NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd

[1992] FCA 260

JUDGMENT No. Zk.0.. ./ 92,

IN THE FEDERAL COURT OF AUSTRALIA )

) No. NG 351 of 1991

NEW SOUTH WAtES DISTRICT REGISTRY )	1
GENERAL DIVISION	i

BETWEEN :	N.V. PHILIPS GLoEILnnPENFABRIEKEN
First Applicant
PHILIPS LIGHTING PTY LIMITED
Second Applicant
AND :	MIRABELIA INTERNATIONAL PTY LIMITED

CORAM:	W1
PLACE :	S ~ Y R ~ I
DATE :	31 MARCH 1992

EXTEMPORE IE?SONS FOR JUlXMBNT

WILCOX J:  Mr Ellicott has sought to file in court an

affidavit of Franciscus Anthonius Stephanus Ligthart. Dr Eindhoven in the Netherlands and, according to his affidavit, he was one of the inventors of the lamp the subject of the patent in issue in this proceeding. Mrs Bennett, on behalf of the respondent, has objected to the filing of the affidavit, contending that it comes much too late and that its use at this stage would prejudice her client's case and force her

into seeking an adjournment.

To put that last matter in its context, I should

refer briefly to the history of this case. The Application
was filed on 5 July 1991 pursuant to leave given to the
applicant to effect short service. The matter came before the
court on 10 July when both parties were represented. The
applicants gave the usual undertaking as to damages and the
respondent gave an undertaking to the Court that, until 5 pm
on Thursday, 1 August or further order, it would refrain from
making, causing to be made, importing, selling, offering for
sale or by way of trade distributing Mirabella PLC-E type
lamps in Australia. Mirabella PLC-E type lamps are the lamps
which the applicants claim infringe its patent.

After these undertakings were given, the further

hearing of the matter, including the claim for interlocutory
relief, was adjourned until 1 August 1991. On that day the
matter was adjourned to the following day, I think in order to
allow discussions to occur, the existing undertaking being
extended until 5 pm on 2 August. On 2 August the matter came

before the Court at 12 noon. By consent, I noted that the

applicants continued their undertaking as to damages and that in accordance with short minutes prepared by the representatives of the parties. They included a direction that the applicants file and serve any additional affidavits on which they relied on or before 1 November 1991. The short minutes required the respondent to file and serve those
the respondent continued its existing undertaking until 31
affidavits on which it relied in relation to its defence or
cross-claim by 6 December 1991; and that the applicants file
and serve any affidavits on which they relied in reply to

those affidavits by 3 January. Any further affidavits on

behalf of the respondent were to be filed and served by 31 -

January. The matter was then stood over for further directions until 13 December. I recall that, at that time, the parties' contemplation was that the matter could be heard, if not by the end of 1991, at least shortly thereafter.

On 6 August the matter was listed before Gummow 3. His Honour noted that the matter should receive a hearing in March 1992 and he stood it over for directions before Sheppard

J on 5 November. It will be recalled that, according to the

timetable which was then in place, the applicants' affidavits

would have been filed before that date, namely, by 1 November.

When the matter came before Sheppard J on 5 November the Court was asked to vary the existing directions. The time	for filing and serving the applicants' affidavits was extended
until 22 November, with consequential amendments to the dates for other affidavits, but nonetheless the affidavits being complete by 31 January. Apparently, it was still contemplated that the matter could be heard in March.

On 19 December the matter was listed before me. I

was informed that the applicants' affidavits had been filed the preceding day, on 18 December. It is worth noting that those affidavits came some five and a half months-after the commencement of the proceeding and nearly two months after the

date appointed by the first directions.	I extended time for
the respondent's affidavits to Friday, 21 February and	-

directed that any affidavits in reply be filed and served by 6

March. Leave was given to any party to apply on 24 hours

notice. I think that it was at about that time that the case was set down for a hearing to commence on 23 March.

The matter did not come back before me for further

directions prior to the commencement of the hearing on 23 associate to make inquiries of the parties to ascertain that the matter was definitely ready for hearing and that it was

intended to proceed. I did this because I was anxious to use

the time which had been set aside for the case, three weeks,
for other cases if it would not in fact be required. On at

least one occasion when a related matter involving the same

applicants and a different respondent was in a directions

list, I inquired of counsel for the applicants whether the
"Mirabella matter" was definitely going ahead and ready for
hearing and I was assured that this was so. Accordingly, it
was a surprise to me to discover, when the hearing commenced
on 23 March, that there was a problem about some of the
evidence.

It appears that the major affidavits filed on behalf of the respondent, which &ould have been filed and served not later than 21 February, were not filed and served until 25

February. Another affidavit, that of Dr J.G. Thompson, was sworn on 9 hrch and served on 10 arch. his lateness was

not called to my attention, either formally or informally. NO

-

information was given to me that there was a likely problem. matter was definitely proceeding.

On the wsekend before the hearing was to commence,

a.Cfidavits was transmitted by facsimile transmission to the
chambers of the respondent's counsel, Mrs Bennett. She
happened to go into her chambers on the Sunday, and then
discovered the affidavits. They were applicants' affidavits
in answer to her client's Cross-claim. When the matter
commenced on the Monday, there was an opening address by Mr

apparently late on the Saturday evening, a bundle of and the issues discussed. Mts Bennett then sought an adjournment to allow her to digest and obtain instructions

upon the affidavits which she had received the previous day.

I granted this application, with the result that the matter

was adjourned from a time shortly after lunch on Monday until
10.15 am on Wednesday.

Prior to the adjournment Mrs Bennett informed me

that she desired to amend her Cross claim. Leave was granted, the Amended Cross-claim being immediately filed in Court. The

applicants did not oppose that course. I was info'	that a
copy of the amended Cross claim had been Served-ofi.ta applicants1 solicitors with the affidavits served on 25 February.

The amended Cross claim raised two issues which had

not been raised by the original Cross claim filed back in the complete specification is not a "manner of manufacture" within the meaning of the patents Act 1990; and secondly, that the invention is not useful.

When the hearing was resumed on Wednesday 25 March,

Mrs Bennett sought to file a further amended Cross-claim. The amendment involved in that later document eliminated certain particulars in respect of the claim that the invention was not novel and inserted two new particulars of the claim of lack of novelty, being new particulars b(iii) and (iv). These particulars referred to two published articles. The articles

had both been annexed to an affidavit of one of the

respondent's witnesses, Dr J.J. Lowke, served on 25 February.
So the articles were known to the applicants, if not before
that date, at least when they read the affidavit served on 25
February. However, until 25 March, the applicants had not
bean told that these articles would be relied upon in relation

to the issue of novelty.

I granted the further amendment. Mr Ellicott then

sought an adjournment of the hearing. There was extensive
discussion, including references to the contents of-the
articles and other material in evidence. I took the view that

the amendment did not cause such a problem as to warrant an

m e d i a t e adjournment. I indicated that, if there was a -

problem arising out of the respondent's late reliance upon
these articles on the issue of novelty, that is a matter about
which evidence could be addressed and that, if it was
impossible to deal with the articles in the normal course of
the trial, I would not now shut the door against the
possibility of an adjournment; but I did not think that it was

necessary to adjourn the matter at that stage.

During the course of reading the affidavits Mrs

Bennett objected to a considerable portion of an affidavit sworn in reply by Dr H.C.G. Verhaar. Without disrespect to anybody else Dr Verhaar might be described as the applicants' major witness in the case. He is a scientist working for the first applicant in Eindhoven and he has come to Australia for

the hearing. However, Dr Verhaar only commenced working for

the first applicant in 1986 and Mrs Bennett took objection to
paragraphs of his affidavit which purported to state
particular action taken by people employed by the first
applicant in relation to the development of their product. No
objection was taken to Dr Verhaar giving evidence of the state
of relevant scientific knowledge, in a general sense, at any
time. The objection was that, insofar as the applicants
sought to show the particular work that had been done to

effect the invention, this was not a matter of general
scientific expertise but particular knowledge; it should come
if at all, from a person who was personally familiar with t*

matters deposed to. I upheld this objection and rejected

those portions of Dr Verhaar's affidavit. -

After the hearing resumed on Wednesday evidence was

by Mrs Bennett. This was followed by the cross-examination of the other major witness of the applicant, Mr Harry Nienhuis.	taken from Dr Verhaar, being almost entirely cross-examination cross-examined. After Dr Thompson's evidence was completed, Dr Lowke was called for cross-examination. That cross- examination proceeded for some time yesterday afternoon. It is not yet complete.
i - L	When the matter was called this morning M r Ellicott

sought to file Dr Ligthart's affidavit in Court. The

objection having been taken, at Mr Ellicott's request, I read

the affidavit. It is not necessary to refer to its detail. It

is sufficient to say that the first two paragraphs refer to Dr

Ligthart's experience and qualifications, paras. 3 to 18 set out steps which Dr Ligthart says were taken in regard to the development of the Philips product, para. 19 refers to two articles annexed to the affidavit of Dr Lowke of 25 February, one of which is the article referred to in the further amended Cross-claim of 25 March, being the document referred to in para 3(b)(iv). Paragraphs 20 and 21 are evidence in reply to

the respondent's affidavits.

In relation to para 19 it seems to me reasonable

that the applicant be able to rely on Dr Ligthart. This

paragraph goes to the relevance of the article qua novelty, an -

issue which has only been raised by the amendment last week.

Consequently the fact that the affidavit comes so late should not be regarded as a reason for rejecting that paragraph.

The matters set out in paras. 3 to 18 raise

different considerations. This material is relevant to two

issues in the case, namely whether the item described in the

patent is an invention and whether the patent discloses a

method of manufacture. Had the affidavit been filed in due

time, there could have been no proper objection to its being

read and used. The problem is that it was not filed in due

time. Mrs Bennett has said to me that she would need to get

instructions on the matters that are set out in these

paragraphs and to discuss them with her expert witnesses.	I
can well understand that this would be so. Moreover, she says	that inquiries would have to be made, with the result that she
would be unable to deal with this material in the time allocated for the hearing of the case. Mr Ellicott says that
I should not act on a statement such as that from the bar
table but require affidavit evidence on the problem. should be required. But I think that, when counsel conducting a case informs the Court that time would be required to obtain

instructions upon a particular matter, unless what is said is
obviously incorrect or exaggerated the Court should-be
prepared to have regard to the statement. It seems to me that

what Mrs Bennett says is obviously correct. The matters that

are set out in paras. 3 to 18 go far beyond anything which she -

might reasonably have anticipated, even from the rejected
parts of Dr Verhaar's affidavit. This material is more
specific. It is material which may well be the subject of
documents which, in the normal course, should be discovered
and which may be of some significance. None of this, of

course, has occurred.

It is most unsatisfactory that an affidavit such as

this should first come to light after the completion of the
cross-examination of the two principal witnesses for the
applicant and the completion of the cross-examination of one
of the major witnesses for the respondent. He has been
excused from further attendance and has returned to Canberra.

Probably he could be brought back, if necessary; but the

situation is, to put it mildly, quite unsatisfactory.

Apparently a copy of this affidavit, or at least a

draft of it, was given to Mrs Bennett - she says literally one

minute - before the hearing commenced yesterday; but she

understandably had no opportunity to consider it during the

course of the day.

Well, then, the question is what course should be

taken. On the one hand, I am extremely reluctant to shut out evidence which is relevant to an issue. On the other hand, I have to consider the consequences of admitting paras 3 to 18. I set out the earlier history of the matter relating to

directions and the undertakings in order to provide some sort
of context to my thinking. I clearly recall that, when the
matter first arose in July and August last year, it was
contemplated that the hearing could take place relatively
quickly and that the issues would be within a fairly narrow

compass. It was in that context that the respondent gave its undertaking to refrain from selling its product.

It is unfortunate that the applicants' affidavits were filed considerably later than had first been intended. This put pressure on the respondent and, perhaps more

significantly, meant that the period which elapsed between the
respondent's affidavits and the commencement of the hearing

was fairly brief.

The critical element in my approach to the matter is

the fact that there is an undertaking by the respondent not to
sell its lamp pending further order.

If the matter has to be adjourned because of the

admission of paras 3 to 18, it would I think be quite
impossible for me to resume the hearing before June; and even
a June hearing presents some problems. That would mean that,
by the time the case is disposed of at first instance, there
would have been a period of some 12 months during which the
respondent's undertaking is operating. It seems to me most
unfortunate, indeed quite unfair, for a respondent to be faced
with a continuation of an undertaking not to compete with the
applicant during the period of an additional three months or
more when that continuation is caused by the late filing of
the applicants' affidavit. With these matters in mind, I
raised with Mr. Ellicott the question whether his client would
be prepared to release the respondent from its undertaking.

He sought the opportunity to take instructions on the matter and I gave him that opportunity. When I returned to Court, he informed me that his client would not be prepared to take that course.

It seems to me, under those circumstances, that I

admitting this material. As I say, I accept its relevance.	have to give very considerable weight to the result of it to be used. But it is now sought to be introduced at a
time which would almost certainly cause an adjournment, and an
adjournment at the expense of the respondent's ability to compete with the applicant. It is true that there is an undertaking as to damages. But the problem of assessing damages in a case like this is quite considerable. No doubt, when it came to an assessment of damages the applicants would say, and reasonably so, that the respondent's sales volume was a matter of some speculation. It would be very difficult to
be confident that the correct amount was assessed. It is true
also that one can impose terms regarding costs; but the problem goes beyond costs. If the undertaking was released and costs were the only matter, then I think that I would take a view different from the view which I have in fact formed.
Under all the circumstances I think that I should refuse leave to the applicant to rely upon paras 3 to 18 of the affidavit. I have already dealt with para 19. Paragraphs
20 and 21 arise out of Dr Lowke's affidavit of 25 February.
Perhaps on a strict view I should reject these paragraphs also, but I think that the matters which are discussed are already squarely in issue. As both Dr Lowke and the deponent have yet to complete their evidence, in the case of the deponent yet to begin his evidence, there would be no practical problem in those matters being dealt with. Accordingly, the ruling that I make is that the affidavit may be filed in Court but I reject as evidence in the case paras 3 to 18 inclusive.
I certify that this and the preceding twelve (12) pages
are a true copy of the Reasons for Judgment of the Honourable Justice Wilcox.
Associate: p &
Dated:  31 ~aich 1992

APPEARANCES

Counsel for the Applicant:	R Ellicott QC and D Ryan
Solicitors for the Applicant:	Sly & Weigall
Counsel for the Respondent:	A Bennett
Solicitors for the Respondent:	Williams Niblett
Date(s) of hearing:	23, 25, 26, 30, 31 March (and continuing)