Tabcorp Holdings Ltd v Entain Group Pty Ltd (No 2)

[2023] NSWSC 311

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Tabcorp Holdings Ltd v Entain Group Pty Ltd (No 2) [2023] NSWSC 311

Hearing dates:

On the papers; submissions received 27 March 2023

Date of orders:

30 March 2023

Decision date:

30 March 2023

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Precise scope of preliminary discovery determined, defendants to pay 60% of plaintiffs' costs of the application for preliminary discovery; plaintiffs to pay reasonable costs of the process of discovery; reserve parties’ rights to seek a variation of that order in the event substantive proceedings commenced

Catchwords:

CIVIL PROCEDURE – preliminary discovery – determination of precise scope of preliminary discovery – costs of the application for preliminary discovery – costs of compliance with orders for preliminary discovery

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

BGC Securities (Australia) Pty Limited v Shillington (No 2) [2022] NSWSC 807

Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (No 3) [2021] FCA 1428

Tabcorp Holdings Ltd v Entain Group Pty Ltd [2023] NSWSC 220

Category:

Consequential orders

Parties:

Tabcorp Holdings Ltd (ACN 063 780 709) (First Plaintiff)
TAB Ltd (ACN 081 765 308) (Second Plaintiff)
Entain Group Pty Ltd (First Defendant)
Australian Hotels Association (NSW) Holdings Pty Ltd (ACN 124 070 042) (Second Defendant)
Australian Hotels Association NSW (ABN 64 243 628 807) (Third Defendant)

Representation:

Counsel:
R C A Higgins SC with B Lim (Plaintiffs)
P D Herzfeld SC with O R Jones and D Farinha (First Defendant)
D J Reynolds (Second and Third Defendants)

Solicitors:
Herbert Smith Freehills (Plaintiffs)
Clayton Utz (First Defendant)
Addisons Lawyers (Second and Third Defendants)

File Number(s):

2022/350754

JUDGMENT

1. I gave judgment in this matter on 15 March 2023. ^[1] I shall use the same abbreviations here.

   1. Tabcorp Holdings Ltd v Entain Group Pty Ltd [2023] NSWSC 220.

2. I ordered that Entain and AHA give Tabcorp preliminary discovery of documents in three of the eight categories sought, and with a limitation in relation to one of those three categories.

3. On 21 March 2023, by consent, I made orders that, subject to what follows, gave effect to my judgment.

4. Four matters continue to divide the parties.

Category (2)

5. Category (2) is in the following terms:

“All documents constituting, recording or evidencing legal advice that Entain received with respect to the lawfulness of the Entain partnership or the arrangements with NSW venues contemplated by it.”

6. Entain seeks to limit this category to legal advice received on or before 6 October 2022, being the date of Entain’s and AHA’s announcement that I referred to at [22] and [23] of the principal judgment. AHA seeks to limit the category to advice received before 19 October 2022, being the date of the letter that AHA sent Tabcorp to which I referred at [50] of the principal judgment.

7. As Entain has pointed out, the category of discovery proposed by Tabcorp was for legal advice “received” with respect to the lawfulness of the proposed arrangements. The category was thus directed to advice received at an unidentified point of time in the past. I accept that it is necessary to specify a date beyond which preliminary discovery of documents in this category is not required.

8. Tabcorp contends that Entain has made ongoing representations as to the lawfulness of the proposed arrangements.

9. Whether or not that is the case, the category should not be used to capture advice given by Entain and AHA in response to the preliminary discovery application itself, for example as to whether, in that context, Tabcorp may be entitled to bring the claims that it contends it may be entitled to bring.

10. Accordingly, the “cut-off” date for disclosure should be the date on which Tabcorp filed its Summons seeking preliminary discovery: 21 November 2022.

Category (4)

11. Category (4) requires preliminary discovery of the following documents:

“All documents or other materials setting out the details as to how the ‘Ladbrokes Lounges’, ‘VIP Ladbrokes Activation Zones’ or ‘Neds Club Lounges’ or any other Entain location or area will or may be configured and operate in connection with the arrangements contemplated by the Entain partnership, including:

a)   details of proposed (or options for) physical layout, infrastructure and features, including presence and/or use of any devices;

b)   incentives or benefits proposed to be offered, through the QR code ‘pathways to our offers, markets and other customer activations’ or otherwise, to customers or venues; and

c)   the proposed features that will or may be available through ‘Mates Zones’, ‘Quaddie Quarter’ or ‘VIP Ladbrokes Activation Zones’ or any other Entain location or area, including those already mentioned.”

12. Tabcorp seeks an order that Entain and AHA give continuing discovery of documents in that category for three months, or the date on which Tabcorp commences substantive proceedings against Entain and AHA, whichever is earlier.

13. In that regard, Tabcorp points to the fact that Uniform Civil Procedure Rules 2005 (NSW), r 5.5, provides that UCPR Pt 21 applies to preliminary discovery and that UCPR r 21.6 makes provision for ongoing discovery “before the end of the hearing”.

14. But in the context of an application for preliminary discovery, “the end of the hearing” stated in UCPR r 21.6 can only be the end of the hearing of the application for preliminary discovery. That has already occurred. Thus, as was submitted on behalf of AHA, “even if r 21.6 were picked up by r 5.5, its operation is already spent”.

15. In any event, I cannot envisage a circumstance in which I would, as a matter of discretion, order continuing discovery in a preliminary discovery context. I certainly will not do so here.

16. As was submitted on behalf of Entain:

“The purpose of preliminary discovery is to enable a prospective plaintiff to make a decision about whether to bring a claim. To assist the prospective plaintiff to make that decision, the defendant can only be required to discover the documents that are in its possession at the time the application for preliminary discovery is determined. The plaintiff must then make the decision as to whether to commence proceedings that it contended it required the discovery to make. It is not entitled to wait around to see if further documents are created in the future which change the position.”

17. The decision to order preliminary discovery is one “to be taken at a particular point in time, namely when the application is brought”. ^[2]

    2. Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (No 3) [2021] FCA 1428 at [146] (Burley J).

18. Tabcorp has formulated the category of documents that it must have regarded as being sufficient for that purpose. I am not prepared to order that Entain or AHA give greater discovery than this.

The costs of the Summons

19. Tabcorp seeks its costs of its application. Each of Entain and AHA contend that there should be no order as to costs.

20. Tabcorp did not achieve complete success on its application, in that it has obtained preliminary discovery of three of the eight proposed categories and of more confined discovery in relation to one of those categories.

21. However, Tabcorp was successful in relation to the threshold issue, on which Entain and AHA focused, of whether Tabcorp already had sufficient information to enable it to decide whether or not to commence proceedings. It was that issue which occupied the majority of the hearing time.

22. In my opinion, the result of Tabcorp’s application justifies an order for costs in its favour.

23. Bearing in mind the nature of Tabcorp’s success, my conclusion is that the appropriate order is for Entain and AHA, together, to pay 60% of Tabcorp’s costs of the application.

Compliance costs

24. Tabcorp accepts that it should pay the reasonable costs of Entain’s and AHA’s costs of production and preparation of their affidavits and lists of documents.

25. Tabcorp also seeks an order that, in the event that it commences substantive proceedings against one or more of Entain and AHA within three months of the final resolution of any contested privilege claims, any costs of compliance be dealt with as an expense incurred by Tabcorp in any substantive proceedings.

26. However, that proposition assumes and predicts some kind of correlation between the costs incurred by Entain and AHA in complying with my orders for preliminary discovery and any success that Tabcorp might achieve in any later proceedings.

27. I would prefer to adopt the approach favoured by Henry J in BGC Securities (Australia) Pty Limited v Shillington (No 2) ^[3] and note that my order that Tabcorp pay Entain’s and AHA’s reasonable costs of giving preliminary discovery is without prejudice to the parties’ ability to seek a variation of that order in any such proceedings.

    3. [2022] NSWSC 807.

Final orders to dispose of these proceedings

28. The parties should now confer and agree on the orders necessary to dispose of these proceedings.

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Endnotes

Amendments

31 March 2023 - Typographical error