Microsoft Corporation v CX Computer Pty Ltd [2002] FCA 3
PRACTICE AND PROCEDURE – privilege against self-incrimination – proceeding for infringement of copyright and of registered trade mark – facts pleaded also constitute offences – Australian Federal Police seized documents in execution of search warrants in relation to suspected commission of the offences – applicants seek discovery by corporate respondent and by individual who is its only director and secretary – applicants serve notice to produce on the company and the individual calling for production of any record of the documents seized by the Australian Federal Police – whether individual and company excused from giving discovery and complying with the notice to produce on ground that giving discovery and complying with notice would involve individual incriminating himself
MICROSOFT CORPORATION & ORS v CX COMPUTER PTY LTD & ORS
N 1015 OF 2000
LINDGREN J 8…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Microsoft Corporation v CX Computer Pty Ltd [2002] FCA 3
Case
[2002] FCA 3
Decision Date
CaseChat Overview and Summary
Microsoft Corporation and Microsoft Australia Pty Ltd have brought a proceeding against CX Computer Pty Ltd and Gaetano Grassia (Grassia), the sole director and secretary of CX Computer, for infringement of copyright and of registered trade marks, and for contravention of certain provisions of the Trade Practices Act 1974 (Cth). The applicants seek discovery of documents and have served a notice to produce on the company and Grassia. CX Computer and Grassia seek to set aside the notice to produce on the basis that complying with the notice would involve Grassia incriminating himself. The applicants’ motion for discovery and the motion of CX Computer and Grassia to set aside the applicants’ notice to produce are before the Court.
The legal issue before the Court was whether CX Computer and Grassia were excused from giving discovery and complying with the notice to produce on the ground that doing so would involve Grassia incriminating himself. The Court held that the privilege against self-incrimination does not extend to a corporation. Therefore, the only issue was whether Grassia could rely on the privilege against self-incrimination. The Court held that Grassia could not rely on the privilege because the documents sought were not in his possession or control, but were in the possession of the corporation. Furthermore, the Court held that the privilege against self-incrimination is not available to a party who has already been charged with an offence, as Grassia had been. For these reasons, the applicants’ motion for discovery succeeds and the motion by CX Computer and Grassia to set aside the applicants’ notice to produce fails.
CX Computer and Grassia will be ordered to pay the applicants’ costs on each motion. CX Computer and Grassia will be ordered to file and serve by 14 February 2002 a verified list of documents within the categories notified in a letter dated 8 August 2001 from Mallesons Stephen Jaques to Gray & Perkins. CX Computer and Grassia have liberty to apply on 24 hours’ notice for relief in relation to the description of any particular document or documents in its or his verified list of documents. The proceeding will be stood over to 25 February 2002 at 9.30 am for further directions.
Orders
Orders of the court
1. The motion of the fifth and sixth respondents to set aside a notice to produce brought by notice of motion filed on 7 November 2001 be dismissed.
2. The fifth and sixth respondents pay the applicants’ costs of that motion.
3. The fifth and sixth respondents each file and serve by 14 February 2002 a verified list of documents within the categories notified in a letter dated 8 August 2001 from Mallesons Stephen Jaques to Gray & Perkins.
4. Each of the fifth and sixth respondents have liberty to apply on 24 hours’ notice for relief in relation to the description of any particular document or documents in its or his verified list of documents.
5. The fifth and sixth respondents pay the applicants’ costs of the applicants’ motion brought by notice of motion filed on 24 October 2001.
6. The proceeding be stood over to 25 February 2002 at 9.30 am for further directions.
Note:
Background
Background to the litigation
Accordingly, before the Court are the applicants’ motion for discovery and the motion of Natcomp and Grassia for a setting aside of the applicants’ notice to produce.BACKGROUNDGeneral By their second further amended statement of claim, the applicants plead causes of action against Natcomp and Grassia of infringement of registered trade marks, infringement of copyright and contravention of certain provisions of the Trade Practices Act 1974 (Cth) (“the TP Act”). I am concerned here only with the claims of trade mark and copyright infringement. Senior counsel for Natcomp and Grassia has read affidavits of Stephen Michael Polczynski and Ian Ible. Mr Polczynski is the solicitor for Natcomp and Grassia. He deposes that Grassia is the sole director and secretary of Natcomp. A historical company extract as at 29 August 2001 annexed to Mr Polczynski’s affidavit establishes that Grassia has been the sole director and secretary of Natcomp since 19 May 1997. As appears later, the events with which this proceeding is concerned commenced in August 1999. Mr Polczynski deposes that Grassia is the legal and beneficial owner of 9,999 fully paid ordinary shares of the 10,000 fully paid ordinary shares, which, he states, constitute Natcomp’s capital. Mr Ible’s affidavit is to the effect that he has been the holder of one fully paid ordinary share of $1.00 in the capital of Natcomp since about August 1989, and that he has, since that time, held that share on trust for Grassia. Mr Ible’s affidavit does not depose to the circumstances from which the trust relationship is said to arise. However, there are difficulties in accepting that the state of affairs is as described above. First, the historical company extract attributes the record of the holding of the one share by Mr Ible to the 1998 annual return of Natcomp – a time much later than 1989. However, this date still precedes the conduct of Natcomp and Grassia, described later, on which the applicants rely, and so no difficulty appears to arise from this discrepancy between Mr Ible’s affidavit testimony and the official record. More importantly, however, the historical company extract is inconsistent with Mr Polczynski’s affidavit testimony that Grassia is the legal and beneficial owner of the other 9,999 shares. It shows that Natcomp’s capital comprises 10,000 fully paid shares of $1.00 each, as Mr Polczynski deposes, but that Gaetano Grassia holds 9,900 of those shares, that Grassia himself holds only 99 of them and that Mr Ible holds the remaining share. It also shows that both Gaetano Grassia and Grassia reside at 12 Bay Road, Russell Lea. Yet Mr Polczynski deposes that Gaetano Grassia is Grassia’s father and lives next door at 14 Bay Road, Russell Lea (Mr Polczynski’s affidavit states, as noted below, that the AFP executed search warrants at both addresses). There is no affidavit by Grassia’s father, Gaetano Grassia. I proceed on the footing that at all material times Grassia was the sole director and secretary of Natcomp, and that of Natcomp’s total capital of 10,000 fully paid shares of $1.00 each, Gaetano Grassia was the legal and beneficial owner of 9,900 shares, Grassia was the legal owner of 99 shares and beneficial owner of 100 shares, and Mr Ible was the legal owner of one share which he held on trust for Grassia.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
LINDGREN J
It should not be thought that the rare exception referred to by Deane J in Refrigerated Express could never have work to do. It would be applicable, for example:·where an otherwise discoverable document had been stolen and disclosure of the fact that it was in the possession, custody or power of the discovering party might tend to incriminate that party;·where statute made disclosure of the existence of an otherwise discoverable document an offence or the subject of the imposition of a civil penalty;·where statute made disclosure of a certain fact an offence or the subject of the imposition of a civil penalty, and any description of an otherwise discoverable document would necessarily amount to disclosure of that fact; or·where any description of an otherwise discoverable document might tend to incriminate the discovering party or render that party liable to imposition of a civil penalty in respect of other conduct or circumstances.CONCLUSION For the above reasons the applicants’ motion succeeds and the motion by Natcomp and Grassia to set aside the applicants’ notice to produce fails. Natcomp and Grassia will be ordered to pay the applicants’ costs on each motion.