Police Citizens Youth Clubs NSW Limited v Insight Holdings Consolidated Pty Limited

[2018] NSWSC 778

Supreme Court

New South Wales

Medium Neutral Citation:

Police Citizens Youth Clubs NSW Limited v Insight Holdings Consolidated Pty Limited [2018] NSWSC 778

Hearing dates:

25/05/2018

Date of orders:

25 May 2018

Decision date:

25 May 2018

Jurisdiction:

Equity - Commercial List

Before:

McDougall J

Decision:

Grant plaintiff leave to discontinue on terms as to costs. Ancillary orders made.

Catchwords:

CIVIL PROCEDURE – application to discontinue proceedings – where plaintiff received benefit of interlocutory order which rendered underlying proceedings unnecessary – defendant consented to discontinuance subject to costs and an inquiry into damages resulting from the interlocutory order –defendant asserts entitlement for inquiry as to damages as plaintiff had not vindicated its right to the interlocutory relief at trial – inappropriate to resolve issue of damages at present – defendant given leave to move for an inquiry as to damages at its own risk.

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Newcomen v Coulson [1878] 7 Ch D 764
Peng v Hua Cheng International Holdings Group Pty Ltd [2018] NSWSC 726

Category:

Procedural and other rulings

Parties:

Police Citizens Youth Clubs NSW Limited (Plaintiff)
Insight Holdings Consolidated Pty Limited (Defendant)

Representation:

Counsel:
D S Weinberger (Plaintiff)
K Andronos SC (Defendant)

 

Solicitors:

  Thomson Geer (Plaintiff)
Marque Lawyers (Defendant)

File Number(s):

2017/385053

Judgment   (ex tempore – revised 25 mAY 2018)

1. HIS HONOUR: It is, with great respect to the parties and to counsel, extremely difficult to see why this matter has come before the Court today.

2. The plaintiff is a charity. It raises funds by a number of means, including by conducting lotteries. At one time, it had an agreement with the defendant to assist the plaintiff in those fund raising activities. The plaintiff contended that the agreement was to come to an end on 31 December 2017. It entered into a new agreement with another service provider.

3. The plaintiff took the view that it needed access to “VIP” banking data to enable it to contact some of those who, from time to time, had bought lottery tickets. That data was effectively in the possession or under the control of the defendant. The plaintiff commenced proceedings seeking, by way of interlocutory relief, an order for the delivery up of that data.

4. The application was heard by Sackar J on 21 December 2017. His Honour considered that there was a serious question to be tried as to whether the plaintiff had the claimed right. His Honour then turned to balance of convenience considerations and found them to be "overwhelmingly in favour of the plaintiff". Thus, although making it clear that nothing his Honour had said "should be construed as [him] coming to any final view, or expressing any final view on any construction question", his Honour granted the relief sought. As his Honour said, that decision was "driven partly by pragmatism, and very much by balance of convenience".

5. The data has been provided. The plaintiff, presumably, is carrying on business with its new service provider utilising the fruits of the interlocutory order that it obtained. The plaintiff no longer wishes to pursue the final relief sought by its summons, part of which at least is said (by the defendant) to have related to matters that were never in dispute.

6. The plaintiff now wishes to discontinue. The defendant does not oppose that. However, it says, the plaintiff should pay its costs.

7. Further, the defendant wants to have an inquiry as to damages. It says that it has suffered loss by reason of the orders made, and that the plaintiff has failed to vindicate at trial its right to those orders. Indeed, the defendant goes further and says, by reference to the decision of Malins V-C in Newcomen v Coulson [1] at 765, that discontinuance cannot absolve a plaintiff of its obligation to pay damages sustained by reason of the grant of interlocutory relief. His Lordship said that that "would be a most dangerous doctrine": referring to what his Lordship characterised as evasion of liability by the mechanism of discontinuance.

   1. [1878] 7 Ch D 764.

8. It is fair to say that his Lordship's decision has not met with unanimous approbation in subsequent authorities, and that there are numerous decisions dealing with the question which seek to analyse, or to cut and dice, the facts in different ways so as to lead to a different outcome.

9. I start with the question of costs. The plaintiff has obtained interlocutory relief, but without any decision by this Court that it had established a final right to that relief. It now wishes to discontinue. The question of costs, although in the discretion of the Court (see s 98 of the Civil Procedure Act 2005 (NSW)) nonetheless must be guided by the Rules. UCPR r 42.19 provides that where a plaintiff discontinues, it should pay the defendant's costs unless the Court otherwise orders.

10. The plaintiff submitted that there was a basis for ordering otherwise, because the general rule is that absent a determination on the merits, the Court should not conduct a trial on the merits to see whether or not an order for costs should be made. If I may say so, that submission appears to overlook the impact of r 42.19 which, as Darke J recognised in Peng v Hua Cheng International Holdings Group Pty Ltd [2] at [9], appears to cast an onus on the discontinuing party to show reasons why costs should not be dealt with in accordance with the rule.

    2. [2018] NSWSC 726.

11. I do not think that the very circumstance that the rule is designed to meet – that there has been no trial on the merits, and that the Court should not conduct a trial on the merits simply to decide a costs question – can of itself take the matter outside r 42.19.

12. Accordingly, the discontinuance must be on terms as to costs.

13. There is a real question apparently as to whether the defendant has any basis for its suggested claim to damages. Insofar as those damages are said to constitute the costs of production, whether or not they amount to damage will depend on whether the defendant was contractually required to produce the records upon request. That also seems to me to apply to the other way in which the claim is put: namely that the defendant lost the right, said to have some commercial value, to bargain with the plaintiff to obtain remuneration for providing the information sought.

14. I do not propose to look at the agreement for the purpose of deciding whether the defendant was, as the plaintiff contends, or was not, as the defendant contends, required to produce the material. What I do propose to do is to give the defendant leave to move, at its own risk as to costs, for an inquiry as to damages. I wish to make it perfectly plain that I am not satisfied, and should not be taken to be holding, that the defendant has made out a basis for that claim. Any legal entitlement, turning as it must on, among other things, the proper construction of the agreement between the plaintiff and the defendant, must be established on the hearing of the application, if brought.

15. It may be wondered why a corporation that apparently makes its living from providing services to charities should wish to engage in a public dispute with a charity, but that is not a matter that is material to my decision. It may perhaps reflect the rationale said by Voltaire to justify the shooting of Admiral Byng.

16. The defendant also contends that the data handed over should be returned. Again, a decision on that point would require the Court to consider the underlying contractual position and the merits of the competing arguments. For the reasons I have given, I do not propose to do so.

17. The defendant provided short minutes of order which provided for leave to discontinue, and alternatively (in the absence of discontinuance) for strikeout for want of prosecution. They sought, also, return of the data or its destruction, an inquiry as to damages and payment of any damages assessed. They sought orders as to costs.

18. I am satisfied that the first, second, sixth and seventh of the orders sought (relating to discontinuance/strikeout and costs) should be made. For the reasons I have given, I am not prepared to make the third, fourth and fifth orders. I will, however, give the plaintiff a direction to move for those orders by notice of motion to be filed by a particular date. So far as I am concerned, that is a matter more appropriate to be dealt with in the General List. It follows that the proceedings should be removed from the Commercial List.

19. The only other point to make is that in the second order sought there should be a time limit of seven days from this date before the proceedings can be struck out for want of prosecution: that is to say, discontinuance in accordance with the leave to be given should be performed within seven days.

20. I make orders in accordance with paras 1, 2, as amended, 6 and 7 of the short minutes of order initialled by me and dated today's date. I grant the defendant leave to apply for relief in accordance with paras 3, 4 and 5 of those short minutes. I direct that the application is to be made by notice of motion filed and served within seven days of today's date. Any such notice of motion is to be made returnable before the Registrar. I direct that the proceedings be removed from the Commercial List.

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Endnotes

Decision last updated: 28 May 2018