Microsoft Corporation v Crosslink Marketing Group

Link copied
Case Copied 48 min read

FEDERAL COURT OF AUSTRALIA

Microsoft Corporation v Crosslink Marketing Group
(CMG) Pty Limited and Walker
[2005] FCA 1817

PRACTICE AND PROCEDURE – application to extend time for making application for leave to appeal – application for leave to appeal.  Consideration of grounds of lack of procedural fairness - consideration of Order 35, Rule 7 – application to set aside consent orders in settlement of the trial on the ground of fraud – application of Order 41, Rule 5 – factors influencing reception of fresh evidence –fresh evidence going to a ground of whether fraudulent conduct established – whether fresh evidence could have been adduced by the exercise of due diligence – whether evidence would have affected the result. 

Federal Court of Australia Act 1976 (Cth), s.4; s.24(1); s.24(1A); s.25(2)
Evidence Act 1995 (Cth), s.55
Copyright Act 1968 (Cth), s.115 and s.116

Microsoft Corporation v Crosslink Marketing Group (CMG) Pty Ltd [2005] FCA 1220, paras. [5] and [7]
Carr v Finance Corporation of Australia Ltd [No. 1] (1980-81) 147 CLR 246
Australasian Meat Industry Employees Union v Mudginberra Station Pty Ltd (1986) 12 FCR 14
Monroe Schneider Associates (Inc.) v No. 1 Rayberem Pty Ltd (1992) 37 FCR 234
Bourke v Beneficial Finance Corp. Ltd (1993) 47 FCR 264
Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534 at p.539
Jonesco v Beard [1930] AC 298 at 301
Birch v Birch [1902] P130 at 136, 139
McHarg v Woods Radio Pty Ltd [1948] VLR 496 at 498
Ronald v Harper [1913] VLR 311
Owens Bank Ltd v Bracco [1992] 2 AC 443
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691
Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-4
Vakauta v Kelly (1989) 167 CLR 568 at 584 and 585
Johnson v Johnson (2000) 201 CLR 488 at 492 [11], 498-9 [31] – [35]
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344-5 [6] – [8]
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 87 and 88
Orr v Holmes (1948) 76 CLR 632 at 635, 640
Florance v Andrew (1985) 58 ALR 377
Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313

MICROSOFT v CROSSLINK MARKETING GROUP (CMG) PTY LIMITED AND WALKER

QUD397 OF 2005

GREENWOOD J
13 DECEMBER 2005

BRISBANE


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD397 OF 2005

BETWEEN:

MICROSOFT CORPORATION
FIRST APPLICANT

MICROSOFT PTY LIMITED
SECOND APPLICANT

MICROSOFT LICENSING GP
THIRD APPLICANT

AND:

CROSSLINK MARKETING GROUP (CMG) PTY LIMITED
FIRST RESPONDENT

KELL WALKER
SECOND RESPONDENT

ROSALIND SUMNER AKA PEE LOO TAN
THIRD RESPONDENT

WAYNE SUMNER
FOURTH RESPONDENT

AND

KELL WALKER
FIRST CROSS CLAIMANT

CROSSLINK MARKETING GROUP (CMG) PTY LIMITED
SECOND CROSS CLAIMANT

MICROSOFT CORPORATION
CROSS RESPONDENT

JUDGE:

GREENWOOD J

DATE OF ORDER:

13 DECEMBER 2005

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.The Notice of Motion issued by the First and Second Respondents dated 15 September 2005 is dismissed. 

2.The First and Second Respondents pay the costs of the First, Second…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Microsoft Corporation v Crosslink Marketing Group and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2005] FCA 1817
Decision Date

CaseChat Overview and Summary

The case of Microsoft Corporation v Crosslink Marketing Group involved a dispute between Microsoft Corporation and Crosslink Marketing Group, with Microsoft seeking to set aside orders that had been made in the Federal Court of Australia. The core of the dispute revolved around allegations of fraud by Microsoft, particularly in relation to the production and presentation of evidence during the proceedings. The case was heard by Justice Gilmour, who was tasked with deciding whether to grant an extension of time for an appeal and whether to allow the appeal itself.

The primary legal issues before the court were whether there was sufficient evidence to suggest that Microsoft had acted fraudulently in obtaining the orders, and if so, whether the delay in filing the appeal application was adequately explained. Additionally, the court needed to assess whether the orders could be set aside on the grounds of fraud and if there was a reasonable prospect of success on appeal.

Justice Gilmour found that there was no evidence of fraud on the part of Microsoft. The court held that the allegations made by Mr Walker were not substantiated by the evidence presented. The affidavit provided by Mr Guy Williams was considered in light of the rules of evidence, and the court ruled that the striking out of certain paragraphs was a proper exercise of judicial discretion. The court also found that the refusal to admit the affidavit in its entirety did not constitute a denial of procedural fairness. Furthermore, the court concluded that the history of interlocutory steps taken by Microsoft was not relevant to the central question of whether the orders were obtained by fraud.

In terms of the extension of time, Justice Gilmour found that the delay in filing the appeal application was not adequately explained and that there was no prospect of success on appeal. Consequently, the court dismissed the application for an extension of time and leave to appeal. The orders sought by Microsoft to set aside the previous orders were also denied.

The final orders of the court were that the notice of motion issued by Microsoft be dismissed and that Microsoft pay the costs of the application on an indemnity basis. This decision underscored the importance of adhering to procedural rules and the necessity for evidence to substantiate allegations of fraud in litigation proceedings.

Orders

Orders of the court

1. The Notice of Motion issued by the First and Second Respondents dated 15 September 2005 is dismissed.

2. The First and Second Respondents pay the costs of the First, Second and Third Applicant in the principal proceeding, of the Notice of Motion on an indemnity basis.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

It should be remembered that the allegations of fraud made by Mr Walker are directed towards the conduct of not only Microsoft but Mr Devlin SC, Mr Nase and Microsoft’s instructing solicitors in the production of the relevant evidence and provision of it to Mr Walker.The Evidence relied upon by Mr Walker The evidence relied upon by Mr Walker was this. On the morning of 29 June 2005, Mr Walker was provided with an affidavit sworn by Mr Guy Williams (that day) deposing to the purchase by Williams on 23 February 2004 of a computer from Magic Computers (which company Williams had known for some time). Williams says the computer was delivered by Magic Computers to his house by Mr Adrian Stevens. When Williams activated the computer and opened the CD burner, he found a CD copy of Microsoft “Windows 2000 Professional”. Mr Williams had not purchased the software as part of the computer. There was no manual nor a Microsoft “Certificate of Authenticity” and the CD exhibited printing on the disk on paper which suggested that the CD was not a genuine Microsoft CD. The affidavit of Williams exhibited documents evidencing the purchase. Mr Walker says that he was shown the CD and provided with a document asserting infringing sales to Stevenson, Taylor, Williams, Collins, Gava and Moes, after the settlement. Mr Walker deposes to a denial of the supply of infringing software to those individuals. He says that in the week following the settlement he spoke with Adrian Stevens who denies the allegation in the Williams affidavit concerning him. Mr Walker says the CD shown to him after the settlement was owned by Mr Peter Bryson (a man unrelated to either Mr Walker or Magic Computers in any way) and Bryson produced the infringing CD. Moreover, says Mr Walker, Bryson orchestrated the formulation of the Williams affidavit. Mr Walker deposes to investigations he made about Bryson and Bryson’s conduct concerning other individuals and a misleading brochure Bryson produced about the sale of computers. Mr Walker asserts that Bryson was the main witness for Microsoft and was, by his conduct, attempting to pervert the course of justice. Mr Walker deposes to a subpoena issued to Bryson, an allegation that Bryson failed to produce documents, an assertion that the documents were important to the defence of the action by the First and Second Respondents and an allegation that Bryson sought to entrap Walker for the purposes of the trial. Mr Walker also deposes in a series of paragraphs to complaints about the failure by Microsoft to provide particulars of infringing acts that would have enabled Mr Walker to make proper enquiries, a failure by Microsoft to produce documents and the many (10 to 27) attempts to agitate these issues with Microsoft and ultimately, the Court. There is no affidavit in the application for an extension of time and leave to appeal from Adrian Stevens or material contradicting the evidence of Guy Williams or any other direct evidence probative of a fact establishing fraud on the part of Microsoft.The Conduct of the Proceedings on 19 August 2005

Decision

Reasons for decision

GREENWOOD J
The Respondent Applicants to the motion filed short submissions in response to the filing by Mr Walker of the affidavit by Williams sworn 5 December 2005, objecting to the affidavit on the basis that leave to adduce evidence had not been given and that if the evidence was to be received, the Respondent Applicants would want to respond to the affidavit, make submissions and presumably cross examine Williams. In response to those submissions, Mr Walker on 8 December filed further submissions. Mr Walker contends that there is nothing new in the affidavit of Williams, the Court should treat the affidavit as a document in the nature of submissions in any event and the affidavit shows that the solicitors for the Applicants were fraudulent. The evidence is not new. Leave has been refused to receive it. Mr Walker concedes that no allegation is made against Mr Devlin or Mr Nase for Microsoft. Conclusions Having regard to all of these matters, I have reached the following conclusions:1.For the reasons indicated at paragraph [40], I am satisfied that Dowsett J was not biased in the determination of the issues before him on 19 August 2005.2.Similarly, I am satisfied that in the determination of those issues, Mr Walker was not denied procedural fairness.3.As to the five matters contended for by Mr Walker identified at paragraphs [16] and [17], I have concluded:(a)the decision refusing Mr Walker leave to represent Magic Computers did not represent a denial of procedural fairness to the First Respondent. Order 9, Rule 3 of the Federal Court Rules provides that a corporation may not without the leave of the Court or a judge enter an appearance or defend any proceeding except by a solicitor. His Honour had previously sought to condition any application for leave by requiring Mr Walker to secure and be in a position to present clear documentary authority enabling him to appear for the company. The imposition of such a condition was within the scope of the exercise of His Honour’s discretion. In any event, Mr Walker appeared on his own behalf and all of the arguments advanced by him to support the Application seemed, on the face of the material, to be the same arguments that Mr Walker would have advanced on the day standing in the shoes of Magic Computers had the discretion been exercised to give leave for Mr Walker to represent Magic Computers;(b)as to the second argument, the rulings by His Honour striking out the various paragraphs of Mr Walker’s affidavit were a function of an assessment by His Honour of the rules of evidence which govern the admissibility of material. Rulings, striking out inadmissible evidence or evidence which is simply argumentative or bears the character of personal opinion, contentions or allegations rather than evidence of facts from which a conclusion might be reached or inferences drawn, is not the expression of a denial of procedural fairness or evidence of bias. It is orthodoxy;(c)the third argument concerning the contention that Microsoft had failed to provide particulars of the allegations of infringement or produce discoverable documents are not matters that His Honour was required to consider in the context of the allegation of fraud. There was no evidence that Microsoft had deliberately withheld the provision of documents and information so as to procure consent orders in settlement of the action in the course of the trial. The election to strike out those paragraphs of Mr Walker’s affidavit dealing with those allegations was not the expression of a denial of procedural fairness;(d)the notion that Mr Walker suffered a denial of procedural fairness because His Honour refused to admit the affidavit of 25 July 2005 as “a whole document” notwithstanding successful challenges by Microsoft to the various paragraphs of the affidavit is novel and entirely unsustainable;(e)the fifth notion propounded by Mr Walker was that he suffered a denial of procedural fairness because His Honour failed to have regard to the history of Mr Walker’s agitation of interlocutory failures leading up to trial on the part of Microsoft and that these failures were material to the question of whether the Orders of Lander J ought to be set aside. The question in issue was whether the Orders obtained by Microsoft were obtained by fraud (established on the evidence), fraud on the part of Microsoft, fraudulent conduct directly material to the judgment and whether the evidence of fraud was “fresh”. The history of the interlocutory steps in relation to the provision of particulars and the production of documents (whatever the merits of those matters might be), was not relevant to the central question. There was no denial of procedural fairness by His Honour’s refusal to consider those historical matters on the Application.4.The determination of the question whether an extension of time should be given is influenced by the length of the delay, the explanation given for the delay and the prospects of success in an appeal should an extension of time (and leave) be granted. Mr Walker has filed an Application which is 20 days out of time. Although I entirely understand the circumstances which led to the delay, there must nevertheless be finality to litigation and this is particularly true of a case where a party who has consented to final orders at trial (to give effect to a settlement agreement) seeks to set aside those orders on the basis that they were obtained by fraud. In determining whether an extension of time should be granted I am influenced by the nature of the order from which appeal is sought, the prospects of success of the appeal, the nature of the orders which are sought by the appeal, the demonstrated prospects in relation to the ultimate matter which is sought to be re-argued, the ground of attack inherent in the application to set aside those orders and the period of the delay. Having regard to all of those matters, I am not satisfied that the delay has been explained properly or is ultimately acceptable. 5.There is no prospect, on the material, of the First and Second Respondents successfully establishing a ground of appeal from the judgment of Dowsett J on 19 August 2005. 6.If the failure to file the application for leave to appeal is nevertheless thought to be properly explained by the circumstances reflected at paragraph [18], I would nevertheless refuse the extension of time on the basis of the conclusion reached at point 5. 7.If an extension of time was granted and leave to appeal granted, the orders sought by the First and Second Respondents are that the Orders of Dowsett J be set aside and the Application by the First and Second Respondents to set aside the Orders of Lander J of 29 June 2005, be heard and determined according to law. Having regard to the evidence relied upon by Mr Walker in this Application, namely his affidavits of 19 September 2005, 25 July 2005 and 15 July 2005 and his submissions of 25 November 2005, there is no evidence to support the claim that the Orders of 29 June 2005 were obtained by fraud on the part of Microsoft. In particular:(a)the proposition that the production of the affidavit of Mr Guy Williams and the provision of that affidavit to Mr Walker on 29 June 2005 is a matter which establishes fraud on the part of Microsoft is unsustainable;(b)although the affidavit was provided on 29 June 2005 shortly before the continuation on that day of the trial and although Mr Walker had a limited opportunity (2 hours) to consider the facts deposed to in the affidavit and the attachments to the affidavit, he nevertheless had that material available to him for consideration and assessment prior to consenting to the orders;(c)the thrust of the criticism of the affidavit lies in the claim that Mr Peter Bryson was involved in conduct to construct the evidence deposed to by Mr Williams. There is no evidence to suggest that Microsoft dealt with the evidence of Mr Williams in any way other than on the basis that its lawyers believed the evidence to be truthful [41]. The conduct of Mr Bryson is not the conduct of Microsoft;(d)the issues raised by Mr Walker concerning alleged failures on the part of Microsoft to provide particulars and documents in the interlocutory stages leading to trial (and at trial) are not matters which, on the evidence, raises any question of fraudulent conduct. Those matters were, in part, on the contention of Mr Walker the subject of interlocutory challenge. To the extent that the issue remained, it ought to have been the subject of further interlocutory challenges under the Federal Court Rules;(e)the provision, after the settlement, of the schedule identifying the dollar value of the loss arising from the transactional claims and the provision to Mr Walker for examination of the CD is not evidence of fraud on the part of Microsoft in obtaining the Orders;(f)it is clear that Mr Walker consented to the Orders having appreciated the consequences of the Orders (see para. [7]).

Ratio Decidendi

Legal Principle Established

Established by: GREENWOOD J

Full text does not contain this section.