iSAM Securities (UK) Ltd v Press

Supreme Court of NSW|2024-09-19|Before: Richmond J

JUDGMENT

In my earlier judgment in this matter on 19 August 2024, I made orders for preliminary discovery: iSAM Securities (UK) Ltd v Press [2024] NSWSC 1036 (J). These reasons deal with the outstanding issue of costs.
By their Amended Summons, the plaintiffs sought preliminary discovery pursuant to both r 5.2 and r 5.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) or the inherent jurisdiction of the Court.
The orders sought under r 5.2 were of two kinds: first, an order for the first defendant to attend the Court to be examined on the identity of the person or persons conducting certain activities and second, the preliminary discovery of two categories of documents for the period from 1 July 2021 to date. As to the first, I made an order that the first defendant, Mr Press, provide an affidavit dealing with the relevant matters as a more efficient and cost effective way of providing the information sought: J[53]-[54]. As to the second, I granted discovery of documents within each of the categories sought, but of a less extensive nature in that the documents concerning the plaintiffs' pricing information were limited to those for products with the prefix 'IDX', the focus was on documents revealing the identity of persons conducting the relevant activities or using the plaintiffs pricing information rather than merely those relating thereto and the relevant period was shortened by bringing forward the commencement date to 1 June 2023: J[55]-[56].
The orders for preliminary discovery under r 5.3 sought all the documents within the defendants' possession created, dated or received in the period from 1 July 2021 to date evidencing, recording or relating to the supply, receipt or use of the plaintiffs' product pricing information or symbols, including but not limited to those with the prefix 'IDX'. The orders made limited this category to the plaintiff's product pricing information utilising the prefix 'IDX', removed the word 'relating' and changed the start date of the relevant period to 1 June 2023, consistently with the orders made under r 5.2, for the reasons given at J[78]-[80].

Costs of proceedings

The plaintiffs contend that the defendants should pay the plaintiffs' costs of the proceedings as they were successful and the usual order that costs follow the event should apply: UCPR, r 42.1. The defendants contend that the appropriate order is that each party bears its own costs because the orders ultimately made were narrower than those originally sought by the plaintiffs, as noted above. It was submitted that it was reasonable for the defendants to have opposed the discovery sought in order to achieve this narrowing of the categories.
Costs are in the discretion of the Court: s 98 of the Civil Procedure Act 2005 (NSW). Under r 42.1 of the UCPR the usual rule is that costs follow the event unless the circumstances justify some other order. The 'event' may be characterised in more than one way, but generally refers to the result of the claim and counter-claim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [14]-[15].
It is recognised that the exceptional nature of preliminary discovery may mean that a successful applicant will not receive its costs: Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (No 2) [2019] FCA 657 at [25]. However, where the respondent to an application for preliminary discovery approaches it in an adversarial fashion, r 42.1 is treated as dictating the general approach to costs and accordingly the respondent will generally be required to bear some or all of the successful applicant's costs unless it appears to the Court that some other order should be made: Steffen v Australia and New Zealand Banking Group Ltd [2009] NSWSC 883 at [29], [32]-[38]; Equiti Capital Ltd v Hewson [2015] NSWSC 1388 at [16]; Pfizer at [25]-[27]; Re Moula Money Pty Ltd (No 2) [2023] NSWSC 1649 at [9].
In my view, in all the circumstances, it is appropriate to apply r 42.1 here. While in general there is no obligation on a prospective respondent to respond to requests for information prior to the commencement of legal proceedings, and it is entitled to remain passive, in this case the plaintiffs and the defendants were not strangers to each other. The first defendant, Mr Press, had been representing the plaintiffs in Australia under a consultancy arrangement for around four years until November 2023. The plaintiffs made a number of reasonable requests of the first defendant for information as to the use by him, or entities associated with him, of the plaintiffs' pricing information with which the first defendant did not engage in any meaningful way, which made it necessary for the plaintiffs to commence these proceedings. Once the proceedings were commenced, the defendants took an adversarial approach, taking every point available to resist the application. The defendants' primary position throughout was that the application should be dismissed with costs.
The plaintiffs were successful in the application (the relevant 'event' for the purposes of r 42.1). While they did not achieve the full extent of the discovery sought, in the sense that the categories of discovery granted were narrower than originally sought, they did achieve substantial success and considerably more than the limited discovery which, at the end of the hearing, the defendants put forward as an 'alternative' position (but without resiling from their primary position that there should be no discovery).
This is not a case where the plaintiffs were unsuccessful on a discrete or separable issue, nor did any of the matters on which the plaintiffs were unsuccessful take up a significant part of the hearing or the written submissions of the parties. On the established principles summarised in Doppstadt Australia at [18], it is not appropriate in my view to apportion the plaintiffs' costs as between different issues, and the fair and just outcome is that the plaintiffs receive their costs of the application. Having adopted an adversarial approach to the application putting forward a variety of arguments in support of their position that there should be no preliminary discovery, the defendants exposed themselves to an adverse costs order if their arguments failed.

Costs of compliance

It was not in dispute that the reasonable costs of compliance with the orders for preliminary discovery should be paid by the plaintiffs.
The plaintiffs also sought a further order that the order that they pay the defendants' reasonable costs of giving preliminary discovery was made without prejudice to the right of the plaintiffs to apply to the Court, in the event the plaintiffs commence substantive proceedings against the defendants (within three months of the production of the documents and the filing of an affidavit, as required by the orders made on 19 August 2024) for relief in those proceedings that has the effect of varying that order.
An alternative approach, which was preferred by Ball J in Racing New South Wales v Racing Victoria Ltd (No 3) [2023] NSWSC 838, is that the costs of compliance should be costs in the cause if proceedings are commenced against the relevant defendant within a period of three months. On balance, I prefer that approach for the reasons explained by Ball J in Racing at [17]-[18].

Conclusion

For the above reasons, the Court will make the following orders: 1. The defendants pay the plaintiffs' costs of the proceedings on the ordinary basis, as agreed or assessed. 2. The plaintiffs pay the defendants' reasonable costs of compliance with the orders made on 19 August 2024, as agreed or assessed. 3. In the event that the plaintiffs (or any of them) bring substantive proceedings against any of the defendants relating to the matters the subject of the Amended Summons within three months of the final resolution of any disputes about production under the orders made on 19 August 2024 (including as to privilege), the costs referred to in order 2 above in relation to those defendants shall be costs in the cause in those proceedings.

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