Fortescue v Element Zero: Ex-employees sued for alleged IP theft say spying included bin, letterbox rummaging

One of Andrew Forrest’s closest former lieutenants says he was shocked by the scale of Fortescue’s spying as it prepared for legal action — digging through his bins and taking letters from his mailbox.

Michael Masterman, a top executive at Mr Forrest’s ill-fated Anaconda Nickel back in the 1990s who followed him to Fortescue, is one of three ex-employees being sued by the ASX giant for the alleged theft of intellectual property.

The miner has accused him, Bart Kolodziejczyk, and Bjorn Winther-Jensen of basing their start-up Element Zero around ionic iron processing technology the two scientists developed while employed by the miner’s green arm, Fortescue Future Industries.

Mr Masterman provided $3.8 million in funding to Element Zero and is its chief executive.

It has already emerged that Fortescue’s surveillance of Element Zero employees ahead of court-sanction document raids in May included Dr Kolodziejczyk and Dr Winther-Jensen being photographed with their wives.

Dr Winther-Jensen’s teenage niece was even observed, and covert cameras were used to photograph inside the Element Zero business and people coming and going.

But affidavits published by the Federal Court have revealed that the weeks-long spying was even more invasive. Mr Masterman said, “The extent and nature ... was a shock to me.”

He said his garbage bins were rummaged through and a surveillance report filed with the court showed photos of envelopes containing letters addressed to him — and his superannuation fund — including from the State Government.

“I have not been able to locate those letters and am concerned that they were removed from my property,” Mr Masterman wrote.

He said the surveillance extended to following Element Zero employees and members of the public as they left the company’s Malaga premises to their homes.

Address details, title searches, and photographs of the employees and their homes had been recorded.

They were tailed as they “went about their business, including at shopping centres, restaurants and private homes unconnected with any of the respondents”, Mr Masterman said.

In his affidavit, Dr Kolodziejczyk said he was “very concerned” to read in the surveillance reports that his home “was under almost continual surveillance for several weeks”.

“I am particularly concerned that the reports indicate that the private investigator followed my wife and child on several occasions without identifying themselves or what they were doing.”

He said that even before the raids, his wife had expressed concerns “that she thought someone was following her, including to our son’s daycare”.

“My wife informed me that on one occasion, she confronted a man who she believed to be following her after dropping my son off at daycare, and the man drove off as my wife chased him.”

He said a neighbour was “very concerned” by the intense monitoring.

The neighbour advised the scientist in late May that a car with NSW registration plates and tinted windows had been parked outside his house “for three days straight.”

Mr Masterman said he did not understand “why the level and nature of the surveillance on me was necessary”, given his history with Fortescue and seemingly amicable meetings with his former colleagues right up until January.

He says he’s still relatively close with Mr Forrest, attending Fortescue’s lavish 20th anniversary bash and the billionaire’s father’s funeral on Minderoo Station in the Pilbara in August and October last year, respectively.

But Fortescue argues the surveillance was necessary to ensure the raids were simultaneous and “ameliorate the risk of a particular respondent ... having the opportunity to destroy evidence”.

The respondents deny the accusations and have sought to have the search orders set aside ahead of a trial.

It’s understood all of the information is being held independently and Fortescue can only access it if approved by the court.

A judgment on the application is yet to be handed down.