Mg Distribution Pty Ltd and Ors v Khan and Anor (No.2)
[2006] FMCA 1584
•12 October 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MG DISTRIBUTION PTY LTD & ORS v KHAN & ANOR (No.2) | [2006] FMCA 1584 |
| COPYRIGHT – PRACTICE AND PROCEDURE – Notice of Admit – failure to file Response – conflict between pleadings and admissions taken to have been made due to failure to file Response – leave granted pursuant to Rule 15.31(3) of Federal Magistrates Court Rules 2001 to withdraw admissions taken to have been made. |
| Federal Magistrates Court Rules 2001, r.15.31(3) |
| Ridolfi v Rigato Farms Pty Ltd (2000) 2 Qd R 455 |
| First Applicant | MG DISTRIBUTION PTY LTD |
| Second Applicant | YASH RAJ FILMS PRIVATE LIMITED |
| Third Applicant | YASH RAJ FILMS INTERNATIONAL LIMITED |
| Fourth Applicant | YASH RAJ FILMS USA INC |
| Fifth Applicant | FILMKRAFT PRODUCTIONS (INDIA) PTY LTD |
| First Respondent: | SAEED KHAN |
| Second Respondent: | ABIDA KHAN |
| File number: | MLG 401 of 2005 |
| Judgment of: | McInnis FM |
| Hearing date: | 12 October 2006 |
| Delivered at: | Melbourne |
| Delivered on: | 12 October 2006 |
REPRESENTATION
| Counsel for the Applicants: | Mr P.H. Wallis |
| Solicitors for the Applicants: | Choy Lawyers |
| Counsel for the Respondents: | Mr C.S. Ward |
| Solicitors for the Respondents: | Nath Lawyers |
ORDERS
The Respondents be granted leave pursuant to Rule 15.31(3) of the Federal Magistrates Court Rules 2001 to withdraw admissions taken to have been made pursuant to Rule 15.31(3) in relation to the Notice to Admit Facts filed 10 August 2006.
The Respondents be granted leave to rely upon the Response to the Notice to Admit Facts filed 4 October 2006 and that all times be extended to permit the Respondents to rely upon that document.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 401 of 2005
First Applicant
Second Applicant
Third Applicant
Fourth Applicant
Fifth Applicant And
First Respondent ABIDA KHAN |
REASONS FOR JUDGMENT
(Revised from transcript)
In this application the Applicants have filed a Notice to Admit Facts on 10 August 2006. The notice required the Respondents to admit a number of facts, which in broad terms include assertions in the pleadings in relation to incorporation of the Applicants and the production of films which are the subject of this copyright claim.
In addition, the Notice to Admit also seeks admissions and a response to other assertions found in the Amended Statement of Claim.
It is common ground that the Notice to Admit Facts, having been served on the solicitors for the Respondents, was not the subject of an appropriate response within the time prescribed by the Federal Magistrates Court Rules 2001. The rule which applies to a Notice to Admit Facts or documents in this Court is Rule 15.31 as follows:-
“(1) A party to a proceeding (the first party) may, by notice in accordance with the form of notice set out in Part 1 of Schedule 2, ask another party to admit, for the proceeding, the facts or documents specified in the notice.
(2) If the other party does not, within 14 days, serve a notice on the first party disputing the fact or the authenticity of the document, the other party is taken to admit, for the proceeding only, the fact or the authenticity of the document.
(3) The other party may, with the Court's leave, withdraw an admission taken to have been made under subrule (2).
(4) Unless the Court otherwise orders, if the other party serves a notice disputing a fact or the authenticity of a document and the fact or the authenticity of the document is later proved in the proceeding, the party must pay the costs of the proof.”
Ultimately the Respondents have filed a response to the Notice to Admit Facts.
Save for a few of the paragraphs in the Notice, it is appropriate to conclude that most of the paragraphs in the Notice to Admit have not been admitted. The Respondents, confronted with the application of the rule which effectively, in the absence of a response, takes the Respondents to have admitted the matters set out in the Notice to Admit, have sought leave pursuant to Rule 15.31(3) to withdraw admissions taken to have been made effectively by operation of subrule (2).
As set out above in this judgment, Rule 15.31(2) provides effectively a 14‑day period within which the other party served with a Notice to Admit Facts should serve a notice disputing the facts in this case.
The Respondents have relied upon an affidavit of Vinod Nath sworn 10 October 2006 which in paragraph 12 the deponent states the following:
“A notice to admit facts was received by my firm on 11 August 2006. It appears to have been incorrectly filed, as a result of which it was not reviewed by me or by counsel until late September 2006.”
Clearly in those circumstances the deponent, who is the solicitor for the Respondents, concedes that the Notice to Admit Facts was served and that the appropriate response was not provided within the time prescribed by the Rules.
Counsel for the Applicants has drawn the Court's attention to a decision of the Supreme Court of Queensland in the matter of Ridolfi v Rigato Farms Pty Ltd (2000) 2 Qd R 455. Counsel has specifically referred to an extract from that judgment which appears at pp.458‑459 paragraph 19 as follows:-
“[19] Asked to exercise the discretion under rule 189(3), a court would ordinarily expect sworn verification of the circumstances justifying a grant of leave. Those circumstances may include why no response to the notice was made as required, the response the party would belatedly seek to make, and confirmation that the response would accord with evidence available to be led at a trial. Here none of those matters was so verified. Issues of prejudice may also fall for consideration upon the hearing of such an application.”
I also for the sake of completeness incorporate paragraph 20 from the Court's judgment:
“[20] There is no principle that admissions made, or deemed to have been made, may always be withdrawn “for the asking”, subject to payment of costs. The discretion is broad and unfettered, as exemplified by Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 and Equuscorp Pty Ltd v Orazio [1999] QSC 354.”
It is clear from those paragraphs in that judgment that the Court in the exercise of the discretion when considering whether it shall grant leave to the Respondents to withdraw the admissions which are taken to have been made by virtue of the operation of sub-rule (2) of the relevant rule has what the Court describes as a "broad and unfettered discretion". The discretion clearly must be exercised judicially.
In considering the arguments advanced for and on behalf of both parties I have taken into account the apparent tension which may arise in matters of this kind between the pleadings, which in this case comprise the Third Amended Statement of Claim of the Applicants filed 16 June 2006 and the Amended Defence of the Respondents dated 5 July 2006.
That tension arises between what appears to be clearly either not admitted or denied by the Respondents and what would otherwise be taken to have been admitted as a direct consequence of the failure to comply with the Rules once the Respondents received, as clearly they did receive, the Applicants' Notice to Admit Facts.
It is clear, in my view, that the Notice to Admit Facts comprises certain factual matters, some of which might, on the face of it, appear somewhat innocuous, including incorporation, albeit in overseas countries, by certain of the Applicants. Further, it may appear that the production of the films which are the subject of this claim, on the face of it, could be regarded as a procedural matter, or at least a less significant factor to be proved by the Applicants in pursuit of this claim.
In a sense, it appears from the Amended Defence of the Respondents, and in particular paragraph 12 that there may to some extent be some common interest in the parties accepting that the films in question were indeed produced as asserted by the applicants.
However, having considered the character and nature of the facts required to be admitted in the Notice to Admit, it is my concluded view that those facts, albeit of varying relative importance, nevertheless relate to material which the Applicants would be required to otherwise prove to establish the claimed breach of copyright.
Where the Respondents have at least provided some explanation for the failure to provide in a timely manner a response to a Notice to Admit Facts and where those facts would otherwise be taken to have been admitted relate to issues which are essential parts of the proof of an Applicants' claim in a copyright matter, then in my view the Court needs to exercise extreme care and caution in permitting the proceedings to continue on the basis that as a result of the breach of the rule the facts are taken to be admitted.
To do so may well be fatal to the Respondents' defence of this claim and would, in my view, effectively shut out the Respondents from pursuing the defence as pleaded and are otherwise legitimately and appropriately testing the evidence they sought to be adduced in relation to those facts.
A concession made by the Respondents to permit the deponents of affidavits where the facts are sought to be asserted to be cross‑examined or made available for cross‑examination by audio or video link is an important practical consideration, though does not determine the outcome of this application.
It is however a factor which I can take into account in the exercise of my broad and unfettered discretion, and I do so from the practical point of view that if for example matters of mere incorporation were to require the attendance in Australia of witnesses from overseas in person who were not already scheduled to appear as witnesses in these proceedings, then that may be a factor which would mitigate against the exercise of my discretion in this matter in relation to whether or not I grant leave to the Respondents.
However, having regard to the principles of procedural fairness and the opportunity for the Respondents, dilatory though they may appear to have been in the material, to properly test the Applicants' claim and to otherwise pursue the trial in a manner consistent with the pleadings, it is my view that in the interest of justice it is appropriate to make orders as follows:-
(1)The Respondents be granted leave pursuant to Rule 15.31(3) of the Federal Magistrates Court Rules 2001 to withdraw admissions taken to have been made pursuant to sub-rule (3) of Rule 15.31 in relation to the Notice to Admit Facts filed 10 August 2006.
(2)The Respondents be granted leave to rely upon the Response to the Notice to Admit Facts filed 4 October 2006 and that all times be extended to permit the Respondents to rely upon that document.
That leaves open the question of whether any and if so what order should be made in relation to the costs arising from this application by the Respondents for leave, and I will consider that question in due course after I determine remaining matters in dispute between the parties.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 12 October 2006
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