5 Boroughs NY Pty Ltd v State of Victoria (No 3)

In the case of 5 Boroughs NY Pty Ltd v State of Victoria (No 3), the plaintiff, a company involved in hotel operations, sought damages for economic loss allegedly caused by the State of Victoria's implementation of a hotel quarantine program during the COVID-19 pandemic. The plaintiff's action was part of a group proceeding in the Supreme Court of Victoria, which raised issues of negligent conduct by the State in relation to the hotel quarantine measures. The dispute centred on whether the civil group proceeding should be stayed due to ongoing criminal proceedings against the relevant State Department of Health, which were based on the same conduct.

The court had to decide whether the substantial overlap between the civil and criminal proceedings would prejudice the State's ability to defend the criminal charges if the civil proceeding proceeded, and whether the companion principle, which generally discourages concurrent civil and criminal litigation, was applicable or compromised in this context. Additionally, the court considered whether staying the civil proceeding would cause undue delay and prejudice to the plaintiff and other group members. The court had to weigh these considerations against the potential for prejudice to the State in defending the prosecution and the availability of protective orders and case management to mitigate risks of prejudice.

The Supreme Court of Victoria ruled that the companion principle did not necessitate a stay of the civil proceeding. The court found that the potential for prejudice to the State in defending the criminal proceedings was not sufficient to warrant a stay, particularly given the availability of protective orders and effective case management to address issues of overlap and prejudice. The court also acknowledged the risk of delay prejudice to the plaintiff and other group members if the civil proceeding were stayed. The court ultimately determined that the benefits of proceeding with the civil litigation outweighed the potential prejudice to the State, and the proceeding was not stayed.