduct and its consequences to Steadfast.

Work previously done by Steadfast directed to Dreamtime was $444,683 and work done for the federal government in 24 months was $742,566.

Steadfast's legal counsel also alleged the individual defendants, having participated in the conduct, had breached their contractual obligations to the company.

The focus of the defendants' case was to undermine any causal connection between any breaches of duty by them and Dreamtime's acquisition of Steadfast's business.

The court will determine orders for the individual defendants and costs on October 15.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: