UGL Services Pty Ltd v F1 Solutions Pty Ltd

REASONS FOR JUDGMENT 1 This is an interlocutory application filed on 29 November 2011 which seeks, in paragraph 1, that paragraphs 8(g), 8(h), 8(i) and 8(j) of the statement of claim be struck out as likely to cause prejudice and delay in the proceeding, and in paragraph 2, pursuant to r 26.01 of the Federal Court Rules 2011 (Cth), that summary judgment be entered against the cross-respondent in respect of the cross-claim. I will deal with each of the applications for relief in the order set out in the interlocutory application.

THE STRIKE-OUT APPLICATION 2 The first part of the interlocutory application relates to the pleadings in the amended statement of claim filed by the applicant, UGL Services Pty Ltd (UGL). That statement of claim supports an originating application in which UGL seeks declarations in relation to ownership of certain intellectual property rights and injunctions relating to alleged infringement of what is said to be UGL's copyright by the respondent, F1 Solutions Pty Ltd (F1). UGL also seeks delivery up of the intellectual property, as well as damages at common law and pursuant to s 115 Copyright Act 1968 (Cth), and otherwise all such accounts and inquiries as may be necessary, as well as interest and costs. 3 In para 3 of the amended statement of claim, UGL pleads the existence of an agreement between UGL and F1 in which F1 agreed to provide consulting and software development services to, amongst other things, build a software system for UGL for commercial exploitation by UGL. Paragraph 4 of the amended statement of claim pleads certain express terms of the agreement. Paragraph 5 pleads certain implied terms. Paragraph 8 alleges breaches of both express and implied terms as pleaded in paras 4 and/or 5. Subclauses (a) through to (f) plead breaches of various provisions of the alleged agreement, and subclauses (g) through to (j), which are in dispute in the present interlocutory application, allege other breaches of the alleged agreement. 4 The basis upon which the strike-out application is made is that the particulars of breach contained in subparagraphs 8(g) through to 8(j) repeat the particulars of subparagraphs (a), (b), (c), (d) and (e), with a proviso that "further particulars may be provided following discovery and prior to hearing". This fact supports F1's case that UGL, in paragraphs 8(g) through to 8(j), is relying on identical conduct to the conduct pleaded at paragraphs 8(a) through to 8(d) to found its allegation of breach of other obligations under the alleged written agreement. According to F1, these allegations in paragraphs 8(g) to 8(j) are "superfluous and irrelevant", because if UGL succeeds in showing that there was a written agreement and that F1 breached the obligations as alleged at paragraphs 8(a) to 8(d), then UGL will be entitled to the relief sought. According to F1, UGL gains no additional rights or remedies by proving that the identical conduct happened to constitute breaches of other clauses of the written agreement. 5 The strike-out application is made in circumstances where, according to F1 - and for this purpose I accept this part of the submission - additional expert evidence will be required in relation to matters such as usual industry practices in order for UGL to make good its allegations in paragraphs 8(g) through to 8(j). F1 points to the fact that s 37M of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible. F1 submits that in circumstances where superfluous allegations are made requiring additional expert evidence, which would significantly extend the length of the trial but for no additional benefit to UGL, the superfluous paragraphs should be struck out pursuant to the power to do so otherwise specified in s 37P(6)(b) Federal Court Act. 6 The difficulty I have with this aspect of F1's application is that the matters specified in paragraphs 8(g) to 8(j) of the amended statement of claim, as F1's own submissions appear to acknowledge, relate to alleged breaches of provisions of the written agreement, separate and distinct from the breaches in paragraphs 8(a) to 8(d). It is true that those breaches are particularised by reference to the same matters set out in the particulars to paragraphs 8(a) through to 8(d) but, in substance, what is being done in paragraphs 8(g) through to 8(j) is that UGL is alleging that, by reason of the same factual circumstances as earlier identified, F1 has acted in breach of other contractual obligations than those specified in the earlier paragraphs. 7 At this stage, on a summary judgment application, it is impossible to know whether UGL will succeed on the whole or any part of its claim. Contrary to F1's assumption and submission, it is not at all apparent to me that UGL would necessarily succeed in obtaining all of the relief that it has sought if it made good any one or more of the claims in paragraphs 8(a) through to 8(d), and failed on each of the claims in 8(g) through to 8(j). Moreover, sitting here today on a summary judgment application, I cannot possibly know whether UGL will fail or succeed on any of the allegations in paragraphs 8(a) through to 8(d). It seems to me that it is entirely possible that it may fail on one or more, or indeed all, of those allegations, but nevertheless succeed on one or more of all of the allegations in paragraphs 8(g) through to 8(j), and it is possible that success or failure on any one or more of those allegations may well found the whole or part of the relief. 8 In substance we have here a series of additional claims which may well in terms of their evidentiary foundation overlap with earlier claims - but that cannot possibly be a sound reason to exercise on the basis of the overarching purpose of civil practice and procedure provisions in s 37M a discretionary power to strike out part of a claim. It must be remembered that the overarching purpose is to facilitate the just resolution of disputes according to law, and as quickly, inexpensively and efficiently as possible. It seems to me to be apparent on the face of the pleading that it would not be just to preclude UGL from making the allegations in paragraphs 8(g) through to 8(j) of the amended statement of claim, irrespective of the fact that this might well require additional expert evidence, and thereby increase the length of the hearing. 9 Nothing suggests that the claims are frivolously made or vexatious. Indeed, it is not even suggested that they are frivolous and vexatious. All that is said is that they are superfluous, because if UGL wins on some other part of its case, it will necessarily obtain all of the relief it seeks. This may well be so, but it does not undermine the fact I have already noted that, sitting here today, I cannot know what will happen to those parts of UGL's claim, and it would be unjust to deprive UGL of the prospect of obtaining the relief that it seeks, or any part of the relief it seeks, on the other part of its amended statement of claim. Accordingly, it follows that the first paragraph of the interlocutory application must be dismissed.