Racing New South Wales v Racing Victoria Limited [2023] NSWSC 838 | Case summary

Supreme Court of NSW|2023-06-27|Before: Ball J

Introduction

On 31 May 2023 I delivered reasons for judgment in this matter in which I held that the plaintiff, Racing NSW, was entitled to preliminary discovery against the defendants other than Mr Carpenter: see Racing New South Wales v Racing Victoria Limited (No 2) [2023] NSWSC 576. At that time, I stood the matter over to hear further submissions on the precise form of orders that should be made and on costs.
The matter came before me on 27 June 2023 at which time I indicated my proposed rulings on the outstanding issues between the parties and invited the parties to bring in short minutes of order that were consistent with what I had said. I also invited the parties to provide written submissions on any remaining questions and indicated that if the parties agreed I would determine any outstanding questions on the papers. This judgment deals with those outstanding questions. It assumes familiarity with my earlier judgment. It also adopts the same abbreviations as my earlier judgment.
Two issues remain between the parties concerning the precise form of orders. In addition, several issues arise in relation to costs.

Time for compliance with the orders

On 27 June 2023, I indicated that the defendants should have six weeks in which to give preliminary discovery. There is a dispute between the parties about whether that six weeks should run from 27 June 2023 (Racing NSW's position) or from the date the orders are made (the defendants' position). At the time I gave the indication, I expected that any outstanding issues would be resolved in a short period of time so that little would turn on whether the six weeks ran from 27 June 2023 or the date orders are made. Consequently, I did not focus on that issue. There has, however, been some delay in obtaining the parties' supplementary submissions which have necessitated a further judgment, with the result that some significance now attaches to the difference.

The meaning of "Other Person"

There are five categories of documents to be discovered. One requires discovery of documents constituting records or notes of meetings between Racing Victoria (referred to in the orders as "RVL") and "any Other Person". Another requires discovery of documents constituting or recording communications between RVL and "any Other Person". "Other Person" is defined to include a number of persons or entities.
One category of "Other Person" originally proposed by Racing NSW was "any federal or state government department or minister or any prospective minister in Australia" which, subject to some amendments suggested by Racing NSW, has become para (f) of the definition of "Other Person" in the proposed orders. Another category is "either or both of the Second Defendant (Greg Nichols) or Fourth Defendant (Brian Kruger)", which is para (i) of the definition of "Other Person" in the proposed orders.
RQB objects to the words "any prospective Minister in Australia" in para (f) on the basis that the meaning of those words is unclear. The first to fourth defendants agree with that objection. The first to fourth defendants also object to para (i).
Racing NSW's primary position is that those objections were not raised at the hearing on 27 June 2023 and consequently cannot be raised now. However, as an alternative to para (f), it proposes the following: f. any federal or state government department or minister or any candidate or member of parliament who is a prospective minister in any Australian government.
In my opinion, the changes sought by the defendants should be made. Although it is true that those changes were not raised by the defendants on 27 June 2023, there was a limited amount of time on that day. Moreover, one reason for not making orders on that day was to allow for the possibility that it would be necessary to refine the categories for discovery further to take account of what I had said.
I agree that the phrase "or any prospective minister" is unclear. It could include anyone who aspires to being a minister in a state or federal government. I do not think that the problem is cured by Racing NSW's reformulation. Correspondence of the type Racing NSW is seeking, if it exists, is most likely to be addressed to an actual minister rather than a prospective one. Accordingly, I think it is appropriate to amend para (f) so that it reads "any federal or state government department or minister in any Australian government".
I accept that inclusion of para (i) in the definition of "Other Person" cuts across the way in which category 5 were ultimately drafted. Consequently, I think that that paragraph should be deleted.

Mr Carpenter's costs

A number of issues are raised by the parties' submissions in relation to costs. The first is what should happen in relation to Mr Carpenter's costs. Mr Carpenter was an employee of Racing Victoria. He was represented by the same solicitors and counsel as Racing Victoria and no separate submissions were made on his behalf. There is no suggestion that he was charged separately from Racing Victoria. In my opinion, it is not reasonably practicable to separate out costs incurred by Mr Carpenter from costs incurred by Racing Victoria. The costs of representing Mr Carpenter in addition to Racing Victoria are likely to be minimal or non-existent. In those circumstances, no order should be made in relation to Mr Carpenter's costs.

Costs of compliance

The second issue is what should happen in relation to the costs of compliance. At the hearing on 27 June 2023, I indicated that I thought that the costs should be costs in the cause if proceedings were commenced against the relevant defendant within a period of three months, but otherwise the plaintiffs should pay the defendants' costs of production. In saying that, I was not making a final determination of the matter. Rather, I was accepting Mr Bannon SC's invitation to give an indication of what I thought the appropriate order should be, with the intention that the parties would seek to reach agreement on that issue, but in the expectation that I would hear further submissions on that issue if agreement could not be reached.
A number of the defendants contend that the appropriate order is an order that the plaintiffs pay the defendants' costs of compliance without prejudice to the plaintiffs' ability to seek a variation of that order in any subsequent proceedings if commenced within three months of the final resolution of these proceedings. In making that submission, they rely on the decision of Stevenson J in Tabcorp Holdings Ltd v Entain Group Pty Ltd (No 2) [2023] NSWSC 311 at [26]-[27]. In that case, Stevenson J, in rejecting the approach I said I preferred, said "that proposition assumes and predicts some kind of correlation between the costs incurred by [the defendants] in complying with my orders for preliminary discovery and any success that [the plaintiffs] might achieve in any later proceedings".
I prefer the approach that I initially indicated I thought I should take. However, the orders should make it clear that only the costs of those parties which are joined in the substantive proceedings should form part of the costs of those proceedings. The orders I propose to make do that.
The approach I prefer has been taken in other cases: see, for example, B & J Hudghton Investments Pty Ltd as trustee for B & J Hudghton Family Trust v Lakeba Group Ltd [2022] NSWSC 830 at [38] per Rees J. The reason for an order in that form is not that there is a correlation in the costs of complying with the orders for preliminary discovery and any success the plaintiff might enjoy in later proceedings. Rather, the order recognises that if substantive proceedings are commenced it is likely that the documents produced in response to the order for preliminary discovery will also be discoverable in the substantive proceedings and in that case the costs of giving discovery of those documents, absent some other order of the Court in those proceedings, should abide to the outcome of those proceedings.
The order also seems to me to be preferable procedurally. First, if the plaintiff commences proceedings and succeeds, it places the onus on the defendant to persuade the Court that the plaintiff should nonetheless pay the costs incurred by the defendants in discovering what are likely to have been relevant documents. That appears to be appropriate as a matter of onus. Second, it seems to me to be procedurally odd to give a party leave to seek in one proceeding orders that vary orders made in another proceeding which has been finally disposed of. Third, and related to the second point, it is unclear how the order for which the defendants contend would work as a matter of practice. If that order is made, presumably the order can be enforced, the costs of compliance can be assessed, and the plaintiff can be required to pay those costs before the substantive proceedings are resolved and any order for costs is made in those proceedings. Once the costs of compliance are assessed and paid, it is difficult to see on what basis those costs can be revisited.

RSA's costs

The third issue relates to RSA's costs.
It is often suggested that the normal principle that costs follow the event cannot be applied in applications for preliminary discovery, since there is no "event". Instead, the Court must consider all the facts of the case. As Kenny J explained in J & A Vaughan Super Pty Ltd v Becton Property Group Ltd [2013] FCA 340 at [16]: Principle and the authorities indicate that it is not useful to speak of a conventional rule as to costs in cases such as the present: see also Apache Northwest Pty Ltd v Newcrest Mining Ltd (2009) 182 FCR 124 at 146-147 [90] per Flick J. The disposition of costs will depend on the circumstances of the case, including the conduct of the parties, the likely nature of any prospective cause of action and the likely passage of time before any such matter would be resolved at trial. …
Whether it is correct to say that there is no 'event' is open to some doubt. The relevant event is the order for preliminary discovery. In any case, it is accepted that a plaintiff is normally entitled to its costs of a successful, fully contested application for preliminary discovery. The plaintiff may also be entitled to its costs where the application was not contested but where the defendant has acted so unreasonably prior to the commencement of the application that an order for costs against it is warranted: see Renton v Kelly [2018] NSWSC 1377 at [14]-[15] per Ward CJ in Eq.
Relying on those principles, RSA submits that a costs order should not be made against it because it did not take an adversarial position. Instead, it simply put the plaintiff to proof, pointing out that if the Court accepted the submissions made by the other defendants, then that would have the same effect on the relief sought against RSA.
I do not accept that submission. It is true that RSA did not make any submissions of its own either in writing or orally in opposition to Racing NSW's application, and its written submissions were carefully crafted so as not to say specifically that it opposed Racing NSW's application. However, when Racing NSW sought documents from RSA before commencing proceedings, RSA did not respond to that request. In substance, the position taken by RSA at the hearing was that it did not make any submissions of its own but relied on the submissions of the other defendants and sought to take the benefit of those submissions if they were successful. Given that all the arguments available to the defendants were fully canvassed by the other defendants, that was a sensible course to take. However, I do not think that it means that RSA should be treated as not having opposed the application. Like the other defendants, it should bear the costs of doing so.

Apportioning costs

RSA submits that if it is ordered to pay costs, it should not be ordered to pay the costs of the proceedings, but instead costs should be apportioned.
In my opinion, this submission does not require any special costs order. The normal order would be that the defendants pay the plaintiffs costs, leaving it to the defendants to determine what proportion of the plaintiffs' costs each should bear. There is no reason in this case to depart from that order. To the extent that the issue cannot be resolved by agreement, it is an issue that is best dealt with at the time of assessment.

Orders

The orders of the Court are: 1. Within four weeks of the date of these orders, pursuant to rule 5.3 of the Uniform Civil Procedure Rules 2005 (NSW), the First, Second, Fourth, Fifth, Sixth, Seventh and Eighth Defendants are to provide to the Plaintiffs verified discovery of the documents responsive to the categories set out in Schedule A to these orders. 2. Within four weeks of the date of these orders, the First, Second, Fourth, Fifth, Sixth, Seventh and Eighth Defendants are to produce to the Plaintiffs the documents, other than privileged documents, referred to in order 1 above. 3. The First, Second, Fourth, Fifth, Sixth, Seventh and Eighth Defendants pay the Plaintiffs' costs of the Summons as agreed, taxed or assessed. 4. Subject to order 5 below, the Plaintiffs pay the First, Second, Fourth, Fifth, Sixth, Seventh and Eighth Defendants' reasonable costs of complying with these orders, to be assessed if not agreed. 5. In the event that the Plaintiffs (or either one of them) bring substantive proceedings against any of the defendants relating to the matters the subject of the Summons within 3 months of the final resolution of any disputes about production under these orders (including as to privilege), the costs referred to in order 4 above in relation to those defendants shall be costs in the cause in those proceedings. SCHEDULE A The documents you are required to produce are as follows: 1 All Documents created in the Relevant Period constituting, recording or evidencing any agreement, draft agreement or proposed agreement between the PRAs concerning: (a) the exclusion of, or threat to exclude, Racing NSW from the Australian thoroughbred racing industry; or (b) the establishment of, or threat to establish, a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia. 2 All Documents created in the Relevant Period constituting records or notes of meetings between RVL (and any of its employees or agents) and any Other Person concerning: (a) the exclusion of, or threat to exclude, Racing NSW from the Australian thoroughbred racing industry; (b) the establishment of, or threat to establish, a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia; or (c) the object sought to be achieved by, or the purpose of any agreement, draft agreement or proposed agreement of the type referred to in paragraph 1. 3 All Documents created in the Relevant Period constituting or recording communications between RVL (and any of its employees or agents) and any Other Person concerning: (a) the exclusion of, or threat to exclude, Racing NSW from the Australian thoroughbred racing industry; (b) the establishment of, or threat to establish, a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia; or (c) the object sought to be achieved by, or the purpose of any agreement, draft agreement or proposed agreement of the type referred to in paragraph 1. 4 All Documents created in the Relevant Period constituting, recording or evidencing any confidentiality agreement or draft confidentiality agreement or proposed confidentiality agreement between RVL and any other PRA concerning discussions for: (a) the exclusion of, or threat to exclude, Racing NSW from the Australian thoroughbred racing industry; or (b) the establishment of, or threat to establish, a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia. 5 All Documents created in the Relevant Period constituting internal communications, briefing notes or work papers concerning: (a) any agreement, draft agreement or proposed agreement between the PRAs concerning the exclusion of, or threat to exclude, Racing NSW from the Australian thoroughbred racing industry; (b) any agreement, draft agreement or proposed agreement between the PRAs concerning the establishment of, or threat to establish, a new entity or joint venture for the provision of services relating to thoroughbred racing in Australia; or (c) the object sought to be achieved by, or the purpose of (a) or (b). DEFINITIONS A. Document has the meaning provided in the Evidence Act 1995 (NSW) and includes (without limitation) all originals and drafts, letters, notes, file notes, memoranda, diary entries, facsimiles, electronic mail and computer records (whether stored on a computer disk or otherwise), text messages (including Whatsapp, Signal and iMessage), and any other written communications in your possession, custody or control. B. Other Person means the persons, entities, organisation or associations described below (and their officers, employees, representatives or agents): a. any other PRA; b. any public relations adviser or strategic adviser; c. either or both of Tabcorp Holdings Ltd or Tab Limited; d. the Australian Trainers Association; e. any breeders' association involved in the Australian thoroughbred racing industry; f. any federal or state government department or any minister in any Australian government; g. any of the International Federation of Horse Racing Authorities, the Asian Racing Federation Handicappers Committee or the IFHA Longines World's Best Race Horse Rankings Committee; h. any of David Gallop, Nick Weeks, Ben Buckley, Adam Sucking or Bruce Meagher. C. PRA means any or all of Racing Victoria Limited (RVL), Racing Queensland Board (RQ), Thoroughbred Racing SA Limited (TRSA), Racing and Wagering Western Australia (RWWA), TasRacing Pty Ltd (TR), Thoroughbred Racing NT Incorporated (RNT) and/or Canberra Racing Club Incorporated (CRC) (and their officers, employees, representatives or agents). D. Relevant Period means 1 February 2022 to the date of these orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 July 2023

Racing New South Wales v Racing Victoria Limited

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