Monash IVF Pty Ltd v Mooring [2024] NSWSC 1651

Supreme Court New South Wales

Medium Neutral Citation: Monash IVF Pty Ltd v Mooring [2024] NSWSC 1651 Hearing dates: On the papers, final submissions ending 15 November 2024 Date of orders: 19 December 2024 Decision date: 19 December 2024 Jurisdiction: Equity Before: Parker J Decision: See [22] Catchwords: COSTS — interlocutory costs — restraint of trade — application for injunction — short service obtained — plaintiff served voluminous evidence on defendant shortly before, and on date of, hearing — adjournment granted to allow defendant to file evidence — interlocutory injunction refused — application by plaintiff for costs thrown away by reason of adjournment refused — plaintiff to pay costs of interlocutory application in full — application by defendant for costs payable forthwith refused — costs in the cause Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: Fiduciary v Morningstar (2002) 55 NSWLR 1 Omutta Pty Ltd v Wilson (No 2) [2019] NSWSC 401 Rhino Rack Australia Pty Ltd v Hub Computing Services Pty Ltd [2021] NSWSC 231 Texts Cited: Nil Category: Costs Parties: Monash IVF Pty Limited (Plaintiff) Charlotte Mooring (Defendant) Representation: Counsel: A R M Pollock/ A Storey (Plaintiff) D Mahendra/ J Pen (Defendant)

Solicitors: Burch & Co Lawyers (Plaintiff) Gadens (Defendant) File Number(s): 2024/266491 Publication restriction: Nil

JUDGMENT 1. On 29 July this year, I refused an interlocutory application by the plaintiff, Monash IVF Pty Ltd ("Monash"), who sought injunctive relief to enforce the restraint terms in a Service Agreement with the defendant, Dr Charlotte Mooring. This judgment deals with the consequential costs of that hearing.

Background and procedural history 1. Monash operates a chain of clinics around Australia which provide fertility services and treatments. At the date of the proceedings, Monash had seven full-service clinics in Queensland, including one in Spring Hill, Brisbane. Pursuant to the terms of a Service Agreement which was entered into on 18 January, Dr Mooring provided IVF Services at the Spring Hill clinic. Dr Mooring is a consultant obstetrician and fertility specialist with her own practice, Bump & Beyond Obstetrics and Fertility, which she continued to operate while consulting for Monash. 2. The parties fell out in April of this year when Dr Mooring purported to terminate the Agreement by reason of material breach on the part of Monash. The allegation of material breach was not accepted by Monash who purported to terminate the Agreement on the basis of repudiation by Dr Mooring on 16 May. The next day, Dr Mooring, through her solicitors, notified Monash that she was "taking steps to provide IVF services at a new location in the coming months, and [would] communicate with patients to let them know that she [was] no longer providing services to Monash IVF and [would] provide details about her plans to provide services elsewhere." 3. On 19 July this year, the matter came urgently before me in the Duty List on an ex parte basis. I granted orders in the form of the proposed minute of order making the summons returnable before the Duty Judge on 24 July for the hearing of Monash's interlocutory application that Dr Mooring be restrained from engaging in or holding an interest in any commercial IVF business within 50 km of Monash's Spring Hill clinic until 16 November 2024. The orders also abridged service of the initiating documents to at or before 6:00pm on 22 July. 4. On the evening of 19 July, Dr Mooring's solicitors were served with the summons, two supporting affidavits and a notice to produce. Between Sunday 21 July and Wednesday 24 July, the solicitor's acting on behalf of Monash incrementally served a further 600 pages of evidence, access to 246 of which was granted on 24 July. 5. On 24 July, counsel for Dr Mooring appeared and sought an adjournment to allow Dr Mooring to file evidence. Counsel for Monash seemed to oppose the adjournment but did not expressly identify any prejudice which would be occasioned by Monash if it was granted, save for foreshadowing an application that the costs be thrown away. I made orders adjourning the interlocutory hearing to 29 July and granted leave to Monash to file and serve a further notice to produce on Dr Mooring. 6. On 29 July, I refused the interlocutory application. My reasons for doing so can be summarised by the following three points. 7. Firstly, counsel for Monash's claim for damages flowing from the "goodwill" associated with patient referrals raised questions about the true nature of Monash's business model and, more specifically, whether its customers are the consultant doctors who receive referrals or the patients who are ultimately treated by such doctors. While such questions, and the adequacy of damages as a remedy for such goodwill, were ultimately a matter for final hearing, the authorities demonstrate that they are considerations which I can take into account in assessing the balance of convenience at the interlocutory stage. Accordingly, I considered such unanswered questions to weigh against the granting of injunctive relief. 8. Second, I took the view that restraining Dr Mooring from practising would have caused prejudice to her patients. Counsel for Monash argued that Monash would be able to replace Dr Mooring with alternative doctors to avoid this prejudice. The doctor-patient relationship is a confidential and personal one and for this reason I did not consider that counsel's proposal was satisfactory. 9. Finally, it appeared to be agreed between the parties that representatives of Monash had foreshadowed the bringing of the proceedings from about 17 May 2024. Furthermore, Monash had been put on notice that Dr Mooring did not consider herself bound by the contractual restraints in the Service Agreement since April when she purported to terminate it on the basis of material breach. There was no explanation, or evidence, as to why the matter was only brought before the Court, urgently, 6 weeks (at least) later. I considered this to be factor which prejudiced Dr Mooring. 10. Accordingly, I made orders dismissing Monash's interlocutory application and granting leave for its representatives to file an amended summons for the purposes of preparing the matter for final hearing. But I reserved the question of costs of the application. 11. On 10 October, I ordered that the reserved question of costs be dealt with by me on the papers and made ancillary orders scheduling the filing of submissions and evidence to facilitate this. 12. Each party has prepared and filed submissions. Dr Mooring further relies on an affidavit sworn by her solicitor, Erin Lynch, dated 14 November 2024 which sets out the correspondence received from Monash's lawyers, serving evidence on Dr Mooring in the days leading up to the 24 July as mentioned above (at [5]).

Incidence of costs 1. Both parties agree that Dr Mooring has succeeded in the application and that, accordingly, the costs of it are to be payable by Monash. The question remaining for the Court, which is pressed by counsel for Monash, is whether Dr Mooring should be ordered to pay Monash's costs thrown away by reason of the adjournment. 2. Counsel for Monash contended that the Court had discretion to depart from the general rule that costs follow the event where the successful party has engaged in disentitling conduct. The disentitling conduct alleged by counsel for Monash was put on two bases: 1. Monash was prepared for the 24 July hearing, having filed affidavits and submissions, and incurred costs (including counsel fees and travel expenses) that were "thrown away" due to Dr Mooring's unpreparedness. 2. Dr Mooring showed a lack of expedition in preparing for the hearing, failing to take meaningful steps to prepare and file evidence despite being notified of Monash's concerns as early as 17 May, and being served with the application on 19 July. 1. Counsel for Dr Mooring contested these bases by reference to the sequence of events which led up to the adjournment on 24 July (described above [4]-[6]). Counsel contended that the service, by Monash's solicitors, of voluminous evidence in a short period of time before, including on the day of, the 24 July hearing date made an adjournment "reasonable, if not inevitable". Indeed, on this basis, it was submitted that the adjournment was consequential on the late service of material and that any costs "thrown away" were incidental to Monash's ultimate application for interlocutory relief which was dismissed. 2. As a matter of general principle, an applicant who has obtained short service of an application for an interlocutory injunction may be able to proceed on the return date but cannot reasonably insist on doing so where the respondent has not received at least the three clear days' notice required under the Rules. This is especially clear on the facts of the present case in which: the bringing of the proceedings was delayed without explanation (above [10]); the initiating documents were served on Dr Mooring less than three clear days before the summons was made returnable (above [5]); voluminous evidence was served on Dr Mooring in the lead up to the hearing date (above [5]; and, lastly, as I mentioned in my oral reasons on 29 July, the proceedings involve complex questions which would no doubt have required careful consideration by any party who sought to defend against them. 3. An order for costs thrown away is appropriate where it can be established that a party is solely responsible for the wastage of costs so claimed. For the reasons given above, counsel for Monash has not established that the adjournment was solely a result of Dr Mooring's actions. The costs of the interlocutory application will be wholly payable by Monash to Dr Mooring.

Assessment and payment forthwith 1. In accordance with UCPR 42.7(2), both parties' submissions start from the general rule that costs are payable at the conclusion of the proceedings. Counsel for the Dr Mooring, invoking the principles established in Fiduciary v Morningstar (2002) 55 NSWLR 1, sought an order for costs to be payable forthwith. Conversely, counsel for Monash opposed this application, providing a variety of grounds to support their position, that any costs order should be made payable only at the conclusion of the proceedings. While I appreciate the submissions provided by both parties, it is, for the purposes of this decision, unnecessary to delve any further into them. 2. As I explained in Omutta Pty Ltd v Wilson (No 2) [2019] NSWSC 401, in circumstances such as the present, making an order for interlocutory costs to be assessable and payable forthwith would be a distraction and potential waste of time and resources. In a case where the circumstances would justify making such an order, I would instead make an order for payment of a lump sum on account of costs: see also Rhino Rack Australia Pty Ltd v Hub Computing Services Pty Ltd [2021] NSWSC 231 at [27]-[38]. That has not been sought by counsel for Dr Mooring. 3. For these reasons, I refuse Dr Mooring's application for costs to be assessable and payable forthwith.

Orders 1. The orders of the Court are: 1. The applicant/plaintiff pay the respondent/defendant's costs of the interlocutory application made by way of the notice of motion filed 19 July 2024. 2. Order that the applicant pay the respondent's costs of this costs application.

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Amendments 20 December 2024 - [decision date amended] 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: 20 December 2024