Bluecolt Nominees Pty Ltd v Sims
[2013] WASC 442
•11 DECEMBER 2013
BLUECOLT NOMINEES PTY LTD -v- SIMS [2013] WASC 442
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 442 | |
| 11/12/2013 | |||
| Case No: | CIV:2770/2013 | 29 NOVEMBER 2013 | |
| Coram: | BEECH J | 29/11/13 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | BLUECOLT NOMINEES PTY LTD NATHAN HAWKE BRIAN SIMS |
Catchwords: | Practice and procedure Application for interlocutory injunction Obligation to confer Failure to confer Application dismissed for failure to confer |
Legislation: | Rules of the Supreme Court 1971 (WA), O 59 r 9 |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
NATHAN HAWKE
Second Plaintiff
AND
BRIAN SIMS
Defendant
Catchwords:
Practice and procedure - Application for interlocutory injunction - Obligation to confer - Failure to confer - Application dismissed for failure to confer
Legislation:
Rules of the Supreme Court 1971 (WA), O 59 r 9
Result:
Application dismissed
Category: B
Representation:
Counsel:
First Plaintiff : Mr P J Mugliston
Second Plaintiff : Mr P J Mugliston
Defendant : Mr P A Tottle
Solicitors:
First Plaintiff : Brook Legal & Settlement Services
Second Plaintiff : Brook Legal & Settlement Services
Defendant : Tottle Partners
Case(s) referred to in judgment(s):
Nil
- BEECH J: (These reasons were delivered orally and have been edited from the transcript.)
Introduction
1 For the reasons that follow, I would dismiss this application for interlocutory injunctions on the ground that the plaintiffs' solicitors have failed to confer with the defendant's solicitors as required by O 59 r 9 of the Rules of the Supreme Court 1971 (WA).
The application
2 By chamber summons dated 26 November 2013, the plaintiffs seek orders in the following terms:
1. The Defendant forthwith cease any conduct which in any way threatens or touches upon damaging the existing relationships that the First Plaintiff's Clients have with the First Plaintiff and in particular that the Defendant does not:
(a) Solicit clients from the First Plaintiff; and
(b) Arrange for any of its agents or servants directly or indirectly to do so.
2. The Defendant be injuncted to not use any information or records obtained during his association with the First Plaintiff for any purpose whatsoever.
3. The Defendant do return the mobile phone, sim card to the First Plaintiff and destroy any copy or record of any information obtained from it.
4. The Defendant do return all documents and information copied or obtained from the Plaintiff.
5. The Defendant do account for any profit he earns as a result of work undertaken for clients previously belonging to the Plaintiff being business diverted from the First Plaintiff to the Defendant.
6. The Defendant do pay damages to the First Plaintiff, such damages to be assessed.
7. The Defendant do provide to the First Plaintiff and Second Plaintiff a list of all its clients.
8. The Defendant do pay to the First Plaintiff 100 cents in the dollar for each of the clients he has which were previously clients of the First Plaintiff.
9. The Defendant do reimburse the First Plaintiff the sum of $3,000.00 per week drawn by the Defendant during the period that the Second Plaintiff was absent on leave between October 2012 until March 2013.
10. There be a declaration that the Defendant is to be the person primarily responsible for the portion of the company's loan accounts obtained during his period as Director such proportion to be fair and equitable.
11. There be a declaration that the Shareholders Agreement is binding and has validity and is the basis upon which the disagreement or dispute between the Second Plaintiff and Defendant should be resolved.
12. The Defendant pays the First and Second Plaintiff's costs for this Application.
13. Such further orders that this Honourable Court thinks fit.
The solicitors' communications
3 The communications between the parties before the filing of the chamber summons can be seen in the affidavit of the second plaintiff, Mr Hawke, and in the affidavit of Ms McCloskey, solicitor for the defendant.
4 On 9 August 2013, the plaintiffs' solicitors wrote to the defendant's solicitors.1 The letter asserted that the defendant was trading in competition to Bluecolt and had acquired clients from it, listing some seven. That was said to be in contravention of the Corporations Law and the shareholder agreement. The letter asserted that the first plaintiff (Bluecolt) required Mr Sims to cease 'acquiring' clients of Bluecolt.
5 The letter also requested an undertaking that any profit made be paid back to Bluecolt. The letter said that should such an undertaking not be given, proceedings would be commenced for an injunction. The letter further stated that unless the matter was resolved by 14 August 2013, proceedings would be commenced.
6 I interpose that that letter, written in August 2013, is the only communication in which the plaintiff's solicitors sought any undertaking of any type from the defendant. That is most unusual, not only because of the obligation of conferral, but because it is the failure to respond positively to a request for an undertaking which often demonstrates or constitutes the threat that animates the grant of an interlocutory injunction.
7 The defendant's solicitors responded to the letter of 9 August 2013 by letter of 14 August 2013.2 In that letter, the defendant, in effect, asserted an entitlement to trade in competition with Bluecolt in circumstances where the defendant, Mr Sims, had resigned as a director, and did not work in the business any longer. The letter stated that Mr Sims accepted that he had an obligation not to use information acquired as a director of Bluecolt improperly, but said that no such information had been used. The letter requested particulars of what information it was said had been used, and how.
8 No response was made to that request, before this application was commenced.
9 For the following three months (less one day), there was no communication between the solicitors for the parties, certainly none that is relevant to the interlocutory injunction application made in late November 2013.
10 On 13 November 2013, the plaintiffs' solicitors wrote again to the defendant's solicitors.3 The letter referred to the earlier letter of 9 August 2013. It then recorded instructions that the respective clients had been in communication, but that the matter remained outstanding and was not settled.
11 I interpose that, as was rightly accepted by counsel for the plaintiffs,4 communications between the parties themselves are not conferral for the purposes of O 59 r 9. The attempts by the parties to resolve the disputes between them are one thing; the obligation of solicitors to confer before bringing any interlocutory application to the court is quite a distinct matter.
12 I return to the letter of 13 November 2013 from the plaintiffs' solicitors. The letter recorded that instructions had been received to issue proceedings seeking injunctive relief and damages. There was no detail provided as to the nature of the injunctive relief, the conduct that was sought to be restrained, or whether interlocutory relief would be sought. There was also a statement made about the size of the damages claim. The letter concluded with a request about whether the defendant's solicitors had instructions to accept service.
13 It is to be noticed that that letter did not respond in any way to the request made three months earlier, in the defendant's solicitors' letter of 14 August 2013, to articulate Bluecolt's claims in the respects I have outlined.
14 Further, the letter did not seek any undertakings, or identify the conduct, the continuation of which would be said to be the basis for an application for an interlocutory injunction.
15 The defendant's solicitors responded by letter of 15 November 2013.5 It is not necessary to detail the contents of that letter. Primarily, it sought further information regarding the damages claim that had been foreshadowed in the letter of 13 November 2013.
The reasons for finding there was inadequate conferral
16 This application was commenced on 26 November 2013. By the time this application had been commenced for interlocutory injunctions in terms of the 13 paragraphs of the chamber summons, the only undertaking that had been sought was an undertaking to account for revenue made from clients of the first plaintiff, Bluecolt. That request had been made three months earlier, in the letter of 9 August 2013. No undertaking had been sought in terms of the numerous paragraphs of the chamber summons, apart from [5] which broadly mirrored what had been asked for in the letter of 9 August.
17 Moreover, prior to the filing of the chamber summons, the defendant's solicitors could not have known what any application for an injunction would seek to restrain, because they had not been told; nor had there been a communication of what, if any, information the plaintiffs claim was being used by the defendant. Insofar as the plaintiffs complain that there has been solicitation of former clients of Bluecolt by Mr Sims, the communications between the solicitors from August 2013 until this chamber summons was filed did not articulate the basis on which the plaintiffs asserted that to be so.
18 Thus, the substance of what is now to be claimed as the foundation for any interlocutory relief, and the substance of the interlocutory relief to be sought, were not communicated to the defendant's solicitors before the application was brought. While such communication is not in itself sufficient to satisfy the requirement to confer, it is a necessary first step.
19 For the reasons I have given, I am satisfied that the obligation to confer was not discharged.
20 That conclusion is reinforced when it is remembered that at no stage before this application was commenced was there any oral communication between the solicitors. It has been said in a number of cases that the exchange of letters does not constitute conferral. However, in making that observation, it should not be thought that, in this case, the only problem was the absence of oral communication.
Conclusion
21 For these reasons, I would dismiss the application on the ground of failure to comply with O 59 r 9.
1 Affidavit of E McCloskey sworn 29 November 2013, EM 1.
2 EM 2.
3 EM 3.
4 ts 4.
5 EM 4.
0
0
1