Conoco Speciality Products Inc. v Merpro Montassa Ltd

[1990] FCA 713

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JUDGMENT No. 7.13 l?= i

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IN THE FEDERAL COURT OF AUSTRALIA ) , .

VICTORIA DISTRICT REGISTRY V. No. 6.332 of 1989

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GENERAL DIVISION	)
B E T W E E N :

CONOCO SPECIALTY PRODUCTS INC. & ANOTHER

Applicants

and

MERPRO MONTASSA LTD. & MWCHER

D:  NORTHROP J.

13 DEC 1990

DATE :  27 NOVEMBER 1990

AUSTRALIA

PLACE :  MELBOURNE PRINCIPAL REGISTRY

EX-TEMPORE REASONS FOR JUDGMENT	. ..
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This is a normal directions hearing in this application which was commenced on 3 November 1989. 1.

The interlocutory 1.;

steps have reached a stage where the matter is almost ready

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for trial. At the directions hearing counsel for the

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applicants moved the court that the directions hearing should

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be adjourned for a substantial period for reasons which I will

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mention in a moment. That motion for the adjournment is i

opposed by counsel for the respondents.

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At the time this application was commenced, an action was pending in Scotland in which the applicant, Conoco Specialty	i '
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Products, and the respondent Merpro Montassa Ltd, were	1:.
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opposing parties. That action involved a number of patents	,
two of which were the equivalents of the patents the subject
of this application. In the Scottish proceedings Conoco had	I

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commenced an infringement action against Merpro in relation to certain types of hydrocyclones which need not be described in detail. Merpro counter-claimed alleging that the United Kingdom patents were invalid. As I said, the application in this Court was commenced while that action in Scotland was pending. On 13 August of this year, the Scottish Court gave judgment in which it held that the United Kingdom patents were valid, but that there had been no infringement by Merpro with respect to the two relevant patents. It has not been contended that that decision is binding in any way on the parties to the proceeding in Australia, but it has been said that the result of that action could have a bearing on the proceedings in Australia. Conoco appealed from that judgment and the material before this Court shows that that appeal will, in all probability, come on for hearing on 24 September

1991. Having regard to the normal course of events, judgment

in that appeal will not be given until some time thereafter, possibly towards the end of next year. In these circumstances the applicants are seeking an order that the directions

of the pending appeal in Scotland. The appeal is against the	hearing be adjourned until after the hearing and determination
finding that there had been no infringement. The Court has been informed from the bar table that Merpro also is appealing from that part of the order of the Scottish Court which held that the patents were valid.
Affidavits have been filed in support and in opposition to the motion for the adjournment and they disclose a fairly

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long history of matters between the parties. It has been put on behalf of Conoco that in reality what is being sought is the delaying of the hearing for the purposes of saving expenditure and for convenience. The grounds are summarised in the affidavit of Mr Hamer as follows:-

"The proceedings should be adjourned until after the determination of the appeal in the Scottish proceeding for the following reasons:

(a)	the issues of infringement are identical in this proceeding as in the Scottish proceeding;
(b)	by adjourning, the parties will save substantial costs;
(c)	substantial saving of Court's time may result, which is in the public interest;
(d)	the main protagonist is making application, and no disadvantage will be suffered by the Respondents; and
(e)	the delay occasioned by the adjournment will not be inordinate."

By way of analogy it was contended that this is very
similar, in many respects, to a motion that an action be

struck out for want of prosecution. Such a motion is normally

brought by a respondent and the general principle apparently

is that such an action will not be struck out for want of

prosecution if a new action could be commenced. In other words, if no statute of limitation prevented the action being commenced there would need to be unusual circumstances to justify an order striking out an action. Reference was made to Birkett v James [l9781 A.C. 297 per Lord Diploch at p.322. By analogy it was argued that in the present case if the directions hearing was not adjourned, it may well be that the

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applicant would discontinue the action, incurring, in so doing, the obligation of paying the costs of the respondents of the action to date. In so doing Conoco would not be prevented from commencing an action in the future, after considering its position in the light of any judgment on the appeal in the Scottish proceedings. In other words, no Statute of Limitations at present or in the near future would prevent such an action. In the light of that submission, and on the material disclosed to the Court in the affidavits, it was contended that this was a case where, as a matter of discretion, the motion should be granted.

As opposed to that, it is argued that the mere existence of the proceedings in Australia of itself is a great disadvantage to the respondents in that it could affect the dealings of the respondent with other possible customers wanting to purchase articles of the type covered by the patents. There is much force in the argument and reference may be made, for instance, to s.121 of the Patents Act 1952

which in effect enables a person, to compel a patentee to take	action to establish an infringement and not rely merely on the
assertion. While the present proceedings are in existence, there is the outward sign of an allegation which does, in my opinion, place the respondents in a disadvantaged position.
It is also a general policy of the Court that actions which have commenced should be pursued with reasonable diligence to completion to enable the parties to know their

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. rights.	Ancillary to that is the concept that there should not be any undue adjournment of matters, unless by consent of the parties, in cases where there may be other proceedings pending. This applies in cases where the real issue might be the same between parties within the jurisdiction, but it is difficult to see how any such principle could be applied to a case where the proceedings which are pending are in another country and cannot bind the parties, where the factual position may not be similar, where the legal provisions might differ and where the parties are not agreeing to such a course being adopted.
In all the circumstances of the case, it seems to me that the applicants, having commenced these proceedings at a time when the proceedings in Scotland were in existence, they did so with knowledge of all the implications arising therefrom; the fact that the result of the proceedings in Australia could depend upon the material put before the Court in Australia, the fact that the outcome of the appeal in Scotland would not
effect on the respondents of the existence of these determine the rights of the parties in Australia and the
proceedings. On balance the motion should be refused. The applicant should pursue its claim diligently and vigorously.
I certify that this and the 4 preceding pages are a true copy of the Reasons for Judgment herein of
the Honourable Mr Justice Northro~
Associate:
Dated:  27 November 1990