Maxwell v Two Dogs International No. DCCIV-96-1623 Judgment No. D3547

[1996] SADC 3547

Court

DISTRICT COURT OF SOUTH AUSTRALIA

Reasons of His Honour Judge Lunn

Hearing

20/12/96.

Catchwords

INJUNCTIONS Plaintiff applied unsuccessfully for an ex parte interim injunction and without disclosing a letter received from solicitors acting for the defendant - subsequent inter partes application dismissed by reason of breach of duty of plaintiff to make full disclosure on the ex parte application - authorities considered.

Representation

Plaintiff BRENDA GEORGINA MAXWELL:
Counsel: MR C EATON - Solicitors: EATON &; ASSOCIATES

Defendant TWO DOGS INTERNATIONAL PTY LTD:
Counsel: MR M ABBOTT QC with MR J COSOFF - Solicitors: MINTER ELLISON

Defendant DUNCAN MACGILLIVRAY:
Counsel: MR M ABBOTT QC with MR J COSOFF - Solicitors: MINTER ELLISON

DCCIV-96-1623

Judgment No. D3547

24 December 1996

(Civil)

MAXWELL v TWO DOGS INTERNATIONAL

Civil

Judge Lunn

On 18 December 1996 the plaintiff instituted this action and issued an application seeking various interlocutory injunctions restraining the defendants from dealing with what she said was her copyright in the design "Two Dogs alcoholic lemonade". An affidavit of the plaintiff exhibited various correspondence between her and the defendants in which the defendants had refuted her claim to such copyright. On 13 December 1996 the defendants had advised the plaintiff's solicitor that they were in the process of instructing solicitors on the matter. The plaintiff requested that her application for an interlocutory injunction be made specially returnable as a matter of urgency. As a consequence it was made returnable before me on Thursday, 19 December at 9.50am.

The application came on for hearing at 10am on that morning. There was no attendance for the defendants and I was informed that they had not been served. The transcript of the proceedings, which I believe is reasonably accurate, records the following as occurring:

"HIS HONOUR: Well you could explain to me why you think you're going to get an ex parte order. You could have served the first defendant at any rate by just walking around to Pulteney Street.

MR EATON Very well, I will serve the first defendant.

HIS HONOURBoth defendants actually. I am very reluctant to injunct an $18 million settlement on the basis of some fairly bald assertions by the plaintiff who's done nothing for several years.

MR EATON I wouldn't have thought they were terribly bald with respect. I would have thought that it was fairly -

HIS HONOURWell she makes allegations in the correspondence she hasn't deposed to.

MR EATON They also have the opportunity of getting back to her by Friday afternoon and they didn't. If that's your - maybe if you could adjourn the application. I don't know, it may very well be that the sale's going to take place before Christmas. If I can get them served today.

DISCUSSION RE DATES

HIS HONOUR:Adjourned to 2.15 p.m. on 20 December 1996."

On the adjourned hearing on 20 December counsel attended for both defendants. An affidavit of the defendants' solicitor was put forward deposing to the fact that on 17 December at 5.10pm he had telephoned the plaintiff's solicitor, who was not then available, and had left a message with his office informing him that he was acting and that he would call him back. He further deposed that on 18 December at 3.30pm he had faxed a letter to the plaintiff's solicitor advising that he was acting and taking instructions, informing him that the 2nd defendant was overseas and stating:

"We are also instructed to inform you that, in the event our clients decide to transfer their intellectual property, they will give your client seven days written notice, which will enable her to issue proceedings should she wish to do so. .. Our clients do not acknowledge or admit in any way any of the allegations made in your correspondence. As stated above, we shall contact you again shortly once we have taken full instructions. In the interim, please address any future correspondence in connection with this matter to us."

The affidavit further deposed that the plaintiff's solicitor did not return the telephone call until shortly before midday on 19 December.

The plaintiff's counsel declined my invitation to answer the allegations in this affidavit about these matters and merely submitted that they were irrelevant.

At the hearing on 20 December counsel for the defendants submitted that the plaintiff had breached her duties to the Court in not making proper disclosure of the communications from the defendants' solicitors at the hearing on 19 December, and therefore the application should be dismissed.

The plaintiff's counsel submitted that it was not relevant to the matters before the Court on 19 December whether there had been any communication received from the solicitors for the defendants. I cannot agree. The function of the Court in granting any interim ex parte injunction is merely to preserve the situation until the opposing parties can be heard: Zafiropoulos v The Registrar General (1980) 24 SASR 133. As the Full Court stated there, as a general rule no order should be made to the prejudice of a party unless it has had the opportunity of being heard in its defence, but if there is a danger of irremediable or serious damage during the period in which it would take to bring the other party before the Court, then an ex parte interim order may be made. Thus a primary inquiry by the Court on any such ex parte application must be what trouble and delay would be involved in having the defendants served and being able to get them before the Court before any orders are made to their potential prejudice. The fact that local solicitors were acting for the defendants was extremely relevant on this point.

There have been a number of instances recently where plaintiffs have sought ex parte interim injunctions when there was no particular difficulty in serving the defendant and the relief claimed was not extremely urgent. They did not succeed. It is obvious that if plaintiffs can obtain an ex parte injunction they derive tactical advantages of a decision in their favour and perhaps forcing the defendant to apply to discharge the order which can have a de facto effect of reversing the onus of proof. Plaintiffs should only be given such tactical advantages where they are outweighed by the prejudice which they would suffer if the injunction were not granted immediately.

There is copious authority that in relation to ex parte interim injunctions, and any type of ex parte order, the applicant has a positive duty to disclose to the Court all material matters which may be in favour of an absent party: Spry "Equitable Remedies", 3rd edition, 476 et seq; "Halsbury's Laws of Australia", 325-2760; Gilfillan v Gilfillan (1973) 6 SASR 330; O'Brien v Australasian Temperance Society Ltd (1891) 24 SALR 128; Thomas A Edison Ltd v Bullock (1912) 15 CLR 679; Town & Country Sports Resorts Ltd v Partnership Pacific Ltd (1988) 97 ALR 315. In the circumstances of this matter I am satisfied that the plaintiff was in breach of her obligation to make proper disclosure to the Court at the hearing on 19 December of the letter received from the defendants' solicitor and its contents. If any ex parte injunction had been made on 19 December, there is little doubt that it would have been discharged in accordance with the authorities mentioned for failure to make proper disclosure.

I have not been able to find any direct authority on the powers of the Court where the plaintiff was in breach of her duty to make disclosure but no ex parte injunction was made. The Court must be zealous to ensure that it strictly enforces the obligations of such plaintiffs to make proper disclosure: AG v Mayor of Liverpool (1835) 40 ER 342 at 355-6. Where there has not been proper disclosure the Court may, if it thinks fit, not continue an ex parte injunction, even where there are grounds for it which are unrelated to the subject matter of the non-disclosure: Bentley v Nelson [1963] WAR 89 at 94. A plaintiff who has made non-disclosure should not be in any better position because the Court did not grant the ex parte injunction. As this is both an equitable jurisdiction, and a situation where the Court should enforce compliance with obligations of the parties, I consider it is both open to me, and proper in the circumstances, to dismiss the present application of 18 December for an interlocutory injunction on the grounds that the plaintiff did not make proper disclosure to the Court of material matters on an initial ex parte hearing of that application. A costs order against the plaintiff would not be sufficient. Accordingly, the application is dismissed. It will be for any Judge who considers any subsequent application for similar orders to decide whether such an application can be brought, but hopefully any undertaking offered by the defendants' solicitors can preserve the status quo satisfactorily for the time being.