Press v iSam Securities

Court of Appeal (NSW)|2024-10-29|Before: Ward P, Richmond J

The application for preliminary discovery

iSAM sought orders pursuant to UCPR rr 5.2 and 5.3 supported by an affidavit dated 16 July 2024 by Mr Johnson (upon which he was not cross-examined) which deposed that: 1. Despite making various inquiries, iSAM was unable to ascertain the identity of the prospective defendants other than Mr Press himself. Although it appeared that the conduct was by companies who trade under the name "PTX Markets", iSAM was unclear as to which specific entities were responsible for the conduct giving rise to a possible cause of action. 2. Whilst iSAM believed Mr Press was directly involved with the PTX companies, iSAM had not determined how Mr Press was involved in the impugned conduct and what his conduct included. As such iSAM contends that it did not have sufficient information to determine whether it ought to commence proceedings against Mr Press.

The impugned orders

The following orders made by Richmond J on 19 August 2024 were: (1) An order that by 16 September 2024 the first defendant should swear or affirm and serve on the plaintiffs an affidavit setting out the full name and address of the person or persons who in the period 1 June 2023 to the date of this order: (a) offered, supplied or made available liquidity and/or brokerage services, including but not limited to, the provision of pricing information with respect to financial products or financial services, under the business name 'PTX Markets' or through the website URL: ptxmarkets.com. (b) supplied, received or used the plaintiffs' product pricing information or symbols with the prefix 'IDX'. (2) An order pursuant to rule 5.2(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that by 16 September 2024, the defendants give discovery (verified in accordance with rule 21.4 of the UCPR) to the plaintiffs, of: (a) all documents in the defendants' possession created, dated or received during the period 1 June 2023 to the date of this order, revealing the identity of the person or persons offering, supplying or making available liquidity and/or brokerage services, including but not limited to, the provision of pricing information with respect to financial products or financial services, under the business name 'PTX Markets' or through the website URL: ptxmarkets.com. (b) all documents in the defendants' possession created, dated or received during the period 1 June 2023 to the date of this order revealing the identity of the person or persons supplying, receiving or using the plaintiffs' product pricing information which utilises a symbol with the prefix 'IDX'. (3) An order pursuant to rule 5.3(1) of the UCPR that by 16 September 2024, the defendants give discovery (verified in accordance with rule 21.4 of the UCPR) to the plaintiffs, of all documents in the defendants' possession created, dated or received during the period 1 June 2023 to the date of this order evidencing or recording the supply, receipt or use of the plaintiffs' product pricing information which utilises a symbol with the prefix 'IDX'. (4) Direct the parties to bring in short minutes of order for the making of submissions on costs within 7 days. (5) Note that the costs orders will be made, if possible, on the papers but that if any of the parties requires a brief oral hearing this should be identified in the submissions filed pursuant to the short minutes referred to in order 4 (with a short explanation as to why an oral hearing is necessary). (6) Liberty to apply on 2 days' notice.

(b) The proposed grounds of appeal

The applicants raise three proposed grounds of appeal: Ground 1: as to UCPR 5.2, did the primary judge act on a wrong principle, or was the primary judge's decision unreasonable or unjust, by ordering discovery under UCPR 5.2 despite the primary judge's order that Mr Press provide an affidavit pursuant to the Court's inherent jurisdiction, particularly in the absence of the parties being informed that an affidavit may be required and given the opportunity to make submissions on the consequences of such an order? Ground 2: as to UCPR 5.2, did the primary judge act on a wrong principle, or was the primary judge's decision unreasonable or unjust, in ordering discovery of both categories sought by iSAM, in the absence of proper reasons as to why discovery of this breadth was necessary? Ground 3: as to UCPR 5.3, did the primary judge act on a wrong principle in determining that iSAM could not decide whether to bring a claim in reliance on s 18 of the Australian Consumer Law (ACL) against the applicants and the "unidentified defendants", rather than asking whether iSAM had sufficient information to bring proceedings against the prospective defendant? Did this error also infect the primary judge's approach to UCPR 5.2 and the order for an affidavit?
As to Ground 1, the applicants contend that the primary judge erred in principle in ordering Mr Press to provide an affidavit (in lieu of him being examined) and also ordering document production under UCPR r 5.2(2)(b). The primary judge's approach was challenged on the following bases: 1. Having determined to order the provision of an affidavit in the Court's inherent jurisdiction (which is outside the scope of UCPR 5.2), the primary judge was obliged to consider the test for preliminary discovery in UCPR 5.2(2)(b) and determine whether that test was satisfied where an affidavit had been ordered. The applicants urged the Court to grant leave because there was no appellate authority which has addressed the interaction between the Court's inherent jurisdiction to order an affidavit and its powers under UCPR 5.2(2)(b). 2. The primary judge's order requiring an affidavit from Mr Press was made without the parties having an opportunity to address that course of action. 3. There is a real prospect that, if the requirement to provide an affidavit had been raised, the primary judge may have been persuaded that no discovery under UCPR 5.2 was necessary. His Honour also failed to explain why iSAM was entitled to discovery in addition to being able to review Mr Press' affidavit.
As to Ground 2, which asserts that order 2 below required excessive production, the applicants contend that the category of discovery ordered under 2(a) was not reasonably necessary to reveal the identities of the unidentified defendants in light of category 2(b), and that his Honour did not provide adequate reasons for ordering both categories. Further, the applicants submit that category 2(a) captures all documents concerning services provided under the PTX Markets banner, which extends beyond where PTX Markets is providing its services using iSAM's pricing utilising the IDX symbol (which goes beyond iSAM's proposed claim). The applicants say that they contended before the primary judge that any discovery ordered under r 5.2 should be limited by reference to use of iSAM's IDX symbol.
As to Ground 3, the applicants contend that the primary judge made an error of principle when assessing whether iSAM had sufficient information to decide whether or not to commence proceedings. They submit that, in light of Tabcorp Holdings Ltd v Entain Group Pty Ltd [2023] NSWSC 220 and Racing New South Wales v Racing Victoria Ltd (No 2) [2023] NSWSC 576, the relevant question is not whether the prospective plaintiff has sufficient information to advance additional causes of action or join further defendants (which the applicants contend his Honour erroneously considered), but rather whether the prospective plaintiff has enough information to commence proceedings generally.
The applicants submit that, in light of both Tabcorp and Racing NSW, the primary judgment raises an issue of principle on which there is now conflicting first instance authority.
The applicants rely on Counter Building and Construction Pty Ltd v Kerr [2008] NSWSC 883 and Murray & Anor v Wheeler & Ors [2013] NSWSC 137 in support of the proposition that assertions made in solicitors' correspondence can be sufficient to demonstrate that a decision has or could be made to commence proceedings.

The applicants require leave to appeal under s 101(2)(e) of the of the Supreme Court Act 1970 because the impugned orders are interlocutory.
The principles guiding the Court's discretion whether or not to grant leave to appeal were recently discussed by Kirk and McHugh JJA Mohareb v Local Court of New South Wales [2024] NSWCA 235 at [25]-[31]. It is well to set out what their Honours said at [25]-[27] because they are directly relevant to these proceedings: Section 101(2) of the Supreme Court Act refers to this Court granting leave to a party to appeal but does not specify any criteria by which the discretion is to be exercised. In the usual way of the common law method, statements of principle have evolved to guide the exercise of discretion. This Court has stated on numerous cases that it is usually or generally only appropriate to grant leave to appeal concerning matters that involve issues of principle, questions of general public importance or a reasonably clear injustice going beyond something that is merely arguable: see eg Carolan v AMF Bowling Pty Ltd (t/as Bennetts Green Bowl Ltd) [1995] NSWCA 69 per Kirby P; The Age Company Ltd v Liu [2013] NSWCA 26; (2013) 82 NSWLR 268 at [13]; see more recently eg Shapkin v The University of Sydney [2024] NSWCA 156 at [39]. It is commonly sufficient to refer to those factors in deciding whether to grant leave to appeal. But as is implicit in the use of "usually" and "generally", whilst those factors are important they are neither exhaustive nor necessarily determinative. Thus this Court has also said, for example, that "leave should be granted only where there are substantial reasons to allow an appellate review … such as where there is an error of principle which, if uncorrected, will result in substantial injustice": Collier v Lancer (No 2) [2013] NSWCA 186 at [7] (citations omitted); see also Rodi v Gelonesi [2012] NSWCA 424 at [24]; DEF v Trappett [2017] NSWCA 163 at [25]. There are no "rigid and exhaustive criteria" as the "circumstances of different cases are infinitely various": Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 177. The ultimate issue is the interests of justice, taking into account both the circumstances of the particular case and broader interests in resolving matters of public importance and clarifying the law. A range of considerations may be relevant. For example, it has often been said that particular caution is called for in granting leave to appeal a decision pertaining to practice and procedure: eg Adam P Brown at 177; PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [3].
The need for restraint in granting leave to appeal from a decision pertaining to practice and procedure is especially relevant here, given that the orders which are sought to be challenged are of that nature.

(d) Why leave to appeal should be refused

For the following reasons, none of the three proposed grounds of appeal warrants the grant of leave.
As noted above, in circumstances where the impugned orders relate to practice and procedure, the applicants need to demonstrate a strong basis for the grant of leave to appeal. The need for restraint in such cases is tied to the important objective of securing finality in litigation.
It is convenient at the outset to set out the terms of UCPR 5.2: 5.2 Discovery to ascertain prospective defendant's identity or whereabouts (1) This rule applies if it appears to the court that - (a) the applicant, having made reasonable inquiries, is unable to sufficiently ascertain the identity or whereabouts of a person (the person concerned) for the purpose of commencing proceedings against the person, and (b) some person other than the applicant (the other person) may have information, or may have or have had possession of a document or thing, that tends to assist in ascertaining the identity or whereabouts of the person concerned. (2) The court may make either or both of the following orders against the other person - (a) an order that the other person attend the court to be examined as to the identity or whereabouts of the person concerned, (b) an order that the other person must give discovery to the applicant of all documents that are or have been in the other person's possession and that relate to the identity or whereabouts of the person concerned. …
As to proposed Ground 1, no issue of general principle or public importance is identified. The absence of any appellate authority addressing the interaction between the Court's inherent jurisdiction to order an affidavit identifying potentially relevant defendants and its powers under UCPR r 5.2(2)(b) is insufficient of itself to warrant a grant of leave.
Perhaps more significantly, the primary judge's conclusion to require both an affidavit and discovery reflects the particular circumstances of the case. As his Honour noted at PJ [53], it was "likely" that Mr Press had knowledge of all the matters concerning the identification of relevant persons, but without knowing what Mr Press would say in his affidavit, the primary judge considered that it was also appropriate to require discovery under r 5.2(2)(b).
At PJ [56], the primary judge acknowledged that there was "some overlap" between the order requiring an affidavit and the order requiring discovery of documents under r 5.2(2)(b), but his Honour said that the plaintiffs were entitled to see the documents in the defendants' possession which identified the persons concerned. That statement does not present any issue of general principle or of public importance. Nor does it reveal any error on the part of the primary judge. Requiring the production of documents in addition to the affidavit is in the interests of justice and would better enable the defendants below to test Mr Press' affidavit if they wished.
These and the other relevant orders made by the primary judge do not cause the applicants substantial injustice so as to warrant a grant of leave to appeal in circumstances where: 1. they have adduced no evidence of unreasonable prejudice or burden in complying with the orders; 2. by orders dated 25 September 2024, the plaintiffs below were ordered to pay the defendant's reasonable costs of compliance with the orders made on 19 August 2024, as agreed or assessed; and 3. it was common ground that the plaintiffs below would need to obtain a release from the Harman undertaking (see at PJ [57]).
As to proposed Ground 2, the primary judge explained the rationale underlying the plaintiffs' application below for the relief identified in the original prayers 7 and 8 of their application at PJ [35]: The structure of prayers 7 and 8 is also explained on the basis that the plaintiffs seek to identify two categories of potential defendants: (a) the person or persons who made available financial products and services under the name 'PTX Markets'; and (b) the person or persons who supplied, received or used the plaintiffs' product pricing information in connection with the activities referred to in (a). The first category would be subject to a claim for breach of s 18 and the second category would be subject to a claim for knowing involvement in that breach.
The primary judge explained at PJ [56] why he considered that it was appropriate to make an order for preliminary discovery of documents in the form of a revised version of prayer 8 which was provided by the plaintiffs after the hearing below: The revised version of prayer 8 addresses both of these concerns in a manner which I consider to be reasonable. I will adopt the starting date of 1 June 2023 for the reasons given at [78] below. In my opinion it is also necessary to limit the order to the plaintiffs' pricing information to that which concerns product symbols with the prefix IDX for the reason given above. The revised form, with this change, in my view goes no further than is reasonably necessary to enable the plaintiffs to establish the identity of the person or persons of the entities which engaged in the conduct which they allege to contravene s 18 of the ACL, and those knowingly involved in that conduct. While there is some overlap between prayers 7 and 8, in my view the plaintiffs are entitled to see the documents in the possession of the defendants which identify the persons referred to notwithstanding that this is a matter which will be addressed in the affidavit provided by Mr Press.
The applicants' complaint is essentially one of excessive production; that an order for preliminary discovery under r 5.2(2)(b) was excessive where an affidavit had also been required. Despite their original complaint of procedural unfairness concerning the order that Mr Press provide an affidavit, counsel for the applicants said to this Court that that order was appropriate as long as it was not accompanied by an order for preliminary discovery of documents.
The applicants have not identified a sufficiently arguable error in the primary judge's reasoning or in his decision to order both an affidavit and preliminary discovery to warrant a grant of leave. The primary judge was plainly aware of the overlap between both these orders but viewed them as being necessary, implicitly because of what his Honour had said at PJ [53] regarding the likelihood (as opposed to the certainty) of Mr Press having knowledge regarding the identities of persons sought by the plaintiffs below.
Refusing leave to appeal in respect of proposed ground 2 does not cause the applicants substantial injustice, for the same reasons as set out at [29] above.
As to proposed Ground 3, UCPR r 5.3(1) provides: If it appears to the court that: (a) the applicant may be entitled to make a claim for relief from the court against a person (the prospective defendant) but, having made reasonable inquiries, is unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant, and (b) the prospective defendant may have or have had possession of a document or thing that can assist in determining whether or not the applicant is entitled to make such a claim for relief, and (c) inspection of such a document would assist the applicant to make the decision concerned, the court may order that the prospective defendant must give discovery to the applicant of all documents that are or have been in the person's possession and that relate to the question of whether or not the applicant is entitled to make a claim for relief.
As noted above, the applicants contended that the primary judge's ruling on r 5.3(1) is inconsistent with other first instance decisions in Tabcorp and Racing NSW in that the primary judge focused not on whether the plaintiffs had enough information to commence proceedings against Mr Press, but rather whether there was sufficient information to bring a particular cause of action.
Proposed Ground 3 does not raise any issue of general principle or question of public importance. The primary judge correctly acknowledged at PJ [66] that the question whether the plaintiffs were unable to obtain sufficient information to make a decision whether or not to commence proceedings required an objective assessment of the information in their possession. In addressing this question his Honour said that he had "carefully considered" the correspondence sent by the plaintiff's English solicitors to Mr Press. Having reviewed the correspondence, the primary judge made findings of fact which were relevant to the application of r 5.3(1).
His Honour gave the following four reasons for rejecting the applicants' contention that the correspondence demonstrated that the respondents had already decided, or could decide, to bring proceedings against Mr Press, none of which raises any error of principle or matter of public importance: 1. Although the language in the correspondence was "quite strident" in making allegations of wrongdoing, it was acknowledged that relevant material was in the possession of the applicants and the correspondence also had to be read in the context of a Practice Direction applicable to commencing proceedings in England. Moreover, reference in one of the letters to counsel having "been instructed, with a view to preparation of particulars of claim" is a statement to the effect that further steps were being taken in preparation to commence proceedings if a decision was made to litigate. 2. The correspondence from the English solicitors related to concerns that Mr Press and Forexco had breached his consultancy agreement with the respondents, rather than to s 18 of the ACL. The correspondence from the respondents' Australian solicitors made clear that no decision had been made to commence proceedings under s 18 of the ACL. 3. Although it should be accepted that preliminary discovery cannot be used to build a case which could be brought by a plaintiff on existing information, merely because a plaintiff has sufficient information to plead a claim does not mean that it has sufficient information to bring proceedings, citing Racing NSW at [56]. It was open to the primary judge to accept Mr Johnson's evidence that the plaintiffs did not know the extent to which the unidentified defendants had used iSAM's pricing in conjunction with its symbol. 4. On the basis that the consultancy agreement terminated on 1 February 2024, as claimed by the defendants below, conduct after that time which might be the subject of proceedings concerning s 18 of the ACL would not be part of the claims brought in England.
The applicants cannot complain of substantial injustice in the event that leave to appeal is refused in respect of proposed Ground 3, having regard to the matters set out at [29] above.
For completeness, it should be noted that, prior to the hearing, the respondents opposed the grant of leave to appeal on the basis that the applicants should have approached the primary judge pursuant to UCPR r 36.16. That submission raises some complex issues which are best left for another day in circumstances where the respondents said during the course of the hearing that there was no need for the Court to determine their argument concerning r 36.16.
Finally, although the applicants assert in each of the three proposed grounds of appeal that the primary judge acted on a wrong principle and, in the case of proposed grounds 1 and 2, that his Honour's decision was also "unreasonable or unjust", on closer examination the applicants' real complaint is with the merits of his Honour's orders. Having regard to the discretionary nature of the primary judge's powers, both in the inherent jurisdiction and under the relevant parts of the UCPRs, to obtain leave to appeal the applicants are required to demonstrate that there is more than a merely arguable error of the kind identified in House v The King (1936) 55 CLR 499. They have failed to do so. They have also failed to identify any substantial injustice if leave to appeal is refused.

Conclusion

For these reasons, the application for leave to appeal will be dismissed, with costs.

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(Cth), the Australian Securities and Investments Commission Act 2001(Cth)

JUDGMENT:

THE COURT: The applicants seek leave to appeal from orders made by Richmond J on 19 August 2024 (see iSAM Securities (UK) Ltd v Press [2024] NSWSC 1036 (PJ)).
In brief, the proceedings relate to concerns by the iSAM group of companies (iSAM) that Mr Press and companies associated with him may have engaged in misleading or deceptive conduct in providing pricing and liquidity services in a way which falsely suggested that they were associated with iSAM.
iSAM claimed that it had insufficient information to commence substantive proceedings against Mr Press or others, including for any accessorial liability. Accordingly, proceedings were brought seeking orders for preliminary discovery and the like, relying on rr 5.2 and 5.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and the Court's inherent jurisdiction.
The primary judge ordered Mr Press to provide an affidavit identifying persons who supplied liquidity and/or brokerage services during a specified period using a particular business name as well as identifying persons who supplied or used a particular product using a pricing prefix associated with iSAM. The primary judge also made an order requiring Mr Press and a company associated with him to provide preliminary discovery.
It being common ground that these were interlocutory orders, the applicants require leave to appeal under s 101(2)(e) of the Supreme Court Act 1970 (NSW). For the following reasons, the application for leave to appeal will be dismissed, with costs.
These reasons for judgment are structured as follows: 1. Context and background facts. 2. The proposed grounds of appeal. 3. Principles relating to granting leave to appeal. 4. The reasons for refusing leave to appeal.

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