Dart Industries Inc v David Bryar and Associates Pty Ltd

[1997] FCA 967

FEDERAL COURT OF AUSTRALIA

Federal Court Rules  O 15 r 15, O 35 r 7(2)(c)

Lemon and Company Pty Ltd v Moran & Cato Pty Ltd [1921] VLR 240
Autodesk Incorporated v Dyason (No 2) (1993) 176 CLR 300

DART INDUSTRIES INC & ANOR v DAVID BRYAR & ASSOCIATES PTY LTD & ORS
No VG 70 of 1997

GOLDBERG J
MELBOURNE
20 AUGUST 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 70 of 1997

BETWEEN:

DART INDUSTRIES INCORPORATED

FIRST APPLICANT

AND

TUPPERWARE AUSTRALIA PTY LTD (ACN 004 534 749)

SECOND APPLICANT

AND:

DAVID BRYAR AND ASSOCIATES PTY LTD (ACN 007 396 643)

FIRST RESPONDENT

AND

DAVID CHARLES BRYAR

SECOND RESPONDENT

AND

AUSTEC DESIGN PTY LTD (ACN 065 147 417)

THIRD RESPONDENT

AND

RONALD GRAEME WANLISS

FOURTH RESPONDENT

AND

JAR ENGINEERING (VIC) PTY LTD

FIFTH RESPONDENT

AND

ROY MILAN

SIXTH RESPONDENT

JUDGE:

GOLDBERG J

DATE:

20 AUGUST 1997

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

On 10 April this year I delivered reasons for judgment on an application brought by the applicants for interlocutory relief against the respondents.  Orders were pronounced on that day and interlocutory injunctions were granted until further order which, in substance and in effect, restrained the respondents from disclosing information relating to a range of plastic containers known as Modular Mate containers and restraining the respondents from dealing with documents and other records relating to such plastic containers and in particular restraining them from parting with possession, power or control of what were called Superior Focus moulds or any parts of them with exceptions not relevant for present purposes.

There are four applications before the Court today:

(a)the four respondents for whom Mr Clarke appears apply to vary the interlocutory orders in a manner to which I will refer;

(b)the applicants for whom Mr Young QC and Ms Schoff appear seek further and better particulars of paragraph 9 of the defences of all respondents; 

(c)the applicants seek orders for confidentiality upon inspection of discovered documents;

(d)the applicants seek what I will call loosely staggered discovery by the respondents. 

So far as that last matter is concerned I have already made an order earlier today which varies the earlier order I made in relation to staggered discovery by the applicants to provide that that order also apply to the respondents.

In relation to the application for further and better particulars I am of the opinion that the further and better particulars sought by the applicants ought to be provided.  The material allegation in paragraph 9 of the defence is that if the Modular Mate product drawings contain any confidential information then that information has been published by the applicants and released into the public domain.  Further particulars were sought as to that release and publication and the particulars which were provided included Tupperware Standards Manuals given to approximately ten sub‑contractors in or about 1991.  It is then said that a copy of the standards manual is an exhibit to an earlier affidavit of Mr Wanliss.

The applicants seek further particulars seeking to have the respondents identify each Tupperware manual, and I will deal with these sequentially.  As I read the particulars already given, each manual has been identified in the sense that the particular given says that each of the manuals which was made available was in the form of the manual exhibited to Mr Wanliss’ affidavit.  Unless the respondents wish to contend that the interpretation which I have given to the particular is not correct I do not consider it necessary for there to be the particular given sought in paragraph 2(a) of the request dated 11 July 1997.

The next particular seeks to identify each and every sub‑contractor to whom it is alleged a manual was given and in my view that is a particular that ought to be given, the material allegation of fact being the publication.  The question arises as to whether that publication and also the release was in circumstances of either confidentiality or non‑confidentiality and I consider it a proper particular to identify the sub‑contractor. The respondents submit that identifying the sub‑contractor is a matter of disclosing a name of a witness which the respondents should not be compelled to disclose.

In my view that objection is not sustainable.  The matter was dealt with in argument before me by reference to Lemon and Company Pty Ltd v Moran & Cato Pty Ltd [1921] VLR 240 at 244, and I adopt the principles there referred to. In my view the particulars sought in paragraph 2(b) of the request should be given. In the same way paragraph 2(c) seeks the identification of the persons from whom the sub‑contractors referred to received the manuals. If that is within the knowledge of the respondents in my view again it is a particular of a material allegation relevant to the issue of whether the release and publication was in the nature of a waiver or discharge of such confidentiality as existed or was under the protection of confidentiality.

The particular sought in paragraph 2(d) (ie the usual particulars and details of the circumstances in which the manual was given) falls within the same category.  If they are known to the respondents they should be given for the reasons to which I have already referred; if they are not known then at least the applicants know the parameters of the issues that they have to address.

In any event, even if I am wrong in that respect these are matters which are referred to which in due course would have to be the subject of affidavit evidence to the extent to which they can be identified and I am reluctant in this list to have anything that savours of trial by ambush in the sense that particulars become apparent, albeit in evidence at the last moment.  In all the circumstances I think those particulars should be given and I so order.

In relation to the issue of confidentiality in relation to inspection, I think that is a matter at the moment that is premature.  Under O 15 r 15 of the Rules I can make an order for inspection if satisfied that inspection is necessary.  I am not yet satisfied as to the basis or terms of such inspection because I have an insufficient knowledge of the relevant documents.

The issue of confidentiality has recently been considered by the Victorian Court of Appeal in Mobil Oil Australia Limited v Guina Developments Pty Limited [1996] 2 VR 34, in particular in the judgment of Hayne JA. The matter has also been considered recently by Spender J in Mckay Sugar Co-operative Association Limited v CSR Limited (1996) 63 FCR 408. The thrust of the principles in those cases is that a person who is seeking discovery cannot simply say "I'm entitled to discovery, therefore I'm entitled to inspection."

There is a general principle that in an exceptional case inspection will be limited having regard to the intrusive nature of discovery.  In this particular case it seems to me it is appropriate that I should defer further consideration of that issue until the applicants have started to deliver their lists of documents.  The same observations apply to the respondents and their lists of documents.  The relevant confidentiality from inspection can then be identified, consideration can then be given by the opposing party as to why it is that they say they need wider inspection than is offered.  I understood from the submissions of counsel that neither side at the moment is averse to that procedure being adopted.  So at the present time I make no orders as sought by the applicants in relation to the extent to which inspection of discovered documents should not be given.

I then come to the issue that occupied the main thrust of argument this morning.  The applicants seek to vary the order which I made on 10 April 1997 by proffering undertakings and varied orders to which I will come in a moment.  The relevant paragraphs sought to be varied are paragraphs 1 and 2 of the orders which I made.

There is no doubt that I have the power to vary the interlocutory orders which I made on 10 April 1997.  However, as a general rule a party ought not to be given the opportunity simply to re‑argue a matter.  In general terms there must either be some further circumstance which has arisen since the order was made or, as pointed out by the High Court in Autodesk Incorporated v Dyason (No 2) (1993) 176 CLR 300, there must be some misapprehension of relevant facts or law. In that case the court was considering an application to re‑open a final judgment.

Different principles, or added principles, apply when dealing with an interlocutory matter because in relation to an interlocutory matter the court always remains in control of its interlocutory process and in particular O 35, r 7(2)(c) allows the Court, if it thinks fit, to vary or set aside an order where the order is interlocutory.  However, the principles laid down, and the cases, establish that this jurisdiction should only be exercised where circumstances have changed, new material has become available, or it turns out that a view taken of the law is wrong.

There are a number of cases that deal with these issues.  Suffice it to refer to Chanel Ltd v Woolworths & Co Ltd [1981] 1 WLR 485, 492; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 178 and the recent unreported decision of Heerey J in this Court, Cole as Liquidator of Ivas Holdings Pty Ltd v Bosiljevac (unreported, 22 March 1996, VG 3494 of 1995).  Ultimately, as the cases point out, further orders or varied orders will be appropriate when new facts come into existence or are discovered which render the enforcement of the order unjust and ultimately the jurisdiction is grounded in those terms. 

The first to fourth respondents submitted that there were changed circumstances in a number of respects, in particular  that the Superior Focus company had cancelled the orders for moulds which it had placed with the respondents.  It was said that there was a change in the respondents’ commercial position in relation to those moulds, in that they were no longer being asked to supply the moulds to Superior Focus and that there was a commercial impact on the respondents’ business namely reduced capacity, that is the reduced workload it had and the fact that it had lost tenders.  The trial date had been fixed for 11 May 1998 so that the interlocutory injunctions would run at least into May 1998.  It was also said that further particulars of confidential information were delivered on 26 June 1997 showing that the mould frames which are part of the totality of the moulds were not the repositories of confidential information.  It was also submitted that the applicants would not be disadvantaged in any respect and particular attention was paid to what might occur if an order for delivery up was made consequent upon a final order in favour of the applicants.  However, it is important to note that on the hearing of the interlocutory application before me the commercial issues affecting the respondents were raised in submissions and also dealt with at relevant places in my reasons for judgment.  A submission was also made relating to the fact that any injunctions granted should be limited to parts of moulds, it being said that other parts of moulds to which the injunctions ought not to be limited might have commercial value.  Evidence was also given on behalf of the respondents by Mr Wanliss as to the sequence of events and the chain of events involved in the making of a mould.

Importantly, evidence had been led by the respondents at the interlocutory hearing that, “Moulds are necessarily custom built and the value of the work done to date on the moulds could not be retrieved by alternative uses”.  Evidence has now been placed before me in affidavits filed recently by Mr Bryar where he sets out in considerable detail circumstances and events relating to the manner in which a mould is made and the various components of a mould.  In referring to the making of a mould, I refer to the mould frame, sometimes called the mould bolster, the mould unit and the extent to which each mould and each component of the mould has been completed.

Evidence was also given to the effect that no mould bolster or frame component was manufactured using what was claimed to be the confidential information of the applicants and it was also said that mould units only became unique when they were finalised.  It was also said that mould units are interchangeable within mould frames.  Mr Bryar's evidence, however, was challenged by Mr McAllister and Mr Hunter who swore affidavits on behalf of the respondents.  It is not necessary to go into those affidavits in detail other than to note that those witnesses affirmed what had been said earlier that moulds are custom built.  There was also considerable evidence in some detail, to the effect that the mould frames, and the manner in which they are created and manufactured, are dictated by the proposed product configuration. 

The difficulty with the application which is made today is that all the moulds in issue have come about as the result of orders placed by Superior Focus with the respondents for moulds to be made for products which moulds have been identified as derived from what have been called the MS or the Mah Sing drawings.  In other words, the moulds which are being manufactured and which are partially completed are derived from information and design features said to be the applicants’ confidential information.  All I can say about that at this stage is that I have found that there is a serious question to be tried on that issue as to whether what is identified in the Mah Sing drawings, and is sought to be translated into moulds, is the repository of the applicants’ confidential information. I have also found a serious question to be tried as to whether there is an associated breach of copyright in the applicants’ product drawings.

Mr Young submitted that in the light of that finding and what I will call loosely the springboard principle exemplified in, for example, Saltman Engineering Co (Mitcham) Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 I should not be allowing the respondents at this stage to be free to use the moulds said to be the repository of the confidential information. I see force in that submission especially when there is a state of uncertainty in the evidence about the nature and the features of the moulds.

When I refer to uncertainty in the evidence about the nature and the features of the moulds I mean to contrast Mr Bryar’s earlier evidence that moulds are purpose built and that the value of the work done to date cannot be retrieved by alternative uses and Mr Wanliss’ evidence as to the sequence involved in manufacturing a mould with the evidence now placed before the Court as to the interchangeability of the components of the moulds.  It is fair to say that Mr Bryar has recently deposed to a number of matters in great detail which do not lie easily with this earlier evidence.

In response to that issue the respondents have propounded undertakings which they say are designed to protect the applicants’ position.  Those undertakings in their latest form include not parting with possession of any mould components for the purpose of supplying any completed moulds to Superior Focus or associated persons and entities.  They also include an undertaking by the first and fourth respondents, only to sell mould components as part of a completed mould.

More importantly, they also include an undertaking that any completed mould will not be used to enable the manufacture of any product described in the Mah Sing product drawings.  However, as I pointed out in argument an undertaking in those terms gives rise to difficulties as to what is meant by the products described in the Mah Sing product drawings.  I think it was to try and meet that issue that the latest undertaking was proffered through Mr Clarke. 

In the course of argument I raised with counsel the issues of the differences between mould frames and mould units or whether one could compartmentalise the mould frames or mould bolsters and consider them separately from the mould units.  This was not a distinction which counsel on either side sought to embrace.  Indeed the thrust of the applicants’ evidence was that although the mould frames, may not be the repository inherently of the confidential information alleged, nevertheless, their manufacture was dictated by the products identified in the Mah Sing product drawings for which the moulds are made. 

Although I have some sympathy with the respondents having regard to the predicament in which they find themselves in this litigation, I do not consider it appropriate to vary the injunctions in the manner sought.  Firstly, although there is no doubt that I have the jurisdiction to vary the injunctions, I am not satisfied, consistently with the principles and authorities to which I have referred, that this is an appropriate case in the sense that there are changed circumstances or that there is new material not hitherto available.  The issue of limiting the injunction to the particular components which are, in effect, the immediate repository of the alleged confidential information, that is, the core, the stripper ring and the cavity portions of the moulds, was the subject of argument in submission and was a matter referred to in my reasons for judgment at page 61.  The issue of the effect on the respondents' business was also raised and considered by me and there was also evidence led about the nature of the uses of moulds.  I have already identified the potential inconsistency, if not actual inconsistency, between the thrust of that evidence at the time it was led before the interlocutory orders were made and the thrust of the evidence now.  In any event, it is also the subject of controversy between the parties.

If there be any change in the circumstances, it is the cancellation of the Superior Focus orders and the undertaking not to deal with Superior Focus or sell to it.  However, those undertakings do not respond to, or resolve, the proposition that the repository of the confidential information as claimed should be put into circulation albeit elsewhere in some other form.  Consistently with principle I do not consider it appropriate to allow dissemination of moulds in respect of which there is a serious question as to whether they are the repository of the applicants’ confidential information and I think this is more particularly so when there is a disputed issue between the parties as to the relationship between the manufacture, and the features, of the mould frames or bolsters and the mould units.

For all those reasons I reject the application to vary paragraphs 1 and 2 of the orders which I made on 10 April 1997 and which are enshrined in the order dated 14 April 1997.

In all the circumstances I propose to make the costs of today's hearing, the costs of each party to be their costs in the cause.  There is substantial force in what Mr Young says about costs, namely that the first to fourth respondents have failed in their application.  The only concern I have about that matter is that although on one view the applicants have been successful on the merits of the particular application, the matter has been brought about by the grant of the injunction.  It seems to me it would be appropriate, having regard to the peculiar circumstances of this case, to either reserve the costs or make them costs in the cause.  There is no point in reserving the costs and I will order that the costs of each party of the hearing of the application today be that party’s costs in the cause.

I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg

Associate:

Dated:            September 1997

Counsel for the Applicant:	Mr N Young QC and Ms Schoff
Solicitor for the Applicant:	Arthur Robinson & Hedderwicks
Counsel for the Respondents:	Mr Clarke
Solicitor for the first - fourth Respondents:	Phillips Fox
Solicitor for the fifth & sixth Respondents:	Griffith Hack
Date of Hearing:	20 August 1997
Date of Judgment:	20 August 1997