OPSM v Taylor

[2005] NSWSC 81

CITATION:	OPSM v Taylor [2005] NSWSC 81
HEARING DATE(S):	10, 11 February 2005
JUDGMENT DATE :	22 February 2005
JUDGMENT OF:	McDougall J at 1
DECISION:	See para [31] of judgment

CATCHWORDS:	PRACTICE AND PROCEDURE - costs - costs of interlocutory application - where relief favoured the applicant although the claimed relief was not awarded - where parties eventually consented to existing interlocutory regime - whether actions of parties were reasonable - whether costs ought to be awarded to the applicant - whether costs ought to be costs in the proceedings or costs of the application - no question of principle
PARTIES:	OPSM Pty Ltd (Plaintiff) Brigette Taylor (Defendant)
FILE NUMBER(S):	SC 6677/04
COUNSEL:	R F Margo SC/S B Loughnan (Plaintiff) M S White (Defendant)
SOLICITORS:	Norton White (Plaintiff) Diamond Peisah & Co (Defendant)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

22 February 2005

6677/04 OPSM PTY LTD v BRIGETTE TAYLOR

JUDGMENT ON COSTS

1 HIS HONOUR: An application for continued interlocutory relief, relating to the records of an optometrist’s practice at Castle Hill and other matters, was resolved by consent on 10 February 2005; but only after evidence had been taken and submissions put. The resolution did not extend to the questions of costs. The parties agreed that they would put submissions on costs in writing and that I could decide the question of costs by reference to those submissions.

Background

2 Interlocutory orders for access to the patient records were made by consent on 17 December 2004. The plaintiff (OPSM) had proposed that the regime continue until further order. The defendant (Ms Taylor) sought that it continue only up until 15 February 2005. OPSM accepted this limitation. The effect of the agreed regime was that Ms Taylor would keep “Patient Records” (a defined term) secure; that she would not supply them to anyone other than OPSM or any person supplying optometric services at the Castle Hill “Outlet” (another defined term); and that she would provide OPSM with copies of individual records on request.

3 The consent regime included, as well as the matters just referred to, an undertaking by Ms Taylor to comply with a restraint of trade provision set out in the relevant agreement between her and OPSM. That restraint provided in substance that Ms Taylor would not practise as an optometrist for a period of three years within an area bounded by a circle having a 5 km radius based on the “Outlet”. It specified, in the alternative, a series of lesser restraints, diminished both by time and by area.

4 OPSM, or it may be the parties, sought expedition of the proceedings. They were listed before Campbell J in the expedition list on 4 February 2005. His Honour gave directions for the further conduct of the proceedings, but, apparently through pressure of business, could not deal with OPSM’s application for extension of the interlocutory regime. It was apparently submitted for Ms Taylor that the existing regime was inconvenient for her because it required her to remain at her home (which is where she kept the relevant records) to answer OPSM’s requests, and that this would interfere with the execution of her desire to recommence practise as an optometrist. It will be observed that, although the objection related only to the access to patient records, the effect of Ms Taylor’s position was that she would cease to be bound also by her undertaking, referred to in the previous paragraph, to observe the terms of the restraint of trade provision.

5 Further negotiations between the parties did not resolve the matter. Accordingly, it was listed before the duty judge, and thereafter before me, on 10 February 2005.

6 In the negotiations between 7 and 10 February 2005, OPSM’s lawyers proposed an alternative regime, the essence of which was that OPSM would keep all the records secure at the Castle Hill premises, and to use them, on certain conditions as to confidentiality, for the purposes of the optometrist’s practice conducted from those premises. That regime also proposed a continuation of the existing position in relation to the restraint of trade.

7 Ms Taylor’s position was that she wished to recommence practice, and that she required access to the records to enable her to provide her services to any former patient who might seek them. She suggested that she do so from OPSM’s Castle Hill premises. This was unacceptable to OPSM. (The unacceptability of the proposal was clearly influenced by the proposition, earlier stated by Ms Taylor, that she might seek to work for a major competitor of OPSM’s in the Castle Hill centre.)

8 Thus, whilst OPSM was prepared to make records available to Ms Taylor in certain circumstances (including, specifically, that she not practise as an optometrist within a 5 km radius of its premises at Castle Hill), it was not prepared to provide her with unrestricted access.

9 By the time the interlocutory application was listed before me, the parties’ positions appeared to be entrenched. OPSM wanted something substantially different to the existing regime: because it wanted custody of the records itself. Ms Taylor wanted something different.

10 The regime propounded by Ms Taylor at the commencement of the hearing on 10 February 2005 was substantially different to the existing regime. She proposed that she would retain possession of the records, but that OPSM would not have access to them. She did however propose that if a patient should make written request to her for that patient’s record, she would provide a copy to the patient.

11 Further, Ms Taylor proposed to undertake not to practise as an optometrist, but only within a 3 km radius of the Castle Hill premises. (As I have said, the primary area of the restriction was a circle of 5 kms’ radius; in a not uncommon way, the restrictive covenant specified a series of decreasing areas, and a series of decreasing terms of restraint; and it appears that Ms Taylor had selected one of the lesser areas as being more favourable to her.)

The agreement of 10 February 2005

12 Ultimately, after several hours of hearing, an agreement in principle was reached. Counsel were satisfied that the terms were clear and that each party understood them, and accordingly I stood the proceedings over to 11 February 2005 to enable counsel to bring in short minutes of order. This they did. In essence, the orders that I made by consent on 11 February 2005 involved a continuation of the existing regime up until further order. There were, however, some modifications. Those modifications were not, in my view, substantial. They dealt with two matters:

(1) The detail of the obligation placed on Ms Taylor to respond to requests for records made by OPSM; and

(2) The detail of an obligation placed on OPSM to notify patients, if they enquired, that Ms Taylor was no longer in practice at the Castle Hill premises.

The submissions on costs

13 OPSM submitted that the interlocutory application that I dealt with (ultimately, by consent) was necessitated by Ms Taylor’s objection to the continuation of the existing regime. It submitted that Ms Taylor’s stance was unreasonable, and that it was only overcome “by the plaintiff prosecuting its application to the point of judgment”. Thus, it submitted, it should have costs.

14 Ms Taylor submitted that the regime proposed by OPSM, that was the subject of the evidence and argument on 10 February 2005, was substantially different to the existing regime. She pointed to the circumstance that the orders that were made by consent replicated, but (she said) with benefits from her perspective, the existing regime. She submitted that costs should be costs in the proceedings.

Analysis

15 It is correct to say that, from 7 February 2005 up until the making of the agreement (in the course of the hearing on 10 February 2005), OPSM was seeking something different in substance to the existing regime. It is equally correct to say that what was agreed can properly be characterised as, in substance, a continuation of the existing regime. I am referring to the proposed and existing regimes insofar as they dealt with patient records; OPSM’s position in relation to the restraint of trade has never changed.

16 However, OPSM’s attitude in relation to patient records was dictated by Ms Taylor’s refusal to consent to a continuation of the existing regime, and to the assigned reason for that refusal. That reason was, as I have said, that the existing regime was onerous upon her, in that (because, she said, it required her to stay at home to answer OPSM’s requests) it did not permit her to resume her practice.

17 OPSM’s change of position was a response to, and attempt to accommodate, Ms Taylor’s position as indicated at the directions hearing before Campbell J on 4 February 2005. Ms Taylor’s response was, in my view, an unwieldy and unworkable proposal. Further, insofar as it offered a lesser restriction than that to which, prima facie, OPSM was entitled, it was unjustified by any evidence. (Mr M S White of Counsel, who appeared for Ms Taylor, submitted in the course of the hearing that the 5 km radius was excessive; but this is not a question that is capable of determination on an interlocutory application. This is so particularly where – as is often the case, and was the case here – there are authorities, each based on its own facts, going each way.)

18 However, it became apparent in the course of the hearing before me that OPSM’s preference for its own proposal was not motivated solely by a desire to facilitate the provision of optometric services to patients at the premises. Mr R F Margo SC, who appeared with Mr S B Loughnan of Counsel for OPSM, submitted more than once that Ms Taylor’s proposal was inadequate not only because of the obvious shortcomings in the ability of OPSM, or an optometrist at the premises, to have access to patient records, but also because it would prevent OPSM from canvassing patients or former patients of the practice. This, Mr Margo submitted, was a significant matter because, in substance, OPSM required the records to promote its services in this way.

19 Further, I have to say, I regard the compromise that was reached as marking (notwithstanding the protestations of counsel) a substantial retreat by both sides from the positions that they had respectively taken. It is impossible to view OPSM’s interlocutory application as representing, in substance, an attempt by it to maintain the existing regime.

20 I accept, as I have said, that OPSM’s proposed regime was an attempt to cope with the difficulties asserted by Ms Taylor. However, I conclude, OPSM was also aware that its proposed regime would offer it benefits over and above those that it enjoyed under the existing regime.

21 On the contrary, however, it is impossible to regard the regime proposed by Ms Taylor as anything other than an attempt to retreat substantially and fundamentally from the limited concessions offered by her that were embodied in the existing regime. Further, on the basis that it was likely (as I indicated in the course of argument) that the restraints upon her practising, and soliciting former patients of her Castle Hill practice, would be enforced on an interlocutory basis, it is very difficult to understand what benefits she hoped to derive by restricting OPSM’s access to the records. The reality, I suspect, is that she was motivated at least in part by a desire to make life as difficult as possible for OPSM and those employed by it or contracted to it at the Castle Hill premises.

22 It may very well be that, on a final hearing, Ms Taylor’s position will be proved to have been justified. However, that is not the point that I am presently required to consider. Rather, I think, the point that I am now to consider is whether, in all the circumstances, she should be ordered to pay OPSM’s costs of the interlocutory application, or whether some other order should be made.

23 Looking at the matter by outcome, it is apparent that the outcome that was – ultimately – achieved by consent is far more favourable to OPSM than the outcome proposed by Ms Taylor at the commencement of the interlocutory hearing. Further, I think, the outcome initially proposed by Ms Taylor was one lacking in any substantial justification. These comments apply not only to the outcome in relation to patients records, but also, and I think with greater force, to the outcome in relation to the restraint of trade.

24 In circumstances where the application was necessitated by Ms Taylor’s refusal to consent to a continuation of the existing regime, it is necessary to consider whether the proposal advocated by OPSM was reasonable. I have come to the conclusion that it was, notwithstanding that (as OPSM quite clearly perceived) it offered OPSM some advantage over and above that accruing to it under the existing regime.

25 Another matter to consider is that the regime that was ultimately agreed reflects in substance, although not in some details, the existing regime. In other words, Ms Taylor has consented to what is in substance a continuation of the regime that she had said, a few days earlier, was unduly burdensome upon her. There is no explanation given for this apparent change of position.

26 I therefore think that the costs order to be made should favour OPSM. The question in my mind is whether the order should be that Ms Taylor pay OPSM’s costs of the interlocutory application, or whether the costs of that application should be OPSM’s costs in the proceedings.

27 I have come to the view that the order should be in the former form. That is substantially because, given Ms Taylor’s attitude, it was necessary for OPSM to bring the interlocutory application; and, having regard to the reasons given by Ms Taylor to justify her attitude, it was necessary for the application to be brought in the form that it was. There is nothing in the correspondence passing between the parties to suggest that Ms Taylor, between 7 and 10 February 2005, would have countenanced abandoning her position that a continuation of the existing orders was inappropriate and burdensome. I do think that the regime proposed by OPSM was a reasonable response to her proclaimed attitude; and the fact that it provided other benefits to OPSM does not gainsay this. On the other hand, as I have already indicated, I think that the regime propounded by Ms Taylor as to patient records was inappropriate and impractical.

28 Thus, whilst I regard Ms Taylor’s retreat from her stated position to an acceptance of a continuation of what is in substance the agreed regime, as significant (see para [19] above), I do not regard OPSM’s retreat as bearing anything like that degree of significance.

29 What I have said relates primarily to the dispute in relation to patient records. However, I take into account also that OPSM sought a continuation of the existing regime in relation to the contractual restraint that, it said, bound Ms Taylor. Ms Taylor propounded a variation to the contractual regime but, as I have observed in para [17] above, there was no real justification offered for this aspect of her change in attitude. The agreement reached on 10 February 2005 resolved this issue also in favour of OPSM, on an interlocutory basis, in a manner consistent with the previous consent regime.

30 In short, the interlocutory application was necessitated by Ms Taylor’s attitude. Further, although the relief obtained by OPSM in relation to patient records was not that for which it had moved, I think that it was reasonable for OPSM to seek the relief that it did having regard to Ms Taylor’s stated attitude. I therefore conclude that OPSM should have its costs. OPSM did not ask for those costs on an indemnity basis, so I do not need to consider the merits of its submission that the circumstances would have justified such an order.

Order

31 I order the defendant to pay the plaintiff’s costs of its notice of motion for continued interlocutory relief filed on 10 February 2005.

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