Holon Global Innovations Pty Ltd v Seagate Technology Australia Pty Ltd - [2025] NSWSC 113 - NSWSC 2025 case summary — Zoe

Holon Global Innovations Pty Ltd v Seagate Technology Australia Pty Ltd - [2025] NSWSC 113 - NSWSC 2025 case summary — Zoe

JUDGMENT

The defendant, Seagate Technology Australia Pty Limited, is the manufacturer of large and complex data storage devices known as "Corvaults". Corvaults are large, specialised hard drive arrays. Each measures 1.35m x 0.68m x 1.06m. Each has a gross weight of 175 kilograms. The drives contained within the Corvaults require extreme care in transportation as the risk of damage to them is high.
The plaintiffs, Holon Global Innovations Pty Limited and Holon Global Investments Limited (together, "Holon"), entered a hire purchase arrangement with a distributor, Dicker Data Financial Services Pty Ltd and Dicker Data Limited (together, "Dicker") to acquire 20 Corvaults.
Holon alleges that: 1. Seagate made various representations to Holon about the likelihood or risk of failure to the Corvaults; 2. Seagate knew of a fault in the code of the Corvaults which heightened their likelihood of failure, and did not disclose this to Holon; 3. Holon acquired Corvaults in reliance on Seagate's representations; 4. in November 2023, certain of the Corvaults suffered failures; and 5. these failures were caused by the fault in the code of the Corvaults that was known to Seagate. [1]
After the alleged faults emerged, Holon returned the Corvaults to Dicker.
In July 2024, shortly after Seagate had filed its Commercial List Response in these proceedings, Dicker's solicitors informed Seagate's solicitors that Dicker considered it was under a duty to mitigate its own loss and would refrain from selling any of the Corvaults until, and inferentially only until, 26 July 2024.
Seagate was concerned that if Dicker did dispose of the Corvaults, it would not be able to inspect them and thereby obtain evidence critical to its defence of these proceedings.
The obviously appropriate course for Seagate to follow was to make an application under Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), r 25.3, for preservation by Dicker of the Corvaults.
Instead, Seagate caused two subpoenas to be issued, directed to Dicker, requiring that it produce the Corvaults to the Court.
It must have been obvious to Seagate that, in practical terms, the subpoenas could not be complied with, both because of the difficulty inherent in the transportation of the Corvaults and the impracticability of the devices being stored at the Court.
That Seagate actually recognised this is made clear by a letter written by its solicitors to the solicitors for Holon on 1 August 2024 as follows: "Your letter suggests that it will be practically and logistically difficult for production of the [Corvaults] to the Court, to occur in the usual way. We do not disagree with that. We therefore propose that: 1. The parties, in consultation with [Dicker], negotiate an alternative to production of the [Corvaults] to the Court in the usual way, and an appropriate regime for inspection and access to these devices. 2. [Dicker] be directed not to send the [Corvaults] to the Court in the interim, while such a regime is negotiated. 3. To the extent agreement cannot be reached in respect of such a regime, our client will make an application to the Court seeking relevant orders."
Thereafter, Seagate informed Dicker that it did not press for immediate production of the Corvaults to the Court, given the practical difficulties inherent in that course, and instead sought to negotiate a regime for access to and inspection of the Corvaults.
Negotiations in relation to a proposed regime took place over the next few months. In the course of those negotiations, Dicker contended that production of the Corvaults to the Court would be burdensome, would cost $30,000, and that, for that reason, the subpoenas were oppressive.
This appears to have been acknowledged by Seagate because, on 17 September 2024, its solicitors wrote to Dicker's solicitors proposing a regime for inspection and stating: "… the Regime proposes an ordered process that secures, for the foreseeable future, the preservation and inspection of the [Corvaults]. As such, the Regime would, in effect, replace the Subpoenas and those subpoenas would therefore be discharged. There is no doubt that the Court has the power to make such orders, including pursuant to rule 25.3 of the UCPR."
Ultimately, on 29 November 2024, Dicker filed a motion seeking an order that the subpoenas be set aside.
Seagate responded with a motion filed on 13 December 2024, seeking the following orders: "1. In respect of each of the subpoenas issued on 5 August 2024 to [Dicker], respectively (together, Subpoenas): (a) an order pursuant to s 14 of the Civil Procedure Act 2005 (NSW), or alternatively in the Court's inherent jurisdiction, dispensing with any requirement under rr 33.6(4) of the [UCPR] for [Dicker] to physically produce, deliver or send the [Corvaults] … to the Court; and (b) orders pursuant to rr 23.8 and/or 33.8 of the UCPR, or alternatively in the Court's inherent jurisdiction, directing that access and inspection of the [Corvaults] occur in the manner and on the terms identified in the Schedule. 2. In the alternative to prayer 1: (a) an order pursuant to r 25.3(1) of the UCPR, or alternatively in the Court's inherent jurisdiction, requiring [Dicker] not to destroy, tamper with, cancel, sell or part with possession, power, custody or control of any of the [Corvaults] until further order of the Court; (b) an order discharging the Subpoenas concurrently with the entry of the order referred to in prayer 2(a); and (c) orders pursuant to r 23.8 of the UCPR for access and inspection of the [Corvaults] to occur in the manner and on the terms identified in the Schedule. 3. Costs." (Emphasis in original.)
The orders sought by Seagate in this motion in the alternative, namely an order under UCPR r 23.8, as well as an order under UCPR r 25.3, were obviously, in my opinion, the appropriate form of orders for Seagate to seek.
The Schedule attached to Seagate's motion set out Seagate's then proposal for a regime whereby it could inspect the Corvaults.
Discussions continued between the parties as to the detail of that regime, the sticking point evidently being whether or not Seagate was prepared to offer Dicker an undertaking as to damages. Such an undertaking was first offered, at least on an open basis, as recently as 20 February 2025.
The terms on which Seagate should have access to the Corvaults are now in substance agreed.
What remains is the question of costs of the two motions.
In effect, the parties have settled the substantive issue between them, namely the terms on which the Corvaults should be made available to Seagate for inspection. As I have said, those terms are now in substance agreed, including that the Corvaults be transported to a site in Colorado.
However, by causing the Court to issue a subpoena requiring production to the Court of items that, as a practical matter, could not be produced to the Court, and in circumstances where Seagate did not intend to expect that the items be produced to the Court, Seagate has misused the Court's processes.
Where a particular method has been prescribed by the rules of court for the achievement of a particular objective, it is impermissible to seek to achieve that objective through other means. [2]
Contrary to the submissions of Mr Langshaw, who appeared for Seagate, I do not see this as a triumph of form over substance, nor do I see Seagate as having sought to adopt a practical approach in the circumstances.
Indeed, even now that a regime for inspection has been agreed, Seagate continues to seek orders to the effect of the first alternative posited in its motion of 13 December 2024.
I propose to give effect to the agreement the parties have reached concerning the regime, whereby the Corvaults may be inspected by Seagate, but propose to do so adopting the orders proposed by Dicker.
It must also follow that Seagate pay Dicker's costs.
Once the precise terms of the regime under which Seagate is to inspect the Corvaults is agreed, I propose to make the following orders: Dicker Motion 1. The subpoena issued to Dicker Data Financial Services Pty Ltd on 5 August 2024 be set aside. 2. The subpoena issued to Dicker Data Ltd on 5 August 2024 be set aside. 3. The defendant, Seagate, is to pay Dicker Data Financial Services Pty Ltd's and Dicker Data Ltd's costs of and incidental to the Notice of Motion filed by Dicker on 29 November 2024 ("Dicker Motion"), such costs payable and assessable forthwith. 4. The Dicker Motion otherwise be dismissed. Seagate Motion 1. Upon the Undertakings given by Seagate: 1. pursuant to r 25.3 of the UCPR, Dicker is not to destroy, tamper with, cancel, sell or part with possession, power, custody or control of the "Control Corvault" and the "Relevant Devices" (as those terms are defined in the Regime) except as provided under the Regime or otherwise ordered by the Court; and 2. pursuant to r 23.8 of the UCPR, access and inspection to the "Control Corvault" and the "Relevant Devices" (as those terms are defined in the Regime) is to occur in the manner and on the terms identified in the Regime. 1. Seagate is to pay Dicker's costs of and incidental to the Notice of Motion filed by Seagate on 13 December 2024 ("Seagate Motion"), such costs payable and assessable forthwith. 2. The Seagate Motion otherwise be dismissed. 3. Dicker, Seagate and the plaintiffs ("Holon") have liberty to restore on 3 days' notice in respect of any matter arising in respect of the Regime. 4. In these orders: 1. Undertakings means the form of undertakings contained in Annexure A to these orders; 2. Regime means the access and inspection regime contained in Annexure B to these orders.