IceTV Pty Ltd v Ross & ors [2008] NSWSC 1321 | Case summary

2577/07 IceTV Pty Ltd v Duncan Ross & ors JUDGMENT (ex tempore) 1 HIS HONOUR: The first defendant Mr Duncan Ross and the second defendant Mr Peter Vogel are former employees of the plaintiff IceTV Pty Ltd ("IceTV"). The third defendant Vogel Ross Pty Ltd ("Vogel Ross") is a company which Mr Ross and Mr Duncan formed on 29 September 2006, whilst still in the employ of IceTV. IceTV claims that Mr Ross and Mr Vogel breached provisions of their respective employment contracts - in particular, obligations of confidentiality and fidelity - both before and after the termination of their employment contracts on 4 October 2006, by providing consultancy services to Mobilesoft in the field of video on-demand services for content provision, and thereby being involved in a business similar to or competitive with the business of IceTV carried on during the period of 12 months prior to the termination of their employment (in contravention of sub-paragraph (a) of a non-solicitation restraint contained in their contracts) and also by soliciting Mobilesoft, who had entered into discussions or negotiations with IceTV during that 12 months prior to termination of their employment, with a view to becoming a customer of IceTV for a contract to provide consultancy services (in contravention of sub-paragraph (c) of that restraint). 2 IceTV sought an interlocutory injunction to restrain the defendants from engaging in that conduct. Following an interlocutory hearing on 28 May 2007, on 3 July 2007 I granted IceTV an interlocutory injunction. On 28 September 2007, I discharged that injunction, in circumstances that the defendants had showed that IceTV's undertaking as to damages was worthless, when it had been a material consideration on the balance of convenience when granting that injunction. I also made an order that IceTV give security for costs of the proceedings, and I rejected an application by the defendants to join IceTV directors as "co-plaintiffs". IceTV's claim is now one for damages. 3 On 19 August 2008, White J declined the defendants' application for immediate enforcement of IceTV's undertaking as to damages, on the basis that the final determination of the proceedings would be highly material as to whether the undertaking should be enforced at all. His Honour also refused an application to join as plaintiff IceTV Holdings Pty Ltd ("IceTV Holdings"), the holding company of IceTV. His Honour allowed a first cross-claim to be filed (which pleaded that the restraints were invalid and which also contained an allegation of an abuse of process by misleading the Court at the time of giving the Court the undertaking as to damages), but otherwise refused the application on various bases, including that while in some respects there might have been a sufficient connection between the proposed cross-claim and the primary proceeding, it was insufficiently pleaded to ascertain whether that was so. It is unnecessary to revisit in detail the bases of his Honour's decision. 4 His Honour referred the matter to the Expedition List, and on 19 September 2008, on the defendants' application, Palmer J expedited the hearing and fixed the proceedings for hearing to commence on 23 February 2009 for four days. 5 By Notice of Motion filed on 14 October 2008, the defendants now seek leave to file a second cross-claim. The proposed second cross-claim, if permitted, would join as cross-defendants (in addition to the plaintiff IceTV), its holding company IceTV Holdings, Mr Colin O'Brien (a director of IceTV Holdings and of IceTV), his wife Mrs Gai O'Brien (also a director of IceTV Holdings) and Mr Roderick Sutherland (a director of IceTV and shareholder and director of IceTV Holdings). It is plain that a significantly motivating factor in the defendants desire to bring cross-claims joining parties other than IceTV is the apparent impecuniosity of IceTV lest is unable to satisfy its undertakings as to damages which the defendants wish to enforce. 6 The proposed second cross-claim would plead the following causes of action. First, perhaps imprecisely, but for present purposes sufficiently described as "oppression" under (CTH) Corporations Act 2001, s 233 [paragraphs 27-30]. On the face of the pleading it is not clear whether the company in question is IceTV or IceTV Holdings, but ultimately Mr Vogel, who presented the defendants' case, says that if forced to make a choice, it is IceTV Holdings. In my view, it could only be IceTV Holdings because that is the only company of which the defendants are members. Secondly, abuse of process, by misleading the Court at the time of giving the undertaking as to damages [see paragraphs 31-33]. Thirdly, collateral abuse of process [see paragraphs 34-37]. Fourthly, intimidation of Mobilesoft [see paragraphs 38-41]. Fifthly, exclusive dealing, exclusionary arrangements and misuse of market power under (CTH) Trade Practices Act 1974, ss 45, 46 and 47 respectively [see paragraphs 42-44]. Sixthly, unconscionable conduct in relation to the affairs of IceTV Holdings and Mobilesoft, said to be under Trade Practices Act, ss 51AA, 51AB and 51AC [see paragraph 45]. Seventhly, unconscionable conduct by Mr Sutherland in his capacity as administrator of Mobilesoft, said to be under the (NSW) Fair Trading Act 1987, s 43 [see paragraph 46]. Eighthly, misleading and deceptive conduct (under Fair Trading Act, s 42) and misconduct as administrator (under Corporations Act, ss 436DA, 438 and 439A) by Mr Sutherland in his capacity as administrator of Mobilesoft [see paragraphs 47-56]. 7 The proposed second cross-claim would claim the following relief. First, a stay or dismissal of the proceedings for abuse of process; this is evidently based on the allegation of collateral abuse of process. Secondly, an order under Corporations Act, s 233(1)(f), that IceTV discontinue the primary proceeding; this is evidently based on the oppression cause of action. Thirdly, an inquiry as to damages; but whether or not the proposed cross-claim is filed, the Court will consider at the final hearing whether there should be an inquiry as to damages on the undertaking as to damages. Fourthly, an order under Corporations Act, s 233, for the purchase of Mr Ross and Mr Vogel's shares in IceTV Holdings or alternatively, for the winding up of IceTV Holdings; this is evidently based on the oppression cause of the action. Fifthly, damages amounting to $2,810,516; this is not related to any particular cause of action but would apparently be based on the allegations of collateral abuse of process, intimidation and unconscionable conduct, and the enforcement of the undertaking as to damages. Sixthly, damages against Mr Sutherland in favour of Vogel Ross in the sum of $85,000; this is apparently based on the allegations of misconduct as an administrator of Mobilesoft. Seventhly, exemplary and aggravated damages, further and other compensation, interest and costs. Eighthly, an account of profits in respect of the administration of Mobilesoft by Mr Sutherland; this must also be based on the causes of action founded on alleged misconduct as an administrator. 8 (NSW) Civil Procedure Act 2005, s 22(2), has the effect that a cross-claim may be brought against a person who is not a plaintiff only if the relief claimed in the cross-claim relates to, or is connected with, the subject of the primary proceedings. Although the degree of connection required is not prescribed, and a liberal view is taken of the requisite degree of connection, nonetheless that degree is relevant to the exercise of any procedural discretion in respect of the conduct of the cross-claim [Chatsworth Investments Ltd v Amoco (UK) Ltd [1968] 1 Ch 665, 674 (Cross J)]. 9 (NSW) Uniform Civil Procedure Rules, r 9.1, provides that in proceedings commenced by summons (as these were, although an order has since been made that they continue on pleadings) a party may make a cross-claim by cross-summons before the return day or within such further time as the Court may allow. The return day of the summons has long since passed, and for that reason, leave to bring the proposed cross-claims is required. 10 For the plaintiff, Mr Ireland QC draws attention to the circumstances that, first, a misconceived attempt to join the directors of IceTV as co-plaintiffs was rejected as long ago as 28 September 2007; secondly, an attempt to compel the joinder of IceTV Holdings as a co-plaintiff was rejected by White J on 19 August 2008; thirdly, a previous attempt to file cross-claims joining other parties as cross-defendants including those now sought to be joined and covering some of the same causes of action as sought to be raised was rejected by White J, also on 19 August; fourthly, at the instance of Mr Ross and Mr Vogel, the matter was listed before the Expedition Judge and fixed for hearing in February next year, at which time no reference was made to any intention to seek leave to bring a further cross-claim or to join additional parties, it being suggested to Palmer J that further proceedings would follow the outcome of the principal proceeding; yet fifthly, only after the matter was fixed for hearing, this application was then instituted, which itself would probably jeopardise the February fixture. These submissions are not without considerable force. Allowing the cross-claim may well jeopardise the February fixture, although that will depend on just how the cross-claim is managed and just how much of it, if any, is permitted. It is significant that that fixture was granted on the application of Mr Ross and Mr Vogel without disclosure of any intention to seek leave to join additional parties and add a second cross-claim. 11 However, there are some countervailing considerations. The first is that when the application for expedition was before Palmer J, it was then anticipated that the final hearing of the primary proceeding would take place within weeks, not in February 2009; secondly, whereas IceTV had indicated before White J that it was ready to proceed to final hearing at the primary proceeding, before the Expedition Judge it changed its position to indicate that it needed further time to adduce evidence; thirdly, and most significantly, no prejudice to IceTV from the loss of the February hearing dates has been identified - any prejudice resulting from that eventuality would be to Messrs Ross and Vogel, and they have indicated that the difference between a hearing in February 2009 and one several months later is not such as to deter them from pressing their application to seek leave to bring the second cross-claim, accepting vacation of the February date if necessary, though they contend that it should not necessitate loss of those dates. 12 I have come to the conclusion that the forensic conduct of the proceedings to date, and the other matters raised by Mr Ireland to which I have referred, should not prevent the addition of a second cross-claim, if and to the extent it is otherwise appropriate to permit it. The predominant reason is that if the proposed cross-defendants are unable to meet it this time, then an adjournment will not occasion prejudice to IceTV. It may occasion prejudice to the defendants, but they do not relevantly complain of that. There is also the alternative possibility, again depending on how much if any of the proposed second cross-claim is permitted, that the cross-claim could be determined separately and after the primary proceedings. Accordingly, it is necessary to examine the cross-claim with a view to ascertaining first, whether the various causes of action have a sufficient connection with the primary proceedings to fall within Civil Procedure Act, s 22; secondly, whether they are sufficiently arguable; and thirdly, whether they are adequately pleaded. 13 The first cause of action to which I turn then is that based in oppression. As I have said, although the pleading is ambiguous as to the company to which it relates, it must and could only be the holding company, IceTV Holdings, of which Mr Ross and Mr Vogel are members, and I proceed on the basis that the pleadings are to be read on that basis. I accept that affairs of a company can include the affairs of a subsidiary, and that a company can oppress a shareholder or act otherwise than in the interests of members through the acts of its subsidiary, particularly a wholly-owned subsidiary. I accept also that, since the amendments to the oppression provision in the 1980s, oppression can be of a shareholder, not only qua shareholder, but in some other capacity. This does not, however, mean that, just because a person is a shareholder, oppression of that person in some capacity unrelated to his or her interest in the company will give a remedy under Corporations Act, s 233. In Re Dernacourt Investments Pty Ltd, (1990) 20 NSWLR 588, Powell J made observations that suggest that the oppression of the victim still has to be in a capacity of involvement with the corporation - whether as shareholder, officer or employee (at 515-6). In John J Starr (Real Estate) Pty Ltd v Andrew (Australasia) Pty Ltd (1991) 6 ACSR 63, Young J, as the Chief Judge then was, said that if the oppression of the plaintiff was only in its capacity as a franchisee of the defendant then the Court would decline to grant relief (at 65-6). In my view, the extension of the oppression provision to oppression of a shareholder "whether in that or any other capacity" was not intended to confer a remedy on a person who happened to be a shareholder of a company in respect of conduct of a company vis-a-vis that person which was unconnected with the person's involvement or interest in the company. 14 That is relevant in this case, because many of the complaints of oppression pertain to the prosecution of the present proceedings, which involve the enforcement of the post-employment restraints. Insofar as the prosecution of the proceedings might prevent the defendants from earning a living elsewhere, or otherwise affect them financially or reputationally, that is unrelated to their interest in the company. It is very difficult to see how prosecution of proceedings of that kind could be oppressive of the defendants in a relevant way. 15 But that is not the whole of the oppression case. As I have indicated, the oppression case founds two claims for relief in the proposed cross-claim. One is an order that IceTV discontinue the primary proceedings. Although IceTV is not the relevant company, the Court probably could make an order - if there were grounds for it - under Corporations Act, s 233, that IceTV Holdings procure IceTV to discontinue the primary proceedings. However, that order would be pointless unless made before the final hearing of the primary proceeding. There seems no utility in prosecuting a claim for an order that would bring about the discontinuance of the primary proceedings after those primary proceedings have been prosecuted to a conclusion. Thus, while the relief claimed to that extent relates to the subject matter of the primary proceedings, it is not apparent that it would be of any utility. 16 The second category of relief which depends upon the oppression cause of action is a buy-out order (or, alternatively, a winding-up order) in respect of IceTV Holdings. As I understand the pleading, while it relies in part on oppressive or unfairly discriminatory treatment or unfairly prejudicial conduct of the affairs of IceTV Holdings, it also invokes the alternative ground that the affairs of IceTV Holdings are not being conducted in the interests of the members as a whole. One aspect of this involves allegations that the primary proceedings are not being prosecuted for the benefit of the company as a whole, cannot result in a favourable outcome for the company, are detrimental to the company's interests, and are putting the company or its subsidiary to significant cost for no benefit. 17 However, there remain significant difficulties with the pleading. I do not doubt that the defendants have heeded White J's guidance that only material facts should be pleaded. However, the current cross-claim pleads, in paragraph 30, a mere bald conclusion that the conduct of the company's affairs was contrary to the interests of the members as a whole, or oppressive to, or unfairly prejudicial to, or unfavourably discriminatory against, a member or members. The bald conclusion is unilluminated by material facts that might sustain it. Such material facts are, nonetheless, apparently to be found in the "particulars" subscribed to paragraph 30. Some of those "particulars" are generalised allegations which inform neither the Court nor the proposed cross-defendants of the factual case to be answered. In this category I include paragraphs (a), (b), (l), (m), (q), (y), (ff) and (mm). Others involve pleading of evidence or admissions, not particulars of the oppression or conduct of the company's affairs contrary to the interests as members of a whole. In this category I include particulars (h), (j), (k), (r), (s), (t), (z) and (aa). Others relate to the conduct of Mr Sutherland as administrator of Mobilesoft. On no view could Mr Sutherland's conduct as administrator of Mobilesoft be said to be part of the affairs of IceTV Holdings. In this category are particulars (gg) to (mm) inclusive. 18 That said, there remains in my view discernible from the pleading allegations which may be summarised as follows. First, that IceTV Holdings oppressed Mr Ross and Mr Vogel by causing its subsidiary IceTV to renegotiate - on unfavourable terms and with new restraints - their appropriate agreements not long before termination of their employment; then terminated their employment against their wishes; and then, as a continuation of that course of conduct, took steps to enforce the restraints and concurrently refused to pay them their entitlements. Secondly, that the affairs of IceTV Holdings are being conducted contrary to the interests of the members as a whole, by the institution and prosecution of the primary proceedings for no genuine benefit for IceTV and otherwise by mismanagement of the affairs of IceTV Holdings and its subsidiary. I am unable to say that those cases are unarguable. Because the prosecution of the primary proceedings forms part of each of them, there is a sufficient connection between those claims and the primary proceedings to permit them to be brought in a cross-claim in this proceeding. While it seems to me that the claim for an order that the primary proceedings be discontinued cannot succeed, since the cross-claim will not be heard before the primary proceedings, the matters to which I have referred may result, if established, in a buy out order or a winding-up order. 19 I am far from concluding that the cross-claim should go to trial at the same time as the primary proceedings. Indeed, it may well be appropriate that that it await the outcome of the primary proceedings. However, I think there is a sufficiently arguable case, sufficiently connected with the primary proceedings, to permit a cross-claim based on oppression as alleged in paragraphs 27 to 30, but only in respect of particulars (c), (d), (e), (f), (g), (i), (w), (x), (y), (bb), (dd), and (ff)(i) subscribed to paragraph 30. 20 I turn next to the cause of action for abuse of process by misleading the Court. The gravamen of this complaint is that when IceTV gave to the Court the usual undertaking as to damages in connection with the application for interlocutory injunction, it and its directors and holding company misled the Court by giving an undertaking knowing it to be valueless. As to this, the first observation is that only IceTV, and not the other proposed cross-defendants, gave the undertaking as to damages. Secondly, and more importantly, adducing false evidence and presenting a false case to sustain or defeat a claim in legal proceedings is not a tort in our law [Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc & Anor [1990] 1 QB 391, 470B-C (CA)]. In those circumstances, I do not see how this claim can result in the defendants gaining any relief, and I will refuse leave to bring it. 21 That then brings me to the claim of abuse of process by collateral abuse of process. The gravamen of this claim is an allegation that IceTV, its director and holding company instituted and prosecuted the primary proceedings for the ulterior purpose of causing the defendants financial damage, preventing them from gaining employment with Mobilesoft or otherwise in their industry, and damaging Mobilesoft, as distinct from the purpose for which the proceedings were properly designed. 22 The following propositions may now be regarded as established in respect of the law relating to collateral abuse of process [see Williams v Spautz (1992) 174 CLR 509]. First, proceedings are brought for an improper purpose and constitute an abuse of process where the purpose of bringing them is not to prosecute them to a conclusion, but to use them as a means of obtaining some advantage for which they are not designed or some collateral advantage beyond what the law offers; secondly, an improper act by the party instituting the proceedings is not essential in the concept of the abuse of process; thirdly, the improper purpose need not be the sole purpose of the moving party, so long as it is his predominant purpose; fourthly, and critically for present purposes, if the proceedings are instituted or maintained to achieve the result or remedy which the proceedings provide, then even if the plaintiff can be shown to also have an ulterior purpose in view as a desired by-product of the litigation, the plaintiff cannot be debarred from proceeding, although the pursuit of an ulterior purpose unrelated to the subject matter of the litigation which otherwise the plaintiff would not have begun is an abuse of process [Carson v Legal Services Commissioner [2000] NSWCA 308, [111] (Sheller JA; Giles JA agreeing)]. This last point is illustrated also by passages in Williams v Spautz. The majority judgment gave the example that there was no abuse of process in an alderman prosecuting another alderman, a political opponent, for the ultimate ulterior motive of securing his disqualification from office as an alderman, where the remedy in the proceedings was a conviction and that conviction, pursuant to local government legislation, would bring about a disqualification. Their Honours said (at 526-7): The ultimate purpose of bringing about disqualification is not within the scope of the criminal process instituted by the prosecutor. But the immediate purpose of the prosecutor is within that scope. And the existence of the ultimate purpose cannot constitute an abuse of process when that purpose is to bring about a result for which the law provides in the event that the proceedings terminate in the prosecutor's favour. 23 Similarly, Brennan J said (at 535): There is no impropriety of purpose (whatever may be said of motive) when a plaintiff commences or maintains a proceeding desiring to obtain a result within the scope of the remedy, even though the plaintiff has an ulterior purpose - or motive - which will be fulfilled in consequence of obtaining the legal remedy which the proceeding is intended to produce. To amount to an abuse of process, the commencement or maintenance of the proceeding must be for the purpose which does not include - at least to any substantial extent - the obtaining of relief within the scope of the remedy. 24 Thus, in Carson v Legal Services Commissioner, the Court of Appeal concluded that where proceedings were instituted to quash an opponent's grant of legal aid they were not an abuse of process, even though there might been an ulterior purpose of depriving the opponent of legal aid and forcing him into negotiation in which he would be disadvantaged: it was sufficient that the proceedings were commenced for the legitimate purposes of having the legal aid grant, reviewed and terminated if it had been inappropriately given (at [115]-[117]). 25 I have not overlooked the decision of the Court of Appeal of England and Wales in Speed Seal Products Ltd v Paddington [1985] 1 All ER 91; [1985] 1 WLR 1327, in which the Court of Appeal affirmed a judge's decision to permit former employees to bring a cross-claim alleging collateral abuse of process against their former employers who were claiming an injunction to restrain breaches of obligations of confidentiality. The employee's contention was that the proceedings were brought for the purpose of damaging their business and not protecting any legitimate interest of the plaintiff. On its face, the decision supports Mr Vogel and Mr Ross, but it does not give any attention to the requirement to which I have referred that the proceedings must be brought for a purpose that does not include, to any substantial extent, the obtaining of relevant relief within the scope of the remedy. It seems to me, on what is known of the facts of Speed Seal Products v Paddington, that the alleged ulterior purpose could only have been achieved by obtaining relief within the scope of the remedy claimed. Speed Seal Products v Paddington was decided in 1985; Williams v Spautz was decided by the High Court in 1992; and Carson v Legal Services Commissioner in 2000. To the extent that the result in Speed Seal Products v Paddington is inconsistent with the principles I have derived from Williams v Spautz and Carson v Legal Services Commissioner, I cannot and do not follow it. 26 I have gone into this at some length, because it seems to me that it demonstrates a fatal flaw in the defendants' proposed claim for collateral abuse of process. To borrow Brennan J's words from Williams v Spautz, I do not see how it can be said that the commencement or maintenance of this proceeding was for a purpose which did not include to any substantial extent the obtaining of relief within the scope of the remedy. Indeed, if the plaintiff has the ulterior purposes which the defendants allege, obtaining relief within the scope of the remedy - namely, an injunction and/or damages - is an essential part of pursuing that ulterior purpose. The ulterior purpose is a consequence or result of the remedy which the law gives the plaintiff in proceedings of this kind. I do not see how a claim for collateral abuse of process can succeed, and I will therefore not permit it to be brought by cross-claim. 27 That then brings me to the tort of intimidation. The defendants allege that the plaintiff intimidated Mobilesoft with the intention of harming the defendants by threatening to withhold supply of services to Mobilesoft unless Mobilesoft terminated the services of the cross-defendants. Thus, the threat was to withhold services from Mobilesoft and the demand was to terminate the services of the defendants. It is an essential element of the tort of intimidation that the threat be of an unlawful or illegal act. As I understand the law, that act must be unlawful, independently of the demand. Here, the threat alleged was merely to withhold the supply of services to Mobilesoft. There is nothing in itself unlawful about a supplier of services declining to provide those services to a particular potential customer. It may become unlawful in certain circumstances, such as those provided for by Part 4 of the Trade Practices Act, but that involves circumstances additional to the mere withholding of supply. As pleaded here, the threat was merely not to supply, or to withhold supply. That does not satisfy the requirement of an independently unlawful act such as could amount to a threat for the purposes of tort of intimidation. I do not think the claim of intimidation can succeed as pleaded, and I will not allow it. 28 I then come to the allegations of exclusive dealing, exclusionary arrangements and misuse of market power. Trade Practices Act, s 51, exempts the enforcement of restraints in employment contracts from the restrictive trade practices provisions of Part 4. There is thus some doubt as to whether those provisions would operate in the present circumstances, but I shall assume they do. There is also some doubt in my mind that the pleading asserts all the requisite elements of contravention of the sections concerned, but again, for present circumstances, I will assume that they do. 29 The decisive considerations for present circumstances is that each of these causes of action is a "special Federal matter" within the meaning of (CTH) Jurisdiction of Courts (Cross-Vesting) Act 1987, s 3. This Court only has jurisdiction in those matters by operation of the Cross-Vesting Act. Because they are special Federal matters, the Court would be required to transfer them to the Federal Court, where they would be heard separately from the balance of the proceedings, unless the Court was satisfied that there were sufficiently special circumstances, unrelated to the convenience of the parties, to hear them in this Court, notwithstanding the principle that special Federal matters should ordinarily be heard in the Federal Court. The Court could only make that decision after giving notice to the Attorneys General and hearing such submissions, if any, as the Attorneys General might be minded to make. 30 No argument has been presented to me as to what, if any, are the special circumstances unrelated to the convenience of the parties that would justify or warrant hearing the Federal matters in this Court. Prima facie, if I allowed the cross-claim in that respect, the next step would be to transfer that part of the case to the Federal Court. I see no utility in adopting that course when, if the defendants are minded to pursue those causes of action, they can do so by initiating proceedings directly in the Federal Court. I will not, therefore, permit the Part 4 causes of action to be brought by cross-claim in these proceedings. 31 That then brings me to the allegations of unconscionable conduct in paragraph 45 of the proposed second cross-claim. This is a rolled up omnibus pleading which invokes all the particulars to paragraphs 27-30 and the particulars of the Trade Practices Act, Part 4 complaints. It invokes Trade Practices Act, ss 51AA, 51AB and 51AC. 32 So far as s 51AA is concerned, that is concerned with unconscionable conduct within the meaning of the unwritten or general law. Unconscionable conduct in that sense involves the taking of unfair advantage by a stronger party of a weaker party that is at a special disadvantage. The proposed cross-claim refers to special disadvantage only in particular (nn) to paragraph 30, which asserts that the second cross-claimant (that is Mr Vogel) was at a special disadvantage because Mr Sutherland had wound up a previous venture in which he had been involved and orchestrated the administration of another company in which Mr Vogel had been involved. This is simply not the type of special disadvantage contemplated by the law of unconscionable conduct in cases such as Bromley v Ryan (1956) 99 CLR 362 and Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447. No tenable basis for a claim under s 51AA has been pleaded. 33 So far as ss 51AB and 51AC are concerned, they are each concerned with statutory unconscionable conduct which admittedly has a wider content than general law unconscionable conduct, but only in circumstances of "the supply or possible supply of goods or services to a person" (under s 51AB) and "the supply or possible supply of goods or services to a person" or "the acquisition or possible acquisition of goods or services from a person" (under s 51AC). Consideration of those two sections as a whole makes quite plain that what is involved is the dealing between one party and another in connection with the supply of goods or services, or the acquisition of goods and services, between them. Not only does the pleading fail to identify any relevant supply or possible supply or acquisition of goods or services, but when the particulars referred to are reviewed, it can be seen that, in reality, the subject matter of complaint has nothing to do with the supply or possible supply of goods or services or their acquisition as between the defendants and IceTV. No tenable cause of action under ss 51AB or 51AC is disclosed, and I will not permit the unconscionable conduct cause of action in paragraph 45 to be brought by way of cross-claim. 34 I come then to the matters pleaded so far as the administration of Mobilesoft in paragraphs 46-56 inclusive are concerned. Broadly, the allegations are that in various ways Mr Sutherland, in accepting appointment as one of two administrators of Mobilesoft, did not disclose or sufficiently disclose his interest in IceTV and IceTV Holdings and otherwise conducted the administration to the detriment of creditors including Vogel Ross. The ultimate allegation is that, in part, Mr Sutherland's conduct resulted in the reduction of the amount recoverable by creditors including Vogel Ross, and in particular resulted in the loss by Mr Vogel and Mr Ross of their employment with Mobilesoft. 35 It seems to me that these causes of action have no sufficient connection, for the purposes of s 22 of the Civil Procedure Act, with the primary proceeding. While it is conceivable that there may be overlap between any damages in respect of that loss of employment and any inquiry as to damages consequent upon the undertakings as to damages, I do not think there is any sufficient relationship between the relief claimed which arises from the administration of a different company and potentially involves other creditors as could justify permitting those cross-claims to be brought in these proceedings. The lack of connection is well illustrated by the circumstances that part of the relief claimed reliant on those causes of action is an account of profits of Mr Sutherland's administration of Mobilesoft. On what basis any of the cross-claimants would be entitled to such an account is not apparent. 36 For the foregoing reasons, I make the following orders: 1. Grant leave to the defendants to file a second cross-claim in the form of the draft second cross-claim attached to the Notice of Motion, but omitting claims for relief 1, 5, 6, 7, 8, 9, 10, 11, and 13; omitting from the particulars subscribed to paragraphs 27-30 particulars (a), (b), (h), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u), (v), (z), (aa), (cc), (ee), (ff)(i), (gg)-(nn) inclusive; and omitting paragraphs 31-61 inclusive.

IceTV Pty Ltd v Ross & ors

At a glance

Court

Decision date

Before

Source

Judgment (17 paragraphs)

Parties

Cases Cited (5)

Cited By (3)