Data Processors Pty Ltd v O’Toole

Hearing dates: 21 March 2025

Date of orders: 21 March 2025

Decision date: 21 March 2025

Jurisdiction: Equity - Commercial List

Before: Stevenson J

Decision: Defer consideration of the plaintiff’s motion of 7 March 2025 until liability evidence served

Catchwords: CIVIL PROCEDURE – separate determination of questions – where appropriate – whether issue of liability should be heard separately and before quantum – where four of five defendants in effect admit liability – where remaining defendant does not actively dispute liability – where second hearing inevitable even if liability heard first – where separate hearing on liability might enable plaintiff to elect between damages and account of profits – where overall costs likely to be borne by defendants – where preferable course is to direct plaintiff to serve its evidence in chief on liability and reconsider separate question thereafter

Category: Procedural rulings

Parties: Data Processors Pty Ltd (Plaintiff/Applicant)
Sean O’Toole (First Defendant/Respondent)
Michael Demos (Second Defendant/Respondent)
Joel Caley (Third Defendant/Respondent)
Kusuv Bhandari (Fourth Defendant/Respondent)
Richard Zhang (Fifth Defendant/Respondent)

Representation: Counsel:
S A Lawrance SC / A Smorchevsky (Plaintiff/Applicant)
M E Hall (Fourth Defendant/Respondent)
Solicitors:
Prandium Legal (Plaintiff/Applicant)
First Defendant (self-represented)
Blackbay Lawyers (Second Defendant/Respondent)
Third Defendant (self-represented)
Origin Lawyers (Fourth Defendant/Respondent)
Bridges Lawyers (Fifth Defendant/Respondent)

File Number(s): 2023/232617

EX TEMPORE JUDGMENT (REVISED)

1. The plaintiff provides advice to clients about betting odds on sporting events. The plaintiff brings these proceedings against former employees and also against participants in allegedly illicit wagering business, alleging against each of those individuals misuse of its confidential information. The plaintiff seeks damages from each of the defendants or, alternatively, an account of profits.

2. The proceedings were commenced in April 2023, almost two years ago.

3. The defendants had filed their list responses by December 2023. Between then and now, I am informed that attempts have been to be made to resolve the proceedings by mediation and otherwise, and that, for that reason, nothing further has occurred in the proceedings by way of the service of evidence and the like.

4. Now, by notice a motion filed on 7 March 2025, the plaintiff seeks a separate hearing of liability before quantum.

5. In their list responses, the first, third, fourth, and fifth defendants each admit that the plaintiff is entitled to:

“9. A declaration that all property created or obtained by each of the defendants through his their breaches of equitable duties, or through their knowing assistance of breaches of fiduciary duties, pleaded in the Commercial List Statement is held by him them upon constructive trust for the plaintiff.

10. An order requiring each of the defendants to:

(a) do all things reasonably necessary to deliver up to the plaintiff all documents and other things containing any data or information referred to in 2(a)(i) above;

(b) do all things reasonably necessary to destroy any such documents and other things to the extent that they are not capable of being delivered up; and

(c) file and serve an affidavit verifying the delivery up or destruction of all such documents and other things within 7 days.

11. An order that each of the defendants be permanently restrained from using or disclosing any data or information referred to in 2(a)(i) above, other than as required by law.”

6. The second defendant’s position is more nuanced, but his response is, substantially, to “not admit” rather than deny the critical allegations.

7. The defendants do, however, put in issue the plaintiff’s entitlement to damages or an account of profits.

8. I am informed that the first, second and fifth defendants neither consent to nor oppose the plaintiff’s application for a separate hearing. Ms Hall appeared before me today for the fourth defendant to oppose the separate hearing.

9. The position of the third defendant is not known, but he has notice for this application and has not appeared.

10. As four of the five defendants in effect admit liability, and the remaining defendant does not actually deny liability, there seems little or no prospect of the plaintiff failing to establish the defendants’ liability to it. Thus, if there were to be a separate trial on liability there would inevitably be a second round of hearing on the question of the relief to which the plaintiff is entitled.

11. Mr Lawrance SC, who appeared with Mr Smorchevsky for the plaintiff, submitted that, although this was so, having a separate hearing on liability would determine when the defendants first misused the plaintiff’s confidential information and would enable the plaintiffs to decide whether to elect for damages as opposed to an account of profits.

12. In one sense that is a matter only for the plaintiff’s advantage.

13. However, as Mr Lawrence submitted, if there is no separate hearing the plaintiff will have to prepare its case for damages as well as its case for an account of profits.

14. In so doing, the plaintiff is likely, Mr Lawrence submitted, to seek discovery from the defendants on both topics, possibly issue subpoenas to third parties on both topics and likely engage a forensic accountant to opine on both topics, all of which may well ultimately be at the defendant’s cost in view of the position they have taken.

15. Further, Mr Lawrence submitted that a hearing on liability would take a good deal less than a hearing on quantum. It had been suggested in the evidence that a liability hearing would take about a day and a quantum hearing very much more.

16. I have the usual reservations about ordering a separate hearing. Those reservations include there being the spectre here of the defendants possibly giving evidence at both stages of the proposed split trial. That would be a particular problem if, as may well be the case, the question of quantum is heard by a different judge who hears liability, or is referred out. There is also the usual problem of how the appellate process would be managed once the decision is published in relation to the posited separate question.

17. The conclusion I have come to is that the better course here is to defer consideration of the plaintiff’s application until it has served its evidence on liability. I propose to make a direction that the plaintiff serves such evidence and then bring the matter back for further consideration. I will then inquire of the defendants whether it is their intention in the light of the evidence then served to them themselves serve evidence in response.

18. I invite the parties to confer and agree on a timetable for that to occur and a mutually convenient directions date. I reserve the question of costs.

19. [Thereafter, I made directions by consent for the plaintiff to serve its lay and expert evidence on liability by 2 May 2025, and stood the plaintiff’s motion over to the motions list on 9 May 2025 for final determination.]

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