Power Grid Cables Pty Ltd v Essential Energy

[2016] NSWSC 859

Supreme Court

New South Wales

Medium Neutral Citation:	Power Grid Cables Pty Ltd v Essential Energy [2016] NSWSC 859
Hearing dates:	19 May 2016 9 June 2016
Decision date:	23 June 2016
Jurisdiction:	Common Law
Before:	Button J
Decision:	(1) The defendant is not required to comply with the notice to produce of the plaintiff of 11 May 2016 until further order of a judge of this Court. (2) The notice of motion of the defendant of 13 May 2016 is otherwise dismissed. (3) Costs of the proceedings before me are costs in the cause. (4) The matter is listed before the Common Law Registrar at 9 AM on 7 July 2016.
Catchwords:	PRACTICE AND PROCEDURE – application for determination of separate question – whether decision amenable to judicial review – whether issue should be determined prior to trial – whether plaintiff should be compelled to proceed by way of pleadings – whether notice to produce should be set aside
Legislation Cited:	Competition Policy Reform (New South Wales) Act 1995 Electricity Supply Act 1995 (NSW), s 31(1)(a) Limitation Act 1969 (NSW)
Cases Cited:	Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1 Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Category:	Procedural and other rulings
Parties:	Power Grid Cables Pty Ltd ACN 102 888 719 (Plaintiff/Respondent) Essential Energy ABN 37 428 185 226 (Defendant/Applicant)
Representation:	Counsel: V Heath (Plaintiff/Respondent) K C Morgan (Defendant/Applicant)   Solicitors: Francis John Simpson (Plaintiff/Respondent) Minter Ellison (Defendant/Applicant)
File Number(s):	2016/134225

Judgment

Introduction

1. An amended notice of motion of Essential Energy (the defendant) came before me in the Duty List on 19 May 2016. Due to my inability to do the matter justice, in light of the list as it was on that day, the matter was stood over part heard before me to 9 June 2016, again in the Duty List. On that occasion, the defendant amended the notice of motion slightly, so that the three orders pressed were as follows:

1. Pursuant to UCPR 28.2, the Court decide a separate question before any other issue in the proceedings: namely, whether the Decision referred to in the plaintiff’s summons filed 2 May 2016 is a decision that is amenable to judicial review.

2. Pursuant to UCPR 6.6(2), that the matter continue, in relation to prayers for relief 6 and 7 in the plaintiff’s summons filed 2 May 2016, by way of pleadings.

3. Paragraphs (2) to (4) of the notice to produce dated 11 May 2016 be set aside.

2. Power Grid Pty Ltd (the plaintiff), resisted all of the orders sought in the motion. Having said that, I think it fair to say that the distance between the two counsel before me was not overly great, in that each accepted that the position of her opponent could have force at a later stage, after the litigation had developed more fully.

Background

3. By way of very brief background, the plaintiff is a supplier of electrical cables and conductors. The defendant is a statutory corporation operating an electricity distribution network.

4. By way of a summons filed in this Court on 2 May 2016, the plaintiff claims that, on or about 1 or 2 February 2016, the defendant made a decision revoking approval of the products of the plaintiff; directing accredited service providers not to use those products; and refusing services to any customer or potential customer using products supplied by the plaintiff.

5. The decision complained of is impugned by the plaintiff on three major grounds.

6. First, it is said to be contrary to s 31(1)(a) of the Electricity Supply Act1995 (NSW), in that it unlawfully restricts the right of consumers to choose their own products or suppliers.

7. Secondly, the decision is alleged to be contrary to legislation directed against anti-competitive behaviour, namely the Competition Policy Reform (New South Wales) Act 1995.

8. Thirdly, and separately, the decision is said to be amenable to judicial review. Familiar grounds in that regard have been pleaded; they include: denial of procedural fairness; lack of reasons; improper purpose; illogicality; and gross unreasonableness.

9. The litigation is at a very early stage. I say that because, although an originating process has been filed and served by the plaintiff, and particulars of claim were served upon the defendant between the first time the matter was before me (on 19 May 2016) and the second (on 9 June 2016), and a notice to produce has been served by the plaintiff on the defendant, no response to the originating process has been provided by the defendant. Indeed, I was told by counsel for the defendant at the hearing of 9 June 2016 that the next step from the perspective of her client will be to request further and better particulars of the plaintiff. In other words, the provision of a response in the nature of a defence by the defendant is quite some time away.

10. That has a number of inevitable consequences. The first is that it is difficult indeed for me to determine the true areas of dispute between the parties. The second is, with regard to any subpoena or analogous process, it is difficult indeed to determine whether it has a legitimate forensic purpose, and whether it is too broad.

Proposed order 1

11. It is in that context that the defendant submitted that it would be appropriate for me, at this very early stage, to order that the question of judicial review be heard separately from the question of alleged infringement of the two statutory provisions to which I have referred. In support of that proposed order, the following submissions were made.

12. First, it was said that the determination of whether the decision is amenable to judicial review will call for an analysis of whether, in making the decision, the defendant was operating (at one end of the spectrum) as a business making a commercial decision (and therefore its decision is not amenable to judicial review), or (at the other end of the spectrum) as an arm of government exercising a statutory function (and therefore its decision is so amenable). It was submitted that that question could be resolved in as little as two hours. It was also submitted that that process will call for little or no contestable evidence, but rather an analysis of a regulatory structure relevant to the defendant and to the decision.

13. Secondly, it was said that there could be no evidential overlap between the questions of infringement of the two statutes and the entirely separate question of characterisation of the defendant and the decision.

14. Thirdly, it was submitted that it would be convenient to the parties to have that question separately determined, before an extended substantive hearing about the alleged breach of the two statutes.

15. Turning to my determination, I do not accept that I should make proposed order 1. That is so for the following reasons.

16. First, I regard the application as very premature, bearing in mind that neither the plaintiff nor the Court can know, by way of a defence, what the position of the defendant is with regard to the contentions of the plaintiff, and which contentions of fact and law are truly in dispute. In those circumstances, I do not accept that I can properly determine whether or not the issue of judicial review should be severed from the issues of alleged statutory infringement.

17. Secondly, it is well known that the “default position” is that all matters should be determined at the one substantive hearing, and that the “onus” is on the party asserting the contrary to justify the departure and to demonstrate that “utility, economy, and fairness to the parties are beyond question” in severing the issue: Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1 at [170].

18. Thirdly, even legal questions that are seemingly readily severable and determinable are not to be decided separately in the usual course. An example is questions pursuant to the Limitation Act 1969 (NSW): see Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 533-534. That argues against severance in these less compelling circumstances.

19. Fourthly, in light of the submission of counsel for the plaintiff that it would not be the case that there would be no overlap in evidence between those matters going to the question of breach of statutes and those matters going to the availability and appropriateness of judicial review, combined with the absence of any pleading of the defendant, I am not confident that there would be no such an overlap. That lack of confidence on my part about the absence of the avoidance of the repetition of evidence argues against severance as well.

20. Fifthly, I mean not the slightest disrespect to the parties in saying that I am not confident that the question of the availability and appropriateness of judicial review in this case could be determined in two hours, or anything like it. I think that the question would be hard-fought, complex, and time-consuming.

21. Sixthly, counsel for the plaintiff submitted that it could be that the question of the order in which the claims were heard and determined should be revisited later in the litigation. That concession on her part tends to bolster my belief that this application is premature.

22. In summary, for a number of reasons – the most significant of which is that no defence has been filed by the defendant – I consider that to make proposed order 1 at this stage would be inappropriate, and I decline to do so.

Proposed order 2

23. Turning to proposed order 2, again there was some degree of concordance between the parties. The defendant submitted that the proposed order should be made forthwith, in aid of clarification of the claim of the plaintiff. Counsel for the plaintiff submitted that it could perhaps be made by consent at a later time, bearing in mind that, although points of claim were filed on 9 June 2016, nevertheless they may require supplementation in due course. But she submitted that to compel the plaintiff at this stage to conduct its claim in a particular way, the defendant having provided nothing by way of a response to the originating process and particulars of claim that have now been filed, would be premature.

24. Turning to my determination, I do not accept the submission of the defendant that I should, at this very early stage, presume to compel the plaintiff as to how it should present its case. Again, I think that the fact that the defendant has not provided any formal response to the claim, and indeed has foreshadowed that the provision of any response may take quite some time (bearing in mind the proposal to seek detailed particulars), argues against the necessity or desirability of making specific orders about how the plaintiff presents its case at this very early stage. I express no opinion as to the appropriateness of such an order at a later stage of the litigation.

25. In short, I shall not make proposed order 2 in the motion.

Proposed order 3

26. Proposed order 3 is founded on the proposition that the notice to produce served by the plaintiff on the defendant is inappropriate. In support of the proposition that it should be set aside, it was said that that compulsory process is far too broad, and more akin to discovery. My attention was invited to para 3 and para 4 of the notice to produce, which call for production of:

[3] All documents created or modified in the period 1 January 2014 to date referring or relating to the plaintiff, including without limitation reports, correspondence, emails and memoranda.

[4] All documents created or modified in the period 1 January 2014 to date referring or relating to the plaintiff’s products, including without limitation reports, correspondence, emails and memoranda.

It was said that those requests are, on their face, simply far too broad.

27. Counsel for the plaintiff submitted, in response, that those paragraphs are indeed appropriate, bearing in mind the claims of her client that the defendant has contravened the two statutes, as well as the need for this Court to have all of the material that was before the decision maker in order to adjudicate on the question of judicial review. She submitted that the notice to produce should stand.

28. Having said that, by the end of the hearing before me, each counsel expressed herself reasonably content with the proposition that proposed order 3 be stood over (along with, presumably, the need to comply with the notice to produce) to permit the litigation to develop further.

29. Turning to my determination, the starting point of the analysis of a subpoena or analogous compulsory process is determination of whether it has a legitimate forensic purpose. That will form the basis, as well, of any analysis as to whether the compulsory process is too broad.

30. Here, because of the absence of any defence from the defendant, it is impossible to determine whether or not the notice to produce has a legitimate forensic purpose. That is because it is impossible to know what legal and factual issues are in dispute. By that I mean that it would be rare indeed for a compulsory process to have a legitimate forensic purpose if it were directed only to proving a matter conceded by one’s opponent as correct. On the other hand, if one’s opponent had placed the matter firmly in dispute, then the same process could indeed have a legitimate forensic purpose. The same may be said of allegations of inappropriate breadth: much depends on the issues joined between the parties.

31. At first blush, I think there is substantial force in the proposition of the defendant that the paragraphs I have quoted above are far too broad in their effort to capture seemingly countless communications within the defendant pertaining to the plaintiff and its products. But I repeat that until a defence is filed it is impossible to answer that question definitively.

32. My solution to this procedural problem is to decline to make proposed order 3 in the notice of motion. Once the issues between the parties have been clarified, it may be that the defendant would care to renew the application by way of a further notice of motion. But as a procedural matter, I do not believe that this proposed order, contained as it is in an amended notice of motion filed on 19 May 2016, should remain in abeyance, to be determined perhaps months from now by another judge. I think that proposed order 3 must be rejected at this stage.

33. Having said that, because it is impossible until the litigation develops further to determine the appropriateness of the notice to produce, and because of my strong impression that it is too broad, I propose to order that it need not be the subject of compliance by the defendant until a further order of a judge of this Court.

34. In short, I do not intend to make proposed order 3 in the notice of motion.

Costs

35. Turning to costs, neither party made submissions about them. I infer that each party was content for costs to follow the determination of the motion.

36. The defendant failed in seeking to have an issue determined separately. It also failed in its attempt to have the plaintiff forced to present its case in a certain way at this early stage. It also failed, in a formal sense, in having the notice to produce set aside.

37. Having said that, the defendant succeeded in resisting compliance with the notice to produce, at least for the time being. It is also the case that, as I have said, counsel for the plaintiff indicated that in due course it could be appropriate for the separate issues raised by her claim to be dealt with in a certain order. She also indicated that, in due course, she would in all likelihood be prepared to proceed by way of pleadings with regard to the subject matter of proposed order 2 in the notice of motion.

38. In all of those circumstances, as an exercise of discretion I think that the appropriate order is that costs of the motion before me be costs in the cause.

Orders

39. Finally, in order to progress the matter I think that it should return to the Registrar’s list promptly.

40. I make the following orders:

1. The defendant is not required to comply with the notice to produce of the plaintiff of 11 May 2016 until further order of a judge of this Court.

2. The notice of motion of the defendant of 13 May 2016 is otherwise dismissed.

3. Costs of the proceedings before me are costs in the cause.

4. The matter is listed before the Common Law Registrar at 9 AM on 7 July 2016.

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Decision last updated: 23 June 2016