People Telecom Limited v Phatchat Pty Limited
[2008] FCA 405
•1 April 2008
FEDERAL COURT OF AUSTRALIA
People Telecom Limited v Phatchat Pty Limited [2008] FCA 405
Trade Practices Act 1974 (Cth), Pt IV, ss 4D, 45, 46
People Telecom Limited v Phatchat Pty Limited [2007] FCA 536 related
PEOPLE TELECOM LIMITED (ACN 091 714 699) v PHATCHAT PTY LIMITED (ACN 100 266 000), BODRUM PTY LIMITED (ACN 070 141 945) and PETER JAMES KELLY
PHATCHAT PTY LIMITED (ACN 100 266 000) and PETER JAMES KELLY v PEOPLE TELECOM LIMITED (ACN 091 714 699) and SINGTEL OPTUS PTY LIMITED (ACN 052 833 208)
BODRUM PTY LIMITED (ACN 070 141 945) and PETER JAMES KELLY v PEOPLE TELECOM LIMITED (ACN 091 714 699) and SINGTEL OPTUS PTY LIMITED (ACN 052 833 208)NSD 2044 OF 2006
GYLES J
1 APRIL 2008
CANBERRA (VIA VIDEO LINK TO SYDNEY) (HEARD IN SYDNEY)
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2044 OF 2006
BETWEEN:
PEOPLE TELECOM LIMITED (ACN 091 714 699)
ApplicantAND:
PHATCHAT PTY LIMITED (ACN 100 266 000)
First RespondentBODRUM PTY LIMITED (ACN 070 141 945)
Second RespondentPETER JAMES KELLY
Third RespondentPHATCHAT PTY LIMITED (ACN 100 266 000)
First Cross-Claimant on the First Cross-ClaimBODRUM PTY LIMITED (ACN 070 141 945)
First Cross-Claimant on the Second Cross-ClaimPETER JAMES KELLY
Second Cross-Claimant on the First and Second Cross-ClaimsPEOPLE TELECOM LIMITED (ACN 091 714 699)
First Cross-RespondentSINGTEL OPTUS PTY LIMITED (ACN 052 833 208)
Second Cross-Respondent
JUDGE:
GYLES J
DATE OF ORDER:
27 MARCH 2008
WHERE MADE:
CANBERRA
THE COURT ORDERS THAT:
1.The first cross-claimants on the first and second cross-claims are to provide security for the costs of the second cross-respondent in the further sum of $75,000 on or before 10 April 2008 (taking the total amount of security to $105,000), failing which the cross-claims as against the second cross-respondent will be stayed unless and until the security is provided.
2.The security referred to in paragraph 1 is to be provided by way of bank guarantees from a listed Australian Bank in favour of the second cross-respondent in terms that it may be called upon by the second cross-respondent to the extent that the first cross-claimants (or any of them) are ordered to pay the second cross-respondent’s costs in these proceedings and the amount of such costs are taxed or agreed, or ordered by the Court, as the case may be, for the purpose of satisfying any costs orders made in favour of the second cross-respondent.
3.The first cross-respondent to file its defences to the second further amended cross-claims within 14 days.
4.The first and second cross-respondents to file their evidence on the cross-claims by 18 June 2008.
5.The cross-claimants to file their evidence in reply on the cross-claims by 30 July 2008.
6.The matter be listed for further directions on 12 August 2008.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2044 OF 2006
BETWEEN:
PEOPLE TELECOM LIMITED (ACN 091 714 699)
ApplicantAND:
PHATCHAT PTY LIMITED (ACN 100 266 000)
First RespondentBODRUM PTY LIMITED (ACN 070 141 945)
Second RespondentPETER JAMES KELLY
Third RespondentPHATCHAT PTY LIMITED (ACN 100 266 000)
First Cross-Claimant on the First Cross-ClaimBODRUM PTY LIMITED (ACN 070 141 945)
First Cross-Claimant on the Second Cross-ClaimPETER JAMES KELLY
Second Cross-Claimant on the First and Second Cross-ClaimsPEOPLE TELECOM LIMITED (ACN 091 714 699)
First Cross-RespondentSINGTEL OPTUS PTY LIMITED (ACN 052 833 208)
Second Cross-Respondent
JUDGE:
GYLES J
DATE:
1 APRIL 2008
PLACE:
CANBERRA (VIA VIDEO LINK TO SYDNEY) (HEARD IN SYDNEY)
REASONS FOR JUDGMENT
On 27 March 2008 I resolved a further issue as to the provision of security for the costs of the second cross-respondent, Singtel Optus Pty Limited (Optus), by ordering the payment of a further $75,000. These are the reasons for that order.
On 11 April 2007 I decided an application for security for costs by the two cross-respondents in principle and gave reasons for the decision (People Telecom Limited v Phatchat Pty Limited [2007] FCA 536). The last substantive paragraph was as follows:
So, in my opinion, the task at the moment is to fix an amount which would be reasonable for those steps which should be taken to meet the s 45 and s 46 case, pending receipt of the evidence, which will be led by the applicant. It is at that point that both the cross-respondents, and myself, will have a better idea as to what is required for security. I will stand the matter over for further directions to 8 May 2007 at 9.15 am. If, in the meantime, that guidance helps you work something out, so much the better.
The amount of $30,000 was subsequently fixed for each cross-respondent. The point has now been reached where the next tranche of security is to be considered in relation to the cross-respondent Optus. After security was ordered and provided, there was a major change in the cross-claim based upon breach of Pt IV of the Trade Practices Act 1974 (Cth) – the claim based upon s 46 has been abandoned, leaving a claim of breach of s 45 entirely based upon s 4D. Also, the cross-claimants’ evidence has now been filed.
The orders for security were intended to provide security for the additional costs that would be incurred by reason of the preparation for the Pt IV cross-claim as such and that principle will govern this application, but with a rider. There are effectively three bases for the cross-claims against Optus – breach of Pt IV of the Trade Practices Act 1974 (Cth), breach of the Privacy Act 1988 (Cth) and interference with contractual relations. There was no particular analysis of these bases on the earlier occasion – the principal focus was upon the claims against the other cross-respondent. However, applying the same reasoning, the claim for interference with contractual relations would not attract an order for security. I doubt if the same can be said of the Privacy Act claim. On the face of it, it can be seen as both discrete and offensive (in the relevant sense). However, it arises out of circumstances otherwise in issue and, apart from a possible question of law, it is not suggested that it requires factual preparation not otherwise required.
The assessment of the appropriate amount attributable to preparation of the Pt IV case alone is somewhat arbitrary, as recognised by the solicitor for Optus. However, as I understand the case to be made, the relief claimed in relation to the Pt IV breach will substantially, if not entirely, overlap that in relation to the other bases for the cross-claim and will be based substantially upon the same matrix of facts. The evidence envisaged for Optus will effectively cover the entire case to be met, including relief. In my opinion, it is not correct to regard the claim for interference with contractual relations as an ancillary claim representing only a small proportion of the overall costs. It is appropriate to consider the issue for consideration as liability for breach of Pt IV.
There are issues concerning the level of some fees and the estimates of time involved in the assessment by Optus. I also take into account the relatively confined nature of the issues that arise in relation to a claim based upon s 4D. Nonetheless, both lay evidence and evidence from an industry expert will be required. I cannot see that expert evidence from an accountant can be attributed to liability on this cause of action alone. I must also keep in mind that Optus has been brought into the case by an impecunious company and that a proper order will not stifle the cross-claim. Doubts should be resolved in its favour.
In my view, it is reasonable to adopt $150,000 as an estimate for preparation of the case as a whole for trial. An order that 50% of that amount be provided by way of security would be a generous assessment of what will be required to defend liability on the Pt IV case. Security in the amount of $75,000 was ordered.
I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate:
Dated: 1 April 2008
Counsel for the Cross-Claimants: Mr JC Giles Solicitor for the Cross-Claimants: Levitt Robinson Solicitor for the Applicant/First Cross-Respondent: Mr A Miers of Ebsworth & Ebsworth Counsel for the Second Cross- Respondent: Mr MA Jones Solicitor for the Second Cross-Respondent: Baker & McKenzie
Date of Hearing: 20 March 2008 Date of Orders: 27 March 2008 Date of Reasons: 1 April 2008
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