Cyclopharm Ltd v Morcos - [2021] NSWSC 1010

Supreme Court

New South Wales

Medium Neutral Citation: Cyclopharm Ltd v Morcos [2021] NSWSC 1010
Hearing dates: 6 August 2021
Date of orders: 12 August 2021
Decision date: 12 August 2021
Jurisdiction: Equity
Before: Robb J
Decision:
See par 41. The Court makes orders varying the undertaking in the terms set out in par 41.

Catchwords:
CIVIL PROCEDURE — Implied undertakings — Release from — Special circumstances — Where plaintiffs gave an express undertaking to the Court in respect of an application for search orders — Where the undertaking was similar to a Harman undertaking — Where the plaintiffs now seek partial release from or a variation of the undertaking in order to seek advice as to whether proceedings can be commenced against certain defendants in Germany — Where the active defendants have neither consented to nor opposed the making of the orders — Where the Court held that in the circumstances the needs of justice are served by varying the undertaking in the manner sought in the plaintiffs’ notice of motion

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Bayside Council v Estate of Goodman [2019] NSWSC 530
Cobra Golf Inc v Rata [1998] Ch 109
Crest Homes Plc v Marks [1987] AC 829
Harman v Secretary of State for the Home Office [1983] 1 AC 280
Hearne v Street (2008) 235 CLR 125; [2008] HCA 36
State Street Global Advisors Trust Company v Maurice Blackburn Pty Ltd [2019] FCA 1464
Wellness Pty Ltd v Hamilton-Bond [2002] NSWSC 1259

Category: Procedural rulings
Parties: Cyclopharm Limited (first plaintiff)
Cyclomedica Australia Pty Limited (second plaintiff)
Nabil Morcos (first defendant)
HZM Pty Limited (second defendant)
Charles Francis Buttigieg (third defendant)
Richard Frank Gotch (fourth defendant)
Michael Jian Guo (fifth defendant)
David Thomas Rundell (sixth defendant)
Landauer Australasia Pty Limited (seventh defendant)
Landauer Radiopharmaceuticals Pty Limited (eighth defendant)
Björn Altmann (ninth defendant)
Almedis Altmann GmbH (tenth defendant)
Vent-Medis GmbH (eleventh defendant)
Representation:
Counsel:
S Keizer and S Andrews (first and second plaintiffs)
Solicitors:
Webb Henderson (first and second plaintiffs)

File Number(s): 2019/298748

Judgment

The plaintiffs, Cyclopharm Ltd and Cyclomedica Australia Pty Ltd, commenced these proceedings by summons filed in the Duty List on 24 September 2019. It will be convenient to refer to the plaintiffs collectively as Cyclopharm.
The defendants were Nabil Morcos, HZM Pty Limited (HZM), Charles Francis Buttigieg, Richard Frank Gotch and Michael Jian Guo. The four personal defendants were former employees of Cyclopharm. HZM is a company whose shares were, at the time the proceedings were commenced, owned by Prof Morcos and his wife. Professor Morcos was the sole director of HZM.
By their summons, Cyclopharm sought relief against the defendants for misuse of Cyclopharm's confidential information, and breaches of contractual, fiduciary and statutory duties. Cyclopharm sought injunctions, equitable compensation and damages.
On 24 September 2019, Pembroke J, as Duty Judge, issued search orders in the conventional form against the defendants, other than Mr Guo.
In due course, each of the search orders was executed and documents…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWSC 1010
Decision Date: 12 August 2021

CaseChat Overview and Summary

The case of Cyclopharm Ltd v Morcos involved a dispute between the plaintiff, Cyclopharm Ltd, and the defendant, Morcos, concerning an application for search orders. The matter was heard by the Federal Court of Australia. The plaintiffs sought to vary an express undertaking that they had given to the Court, similar to a Harman undertaking, to seek advice on whether proceedings could be commenced against certain defendants in Germany. The active defendants neither consented to nor opposed the making of the orders sought by the plaintiffs.

The legal issues before the Court were whether the plaintiffs were entitled to partial release from, or a variation of, the undertaking they had given to the Court. The Court needed to determine whether the circumstances were such that the needs of justice would be served by varying the undertaking in the manner sought by the plaintiffs. The Court considered the principles of implied undertakings and the role of the Court in balancing the interests of justice with the rights of the parties involved.

The Court held that the plaintiffs were entitled to partial release from or a variation of the undertaking in the manner sought in their notice of motion. The Court found that the active defendants had neither consented to nor opposed the making of the orders sought by the plaintiffs, and that varying the undertaking in the manner sought would serve the needs of justice. The Court considered the importance of allowing the plaintiffs to seek advice on the potential for proceedings in Germany, while also recognising the need to protect the interests of the defendants.

In light of the Court's findings, it made orders varying the undertaking given by the plaintiffs in the manner sought. The Court's decision allows the plaintiffs to seek advice on the potential for proceedings in Germany, while also ensuring that the interests of the defendants are protected.

Orders