Higgins v Sinclair (No. 2)

[2011] NSWSC 238

Supreme Court

New South Wales

Medium Neutral Citation:	Higgins and Ors v Sinclair (No. 2) [2011] NSWSC 238
Hearing dates:	31 March 2011
Decision date:	31 March 2011
Before:	Johnson J
Decision:	Verdicts, judgments, declarations and injunctions, orders and directions made in accordance with Orders dated 31 March 2011
Catchwords:	DEFAMATION - misleading and deceptive conduct - consequential orders - form of declaratory and injunctive relief
Legislation Cited:	Fair Trading Act 1987
Cases Cited:	Higgins and Ors v Sinclair [2011] NSWSC 163
Category:	Consequential orders
Parties:	Peter Gordon Higgins (First Plaintiff) John Randall Sharp (Second Plaintiff) Power & Data Corporation Pty Limited (Third Plaintiff) John Ashton Sinclair (Defendant)
Representation:	Counsel: Mr KP Smark SC (Plaintiffs) Solicitors: Doyle Watson Solicitors (Plaintiffs)
File Number(s):	2009/297946

Judgment

1. JOHNSON J : On 18 March 2011, I gave judgment in these proceedings: Higgins and Ors v Sinclair [2011] NSWSC 163. For reasons expressed in that judgment, I indicated that I would award damages in favour of each of the First and Second Plaintiffs in the sum of $100,000.00, together with interest. I indicated, as well, that I was satisfied that injunctive and declaratory relief should be granted to the Plaintiffs. I stood the proceedings over until today, and directed the Plaintiffs to provide draft orders to the Court and the Defendant, together with short submissions explaining why particular orders were being sought.

1. I note that both Mr Smark SC, for the Plaintiffs, and the Defendant (appearing in person) were present in Court on 18 March 2011. I fixed today's hearing for 9.30 am, after consulting the Defendant whether that time suited him or whether he wished it to be later in the day. I was conscious that the Defendant lives outside Sydney (in the Port Macquarie area) and that a later time may facilitate his attendance, if he wished to attend. He indicated that he did not wish to have a later time today, and that it may be that he would stay overnight in Sydney.

1. The matter was called on this morning. The Defendant has not appeared. It is now 9.57 am. It may be, from the tenor of an email which he has sent, that he has determined not to come to Court today, although he has not communicated that intention directly to my Associate nor to the Plaintiffs.

1. As a result of the orders made on 18 March 2011, the Plaintiffs furnished to the Court and to the Defendant draft orders and submissions on 22 March 2011. The Defendant was given an opportunity to indicate his position concerning the draft orders. He sent an email to the Court on 28 March 2011 which has, in several respects, revisited a number of matters raised by him at the hearing. His email (MFI2) does not in fact address directly any of the proposed orders. However, the Defendant clearly had an opportunity to consider the proposed orders, and I am satisfied that he is on notice of the orders which I am asked to make today.

1. The issues which were flagged for possible consideration on the last occasion have been somewhat reduced.

1. Firstly, the Plaintiffs do not maintain their claim for prejudgment interest and no order is sought in that regard.

1. Secondly, the Plaintiffs submit that costs should follow the event, but they do not seek any special order as to costs against the Defendant.

1. There are a number of declarations and injunctions contained in the proposed orders. I should say something briefly about them to explain the approach which I will take.

1. The first proposed declaration is that Power & Data Corporation Pty Limited owns the intellectual property in the Mainline system. This declaration was sought in prayer 7 of the Further Amended Statement of Claim. It will be apparent from my judgment that there was an issue in the case concerning statements made by the Defendant, in various forms, concerning the ownership of the intellectual property in the Mainline system. I accept the submissions of the Plaintiffs that the effect of the findings which I have made renders it both appropriate and necessary to make a declaration in the form which is sought.

1. As the judgment reveals, the Defendant has expressed views, and strong views, about issues of inventorship and the roles of other persons, who are not parties to these proceedings. The issue that I had to decide, as a live issue in these proceedings, related directly to whether Power & Data Corporation Pty Limited owned the intellectual property in the Mainline system. That issue was answered clearly in favour of the Plaintiffs. The making of this declaration will settle the issue as between Power & Data Corporation Pty Limited and the Defendant. It has the benefit of promoting finality of litigation, at least between these parties.

1. Whether the Defendant seeks to make any application in any other forum with respect to issues of inventorship, concerning persons who are not parties to these proceedings, is a matter about which I express no view. What is clear is that the making of this declaration settles the issue as between the parties to this litigation. I am satisfied that such a declaration ought be made.

1. The next set of declarations are sought to be made pursuant to s.72 Fair Trading Act 1987 . The declarations sought are that the Defendant has engaged in misleading and/or deceptive conduct by representing seven stated matters. The seven stated matters flow directly from the representations referred to in the proceedings and my findings. I consider it appropriate, in the circumstances of this case, to make declarations 2(a) to 2(g).

1. The general orders whereby there will be verdicts for the First and Second Plaintiffs in the nominated sums, and judgment for the Third Plaintiff are not controversial and I will make those orders in due course.

1. That brings me to the question of injunctive relief. That relief was sought with respect to both the defamation proceedings by the First and Second Plaintiffs and the Fair Trading Act 1987 proceedings by the Third Plaintiff. I indicated in my principal judgment that I was persuaded, in the circumstances of this case, that injunctive relief was appropriate. I should observe that the content of the Defendant's email of 28 March 2011 (MFI2) reinforces that view in my mind.

1. The form of the injunctive relief sought by the Plaintiffs has been carefully drawn. It seeks, in effect, orders of the Court restraining the Defendant from making defamatory and misleading statements of the type which he has made in the past on more than one occasion.

1. Each of the injunctions is expressed as a permanent restraint. However, the Plaintiffs acknowledge that orders in this form would not prevent the Defendant from seeking to have such orders varied or discharged upon a proper basis in the future. Further, there is built into the proposed injunctive relief, provision for the Defendant to seek the consent of the Plaintiffs to certain communications being made.

1. I bear in mind that there is a pattern of behaviour disclosed in this case whereby the Defendant, almost invariably by email, although in the offending website as well, uses strong and intemperate language paired with defamatory and misleading statements. A reading of my primary judgment will make clear what I mean in that respect.

1. The Court will not lightly make orders restraining a person from communicating with others. However, the Plaintiffs have brought these proceedings and have succeeded clearly. For reasons explained in my principal judgment, a clear foundation exists for injunctive relief.

1. I should, however, make this observation. As will be apparent from the transcript of today's ex-parte hearing, both senior counsel for the Plaintiffs and the Court acknowledge that these orders should not operate to shut out the Defendant from having an opportunity to make, using temperate and non-defamatory language, communications with appropriate authorities concerning safety issues, including the requirements of Australian Standards and matters of that type. If the Defendant seeks to take such a course, then it may be expected that the Plaintiffs will not seek to prevent him from doing so. If the Plaintiffs did not consent to such communications, then the Court would readily entertain an application by the Defendant to vary the orders so that such communications could be made.

1. It is self evident, from the terms of my principal judgment, that the Plaintiffs themselves have a close interest in the Mainline system operating safely. It would be in no one's interest, if there were legitimate safety issues which were sought to be brought to the attention of relevant authorities, for the Defendant to be prevented from raising those matters.

1. However, the problem so far has been, as I have said, the intemperate and strong language used by the Defendant and its defamatory and misleading content. Intermingled in the Defendant's statements is a type of foundational grievance concerning inventorship, which seems to colour his approach to statements made with respect to safety issues. I say no more about that. A fair reading of my primary judgment will disclose what I mean.

1. Clearly, the Defendant has considerable practical knowledge about this system. It is not the role of the Court to make orders that stop him from raising legitimate safety issues with the appropriate authorities in temperate and non-defamatory terms.

1. I will take steps to have both the transcript of today, and a copy of this judgment, sent to the Defendant so that he is aware of what has been said in Court by senior counsel for the Plaintiffs and by me.

1. I am satisfied, in the circumstances of this case, that the injunctive relief sought is entirely appropriate and that it involves a measured approach to properly protect the legitimate interests of the Plaintiffs, who have succeeded in these proceedings, while at the same time leaving open a proper avenue for the Defendant to raise any legitimate issues he wishes to raise in temperate and non-defamatory terms.

1. I make declarations in terms of the declarations contained in paragraphs 1 and 2 of the Orders which I have signed and dated today.

1. In addition, I give verdicts and judgments in terms of paragraphs 1 through to 5, on page 2 of the Orders which I have signed and dated today.

1. Further, I grant injunctions in terms of paragraphs 6, 7, 8 and 9 on pages 2 to 4 of the Orders which I have signed and dated today.

1. I make an order as to costs in accordance with paragraph 10 of the Orders on page 4 which I have signed and dated today.

1. I give a direction with respect to the exhibits, in accordance with the direction on page 4 of the Orders which I have signed and dated today.

Orders

The Court declares that:

(1)   Power & Data Corporation owns the Intellectual Property in the Mainline system.

(2)   The defendant has engaged in misleading and/or deceptive conduct by representing that:

(a)   Power & Data Corporation would go into liquidation, leaving its customers responsible for the cost of rewiring their homes;

(b)   The Mainline system developed and marketed by Power & Data Corporation was likely to cause avoidable death or injury to children, because it was more dangerous than conventional power conduction systems;

(c)   Power & Data Corporation does not own the Intellectual Property in the Mainline system;

(d)   Power & Data Corporation had stolen the defendant's intellectual property in the Mainline system from him;

(e)   Power & Data Corporation was responsible for the Mainline system which was so dangerous that it would lead to claims for compensation for loss of life, injury or property;

(f)   The intellectual property in the Mainline system produced by Power & Data Corporation Pty Ltd was stolen from the inventor;

(g)   The validity or efficacy of the patent for the Mainline system was in doubt because extra inventors' names had been added to the patent;

The Court orders:

(1)   Verdict for the first plaintiff.

(2)   Verdict for the second plaintiff.

(3)   Judgment for the first plaintiff in the sum of $100,000.00.

(4)   Judgment for the second plaintiff in the sum of $ 100,000.00.

(5)   Judgment for the third plaintiff.

(6)   That the defendant be permanently restrained, by himself, his servants or agents, from publishing any matter substantially to the same effect as any part of the publications comprised by Exhibits A2, B or C in these proceedings, except with the express prior written permission of all of the plaintiffs.

(7)   Without limiting order 6, that the defendant be permanently restrained, by himself, his servants or agents, from publishing any matter substantially to the effect of any of the following matters, except with the express prior written permission of the first plaintiff:

(a)   The first plaintiff has conspired with others to steal the intellectual property in the Mainline product from the defendant;

(b)   The first plaintiff, as a director of Power & Data Corporation, has permitted the sale of the Mainline product to Australian schools, despite knowing that the product was much more dangerous than conventional electrical wiring systems.

(8)   Without limiting order 6, that the defendant be permanently restrained, by himself, his servants or agents, from publishing any matter substantially to the effect of any of the following matters, except with the express prior written permission of the second plaintiff:

(a)   The second plaintiff has cynically sought to promote a product which he knew would fail, to make the government and tax-payers end up paying for the cost to replace the product when it did fail;

(b)   The second plaintiff, as a director of Power & Data Corporation, has permitted the sale of the Mainline product to Australian schools, despite knowing that the product was much more dangerous than conventional electrical wiring systems.

(9)   Without limiting order 6, that the defendant be permanently restrained, by himself, his servants or agents, from publishing any matter substantially to the effect of any one or more of the following matters, except with the express prior written permission of the third plaintiff:

(a)   Power & Data Corporation will go into liquidation, leaving its customers responsible for the cost of rewiring their homes;

(b)   The Mainline system developed and marketed by Power & Data Corporation is likely to cause avoidable death or injury to children, because it is more dangerous than conventional power conduction systems;

(c)   Power & Data Corporation is responsible for the Mainline system which is so dangerous that it would lead to claims for compensation for loss of life, injury or property;

(d)   Power & Data Corporation has stolen the defendant's intellectual property in the Mainline system from him;

(e)   The validity or efficacy of the patent for the Mainline system is in doubt because extra inventors' names had been added to the patent;

(f)   Power & Data Corporation does not own the Intellectual Property in the Mainline system;

(g)   The intellectual property in the Mainline system produced by Power & Data Corporation Pty Ltd was stolen from the inventor.

(10)   The defendant to pay the plaintiffs' costs as agreed or assessed.

The Court directs that the exhibits may be returned to the parties after 28 days from the making of these orders unless a notice of appeal or notice of intention to appeal is lodged within that time by the defendant. The Court further directs that should the exhibits be returned to the parties, the plaintiffs' solicitor is to keep safe custody of Exhibits A2, B and C, and is to provide legible copies of those particular exhibits to the defendant, within a reasonable time after taking custody of such exhibits.

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Decision last updated: 04 April 2011