Kingfisher Mobile Australia Pty Ltd v Telstra Ltd [2023] NSWSC 1600

Supreme Court New South Wales

Medium Neutral Citation: Kingfisher Mobile Australia Pty Ltd v Telstra Ltd [2023] NSWSC 1600 Hearing dates: 14 December 2023 Decision date: 15 December 2023 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Defer consideration of whether separate question should be ordered; direct plaintiff first to adduce all evidence on which it relies in relation to that question; provisionally fix separate question for hearing Catchwords: CIVIL PROCEDURE – application for determination of separate question – whether hearing of separate question should be ordered – whether proper construction of contract and final injunctive relief in respect of alleged breach of that contract should be heard before claim for damages – whether separate question should be provisionally listed for hearing Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Category: Procedural rulings Parties: Kingfisher Mobile Australia Pty Ltd (Plaintiff/Applicant) Telstra Limited (Defendant/Respondent) Representation: Counsel: D R Sulan SC with B Yin (Plaintiff/Applicant) R Scruby SC with C Ernst (Defendant/Respondent)

Solicitors: Corrs Chambers Westgarth (Plaintiff/Applicant) King & Wood Mallesons (Defendant/Respondent) File Number(s): 2023/429982

JUDGMENT 1. The plaintiff, Kingfisher Mobile Australia Pty Ltd is a provider of mobile device lifecycle services. 2. On 11 November 2020, Kingfisher entered into a Mobility Products Services Agreement with Telstra Corporation Ltd pursuant to which it agreed to provide certain lifecycle services to Telstra for the benefit of customers who had enrolled in certain programs offered by Telstra during the "Ordering Period". The Ordering Period was initially to 30 June 2023, but has now been extended to 31 March 2024. 3. The agreement is for a seven year term concluding on 30 June 2027. 4. The agreement provides that Telstra could "only enrol new devices" until, effectively, 31 March 2024. 5. In submissions before me Mr Sulan SC, who appeared with Mr Yin for Kingfisher, described customers already "enrolled" by 31 March 2024 as "Tail Customers". It is Kingfisher's position that the effect of the Agreement is that Tail Customers will always remain customers of Kingfisher. There is a significant number of Tail Customers. 6. In November 2022, Telstra commenced a tender process for the provision, from 1 April 2024, of services such as those provided by Kingfisher to Telstra under the Agreement. Kingfisher participated in that tender but was not the successful tenderer. The result is that, from 1 April 2024, Telstra will engage a third party, Assurant Services Australia Pty Ltd to provide the services hitherto provided by Kingfisher in relation to "New Enrolments". 7. Kingfisher contends that: 1. Telstra failed properly to engage in the good faith negotiation process specified in the Agreement before engaging a third party to provide services substantially similar to those provided by it; and thus acted in breach of an identified clause in the Agreement and causing it, in effect, to lose the chance to be the successful tenderer (the "Lost Opportunity Case"); and 2. the combined operation of a number of express terms of the Agreement, and a number of implied terms alleged to be in the Agreement, is that Telstra may not cause the Tail Customers to be migrated to the successful tenderer, Assurant (the "Tail Customers Case"). 1. Kingfisher commenced these proceedings on 28 November 2023 seeking: 1. as to the Lost Opportunity Case: 1. a declaration that Telstra's conduct constituted a breach of the Agreement; and 2. damages (in effect for the loss of a chance to be the successful tenderer); and 1. as to the Tail Customers Case: 1. a declaration that the contract has the effect set out at [7(b)]; 2. an injunction to restrain Telstra from causing Tail Customers to be migrated to Assurant (the "Tail Customers Injunction"); and 3. damages. 1. During argument before me on 14 December 2023, Mr Sulan accepted that if Kingfisher obtained the Tail Customers Injunction, it would not suffer damage as referred to in [8(b)(iii)]. 2. By Notice of Motion filed on 5 December 2023, and as in substance pressed during the hearing on 14 December 2023, Kingfisher seeks an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 28.2 that the question of its entitlement to the declaratory and injunctive relief concerning its Tail Customers Case be determined separately from and before its Lost Opportunity Case and before any assessment of damages. 3. At the hearing on 14 December 2023, Mr Sulan also sought the setting of a hearing date in March 2024 for those questions so that Kingfisher could then move, on a final basis, for the Tail Customers Injunction prior to the date on which Assurant will commence to provide services to Telstra. 4. Telstra opposed this course of action on three bases.