Reebok v SOCOG [2000] NSWSC 1014

New South Wales Supreme Court

CITATION : Reebok v SOCOG [2000] NSWSC 1014 CURRENT JURISDICTION: Equity Division Commercial List FILE NUMBER(S) : SC 50149/99 HEARING DATE(S) : 30.10.00 JUDGMENT DATE : 2 November 2000

PARTIES : Reebok International Limited -v- Sydney Organising Committee for the Olympic Games JUDGMENT OF : Hunter J

COUNSEL : Plaintiff: F M Douglas QC & C A Moore Defendant: S J Gageler SC SOLICITORS : Plaintiff: Freehills Solicitors Defendant: Blake Dawson Waldron CATCHWORDS : Practice and Procedure - costs - interlocutory proceedings derived by consent orders after extensive history CASES CITED : Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia : Ex Parte Lai Qin (1997) 186 CLR 622 One.Tel Ltd -v- Deputy Commissioner of Taxation (2000) 171 ALR 227 DECISION : Costs of the applications plaintiff's costs in the cause.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

HUNTER J

THURSDAY 2 NOVEMBER 2000

50149/99 REEBOK INTERNATIONAL LTD -v- SYDNEY ORGANISING COMMITTEE FOR THE OLYMPIC GAMES

REASONS FOR JUDGMENT 1 The remaining issue between the parties is that of the costs of several interlocutory disputes which were resolved without a full hearing on the merits. At the centre of those interlocutory disputes was the endeavour of the defendant (SOCOG) to protect the confidentiality of discoverable documents. 2 Issues of that kind had arisen before Rolfe J in motions by SOCOG on notices dated 3 March and 5 April 2000. The nature of the substantive issues in these proceedings and of those interlocutory questions are set out in His Honour's judgment of 12 April 2000. The nature and history of those interlocutory disputes is not, in my opinion, without relevance to the present dispute about costs. 3 In brief, the plaintiff (Reebok), seeks damages from SOCOG for an alleged breach of a marketing agreement between them of 11 November 1997 (the Reebok agreement). The breach is said to be constituted by SOCOG's granting of Olympic Games related marketing rights to competitors of Reebok under agreements referred to as the Canterbury agreement and the Dunlop agreement (Reebok referred in its summons to the Dunlop agreement as the Bond arrangement - however nothing turns on that). 4 SOCOG in its defence admitted to having entered into the Canterbury and Dunlop agreements, while denying any breach of the Reebok agreement. In turn, SOCOG, by way of cross claim, seeks damages from Reebok for breach of the Reebok agreement, the breach relied upon being Reebok's purported termination of the Reebok agreement for SOCOG's alleged breach. 5 By its notice of motion of 5 April 2000 SOCOG moved for orders limiting inspection of the Canterbury and Dunlop agreements in redacted form to legal representatives of Reebok, subject to undertakings as to confidentiality. The hearing before Rolfe J proceeded only in relation to the Dunlop agreement, the parties having resolved their differences in respect of the Canterbury agreement. 6 The issue before Rolfe J was described in His Honour's judgment as being "whether two employees of Reebok, namely Mr David Pace and Mrs Stephanie Cucurullo, both of whom are in-house lawyers of Reebok, should have access to an unedited version of the … Dunlop agreement, subject to their furnishing confidentiality undertakings" (par 13 of the Rolfe J judgment). 7 The competing contentions of the parties before Rolfe J came down to a submission on behalf of SOCOG that the "confined issue" in relation to the Dunlop agreement made it "unnecessary" for wider access being given to the agreement than that contended for in its motion. It was Reebok's submission that "proper instructions" could not be obtained without disclosing its contents to employees of Reebok. 8 The confidentiality argument was based on SOCOG's evidence that the Dunlop agreement contained "significant commercially sensitive information", knowledge of which would give Reebok "a head start and competitive edge over … Dunlop or other potential sponsors tendering for and negotiating sponsorships in relation to future Olympic Games" (par 32 of the judgment of Rolfe J). It was SOCOG's position that once that information was obtained by Reebok's employees they "could not remove from their minds what they had learned" (para 25). That market advantage was said to be one that enabled Reebok to engage in "ambush marketing", namely, a market strategy devised with knowledge of a competitor's marketing arrangements. 9 Rolfe J considered that SOCOG's evidence on this question of ambush marketing had been "eroded to a not insubstantial extent" by cross examination. Reebok's contention of undue hindrance in the preparation of its case was supported by expert evidence of its external solicitors on the record. 10 In the result, Rolfe J ordered disclosure of the Dunlop agreement to Reebok's in-house lawyers in redacted form as particularised in the judgment (par 44). 11 On 19 July 2000 the Court of Appeal in a unanimous judgment dismissed SOCOG's appeal from that decision. In the period between the two judgments the issue of discoverability of documents was enlivened during the course of a directions hearing on 28 April 2000. On that occasion the parties agreed upon categories for discovery, save for the following: " Category 2 …documents … recording: (a) the negotiation of the Canterbury Agreement …