Ev20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd

Case [2025] FCA 328

FEDERAL COURT OF AUSTRALIA

EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328  

File number(s): NSD 161 of 2021
Judgment of: BURLEY J
Date of judgment: 8 April 2025
Catchwords:

 COPYRIGHT – default judgment – applicants failure to appear – claim for wrongful threats of copyright infringement – consideration of Federal Court Rules 2011 (Cth) (FCR) r 5.23(1) – default judgment granted – claim dismissed

COPYRIGHT – default judgment – cross-respondents failure to appear – cross-claim for copyright infringement, breach of confidence, accessorial liability – consideration of requirements of FCR r 5.23(2) – default judgment allowed in part

PRACTICE AND PROCEDURE – where the cross-respondents in default – whether relief can be claimed against the cross-claim pursuant to r 5.23(2)(c) of the FCR – standard of “satisfaction” required for entry of default judgment based on content of pleadings – whether declaratory and/or injunctive relief is appropriate in light of broad pleadings – partial relief granted against cross-claim dependent on evidence provided and specificity of pleadings

Legislation:

Copyright Act 1968 (Cth) ss 10(1), 29, 32, 32(4), 36

Corporations Act 2001 (Cth) s 436C

Federal Court of Australia Act 1976 (Cth) s 21

Federal Court Rules 1979 (Cth) Order 35A

Federal Court Rules 2011 (Cth) rr 4.05(2), 5.23, 5.23(1), 5.23(1)(b), 5.23(2), 5.23(2)(c), 5.23(2)(d)

Cases cited:

Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513

Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427; 236 ALR 665

Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606

Competition and Consumer Commission v Cambur Industries Pty Ltd [2006] FCA 1027; ATPR ¶42–127

Dart Industries Inc v David Bryar & Associates Pty Ltd [1997] FCA 481; 38 IPR 389

Hugo Boss AG v Hardge [2024] FCA 1325

Inland Revenue Commissioners v McGuckian [1974] 1 WLR 991

Real Estate Tool Box Pty Ltd v Campaigntrack Pty Ltd [2023] HCA 38; 278 CLR 240

Roadshow Films Pty Ltd v iiNet Ltd [2012] HCA 16; 248 CLR 42

Secretary, Department of Health v Evolution Supplements Australia Pty Ltd [2021] FCA 74

Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227
Division: General Division
Registry: New South Wales
National Practice Area: Intellectual Property
Sub-area: Copyright and Industrial Designs
Number of paragraphs: 108
Date of hearing: 18 December 2024
Counsel for the Applicant: The Applicant did not appear
Counsel for the Respondent/Cross-Claimant: Mr M Green SC and Mr W Wu
Solicitor for the Respondent/Cross-Claimant: Spruson & Ferguson
Counsel for the Third and Fourth Cross-Respondents: Ms K Van Munster
Solicitor for the Third and Fourth Cross-Respondents: Swaab
Counsel for the First, Second, Fifth, Sixth Cross-Respondents: The Cross-Respondents did not appear

ORDERS

NSD 161 of 2021
BETWEEN:

EV20 CONSULTING GROUP PTY LTD ACN 641 256 626

Applicant
AND:

PAPERLESS WAREHOUSING PTY LTD ACN 000 800 617

Respondent
AND BETWEEN:

PAPERLESS WAREHOUSING PTY LTD ACN…

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Details
AGLC
Ev20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd [2025] FCA 328
Case
[2025] FCA 328
Decision Date

CaseChat Overview and Summary

Ev20 Consulting Group Pty Ltd initiated legal proceedings against Paperless Warehousing Pty Ltd, alleging misleading or deceptive conduct and wrongful threats of copyright infringement. In response, Paperless filed a cross-claim against EV20 and various cross-respondents, asserting copyright infringement, breach of confidence, and accessorial liability. The case proceeded to a hearing where several parties, including EV20 and multiple cross-respondents, failed to appear. The court was required to consider the implications of the default appearances under the Federal Court Rules 2011 (Cth), particularly rules 5.23(1) and 5.23(2). The primary legal issues revolved around the appropriateness of granting default judgment against the absent parties and the extent of relief that could be awarded based on the pleadings and the specific circumstances of the case.

The court examined whether the relief sought by Paperless could be granted based on the content of its cross-claim and the default appearances of EV20 and the cross-respondents. It considered the requirements set out in rule 5.23(2) and the need for satisfaction that the applicant was entitled to the relief claimed. The court noted that the cross-claim contained broad allegations and sought both declaratory and injunctive relief. The court held that the standard for granting a default judgment was met if the court was satisfied on the face of the pleadings that the applicant was entitled to the relief sought. However, the appropriateness of specific relief, such as injunctive relief, depended on the specificity of the pleadings and the evidence provided. The court granted a partial default judgment against EV20 for the relief claimed in the cross-claim but limited the relief based on the evidence and the specificity of the pleadings.

The court ordered that Paperless Warehousing Pty Ltd provide draft short minutes of order by 5pm on 15 April 2025. This order reflects the court's decision to grant partial default judgment against EV20 while taking into account the limitations of the relief based on the particular circumstances of the case.

Orders

Orders of the court

1. The cross-claimant, Paperless Warehousing Pty Ltd, is to supply draft short minutes of order to chambers by 5pm on 15 April 2025, in accordance with the reasons of this judgment.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Paperless submits that the Court can be satisfied pursuant to FCR r 5.23(2)(c) that on the face of the statement of cross-claim it is entitled to the relief sought, the facts as alleged in it being deemed to have been admitted; Speedo at [23] citing Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 (Dataline Appeal Judgment) at [42] (Moore, Dowsett and Greenwood JJ). It also relies on a chronology of events concerning the operation of EV20 in support of its contention that the discretion should be exercised in favour of the orders. Below I set out a chronology, based substantially upon the affidavits of Ms Galpin and Mr Lofthouse and documents annexed thereto. 3. BACKGROUND CHRONOLOGY EV20 was registered on 27 May 2020. Mr McKerrell was appointed as its sole director and secretary on that day. By a loan agreement dated 8 June 2020 (June 2020 loan agreement), EV20 purported to grant a security interest to Roderick Andrew Peters over all of EV20’s present and after acquired property pursuant to a loan agreement dated 8 June 2020. On 2 March 2021, EV20 commenced the current proceedings against Paperless, alleging misleading or deceptive conduct and wrongful threats of copyright infringement. On 20 July 2021, Paperless filed its 2021 cross-claim alleging, inter alia, infringement of copyright by EV20 and former customers of Paperless, alleging that former employees of Paperless had been knowingly involved in the alleged infringements. Twenty-three cross-respondents were named. On 26 July 2021, Gillis Delaney Lawyers filed notices of acting for the first to eighteenth cross-respondents, which relevantly included all of the defaulting cross-respondents. On 1 September 2021:(a)David Lopez was appointed a director of EV20, although this appointment was not notified to ASIC until 9 December 2023;(b)Zoran Markovic was apparently also appointed as a director and as company secretary of EV20, although this appointment was not notified to ASIC until 9 December 2023; and(c)Mr Markovic became the sole shareholder of all of the ordinary shares in EV20 for the consideration of $1,000. On 13 December 2022, the respondent’s 2021 cross-claim was struck out with liberty to replead. On 20 February 2023, orders were made providing for the respondent to file an Amended Notice of Cross-Claim (cross-claim). By a deed of assignment dated 23 February 2023 (February 2023 Deed of Assignment), signed by Mr McKerrell as “Director/Secretary” of EV20 and Mr Peters, EV20 assigned all of its rights in the intellectual property owned by it in various items of software, management program tools, trade marks, internal servers, information stored on internal and external servers and customer supply agreements and contracts to Mr Peters. The agreement includes terms keeping Mr Peters indemnified against all actions and proceedings, damages and penalties, costs claims or demands made in relation to the intellectual property. Warehouse Management Software Pty Ltd (WMS P/L) was incorporated on 27 February 2023. Mr Peters is the sole director and company secretary of WMS P/L. On LinkedIn, Mr Peters identifies himself as “Executive Officer at EV20 Consulting Group”.

Ratio Decidendi

Legal Principle Established

As set out in section 3 below, EV20 was placed in receivership on 1 May 2024. Despite Gillis Delaney remaining on the record for EV20 at that time, the solicitors for Paperless were not informed of this fact until 17 June 2024. On 6 November 2024, EV20 was placed under administration pursuant to s 436C of the Corporations Act 2001 (Cth). On 11 December 2024, the administration ceased. Amidst this flurry of activity, Paperless endeavoured to proceed with the litigation. At a case management hearing conducted on 31 October 2024, I made directions requiring Paperless to file its foreshadowed interlocutory application seeking default judgment together with any supporting affidavits by 7 November 2024 and any submissions in support of its application by 4 December 2024. I also ordered those cross-respondents who had not filed an address for service, including the defaulting cross-respondents, to do so by 14 November 2024 as well as submissions in answer by 11 December 2024. The interlocutory application was set down for hearing on 18 December 2024. The affidavits of Ms Lowe demonstrate that each of EV20, Mr McKerrell and Mr Pearce were served with the present interlocutory application and the affidavits in support on 7 November 2024. By an apparent oversight, Mr Symons was not served at that time, but was later served those documents, by process server, on 16 December 2024. On 6 December 2024, all of the defaulting cross-respondents, including Mr Symons, were served with the affidavit of Ms Crooks affirmed 4 December 2024 and Paperless’ outline of submissions for default judgment application, filed 4 December 2024. None of the defaulting cross-respondents appeared at the hearing conducted on 18 December 2024 or have since filed a notice of address for service. 1.2 The relevant law FCR r 5.23 provides:Orders on default(1)If an applicant is in default, a respondent may apply to the Court for an order that:(a) a step in the proceeding be taken within a specified time; or(b)the proceeding be stayed or dismissed for the whole or any part of the relief claimed by the applicant:(i) immediately; or(ii) on conditions specified in the order.(2) If a respondent is in default, an applicant may apply to the Court for:…(c)if the proceeding was started by an originating application supported by a statement of claim, or if the Court has ordered that the proceeding continue on pleadings – an order giving judgment against the respondent for the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled; or(d)an order giving judgment against the respondent for damages to be assessed, or any other order; or(e)an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time specified in the order.Note 1:The Court may make any order that the Court considers appropriate in the interests of justice – see rule 1.32.Note 2: An order or judgment under this Division may be set aside or varied.