Flocast Australia Pty Ltd v Purcell, James Desmond
[1996] FCA 833
•17 Sep 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIA DISTRICT REGISTRY ) No. VG 379 of 1994
)
GENERAL DIVISION )
BETWEEN: FLOCAST AUSTRALIA PTY LTD
(ACN 007 026 468)
(Applicant)
AND: JAMES DESMOND PURCELL
(First Respondent)
AND: JODIE MARC
(Second Respondent)
AND: TRACEY LEE HOOKE
(Third Respondent)
AND: TIGER BRONZE PTY LIMITED
(ACN 064 627 505)
(Fourth Respondent)
CORAM: Ryan J
DATE: 17 September 1996
PLACE: Melbourne
MINUTES OF ORDER
THE COURT ORDERS:
That paragraphs 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 20, 21, 22, 23, 24 and 25 of the amended defences of the first and third respondents be struck out.
That paragraphs 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 20, 24 and 25 of the amended defence of the fourth respondent be struck out.
That each of the first, third and fourth respondents have leave to file and serve by 4 October 1996 a further amended defence substituting such paragraphs for those struck out by paragraph 1 or 2 of this order as the case may be as he, she or it may be advised.
That liberty be reserved to any party to apply on not less than 72 hours notice in writing to the other parties.
That the respondents' motion on notice filed on 20 June 1995 be otherwise dismissed with no order as to costs.
That the applicant's costs of and incidental to its motion on notice filed on 1 June 1995 be its costs in the cause.
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 ) No. VG 379 of 1994
)
GENERAL DIVISION )
BETWEEN: FLOCAST AUSTRALIA PTY LTD
(ACN 007 026 468)
(Applicant)
AND: JAMES DESMOND PURCELL
(First Respondent)
AND: JODIE MARC
(Second Respondent)
AND: TRACEY LEE HOOKE
(Third Respondent)
AND: TIGER BRONZE PTY LIMITED
(ACN 064 627 505)
(Fourth Respondent)
CORAM: Ryan J
DATE: 17 September 1996
PLACE: Melbourne
REASONS FOR JUDGMENT
RYAN J: There are two motions before the Court, one by the applicant seeking that the amended defence of each of the first, third and fourth respondents be struck out and the other by the respondents seeking, amongst other things, that the amended statement of claim be struck out.
By paras. 4 and 5 of its amended statement of claim, the applicant has alleged:
In the course of the Applicant's business, the Applicant designed a number of vertical continuous casting machines which are used to produce the Applicant's products together with accessories and parts therefor and prepared a large number of technical descriptions, sketches, plans and design drawings (hereinafter referred to as "the Applicant's copyright drawings").
The Applicant's copyright drawings were created for the Applicant's use by persons who were, at the time of creation, Australian citizens in the sole and permanent employ of the Applicant, in the course of their said employment, or by persons who have otherwise assigned all copyright in the Applicant's copyright drawings to the Applicant.
The applicant asserts that it is the owner of copyright in the applicant's copyright drawings and, by para. 7, in literary works being a Workshop's Procedures Manual and a Quality Assurance Manual. As well, the applicant asserts in para. 8 that it is the owner of copyright in other literary works being lists and records of its suppliers, agents, representatives and customers, price lists, product specifications, orders, financial records, stock reports and similar business records which are collectively called "the Applicant's Copyright Business Documents".
Each of the respondents has filed an amended defence and it is convenient for the purpose of illustrating the issues which have arisen in relation to the pleadings to examine the amended defence of the fourth respondent ("Tiger Bronze"). Paragraphs 4-8 of Tiger Bronze's amended defence are in these terms:
It denies that in the course of the Applicant's business the Applicant designed a number of vertical continuous casting machines used to produce the Applicant's products together with accessories or parts therefor. It says further that such technical descriptions, sketches, plans and design drawings as the Applicant may have prepared were not original works and were copied by the Applicant from other sources. It otherwise denies each and every allegation in paragraph 4.
Particulars
The Fourth Respondent is unable to give a complete list of all instances of copying by the Applicant until after completion of discovery and interrogation, but at trial will rely on each such instance.
It denies that the Applicant's copyright drawings were created for the Applicant's use by persons who were, at the time of creation, Australian citizens in the sole and permanent employ of the Applicant in the course of their employment, or by persons who have otherwise assigned all copyright in the Applicant's copyright drawings to the Applicant. It otherwise denies each and every allegation in paragraph 5.
Particulars
The Applicant refers to and repeats the particulars under paragraph 4.
It denies that any copyright subsisting in the Applicant's drawings is owned by the Applicant.
Particulars
It refers to and repeats the particulars under paragraph 4.
It denies that the Applicant is and has at all material times been the owner of any copyright in the works alleged to constitute literary works in paragraph 7. It says further that paragraph 7, whether read alone or in conjunction with other paragraphs of the Amended Statement of Claim, does not plead material facts establishing the alleged ownership of copyright. It otherwise denies each and every allegation in paragraph 7.
Particulars
The Applicant's workshop procedures manual and quality assurance manual were copied from previously existing works of which the Applicant is not and was not at any material time the owner of the copyright therein. The Fourth Respondent is unable to give a complete list of all instances of such copying until after completion of discovery and interrogation, but at trial will rely upon each such instance.
It denies that the Applicant is or has at any material time been the owner of the copyright in any of the works referred to, and alleged to constitute literary works, in paragraph 8. It says further that paragraph 8, whether read alone or in conjunction with other paragraphs of the Amended Statement of Claim, does not plead material facts establishing the alleged ownership of copyright. It otherwise denies each and every allegation in paragraph 8.
For the respondents it was contended that the applicant's pleading of claims in copyright was defective because it did not allege creation of an original work by a natural person, being an Australian citizen, and assignment to the applicant, or by a natural person employed by the applicant. Those, it is said, were facts made material by the relevant provisions of the Copyright Act 1968. Accordingly, it was argued that para. 4 of the amended statement of claim was defective as
failing to identify, in the body of the pleading, in respect of each drawing, who created it and whether the applicant acquired copyright in it by assignment or by virtue of having employed the creator to bring it into existence.
I do not accept that it is incumbent on the pleader of a cause of action for infringement of copyright to identify in the body of the pleading the author or creator of each drawing or literary composition in respect of which the applicant claims to be the owner of copyright. It is sufficient to assert ownership of the copyright in the work which must be sufficiently described to permit its identification by reference to particulars, a schedule to the statement of claim or some other document or object to which the respondent can have access. Thus, the precedent at p. 1541 of Copinger and Skone James on Copyright 13th Edn., suggests that it is sufficient merely to plead:
The Plaintiff is the owner of copyright in the [insert description of copyright work] ("the Work").
The learned authors then go on to indicate that there may be appended to that paragraph "Particulars of Subsistence" going to the dates of creation of the work and features of the author which, by virtue of s. 32(4) of the Australian Copyright Act would make him or her a "qualified person". It is then indicated in the same precedent that "Particulars of Ownership" may also be appended to the proposed paragraph 1 indicating how it is that the plaintiff is said to own the copyright.
In the course of argument, it became clear that the real need in this case is for the statement of claim to identify by reference to a numbered schedule each drawing, specification or other document in which copyright is claimed to subsist. It is submitted on behalf of the applicant that this has already been done by the provision on 24 January 1995 of the following further and better particulars of para. 4 of the amended statement of claim:
1.1An incomplete list of technical descriptions, sketches, plans and design drawings upon which the Applicant relies is attached hereto and marked Annexure A. Each document referred to in Annexure A is in the possession of the Applicant's solicitors and may be inspected at their offices during normal business hours on reasonable notice.
1.2The Applicant is currently attempting to locate all technical descriptions, sketches, plans and design drawings including additional drawings created by John McCahey and drawings created by Mr Dale Ible, an employee of Centrifugal Castings Australia Pty Ltd ("CCA") in the period commencing on or about 26 October 1987 and ending on or about 13 October 1989 and an employee of the Applicant in the period commencing on or about 18 August 1990 and ending in the period between July and September 1992. The Applicant is presently unable to give particulars of all such technical descriptions, sketches plans and design drawings but will do so prior to trial and at the hearing of the Application herein, will seek to rely on each such technical description, sketch, plan and design drawing.
Annexure A to those further and better particulars is a numbered list of 104 drawings and other documents some of which have been ascribed a date of creation but most of which are described as "undated". In para. 2 of the same further and better particulars it is indicated that in respect of each document listed in Annexure A, the author is John McCahey.
I regard it as oppressive to require the respondents, whether in the body of their defences or by way of particulars, to respond to allegations of the subsistence and ownership of
copyright in drawings and other documents which, as is conceded in para. 1.2 of the further and better particulars, the applicant is "currently attempting to locate" and of which it is presently unable to give particulars. However, I consider that the assertion of subsistence and ownership of copyright in respect of the documents enumerated in Annexure A is sufficiently made for the respondents to plead to it without evasion. The respondents should indicate in respect of each drawing or other document in Annexure A whether it puts in issue the subsistence of copyright in that document or drawing and whether it seeks to rebut the presumption that the applicant is the owner of the relevant copyright. Such a pleading would, I consider, discharge the onus cast on the respondents by s. 126 of the Copyright Act which provides:
In an action brought by virtue of this Part -
(a)copyright shall be presumed to subsist in the work or other subject-matter to which the action relates if the defendant does not put in issue the question whether copyright subsists in the work or other subject-matter; and
(b)where the subsistence of the copyright is established - the plaintiff shall be presumed to be the owner of the copyright if he or she claims to be the owner of the copyright and the defendant does not put in issue the question of his or her ownership.
In other words, the respondent should plead to paras. 4 and 5 of the amended statement of claim as particularized by reference to Annexure A by specifically alleging one or more of the following:
(a)that some or all of the documents listed in Annexure A are not original or artistic or literary works;
(b)that some or all of the documents listed in Annexure A were not created by a qualified person;
(c)that the creator of some or all of the documents listed in Annexure A was not, at the time of their creation, employed by the applicant to produce them;
(d)that copyright in some or all of the documents listed in Annexure A has not been assigned to the applicant.
The documents in Annexure A in respect of which each one or other of those allegations is made should appropriately be identified in particulars to the relevant paragraphs of the further amended defence of each respondent. To enable the appropriate amendments to be made, I shall order that paras
4-8 inclusive of each of the existing defences be struck out.
Paragraph 9 of the amended statement of claim alleges:
Wrongfully, the Respondents or one or more of them have reproduced in a material form, or caused, authorised, permitted, aided, assisted, counselled or procured the reproduction and/or substantial reproduction in a material form of the Applicant's copyright drawings or one or more of them for the benefit of the Respondents or one or more of them and to the detriment of the Applicant and the Applicant's business without the leave or licence of the Applicant and have thereby infringed the copyright owned by the Applicant in the Applicant's copyright drawings.
Instances are then given in the particulars to that paragraph of reproduction of the applicant's copyright drawings by embodying certain features of them in machines located at Tiger Bronze's premises. Further and better particulars of
para. 9 of the amended statement of claim have been supplied in these terms:
3.1Examples of the infringement of the Applicant's copyright by the Respondents or one or more of them in the technical descriptions, sketches, plans and design drawings of the Applicant, include:
(i)the copyright work comprised in document 6 referred to in Annexure A hereto - the cooling jacket on the machine located on the Fourth Respondent's premises is a substantial reproduction of this work;
(ii)the copyright work comprised in documents 79 and 80 referred to in Annexure A hereto - the "Vee" roller details on the machine located on the Fourth Respondent's premises is a substantial reproduction of these works;
(iii)the copyright work comprised in document 18 referred to in Annexure A hereto - the "Vee" roller configuration on the machine located on the Fourth Respondent's premises is a substantial reproduction of this work.
3.2Particulars of instances of the Applicant's documents which have been infringed by the Respondents or one or more of them and particulars of the Respondents' documents by which the Applicant's documents are infringed are set out in Annexure B hereto. The numbers of the Applicant's documents in Annexure B correspond to the document numbers contained in Annexure A hereto. The numbers of the Respondents' documents in Annexure B correspond to the numbers with which the documents have been numbered by the Applicant's solicitors, being documents seized from the premises at 39 Northern Road, West Heidelberg and being some of the documents listed in paragraph 3 of the Affidavit of Stephen Marcus Stern sworn on 2 November 1994 and filed in these proceedings. These documents are in the possession of the Applicant's solicitors and may be inspected during ordinary business hours on reasonable notice.
3.3The Applicant is unable to give further particulars of all the copyright in the technical descriptions, sketches, plans and design drawings of the Applicant which have been infringed and the particulars of each reproduction thereof until after the completion of the analysis of the documents referred to in paragraph 7.1 below and after the completion of discovery and interrogation herein, but will do so prior to trial and, at the hearing of the Application herein, will seek to rely on each such instance.
By way of defence to para. 9, Tiger Bronze has pleaded:
It denies that it has reproduced in a material form, or caused, authorised, permitted, aided, assisted, counselled or procured the reproduction and/or substantial reproduction in a material form of any of the Applicant's alleged copyright drawings, whether for the benefit of the Respondents or any of them or to the detriment of the Applicant or the Applicant's business or that it has infringed the alleged copyright owned by the Applicant in any of the Applicant's copyright drawings. It says further that paragraph 9 of the Amended Statement of Claim, whether read alone or in conjunction with other paragraphs of the Amended Statement of Claim, does not plead material facts establishing the alleged infringement of copyright. It otherwise denies each and every allegation in paragraph 9.
As already explained in respect of what I regard as oppressive lack of identification of drawings other than those enumerated in Annexure A, it is insufficient to give merely "instances" or examples of infringement by copying of allegedly copyright works or embodying them in tangible form. However, it is permissible for the applicant to append "Particulars of Infringement" to a general allegation asserting infringement by, for example, reproducing a substantial part of the applicant's work; see Copinger and Skone James op. cit. p 1542. The respondents should only be required to respond, with appropriate particulars, to the allegations that they have infringed in respect of one or more of the works enumerated in Annexure A by reproducing them as cross-referenced in Annexure B. The respondents should therefore plead to para. 9 by specifically admitting those works (if any) enumerated in Annexure A which they concede to have been reproduced in documents identified in Annexure B and specifically denying that they have reproduced the others. If it is asserted that particular drawings or documents identified in Annexure B are not reproduced from the applicant's works but are derived, as was suggested in argument, from journals or obsolete patent specifications, the particulars to be appended to the new para. 9 of the defence should identify each other source from which they have been derived. As with paras. 4-8, para. 9 of each defence will be struck out to enable it to be repleaded with appropriate particulars in the manner which I have just indicated.
Paragraphs 10, 11 and 12 of the amended statement of claim respectively allege reproduction in a material form of the applicant's Workshops Procedures Manual, a Quality Assurance Manual and Copyright Business Documents, thereby infringing the applicant's copyright. By its defence to those paragraphs, Tiger Bronze denies reproduction or infringement and contends that none of paras. 10, 11 or 12 of the statement of claim pleads material facts establishing the alleged infringement of copyright.
I regard paras. 10, 11 and 12 of the amended statement of claim as sufficient pleas of infringement respectively of the applicant's Workshop Procedures Manual, Quality Assurance Manual and Copyright Business Documents. As indicated in respect of earlier paragraphs, the respondents are required to plead specifically only to those allegations of infringement which have been sufficiently particularized to enable them to identify the document which is said to reproduce part of either Manual or one of the applicant's Copyright Business Documents. That should be done without evasion by, for example, admitting reproduction where it has occurred but repeating the contention that the parts reproduced were not original works, or by denying reproduction and asserting that the parts claimed to have been reproduced were composed without reference to the applicant's works but were themselves original creations necessarily using similar technical language or forms dictated by the function of the document, or were reproductions of specified parts of journal articles or other specifications in which the applicant does not own copyright. Accordingly, paras. 10, 11 and 12 of each defence will also be struck out with liberty to replead.
Paragraph 14 of the amended statement of claim commences the allegations designed to make out a cause of action for breach of confidence. Tiger Bronze "does not admit" the allegation in that paragraph that the applicant has developed and created information related to the conduct of the applicant's business and manufacturing processes all of which is confidential to the applicant.
It is open to the respondents to "not admit" and so put the applicant to proof of matters peculiarly within its own knowledge. However, extensive particulars have been given of the information which the applicants claim to have been confidential. If the respondents intend to make out a positive case that any of that information was not confidential either because it was freely available from other sources, had been released into the public domain or had been made available to other persons in circumstances where its disclosure was not impressed with a concern to preserve confidence, the defence should contain a specific averment to that effect with appropriate particulars.
The allegations in each of paras. 15, 16 and 17 that each of the first, second and third respondents was employed by the applicant are effectively admitted and the relevant paragraphs of the defence are apparently not the subject of specific complaint by the applicant. Nor are paras. 18 and 19 which respond to an extensive catalogue of duties and continuing obligations said to have been owed by the first, second and third respondents to the applicant. Paragraph 20 of the amended statement of claim is in these terms:
Wrongfully, and in breach of their said obligations and/or duties to the Applicant, the Firstnamed Respondent, further or in the alternative, the Secondnamed Respondent, further or in the alternative, the Thirdnamed Respondent has disclosed or caused or permitted, aided, assisted, counselled or procured the disclosure to the Fourthnamed Respondent, for the benefit of the Respondents or one or more of them, and to the detriment of Applicant, the Applicant's confidential information, further or in the alternative information forming part thereof.
Then follow particulars comprising, amongst other things, a list of documents obtained by the applicant in execution of an "Anton Pillar" order at various premises occupied by one or other of the respondents. To that paragraph, Tiger Bronze has pleaded:
It denies that the First, Second or Third Respondent disclosed to it confidential information belonging to the Applicant. It says further that paragraph 20, whether read alone or in conjunction with other paragraphs of the amended Statement of Claim, does not plead material facts constituting any such alleged disclosure, and otherwise does not plead to paragraph 20 as the same contains no further allegations of material fact against it.
It follows from what I have already said about particulars which the applicant is not currently able to give, that the respondents are not required to plead to allegations like those contained in para. 20 of the amended statement of claim in respect of confidential information which cannot presently be identified with reasonable precision. However, I regard it as evasive and contrary to the requirements of O.11 r.13(3)
and r.18 of the Rules of this Court in respect of allegedly confidential information sufficiently particularized merely to "deny that the first, second or third respondent has disclosed" to the fourth respondent "confidential information belonging to the applicant". Any denial of the provision of information should be specific and, where information has been provided but is contended for reasons pleaded in earlier paragraphs not to have been confidential, the pleadings should frankly say so by suitable admissions and particulars repeating, where appropriate, those appended to earlier paragraphs of the defence. For these reasons, para. 20 of each defence will also be struck out.
Paragraphs 21, 22 and 23 of the amended statement of claim respectively allege that each of the first, second and third respondents has acted in breach of the conditions of his or her employment by the applicant and in breach of fiduciary obligations owed to the applicant. Tiger Bronze has declined to plead to each of those paragraphs "as the same contains no allegation of material fact against it". In so far as these paragraphs contain allegations of breach of contract of employment or breach of fiduciary duty against the first three individual respondents, that is true. However, the two remaining individual respondents (the action having been discontinued against the second respondent) if they desire to contend that any of the duties alleged in paras. 18 and 19 were not owed to the applicant, should indicate the basis of that contention as contemplated by O.11 rr 9 and 10. As well, the defences of those individual respondents should set forth specific denials, with particulars, if it is desired to maintain them, of the establishment of Tiger Bronze whilst employed by the applicant or disclosure to Tiger Bronze of the documents or confidential information alleged in para. 20 of the amended statement of claim.
By para. 24 of the amended statement of claim, the applicant has alleged that, in breach of s. 232(5) of the Corporations Law each of the first, second and third respondents has made improper use of information acquired as a result of their employment with the applicant to gain an advantage for the respondents or one or more of them or to cause detriment to the applicant. Paragraph 25 is in these terms:
Further or in the alternative, the Fourthnamed Respondent received the confidential information referred to in paragraph 20 hereof from the Firstnamed Respondent, further or in the alternative the Secondnamed Respondent further or in the alternative the Thirdnamed Respondent knowing of the confidentiality of the said confidential information and that the Fourthnamed Respondent's use of the said confidential information for its own purposes would be to the detriment of the Applicant.
To those paragraphs, Tiger Bronze has pleaded:
It denies that the First, Second or Third Respondent has made improper use of information acquired as a result of their employment with the Applicant, or has done so to gain an advantage for the Fourth Respondent, and otherwise does not plead to paragraph 24 as the same contains no further allegation of material fact against it.
It denies receiving confidential information from the First, Second, or Third Respondent belonging to the Applicant, or that if it did so that it knew of such confidentiality, or that it knew that its use of such confidential information would be to the detriment of the Applicant. It says further that paragraph 25, whether read alone or in conjunction with other paragraphs of the Amended Statement of Claim, does not plead material facts establishing the conclusions alleged. It otherwise denies each and every allegation in paragraph 25.
Many of the deficiencies in those paragraphs will be overcome by appropriate recasting of earlier paragraphs, particularly para. 20, of the defences. However, for the reasons indicated in respect of those earlier paragraphs, instead of the "rolled up" pleas presently embodied in them, paras. 24 and 25 of the amended defences as further amended should make clear in a distributive way which information particularized by the applicant is admitted to have been received by the respondents, which is contended not to have been confidential and which admittedly confidential information was not known by Tiger Bronze to have been confidential or the use of which by Tiger Bronze was not known by it to have been to the detriment of the applicant. Accordingly, paras. 24 and 25 of the amended defences will also be struck out with liberty to replead.
It will have been apparent from my discussion of the paragraphs of the amended statement of claim to which the defences are contended to have been deficient, that I have not been persuaded that any of the existing paragraphs of the amended statement of claim should be struck out. However, the applicant's pleadings will require to be amended or supplemented by further particulars if the applicant proposes to rely on instances of infringement or misuse of confidential information which are not presently discernible from Annexure A read in conjunction with Annexure B. Until an indication is given of that intention, the respondent should confine the further amendments, which I shall give them leave to make, to the allegations as particularized by those Annexures.
By their notice of motion, the remaining respondents seek an order that all items and documents obtained in the course of execution of the "Anton Pillar" order to which I have earlier referred be returned forthwith to the persons from whom they were obtained. However, I have not been persuaded that such an order is appropriate at this stage and shall dismiss the respondents' motion. Should any of the respondents need access to any of that material for the purpose of copying it or incorporating it into some data base, arrangements can be made for that to be done under the supervision of the Court subject to such reasonable safeguards as the applicant may require. To provide that facility if necessary, and deal with any further difficulties which are perceived to be created by the service of further amended defences, I shall reserve liberty to apply.
Since the applicant has succeeded to some extent on its motion, its costs of and incidental thereto should be its costs in the cause. There should be no order as to costs on the respondents' motion.
I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan.
Associate:
Date:
Counsel for the applicant : Mr D. Shavin, QC
Solicitors for the applicant : Freehill Hollingdale & Page
Counsel for the respondents : Mr R.M. Garratt
Solicitors for the respondents : Browne & Co
Date of hearing : 27 June 1995
Date of Judgment : 17 September 1996
0
0
0