The High Court has refused DCR Strategies Inc’s application for an interlocutory injunction in a dispute over confidential information and competing card services. The court found a fair issue to be tried about whether Bishopstown Credit Union information received under a 2008 agreement had been used to help establish a replacement MasterCard prepaid-card service. But extensive and conflicting affidavit evidence meant DCR had not established a strong arguable case of wrongdoing at this interim stage.
The agreement, made on 24 June 2008, covered DCR’s administration of a MasterCard debit-card programme for Bishopstown Credit Union members. Its three-year term expired in June 2011, after which the parties continued operating on its terms. Following the planned sale of the card business by Newcastle Building Society, DCR proposed moving the programme to a Visa debit-card product. Bishopstown did not agree to that change and arranged for Cuso Ireland Limited, working with MasterCard and card issuer IDT Financial Services, to provide prepaid cards. The judgment said the existing arrangement would end on 31 October 2012. It did not resolve the parties’ dispute about the legal effect of the agreement’s renewal terms or DCR’s inability to continue its contracted programme.
DCR alleged that Bishopstown had passed on confidential or proprietary material to its chief executive, Ray Kenny, and Cuso, giving Cuso an unfair head start. The material it identified included project and compliance documents, card terms, transaction guidance, marketing material and pricing. The defendants denied that the material was confidential, saying it was generic, publicly available or independently sourced. The judge said it was not possible to resolve those factual disputes on the affidavits and expressed no view on whether DCR would succeed at trial.
At the hearing, DCR narrowed its request. It was prepared to let Cuso provide cards to Bishopstown members, while seeking to stop the defendants from providing or soliciting card services for other credit unions pending trial, where that would involve misuse of confidential information. The court explained that a springboard injunction must remove an unlawfully obtained competitive advantage only so far as reasonably necessary; it cannot prevent competition itself.
The court held that DCR had not crossed the strong-arguable-case threshold. It also found that the alleged future losses from lost or potential credit-union business appeared capable of calculation, so damages could be an adequate remedy. DCR’s separate concern about reputational harm had fallen away after it accepted the changeover to Cuso’s card programme. The balance of convenience therefore favoured refusing an injunction.
The court refused the application and said it would facilitate an early hearing of the substantive action after the defendants offered to cooperate in arranging one. The ruling determined only the interim application; it did not decide the underlying claims.