Mazzoni v Sorrento Family Practice Pty Ltd
[2021] WADC 12
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: MAZZONI -v- SORRENTO FAMILY PRACTICE PTY LTD [2021] WADC 12
CORAM: REGISTRAR KINGSLEY
HEARD: 4 NOVEMBER 2020
DELIVERED : 12 FEBRUARY 2021
FILE NO/S: CIV 1079 of 2015
BETWEEN: PHILIPPA MARY MAZZONI
Plaintiff
AND
SORRENTO FAMILY PRACTICE PTY LTD
First Defendant
EDWARD SAMIR BEBAWAY SOLOMAN
Second Defendant
EIHAB KAMIL BOULOS
Third Defendant
OSAMA MORIS TAKLA ESTEFANOUS
Fourth Defendant
Catchwords:
Practice - Application to adduce expert evidence after entry for trial - Application for discovery by both plaintiff and defendants - Application for further and better particulars - Application for particulars of damage
Legislation:
District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Applications in part successful
Representation:
Counsel:
| Plaintiff | : | Mr P M Poliwka |
| First Defendant | : | Mr H M Reynoldson |
| Second Defendant | : | Mr H M Reynoldson |
| Third Defendant | : | Mr H M Reynoldson |
| Fourth Defendant | : | Mr H M Reynoldson |
Solicitors:
| Plaintiff | : | Poliwka Legal |
| First Defendant | : | Hotchkin Hanly Lawyers |
| Second Defendant | : | Hotchkin Hanly Lawyers |
| Third Defendant | : | Hotchkin Hanly Lawyers |
| Fourth Defendant | : | Hotchkin Hanly Lawyers |
Case(s) referred to in decision(s):
FAI General Insurance Company Limited v Southern Cross Exploration NL (1988) 165 CLR 268
Maxwell v Murphy (1957) 96 CLR 261
Pimley v Fremantle Sailing Club Inc [2019] WADC 156
REGISTRAR KINGSLEY:
The plaintiff is a podiatrist and had purchased a podiatry practice from a third party. The practice at that time was leased from Sorrento Medical Practice. In 2011 the premises were sold and in January 2012 the plaintiff entered into a lease whereby the first defendant was lessee and the plaintiff sub‑lessee.
Since 2011 the second, third and fourth defendants have conducted a medical practice through the first defendant.
The plaintiff pleads that she had podiatry patients that were exclusively her patients (Exclusive Patients) and that it was an implied term of the lease that the information provided about the Exclusive Patients to the first defendant was confidential information and not to be exploited, appropriated, or otherwise used by the first defendant.
The plaintiff goes on to plead that information concerning her patients and medical notes concerning patients were on her own computer, or on handwritten medical notes. The second defendant demanded that all information be migrated to the defendants' computer system. The plaintiff pleads that from March 2012 the plaintiff was entering her patients' medical notes onto the defendants' computer and this information remained confidential to the plaintiff and had not been assigned to the defendants.
The plaintiff pleads she was not granted access to the billing section of the defendants' software on its computer (known as Best Practice) and so was unable to generate her own patient bills.
The plaintiff pleads that the defendants used the plaintiff's information to solicit her patients to attend clinics conducted by the defendants.
The plaintiff goes on to plead that two podiatrists employed by her left the plaintiff's employment on 12 January 2013 and 13 January 2013. The defendants sent letters to common patients of the plaintiff and defendants and the plaintiff's Exclusive Patients referencing the fact that the podiatrists employed by the plaintiff had left and that the patients could continue their podiatry services at the defendants' medical practice.
The plaintiff's lease with the first defendant concluded in February 2013 and the plaintiff relocated. The defendants then sent letters to the plaintiff's Exclusive Patients advising that the plaintiff had ceased the practice and advising that the Exclusive Patients and the common patients could continue to receive podiatry services from the defendant through the plaintiff's former employees.
As a result some of the plaintiff's Exclusive Patients went to the defendants (the Poached Patients).
The plaintiff also pleads a claim under the Australian Consumer Law (Cth) for misleading and deceptive conduct. The plaintiff seeks an account for loss of profits or damages.
The defendants, in broad terms, deny that the plaintiff is entitled to any relief.
Three applications have been brought namely:
1.The defendants' application of 21 August 2020 for leave and for particulars of damage of plaintiff's claim.
2.The plaintiff's application of 11 September 2020 seeking leave to adduce expert evidence and specific discovery.
3.The defendants' application of 7 October 2020 seeking further and better particulars and specific discovery.
Plaintiff's application for leave to adduce expert evidence
The action has been entered for trial on 17 July 2018. The court had issued a notice of default dated 2 July 2018 and as a consequence the plaintiff entered the action for trial.
Rule 47F(4) of the District Court Rules 2005 (WA) (DCR) provides that after a case has been entered for trial, the party who entered the case for trial cannot apply to the court for leave for expert evidence to be adduced at trial. This, in effect, would amount to a prohibition on adducing expert evidence, unless the other parties consent to grant leave.
The plaintiff's counsel submitted that the amendments to r 47F DCR occurred subsequent to the entry for trial. Therefore the prohibition on adducing expert evidence introduced by r 47F DCR did not apply.
The general rule at common law is that a statute changing the law ought not, unless there is clear intention with reasonable certainty, to be understood as applying to facts or events that have already occurred. However, in relation to changes in practice and procedure, unless the contrary is expressed, the change in practice and procedure applies to all actions whether commenced before or after the change. Provided there is no injustice, a party to an action has no right to complain if, during the course of litigation, the procedure is changed: Maxwell v Murphy (1957) 96 CLR 261, 267.
In a different context the issue of r 47F was considered by his Honour Judge Prior in Pimley v Fremantle Sailing Club Inc [2019] WADC 156. At [14] his Honour said that:
14… The purpose of rules requiring disclosure of expert evidence is to ensure that no-one is taken by surprise at trial and that each party had an adequate opportunity to consider, investigate and, if necessary, answer expert evidence to be led by an opposing party.
The issue of r 47F was again considered by his Honour Judge Prior in Ray v Kentz, action CIV 3603 of 2017, heard 22 July 2020 (unpublished). In that case the plaintiff's case had been listed for trial and vacated. As the action was no longer listed for trial his Honour Judge Prior considered that the defendant would have adequate opportunity to consider, investigate and answer the expert evidence sought to be adduced by the plaintiff. His Honour gave leave to adduce that evidence.
Order 3 r 5 Rules of the Supreme Court1971 (WA) (RSC) provides that on such terms as is just, a court may extend or abridge the period within which a person is required or authorised to do any act in any proceedings. FAI General Insurance Company Limited v Southern Cross Exploration NL (1988) 165 CLR 268 is authority for the proposition that O 3 r 5 RSC confers on the court a broad power to overcome injustice. However, the rule does not provide the parties with an unqualified right to an extension of time.
One of the purposes of civil proceedings is to determine respective rights of litigants. An important consideration is giving the parties a proper opportunity to ensure that a court determines the facts on the evidence that is reasonably put to the court by the parties.
This is not to say that case management considerations ought be ignored but those considerations be placed in the context of the stage the proceedings are at.
An objective of case flow management is to ensure the just determination of litigation. In this matter the parties are still some way off listing this matter for trial. As seen from the two remaining applications there is disputation in relation to discovery and particulars of damage. The expert evidence, as submitted by plaintiff's counsel, will inform the content of the particulars of damage.
Rule 24(1) DCR confers a wide power on the court to make any procedural direction that is just to facilitate the case being conducted and concluded efficiently, economically, and expeditiously. Rule 24(2) DCR does not limit the ambit of r 24(1) DCR.
Rule 26 DCR provides that at the hearing of a summons for directions, or any other application, an order under r 32(2) may be made.
Rule 32(2)(c) provides that any interlocutory order may be made.
Whilst a party will not be given unlimited opportunity to present their case, they must be given sufficient opportunity, and considerations of efficiency do not detract from this.
The notice of default dated 2 July 2018 stated the action would become inactive if an entry for trial was not filed on or before 17 July 2018. Whilst there were other options, the plaintiff filed the entry for trial on 17 July 2018. That entry is in the context of the Rules as they then were. It is apparent that expert evidence will be needed to enable the plaintiff to prove her loss. In my opinion, pursuant to O 3 r 5 RSC and r 32(2)(c) DCR, I have the power to extend the time and make the interlocutory order.
Accordingly, leave is given pursuant to r 47F(3)(c) DCR for the plaintiff to adduce expert evidence at the trial of this action.
Plaintiff's application for further and better discovery and defendants' application for further and better discovery
The plaintiff seeks mutually exclusive remedies of account of profits and damages. In an action of this nature, the remedy of an account of profits is to have, in this case, the defendants give up their ill‑gotten gains to the plaintiff whose purported rights have been infringed. In relation to the remedy of damages, the defendants are to compensate the plaintiff for the loss she has suffered.
In this action the plaintiff seeks remedies for the defendants' purported breach of contract in relation to the use of confidential information and the poached patients. Part of the forensic process will be ascertaining the extent of profits that came into the hands of the defendants through the use of the confidential information and the Poached Patients.
On the first and fourth defendant's chamber summons dated 7 October 2020 the plaintiff has conceded that it is appropriate to give further discovery of those items referred to in par 7(a), 7(b) and 7(c)(i).
The remaining documents under par 7 refer to amounts paid by private health insurers, Medicare and Department of Veterans Affairs. I am not persuaded that these documents are necessary having regard to the fact that the plaintiff is already discovering the billing records. Those would be the primary records and I do not intend to order further discovery of the documents referred to in par 7(c)(ii), 7(c)(iii) and 7(c)(iv).
In relation to par 10 of the chamber summons, the defendants' counsel submitted that this went to the quantification of the claim for damages. The argument was that if the plaintiff had established a new podiatry practice and that practice was running at full capacity, then the plaintiff did not have capacity to earn any further money from additional clients.
In my opinion that is the wrong focus. In this action the plaintiff claims against the defendants for an account of profits or by way of damages. The claim for damages arises from the use of confidential information and the profits gained from the use of the poached patients. The damages for breach of contracts may then be measured by the benefit gained by the defendants from the breach.
In my opinion the focus on the plaintiff's podiatry practice by way of discovery is irrelevant and no orders will be made in relation to par 10 of the defendants' chamber summons.
Turning to the plaintiff's chamber summons dated 11 September 2020, the plaintiff seeks discovery from the defendants of all financial documents that go to any revenue or profit derived by the defendants in respect of any patient who has been a patient of the plaintiff. The application for discovery is directed to patients who had been a patient of the plaintiff.
In my opinion the documents sought by the plaintiff are relevant to the question of what profits were earnt by the defendants in relation to the alleged poaching of the plaintiff's patients. It is the information gained from this set of documents which will inform the decision of the plaintiff in relation to the necessary election that must be made.
In my opinion the documents are relevant to a central issue in this matter namely the extent of profits earnt by the defendants from the alleged poached plaintiff's patients.
The defendants' application for particulars of damage
It is clear that the plaintiff must provide particulars of damage. There has been non-compliance by the plaintiff with r 45C DCR.
In the context of this action the monetary calculation of the excess profits by the defendants from the alleged breach of contract is one of expert evidence. The quantification and its particularisation will be informed by the expert evidence.
In my opinion whilst particulars of damage will need to be provided, those particulars can wait until expert evidence has been obtained.
Accordingly I do not intend to make any order, at this stage, in relation to provision of particulars of damage.
Defendants' application for further and better particulars of alleged poached patients
The defendants seek an order that the plaintiff file and serve further and better particulars of par 42 of the plaintiff's re‑amended statement of claim filed 1 July 2016. The defendants seek identification of the names of the alleged Poached Patients referred to in par 42.
The defendants submit that without those names the defendants do not know which patients the plaintiff alleges are the subject of its claim.
Remembering that the plaintiff was required to use the defendants' accounting and computer system, the defendants submit that a patient of the defendants is not also a patient of the plaintiff.
The plaintiff's remedy against the defendants is either an account of profits or damages. But it is an account of profits or damages relating to the use of the confidential knowledge and the Poached Patients in the hands of the defendants.
For the defendants to understand the extent of the case against it, the plaintiff, in my opinion, should identify as far as it can, those patients she contends are the Poached Patients.
I am therefore persuaded that it is appropriate the plaintiff do give particulars of the Poached Patients. I am conscious that there may be some privacy issues surrounding that information and will hear argument on restriction on access to that information.
Conclusion
I will hear from counsel on the form of orders arising from my reasons, and or costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
CM
Court Officer
12 FEBRUARY 2021
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