Kingfisher Mobile Australia Pty Ltd v Telstra Ltd (No 2)

[2024] NSWSC 61

Supreme Court

New South Wales

Medium Neutral Citation:	Kingfisher Mobile Australia Pty Ltd v Telstra Ltd (No 2) [2024] NSWSC 61
Hearing dates:	31 January and 2 February 2024
Date of orders:	02 February 2024
Decision date:	02 February 2024
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Provisional hearing dates for final hearing of plaintiff’s application for Tail Customers Injunction vacated; two of those hearing dates provisionally reserved for any application by plaintiff for interlocutory relief
Catchwords:	CIVIL PROCEDURE – whether provisional hearing date for final determination of the plaintiff’s application for the Tail Customers Injunction should be confirmed or vacated – where defendant contended it could not properly prepare its case by provisional hearing date – whether defendant would not be afforded procedural fairness were provisional hearing date to be retained
Cases Cited:	Kingfisher Mobile Australia Pty Ltd v Telstra Ltd [2023] NSWSC 1600
Category:	Procedural rulings
Parties:	Kingfisher Mobile Australia Pty Ltd (Plaintiff/Applicant) Telstra Limited (Defendant/Respondent)
Representation:	Counsel: D R Sulan SC with B Yin and B Hord (Plaintiff/Applicant) V E Whittaker SC with R Pietriche (Defendant/Respondent) Solicitors: Corrs Chambers Westgarth (Plaintiff/Applicant) King & Wood Mallesons (Defendant/Respondent)
File Number(s):	2023/429982

EX TEMPORE JUDGMENT (REVISED)

1. The background to this matter is set out in my judgment of 15 December 2023. ^[1] I shall use the same abbreviations here.

   1. Kingfisher Mobile Australia Pty Ltd v Telstra Ltd [2023] NSWSC 1600.

2. I then provisionally fixed this matter for final hearing for four days commencing on 18 March 2024 for Kingfisher’s application for what I referred to in the 15 December 2023 judgment as the Tail Customers Injunction.

3. I recorded in those reasons that Telstra was then unable to say whether it could meet the March date.

4. I made directions for Kingfisher to serve its evidence in chief. That has been done.

5. I adjourned the matter to 31 January 2024 to consider whether or not the provisional hearing date should or should not be confirmed.

6. On that application, Mr Sulan SC, who appears with Mr Yin and Mr Hord for Kingfisher, also tendered a redacted copy of the contract between Telstra and Assurant. The contract appears to contemplate that Telstra will retain Kingfisher, amongst others, as an “existing customer”. It also appears to enable Telstra to determine if and when to issue a “Purchase Order” to Assurant and to set a “Target Launch Date” for its engagement with Assurant.

7. Nonetheless, the evidence before me shows that, as a matter of fact, Telstra has set a Target Launch Date to be 2 April 2024, evidently after some six months of work involving many, many employees. Moreover, as I discussed in my earlier judgment, Telstra cannot currently, and will not by 2 April 2024, be able to support both Kingfisher and Assurant as suppliers of the “Upgrade & Protect” product.

8. Before me today, Mr Sulan submitted that, in substance, all that is involved in Kingfisher’s application for the Tail Customers Injunction is what he submitted to be a clear question of the proper construction of the Mobility Products Service Agreement; and in circumstances where he submitted Telstra has not yet explained, by List Response or otherwise, why Kingfisher’s posited construction is not correct.

9. In its List Statement, after having recited a number of express terms of the relevant agreement, Kingfisher alleges:

“On the proper construction of the Agreement, Telstra must not, prior to the Disengagement Start Date:

a. cancel the enrolments of Eligible Customers or Devices in the Device Protection Product;

b. transfer or migrate Eligible Customers or Devices in the Device Protection Product to substantially similar products offered by a party other than Kingfisher; and

c. encourage Eligible Customers to cancel or prematurely end their enrolment or the enrolment of their Devices in the Device Protection Product.

Particulars

This arises on the proper construction of the Disengagement Terms in the context of the Agreement as a whole, which exhaustively prescribes the process of transferring or migrating Eligible Customers from Kingfisher expressly as from the Disengagement Start Date as defined and not before.”

10. However, no express negative covenant is referred to as existing in any particular clause of the contract.

11. Perhaps more significantly, as an alternative to the allegation in cl 35, Kingfisher contends that:

“In the alternative to paragraph 35, it is an implied term of the Agreement (No Cancellation Term) that, Telstra must not, prior to the Disengagement Start Date:

a. cancel the enrolments of Eligible Customers or Devices in the Device Protection Product;

b. transfer or migrate Eligible Customers or Devices in the Device Protection Product to substantially similar products offered by a party other than Kingfisher; and

c. encourage Eligible Customers to cancel or prematurely end their enrolment or the enrolment of their Devices in the Device Protection Product.

Particulars

i. The No Cancellation Term is implied as a matter of fact, being both reasonable and equitable, so obvious that it goes without saying and is necessary to give business efficacy to the terms of the Agreement outlined in paragraphs 22, 23, 25, 26, 27, 28, 29, 31, 32, and 33 above.

ii. Further and in the alternative, the term is a corollary of any or all of the terms implied into the Agreement as outlined in paragraph 34 above.”

12. Evidently in support of the latter contention, Kingfisher’s Chief Financial Officer, Mr Leong, has adduced evidence that appears to be directed to the entire course of contact between the parties leading to the relevant agreement. Further, Mr Limogiannis, the Chief Operating Officer of Kingfisher, has adduced evidence as to some events post-contract. I infer that that material is to be called in aid in relation to Kingfisher’s contentions as to what this contract means. As I set out below, those advising Telstra consider that to meet that case they must also examine that proposed lengthy course of conduct.

13. A further factor that has emerged is that Kingfisher no longer contends that damages would not be an adequate remedy by reason of its damages likely exceeding the Liability Cap Amount of $45 million referred to in my December judgment.

14. Kingfisher’s evidence on the question of whether damages might be an adequate remedy now comprises high level evidence from Mr Leong concerning the effect of a migration of the Tail Customers to Assurant on Kingfisher’s competitiveness in the Australian market and its commercial reputation.

15. Despite that changed position by Kingfisher, Telstra wishes to adduce evidence of Kingfisher’s likely loss, which it contends may well be relevant to the question whether, as a matter of discretion, at a final hearing injunctive relief should be given.

16. On the question of Telstra's ability to be ready for the March hearing, Telstra has now served extensive, detailed and very carefully considered evidence from its solicitor, Mr Benjamin Kiely, concerning Telstra's ability to meet the March dates for a final hearing.

17. Kingfisher's solicitor, Mr Matthew Critchley, has responded to some of the matters to which Mr Kiely deposed. I cannot resolve such tensions that there may be between the opinions expressed by those two experienced solicitors.

18. What is presently relevant is that Mr Kiely’s evidence is that, if they were on for a final hearing of Kingfisher's application for the Tail Customers Injunction on 18 March 2024, Telstra:

1. would be forced to abandon properly investigating Kingfisher’s likely damages; a matter that, as I have said, it contends will be relevant to the question of discretion;

2. will not have an accurate and refined estimate about the timing of what is called the "split technology build", a further matter it contends will be relevant to discretion; and

3. will not complete document collection and review relevant to the question of the proper construction of the contract and, most critically, to the existence of the implied term for which Kingfisher contends.

19. It is now clear to me, from that evidence, that there is a significant possibility that Telstra will be unable properly to prepare for final hearing; and that for Telstra to meet the expedited timetable proposed by Kingfisher would require it not to prepare, or to under-prepare, the aspects of its case to which I have referred.

20. I am satisfied that, were I to confirm the hearing date and make the timetabling orders proposed by Kingfisher, Telstra would thereby be denied, potentially to a very significant extent, procedural fairness.

21. This problem arises in part from Kingfisher's delay in commencing these proceedings. I discussed that matter in my December judgment. An explanation has been given as to why proceedings were commenced when they were. In my December reasons, I said delay was a factor, but not one I then thought to be decisive. It appears to me that it emerges now to be a significant reason why Telstra cannot be ready for a final hearing.

22. I propose to vacate the provisional fixture. It was always open to Kingfisher to move for interlocutory relief. I will reserve for a very short time part of the fixture for any application Kingfisher seeks to make for interlocutory relief.

23. I make the following orders:

1. Vacate the dates provisionally fixed on 18 to 21 March 2024 for the final hearing of the plaintiff's application for the Tail Customers Injunction (as defined in my judgment of 15 December 2023).

2. Reserve until 5pm on 7 February 2024, 18 and 19 March 2024 for any application the plaintiff may seek to make for interlocutory relief to the effect of the Tail Customers Injunction.

3. Note that such dates will cease to be reserved unless the plaintiff indicates, by communication to my Associate by 5pm on 7 February 2024, that it will move for interlocutory relief on those dates.

4. Without prejudice to the plaintiff's entitlement to file a further notice of motion seeking a separate hearing of any question, dismiss with costs the plaintiff's Notice of Motion filed 9 December 2023.

5. Stand the matter over for directions before the Commercial List Judge on 9 February 2024.

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Endnote

Decision last updated: 06 February 2024