Press v iSam Securities (UK) Ltd

1. [1]

   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)).

2. [2]

   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.

3. [3]

   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.

4. [4]

   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.

5. [5]

   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.

6. [6]

   These reasons for judgment are structured as follows:

(a) Context and background facts

1. [7]

   iSAM is a group of related global entities that provide liquidity, brokerage, technology and risk management services to retail brokers and other clients. iSAM provides pricing and liquidity in respect of “Spot FX” (foreign exchange spot transactions), indices (taking a position on a share index) and commodities products. The pricing of these financial products is confidential and proprietary to iSAM. The relevant algorithms and processes that produce iSAM’s pricing are also confidential and proprietary. The pricing is represented by symbols which are viewed by market participants and used to identify iSAM’s products. For “index swaps”, iSAM uses the prefix “IDX”. The prospective litigation concerns the use of this prefix.

2. [8]

   Mr Press and Forexco Australia Pty Ltd (the second applicant) entered into a consultancy agreement with iSAM in July 2019. Part of Mr Press’ role was to assist Forexco Australia to promote the revenue growth of iSAM by finding new clients in the Australian market. The parties contend that the consultancy agreement came to an end either in November 2023 or February 2024. The consultancy agreement included a post termination clause restraining Mr Press and Forexco Australia from competing with iSAM for a period of six months.

3. [9]

   On or around 6 December 2023, the Managing Director of iSAM Securities (UK) Limited (Mr Samuel Johnson) travelled to Australia for business and became aware of a rival business called “PTX Markets” (PTX). On or around 20 December 2023, Mr Johnson was told by the iSAM Head of Asia Pacific that PTX was indirectly owned by Mr Press and was partnered with a former client of iSAM’s (SRW Global). Between February 2024 and June 2024, Mr Johnson caused various inquiries to be made in the Australian market as to PTX and its use of the prefix IDX. Critically, on 22 April 2024, Mr Johnson received a screenshot that showed the prefix IDX being displayed as PTX’s code.

4. [10]

   It is said that the use of the prefix IDX may amount to serious misconduct which could entitle iSAM to relief under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law.

5. [11]

   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:

6. [12]

   The following orders made by Richmond J on 19 August 2024 were:

7. [13]

   To avoid duplication, we will summarise the relevant parts of his Honour’s reasons for judgment when addressing the proposed grounds of appeal.

(b) The proposed grounds of appeal

1. [14]

   The applicants raise three proposed grounds of appeal:

2. [15]

   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:

3. [16]

   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.

4. [17]

   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.

5. [18]

   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.

6. [19]

   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.

(c) Principles guiding the Court’s discretion

1. [20]

   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.

2. [21]

   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:

3. [22]

   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

1. [23]

   For the following reasons, none of the three proposed grounds of appeal warrants the grant of leave.

2. [24]

   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.

3. [25]

   It is convenient at the outset to set out the terms of UCPR 5.2:

4. [26]

   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.

5. [27]

   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).

6. [28]

   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.

7. [29]

   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:

8. [30]

   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]:

9. [31]

   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:

10. [32]

    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.

11. [33]

    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.

12. [34]

    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.

13. [35]

    As to proposed Ground 3, UCPR r 5.3(1) provides:

14. [36]

    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.

15. [37]

    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).

16. [38]

    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:

17. [39]

    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.

18. [40]

    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.

19. [41]

    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

1. [42]

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