Fuelsave Pty Limited & 2 ors v Perentie Holdings Pty Limited & 3 ors

[2007] NSWSC 1497

CITATION:	Fuelsave Pty Limited & 2 ors v Perentie Holdings Pty Limited & 3 ors [2007] NSWSC 1497
HEARING DATE(S):	14 December 2007
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	14 December 2007
DECISION:	Application, by respondent to third party discovery application, for summary dismissal, striking out and particulars, dismissed
CATCHWORDS:	PROCEDURE – Discovery – third party discovery – application by respondent third party for summary dismissal, striking out of pleadings and further and better particulars – whether third party has standing to seek such relief – held it does not
LEGISLATION CITED:	(NSW) Uniform Civil Procedure Rules 2005, rr 5.3, 5.4, 6.24
PARTIES:	Fuelsave Pty Limited (first plaintiff) (4353/07) DieselGas Australia Pty Limited (second plaintiff) (4353/07 ) DGA (IP) Pty Limited (third plaintiff) (4353/07) Perentie Holdings Pty Limited (first defendant) (4353/07) Matthew Michael Derrig (second defendant) (4353/07) Bradley John Pollard (third defendant) (4353/07) Emission Technologies (Aust) Pty Limited (fourth defendant) (4353/07) Fuelsave Pty Limited (first plaintiff) (5547/07) DieselGas Australia Pty Limited (second plaintiff) (5547/07) DGA (IP) Pty Limited (third plaintiff) (5547/07) Derek Robert Watkins (first defendant) (5547/07) Murray Keith Rumbel (second defendant) (5547/07) Bruce Robert Watkins (third defendant) (5547/07) Gas Tek Solutions Pty Ltd (fourth defendant) (5547/07) Hunter Gas Technologies Pty Limited (fifth defendant) (5547/07)
FILE NUMBER(S):	SC 4353/07; 5547/07
COUNSEL:	Mr P C Silver (plaintiffs) Mr A A Loel (defendants) (4353/07) Mr K M Connor SC (defendants) (5547/07)
SOLICITORS:	DMAW Lawyers (SA) (plaintiffs) Toomey Pegg Drevikosky Lawyers (defendants 4353/07) McCabe Terrill Lawyers Pty Ltd (defendants 5547/07)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Friday 14 December 2007

4353/07 Fuelsave Pty Limited & 2 ors v Perentie Holdings Pty Limited & 3 ors

5547/07 Fuelsave Pty Limited & 1 or v Derek Robert Watkins & ors

JUDGMENT (ex tempore)

1 HIS HONOUR: In proceedings 4353/07 (“the Perentie proceedings”) the plaintiffs, Fuelsave Pty Limited and related entities, by summons filed on 3 September 2007, claim the following relief against the defendants Perentie Holdings Pty Limited and related entities:

1. A declaration that it was a common intention of Fuelsave Pty Limited and Perentie Holdings Pty Limited at the time of entry into the Sub-Agent Distribution and Licence Agreement ("Sub-Agent Agreement") that the definition of Product included the diesel/gas electronically controlled system combining the use of diesel fuel and liquid petroleum gas known as the Diesel Gas Australia System ("DGA System") developed and supplied by THE COMPANY as that would apply to 4WD vehicles, motor-homes, campervans, and light commercial vehicles.

2. An order that the Sub-Agent Agreement be rectified to give such effect to such intention by amending of definition of "Product" in clause 1 to read as follows:

“Product means the diesel/gas electronically controlled system combining the use of diesel fuel and liquid petroleum gas known as the DGA System developed and supplied by THE COMPANY including any such system being the subject matter of Patents and for the purpose of this agreement as that would apply to 4WD vehicles, Motor-homes, Campervans, and light commercial vehicles.

3. A declaration that a transferable exclusive licence with the right to sub-licence to enjoy, commercialise and exploit the diesel gas system known as the DieselGas Technologies Sequential II System ("DGT System") throughout the world vests in favour of the Second Plaintiff.

4. A declaration that all rights to the DGT System are owned by the Third Plaintiff.

5. An order restraining the First Defendant by its agents, servants or otherwise from marketing, selling, or otherwise dealing with the DGT System.

6. An order prohibiting the Fourth Defendant by its agents servants or otherwise from marketing, selling, or otherwise dealing with the DGT System.

7. An order restraining the First Defendant by its agents, servants or otherwise from directly or indirectly exploiting or disclosing in any way the confidential information, as defined in Schedule "A" hereto ("Confidential Information").

8. An order restraining the Second Defendant from directly or indirectly exploiting or disclosing in any way the Confidential Information.

9. An order restraining the Third Defendant from directly or indirectly exploiting or disclosing in any way the Confidential Information.

10. An order restraining the Fourth Defendant by its agents, servants or otherwise from directly or indirectly exploiting or disclosing in any way the Confidential Information.

…

12. An order that within 7 days of this order the Defendants deliver up to the First Plaintiff in its own right and as agent for the Third Plaintiff all documents, items comprising or recording in any way the Confidential Information.

13. An account of profits in relation to the use of the Defendants of the Confidential Information and in respect of exploiting the DGT System.

…

15. Alternatively, an order that an inquiry be held as to the loss and damage suffered by the Plaintiffs by reason of the Defendant's use of the Confidential Information and in respect of the Defendants exploiting the DGT System and that the Defendants pay the Plaintiffs the amount of such loss and damage as so determined.

…

2 Interlocutory relief in the Perentie proceedings was granted by Windeyer J and Fuelsave’s claim is now pleaded in an Amended Statement of Claim filed on 12 November 2007. The hearing of the proceedings is set down as an expedited matter to commence on 10 March 2008.

3 Meanwhile, in proceedings 5547/07 (“the Watkins proceedings”), the same plaintiffs claim an order for preliminary discovery pursuant to (NSW) Uniform Civil Procedure Rules 2005, r 5.3, against the defendants Mr Watkins, Mr Rumbel, Mr Bruce Watkins, Gas Tek Solutions and Hunter Gas Technologies - who assert that they are the owners of the DGT System referred to in claims 3 and 4 in the summons in the Perentie proceedings. On 7 December, in the Expedition List, that application was set down for hearing as an expedited matter on 18 February 2008, some three weeks before the trial of the Perentie proceedings is to commence. Simultaneously, the hearing of a foreshadowed motion in the Perentie proceedings for third party discovery in those proceedings pursuant to UCPR r 5.4, against the Watkins parties, was also set down for 18 February.

4 By Notice of Motion filed in Court today in the Perentie proceedings, the Watkins parties seek, in substance, (1) summary dismissal of claims 3 and 4 in the summons, (2) the striking out of various paragraphs of the Amended Statement of Claim and alternatively, further and better particulars of the Amended Statement of Claim, and (3) security for costs, although the application for security for costs is not pressed today.

5 The starting point, and a dominant consideration, is that though the Watkins parties are respondents to a Notice of Motion for third party discovery in the Perentie proceedings, they are not, at least yet, parties to those proceedings. If they are ever to become parties, that will have to be by order and/or amendment joining them as parties.

6 As to the application for summary dismissal of claims 3 and 4 in the summons, the Watkins parties say that they are the owners of the DGT System, that they have an interest in resisting the relief claimed, that the relief claimed cannot be granted without their being joined as parties, and that even if the orders sought could be made without their joinder, they would serve no utility as they would not be bound.

7 All these are very good reasons why the Court might well decline to make orders 3 and 4 at the final hearing in the absence of the Watkins parties. They are also good reasons why the Watkins parties should be joined pursuant to UCPR r 6.24. However, neither do the plaintiffs seek an order for their joinder at this stage, nor do the Watkins parties wish to be joined; indeed, when I offered to make an order joining them they foreshadowed that they would oppose any application that they be joined, at least in the absence of what they regard as a pleading that better articulates a basis for their supposed liability.

8 In those circumstances, although prima facie there is a strong case for their joinder, I do not think that I should, against the wishes of all parties, embark on that course. Nor is it appropriate for the Court to direct that the plaintiffs make an application to join an additional defendant if they do not wish to do so; if the plaintiffs do not join what transpires to be a necessary party, they will have to suffer the consequences; if, ultimately, the plaintiffs belatedly seek to join the Watkins parties, then they will have to face the consequences of leaving it to too late a stage. However, none of those matters confers on the Watkins parties sufficient standing to ask the Court summarily to dismiss claims for relief in proceedings to which they are not parties.

9 As to the application to strike out various paragraphs of the Amended Statement of Claim, and/or for further and better particulars of that Amended Statement of Claim, I accept that a respondent to an application for third party discovery under r 5.4 is entitled to be apprised of the cause of action in the proceedings, so that it can assess whether documents, of which discovery is sought against it, may or may not relate to issues in the proceedings. That end is usually served by providing to the respondent a copy of the pleadings. However, I do not accept that a respondent to a third party discovery application has standing to impugn the pleading, or to seek further and better particulars of it. Indeed, if it sought and was provided with further and better particulars of the pleading, they would be of no relevance in and would not limit the pleaded case against the defendant in the proceedings.

10 If the pleadings are such that the relevance of documents allegedly in the possession of the respondents to a third party discovery application is not apparent, then the remedy of those respondents is to resist the application for discovery on the basis that it cannot be seen or demonstrated how documents that might be in their possession, custody or power relate to a matter in issue on the pleadings in the proceedings. That is a far cry, however, from any proposition that the respondent to such an application can apply for further and better particulars of, or to strike out parts of, the relevant pleadings.

11 If, as was suggested in the course of argument, the pleadings demonstrate that the plaintiffs know what their cause of action is and have the necessary documents and material to inform themselves, so that preliminary discovery is not necessary, that may be a powerful answer to the application for preliminary discovery, but it is no reason to grant the relief sought in the present motion.

12 I order that the motion filed on 14 February 2007 be dismissed with costs.

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