Fleming's Nurseries Pty Ltd v Hannaford - [2008] FCA 591

FEDERAL COURT OF AUSTRALIA
Fleming’s Nurseries Pty Ltd v Hannaford [2008] FCA 591
PRACTICE AND PROCEDURE – whether orders should be made for later determination of any questions of quantum of damages and account of profits – orders granted
Plant Variety Rights Act 1987 (Cth)
Plant Breeder’s Rights Act 1994 (Cth)
Zee Sweet Pty Ltd v Magnom Orchards Pty Ltd [2003] VSC 486 referred to
Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 followed
Olbers Co Ltd v Commonwealth (No 3) [2003] FCA 651 followed
Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 referred to
Dr Martens Australia Pty Ltd v Bata Shoe Company of Australia Pty Ltd (1997) 75 FCR 230 followed
Digi International Inc v Stallion Technologies Pty Ltd (2001) 53 IPR 529 followed
Novartis Crop Protection Australasia Pty Ltd v Orica Australia Pty Ltd [2001] FCA 1013 followed
Polaris Communications Pty Ltd v Dynamic Hearing Pty Ltd [2007] FCA 627 followed
Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 222 ALR 306 referred to
Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 cited
FLEMING'S NURSERIES PTY LTD ACN 006 532 556 and HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA) v TONY HANNAFORD, ROSELYNE NURSERIES PTY LTD ACN 072 821 893 and GEOFFREY ROBERT BRITTON
VID 1432 OF 2005
KENNY J
2 MAY 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 1432 OF 2005

BETWEEN:

FLEMING'S NURSERIES PTY LTD ACN 006 532 556
First Applicant

HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA)
Second Applicant

AND:

TONY HANNAFORD
First Respondent

ROSELYNE NURSERIES PTY LTD ACN 072 821 893
Second Respondent

GEOFFREY ROBERT BRITTON
Third Respondent

TONY HANNAFORD
Cross-Claimant

HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA)
First Cross-Respondent

FLEMING'S NURSERIES PTY LTD (ACN 006 532 556)
Second Cross-Respondent

JUDGE:

KENNY J

DATE OF ORDER:

2 MAY 2008

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.Pursuant to Order 29 rule 2 of the Federal Court Rules there be decided at a separate trial all issues of liability in the proceedings, prior to any trial, if necessary, in respect of all issues of quantum of damages and/or account of profits.
2.The first respondent pay the applicants’ costs of the motion, notice of which is dated 7 February 2008.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 1432 OF 2005

BETWEEN:

FLEMING'S NURSERIES PTY LTD ACN 006 532 556
First Applicant

HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA)
Second Applicant

AND:

TONY HANNAFORD
First Respondent

ROSELYNE NURSERIES PTY LTD ACN 072 821 893
Second Respondent

GEOFFREY ROBERT BRITTON

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FCA 591
Decision Date: 2 May 2008

CaseChat Overview and Summary

Fleming's Nurseries Pty Ltd sought to have certain issues tried separately from the main trial in the Federal Court. The case involves disputes over non-propagation agreements and related claims for delivery up and/or destruction of trees. The applicants sought a trial on liability only, to be followed by a separate trial on quantum and profits. Hannaford opposed the application, arguing that the nature of the claims and the nature of the relief sought weighed against splitting the trial. He also submitted that the cases cited by the applicants were distinguishable.

The court considered the principles governing the making of an order under Order 29 Rule 2 of the Federal Court Rules, which permit splitting the trial if it is just and convenient to do so. The court noted that the outcome of such applications depends on the particular circumstances of the case. The applicants argued that the relief sought included discretionary relief such as declarations and injunctions, which ordinarily weigh against splitting the trial. However, the court found that the nature of the claims and the need to determine the enforceability of certain clauses before deciding the merits of the claims supported splitting the trial.

The court held that it was appropriate to split the trial in this case. The court found that the issues of liability could be decided separately, and that the need to determine the enforceability of certain clauses before deciding the merits of the claims supported splitting the trial. The court also found that the witnesses relevant to these issues may also be witnesses in connection with damages issues, and that findings regarding their credit may need to be made prior to the damages hearing if a split trial is ordered.

The court made an order that all issues of liability in the proceedings be decided at a separate trial, prior to any trial, if necessary, in respect of all issues of quantum of damages and/or account of profits. The first respondent was ordered to pay the applicants’ costs of the motion.

Orders

Orders of the court

1. Pursuant to Order 29 rule 2 of the Federal Court Rules there be decided at a separate trial all issues of liability in the proceedings, prior to any trial, if necessary, in respect of all issues of quantum of damages and/or account of profits.

2. The first respondent pay the applicants’ costs of the motion, notice of which is dated 7 February 2008.

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

KENNY J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: KENNY J

Mr Hannaford also filed written submissions, which he developed at the hearing. Mr Hannaford contends that:1.The bases for the claims against him for delivery up and/or destruction of the trees are the terms of the Non-Propagation Agreements pleaded in subpars (c)(ii) of pars 11, 14, 17, 20 23 and 26 of the applicants’ Further Amended Statement of Claim. As Mr Hannaford observes, he pleads that these are unenforceable since they are penalties and/or seeks relief against forfeiture. Mr Hannaford further submits that this claim, which will have to be determined before the applicants’ entitlement to relief in the nature of delivery up or destruction is granted, “will require a determination of the factors which may have led to the subject clauses being inserted into the agreements and whether … the rights sought to be granted by the clauses were extravagant or oppressive at the time of entry into the agreements”. He added that “[t]he question of relief against forfeiture will require a consideration of the circumstances as at the date of the breach and will require a consideration of the effect of the proposed delivery up or destruction orders on [him]”. Counsel for Mr Hannaford submits that these matters “sit ill” with a trial as to liability only since the witnesses in relation to these matters may also be witnesses in connection with damages issues. Findings regarding their credit may need to be made prior to the damages hearing if a split trial is ordered. In an amendment to his written submissions filed prior to the hearing, Mr Hannaford noted that his defence “rests significantly on his credit” and that, if unsuccessful, he would also be a likely witness in relation to assessment of damages or account of profits. He argued that, therefore, an order for a split trial would have the potential to cause embarrassment and the need for the judge hearing the trial on liability to disqualify herself from hearing the latter part of the proceeding.2.Zee Sweet Pty Ltd v Magnom Orchards Pty Ltd [2003] VSC 486 (“Zee Sweet”) is distinguishable.3.If there is an enquiry as to profits at the trial on liability, as suggested by the Notice of Motion, then issues will plainly overlap. (I note that the applicants disavowed this suggestion at the hearing.)4.The relief sought by the applicants includes discretionary relief such as declarations and injunctions, which ordinarily weigh against the splitting of a trial. CONSIDERATION The principles that govern the circumstances in which an order under O 29 r 2 of the Federal Court Rules may be made are well established. They are discussed by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 (“Reading”) at [7] and [8] and by French J in Olbers Co Ltd v Commonwealth (No 3) [2003] FCA 651 at [7]. Ultimately, the question is whether, in the exercise of the Court’s discretion, this is an appropriate case for the departure from the ordinary course that all issues of fact and law should be determined at the one time, on the basis that it is just and convenient for the order to be made: see Reading at [9]; Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130. As counsel for the applicants pointed out, the outcome of the reported decisions on O 29 r 2 turns in each instance on the nature of the case and the particular circumstances relevant to it.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1432 OF 2005

BETWEEN:	FLEMING'S NURSERIES PTY LTD ACN 006 532 556 First Applicant HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA) Second Applicant
AND:	TONY HANNAFORD First Respondent ROSELYNE NURSERIES PTY LTD ACN 072 821 893 Second Respondent GEOFFREY ROBERT BRITTON Third Respondent TONY HANNAFORD Cross-Claimant HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA) First Cross-Respondent FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) Second Cross-Respondent
JUDGE:	KENNY J
DATE OF ORDER:	2 MAY 2008
WHERE MADE:	MELBOURNE