Pacific Dunlop Ltd v Australian Rubber Gloves Pty Ltd
[1992] FCA 314
•25 MAY 1992
Re: PACIFIC DUNLOP LIMITED
And: AUSTRALIAN RUBBER GLOVES PTY LTD
No. V G133 of 1992
FED No. 314
Practice and Procedure
(1992) 23 IPR 456
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)
CATCHWORDS
Practice and Procedure - preliminary discovery - O.15A r.6 Federal Court Rules - machine for manufacture of rubber gloves - copyright - preconditions for making of order - whether reasonable cause to believe applicant has or may have right to obtain relief - whether all reasonable inquiries made by applicant - whether reasonable cause to believe documents in possession of respondent - discretionary factors.
Practice and Procedure - inspection of property - O.15A r.12 Federal Court Rules - machine for manufacture of rubber gloves - exercise of discretion - whether essential that another order has been made under O.15A
Federal Court Rules: O.15A rr.6 and 12
Copyright Act 1968: Ss.21(3)(a) and 116
Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd (1967) VR 37
CCA Beverages (Adelaide) Limited v Hansford (Federal Court, O'Loughlin J, 15 November 1991, unreported)
W.R. Pateman Pty Limited v Walker Corporation Pty Ltd (1990) ATPR 51, 295
Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 Heerey J.(1)
HEARING
MELBOURNE
#DATE 25:5:1992
Counsel for the applicant: D. Shavin
Solicitors for the applicant: Freehill Hollingdale and Page
Counsel for the respondent: P.A. Liddell QC with R.L. Dean
Solicitors for the respondent: Davies Ryan De Boos
ORDER
The application be dismissed with costs, including reserved costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
The applicant seeks an order for preliminary discovery under O.15A r.6 and also an order under O.15A r.12 for inspection of a machine for the manufacture of rubber gloves which is being presently used by the respondent Australian Rubber Gloves Pty Ltd (ARG) in premises at 37 Industrial Drive, Braeside. I shall refer to it as the Braeside machine.
The applicant has since 1969 carried on the rubber manufacturing business established in 1905 by Eric Ansell. The business is operated as a division of the applicant called Ansell International. For convenience I shall refer to the applicant as Ansell.
Prior to quitting the manufacture in Australia of rubber gloves in 1989 Ansell used a machine which it called the No 5 machine and to which I shall refer as the Ansell machine. Ansell seeks preliminary discovery for the purpose of deciding whether or not it should launch a claim that the Braeside machine infringes the copyright that Ansell has in plans and drawings used for the construction of the Ansell machine.
This case presents two unusual features. First, Ansell has already had two inspections of the Braeside machine. Secondly, in the course of negotiations over a twelve month period Ansell sought further inspection for the purpose of a possible claim for misuse of confidential information. In the application that has now been brought Ansell eschews such a case and raises instead a possible claim for infringement of copyright.
The Ansell MachineThe Ansell machine was commissioned in 1969. It was a larger and modified version of a machine called the No 2 machine which had been operating since 1950. The No 2 machine had been developed by in-house draftsmen and engineers at Ansell.
Up until 1989 the Ansell machine was operated at premises in Palmer Street, Richmond. By then Ansell had decided to cease manufacture of gloves in Australia and become an importer. The Palmer Street factory was decommissioned and the site sold. The Ansell machine was dismantled but it is said that care was taken that any parts of it which might reveal confidential information as to its construction were broken up and destroyed. Ansell's corporate history includes a notable involvement with the law relating to confidential information; see Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd (1967) VR 37. Ansell still retains microfiche copies of some, but not all, of the drawings relating to the Ansell machine and a nearly complete set of the microfiche drawings for a similar machine known as the No 5B.
The Braeside MachineThe Braeside machine was constructed in 1986. A company called Allford Rubber Pty Ltd (Allford) had a plant manufacturing rubber gloves by a hand-dipping process. Allford employed Mr Warren Green, presently the Engineering Manager of ARG, to mechanise the hand-dipping operation and set up a continuous process for the manufacture of rubber gloves. Mr Green designed a machine with the assistance of Mr Barry Cady, a design draftsman, and Mr Peter Norford of Allford. None of those gentlemen has ever worked for Ansell and the evidence is that they at no time have had access to any plans or drawings belonging to Ansell. In an affidavit filed in this application Mr Green describes in detail the literature to which he had access when designing the Braeside machine for Allford.
The Braeside machine proved to be successful and was used to manufacture webbed surf gloves under contract. It was subsequently modified to make light industrial roughened palm rubber gloves.
In 1988 the Allford plant was closed and the Braeside machine was bought by a Mr Hall who onsold it to Rubber Gloves Australia Pty Ltd (RGA). RGA ran into financial trouble. On 20 March 1990 debenture holders took possession of the plant. It was advertised for sale in the Australian Financial Review. A number of potential purchasers viewed the Braeside machine. These included Ansell itself which carried out an inspection in March 1990.
Present at this inspection were the Group Engineering Manager (Mr Robert McPherson), the Commercial Director (Mr Thomas Spall), and two other senior executives of Ansell. The visit took about 75 minutes including 30 to 40 minutes inspecting plant and equipment. Ansell decided not to buy the Braeside machine and it was finally sold to ARG some twelve months later on 4 March 1991.
Although in the present case Ansell stressed that this first inspection was made with a view to possible purchase and not to see if the Braeside machine infringed any of Ansell's rights, Ansell's evidence is that in December 1989 it had received what it regarded as reliable information that information owned by Ansell had been used in design of the Braeside machine. If that is the case I do not think that those from Ansell who made the inspection in March 1990 would have been unmindful of the possibility that the Braeside machine might have infringed some of Ansell's rights - especially as the machine was on the open market and available for purchase by potential competitors of Ansell.
Inspection on 19 March 1991Mr Spall became aware that ARG had purchased the Braeside machine and intended to commence production of gloves after making some modifications to it. Mr Spall told the General Manager of ARG, Mr David Abouav, that Ansell believed that the Braeside machine might contain or embody information confidential to Ansell and asked for permission for some members of Ansell's staff to inspect the machine in more detail than the March 1990 inspection which, he said, had been for a different purpose. Mr Abouav acceded to that request and in a fax to Mr Spall dated 14 March 1991 said:
"We would like to invite you to complete your inspection of the plant at 37 Industrial Drive, Braeside, prior to the installation of our new process. This will offer you the opportunity to establish whether there has been an unauthorised use of Ansell proprietary information. We require your advice in this matter now especially since the existing plant which you and many others visited has been in the public domain for a long period prior to Australian Rubber Gloves becoming involved. You are welcome to send members of your staff or accompany them anytime over the next seven days. Please call me on 018-349-570 at least two hours prior to the proposed inspection so that I may organise access for the visitors. Alternatively you may advise us that you have no claims whatsoever on that machine. The only way you could inspect the machine after that date would be by issuing us with a similar invitation..."
On 19 March Mr McPherson and another officer of Ansell, Mr Brian Foster, who also has a technical background, inspected the Braeside machine. No time constraint was imposed by ARG on the two Ansell men and they were given complete freedom to make such inspection as they wished.
Also on 19 March, and apparently after the inspection, Mr Abouav sent to Mr Spall a fax giving a brief history of the Braeside machine which identified the part played by Messrs Green, Cady and Norford and stating that they had never been in Ansell's employ and had not based their design on any information supplied by Ansell employees.
In an affidavit sworn on 16 April 1992 Mr McPherson deposes:
"64. In the short period I was able to inspect the (Braeside) Machine, it was not possible for me to identify precisely the shape or dimensions of most of the parts incorporated within it. Now produced and shown to me and marked "RWM-5 Confidential" are reproductions of a number of the microfiche drawings by Ansell from which the No. 5A and No. 5B Machines were built. I verily believe that the
(Braeside) Machine incorporated parts which may constitute a three-dimensional reproduction of these two-dimensional works. I was unable to determine whether any of the other drawings have been reproduced because of the short time available for my inspection."
I was informed by counsel for Ansell that the last sentence of the paragraph just quoted was intended to be in the present tense.
Negotiations for Further Inspections
Following the inspection on 19 March Ansell obtained some legal advice and on 5 April sent a letter to ARG requesting a further inspection. In the letter Mr Spall stated that the information provided about the origin of the Braeside machine:
"... (has) not allayed our fears. Indeed, we are most concerned that there would appear to be a significant amount of Ansell's proprietary information used in the construction of the latex dipping line."
It was stated that:
"We wish to make a detailed examination of the line and, with your permission, to take accurate measurements and photographs. For these purposes we will naturally need a reasonable time period and not to be fettered in any way in our inspection."
(It should be noted here that there has not been an allegation that Ansell were in any way "fettered" by ARG in the inspection of 19 March.) An undertaking of confidentiality was proffered.
Mr Abouav replied by telephone on 15 April. He declined to agree to the request for further inspection. He said that he did not want to stop construction for several days while Ansell took measurements. He said that every single thing in the line was about to be changed including the sequence of tanks and width of machine etc; ovens and dip tanks were to be changed and the blower to be modified. (The evidence was that the modifications which were subsequently carried out cost about $500,000 which was more than double the amount ARG had paid for the whole Braeside machine.) According to Mr Spall's note, Mr Abouav:
"... stated specifically that he accepts that much of the line built in Braeside was built using the Ansell process, and this resulted from the former Ansell employees who designed and built parts of the line."
This is disputed by Mr Abouav. According to him he told Mr Spall during the conversation that he had no idea what the Ansell machine looked like and therefore could not tell whether the Braeside machine was a copy. He went on to say that even if he accepted that Ansell's assertion was correct for the purpose of discussion, ARG had not misappropriated any information confidential to Ansell, was not interested in doing so and was changing its process from what it considered to be a primitive one to a sophisticated one. ARG, he said, was prepared to specifically not use any information confidential to Ansell if Ansell could identify it but he did not accept that Ansell could not identify its confidential information from the inspection which had already taken place specifically for the purpose of determining whether or not the Braeside machine embodied any confidential information of Ansell.
I am not prepared to accept that Mr Abouav made the admission imputed to him by Mr Spall. It seems inconsistent with the rest of the evidence. In any event, it was not relied on to any significant extent by counsel for Ansell.
On 18 April (almost a month after the inspection) Ansell sent a fax to ARG enclosing a list of alleged similarities between the Braeside and Ansell machines. The list was stated not to be exhaustive - Ansell said that it had "picked out some of the more obvious matters." Ansell repeated its request for a further inspection requiring "a few days maximum time."
ARG replied by a fax on 19 April refuting in detail Ansell's claims. This document was not included in the material filed by Ansell in support of this application. As far as I can tell, ARG's response seems to be persuasive. (The substance of it was repeated in Mr Green's affidavit in the present application.) For example, Ansell had claimed that the dryer on the Braeside machine "appears to be a direct copy of the Ansell dryer with basically identical configuration of loading doors, hopper, viewing windows etc." ARG's response was:
"This is not a copy of an Ansell Dryer it is an Ansell Dryer sold by Ansell and purchased by the previous owners of the plant (RGA) sold to a finance company then to the mortgagee in possession of RGA and finally to ARG." (Writer's emphasis)
Similarly with the latex tank, which was said to be "precisely as Ansell uses", ARG responded:
"As stated, this is being changed to a technically more advanced method. Once again this information has been in use in Australia since 1986. The information is also published internationally. In addition to the foregoing I was able to purchase today, an identical style tank for my pilot plant, off the shelf in a stainless steel fabricating shop. Nevertheless, as stated earlier, the technology of the tank, including sideflow latex, is being changed." (Writer's emphasis)
Ansell's list also included as part of its claim that the general configuration of the Braeside machine was the same as the Ansell machine an assertion that the former had the "same infra red finger tip heaters." ARG referred to this as "another interesting claim" and queried whether Ansell was "suggesting it (had) a monopoly on the use of infra red bathroom strip heaters in general or merely when they are used for the purpose of drying fingertips on gloves?"
In the hearing before me Ansell did not appear to rely on the matters referred to in its list of 18 April.
ARG sent a fax on 22 April giving further information about the sale by Ansell of its blower fan and heater assembly, extraction fans and fibreglass tank and identifying the Ansell personnel concerned.
Thereafter some inconclusive negotiation took place in which Ansell through its solicitors sought to obtain permission for another inspection. Ansell's solicitors advised ARG's solicitors that Ansell had retained as an expert Mr Edward Kosior, a Director of the Royal Melbourne Institute of Technology Polymer Technology Centre. He is a rubber technology consultant to Technisearch Ltd, the commercial arm of RMIT. Mr Kosior holds degrees of Bachelor of Applied Science in Applied Chemistry from Melbourne University, a Master of Engineering Science in Polymer Engineering from Monash University and is a member of the Royal Australian Chemical Institute and the Plastics and Rubber Institute. He was head of the Plastics Department at RMIT from 1981 to 1991.
Ansell's proposal was that the Braeside machine should be inspected by Mr Kosior and their solicitor who would both give undertakings not to reveal confidential information to Ansell. At the same time ARG was requested to give a like undertaking in respect of any information received from Mr Kosior or the solicitor. ARG declined to give such an undertaking, presumably taking the view that they might commit themselves to barring themselves from using information which was not in truth confidential.
In any event negotiations broke down and the present application was issued on 16 April 1992. Prior to this date there had been no mention by Ansell of any possible claim for infringement of copyright; all the correspondence proceeded on the basis that Ansell's apprehension was of possible misuse of its confidential information by ARG. The material filed on behalf of Ansell, although it includes an affidavit from Ansell's solicitor Mr Stern, does not contain any explanation for this change of course.
Order 15AOrder 15A relevantly provides:
"6. Where:
(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;
(b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and
(c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision;
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c). ........
12. On an application under this Order the Court may also make an order providing for any one or more of the following matters:
(a) the inspection, measurement, photocopying, preservation, custody and detention of property:
(i) which relates to the subject matter of the proceedings; or
(ii) as to which any question arises in the proceedings;
(b) (i) taking of samples;
(ii) observation;
(iii) carrying out of any experiment;
(iv) making, playing or screening of tape recordings and films and other means of recording sight or sound;
(v) making and reproducing or displaying other instrumental recordings and tracings; with respect to any such property mentioned in paragraph (a)."
Order 15A was introduced into the Federal Court Rules in 1988. As Wilcox J. observed in W.R. Pateman Pty Limited v Walker Corporation Pty Ltd (1990) ATPR 51,295 at 51,299:
"... it is not necessary for the Court to come to an affirmative conclusion that an applicant is likely to succeed in order that the Court may make an order under the rule. It is sufficient to say that there is reasonable cause for the belief that the applicant may have a right to obtain relief."
Because O.15A r.6 clearly defines the preconditions for the making of an order, the Court can discard the lawyer's hallowed analogy of fishing expeditions. I would respectfully adopt the comments of Burchett J. in Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733:
"It is no answer to the applicant's application under r 6 to say that the proceeding is in the nature of a fishing expedition: cf Meth v Norbert Steinhardt and Son Ltd (1959) 33 ALJR 78 at 81. Rule 6 is designed to enable an applicant, in a situation where his proof can rise no higher than the level the rule describes, to ascertain whether he has a case against the prospective respondent - that is, to "fish" in the old sense: see Caltex Refining Co Pty Ltd v Amalgamated Metal Workers Union (Federal Court (Full Court), 6 December 1990, unreported); Williams, Civil Procedure Victoria
(1987) vol 1, 3,928-9; cf Richardson Pacific Ltd v Fielding (Federal Court (Burchett J.), 22 August 1990, unreported) which was concerned with another rule in O 15A.
It would be unfortunate if a rule designed to amplify the court's power to penetrate obscurities and uncertainties in the interests of justice were to be weakened by restrictive and unnecessary glosses. I think the rule is of a beneficial kind within the meaning of the well known principle of interpretation, and should be given the fullest scope its language will reasonably allow. The proper brake on any excesses in its use if the discretion of the court, which is required to be exercised in the particular circumstances of each case. One guide for that discretion is provided by the reference in r 6(b) to "all reasonable inquiries", as to which see W.R. Pateman Pty Ltd v Walker Corp Pty Ltd (1990) ATPR 41-016 at 51,299."
Reasonable cause to believe; 0.15A r.6(a)
It was accepted by Ansell that rule 6(a) prescribes an objective test and that it is the Court which has to be satisfied that there is reasonable cause to believe that Ansell has or may have a right to obtain relief against ARG.
A critical step in Ansell's case on this issue was Mr McPherson's evidence in par 64 of his affidavit (supra). The drawings produced in exhibit RWM 5 were dealt with in confidential submissions. I can however without revealing any confidential information record that it was ARG's submission that the drawings refer to almost every major section of the Ansell machine, except the final dryer. It was said to be a "scatter gun approach which Ansell hopes will allow it to measure the Braeside machine from top to bottom."
I do not think this criticism was effectively answered by Ansell. There has been no attempt to select particular parts of the Braeside machine which might give rise to a reasonable belief that some aspect of the Braeside machine might infringe Ansell's copyright and to explain why. In the light of Ansell's unconvincing attempt in April last year to identify particular aspects of the Braeside machine which copy the Ansell machine, the present generalised assertions carry little weight.
Moreover there is significant evidence adduced by ARG that points the other way. In particular there is evidence as to the provenance of the Braeside machine and its design by three gentlemen who had had no connection with Ansell at the time.
Ansell did raise the issue of former Ansell employees who might have had some connection with the Braeside machine. The first is Mr Ron Cook who had been the Production Manager at Ansell between 1972 and 1985. While the machine was in the ownership of RGA it was upgraded by Mr Green with the assistance of Mr Cook. Mr Green deposes:
"25. At the commencement of his work with RGA Ron Cook made it quite clear to me that he was not prepared to divulge any information regarding the Ansell process because Ansell, with which company he had ceased employment some four years earlier, regarded some aspects of the technology used by it as being confidential. Whilst we were working together at RGA he did not tell me anything of a technical nature which I did not already know. In any event, my recollection of Ron Cook is that he had little mechanical knowledge and that his expertise lay in the supervision of production. Ron Cook has never at any time supplied me with any drawings of any description whatsoever. On 24 April, 1992 I specifically asked Ron Cook if he had provided me with any Ansell drawings and he told me and I believe that he had not. Earlier I had rung Ron Cook on 21 April, 1992 for the purposes of this Affidavit, which was the first time I had spoken to him since 1990."
It was not suggested that this evidence was unworthy of belief.
The second is a mysterious figure called Herbert Agius. He was a former employee of Ansell and subsequently of RGA (or two of that company's directors). Mr Agius told Mr Abouav that he had been "spying" for Ansell during the time he was associated with RGA. Mr Abouav put that allegation to Mr Spall who at first denied it, but subsequently found that Mr Agius had approached other executives at Ansell in late 1988 or early 1989 claiming to have information that a particular business was using Ansell equipment. This was pursued by Ansell but they found no basis on which to take any action. Ansell apparently came to the conclusion that Mr Agius was an unreliable source of information.
The third former Ansell employee was Mr Theo Evgenidis who went to work for RGA and met the Ansell team which inspected the Braeside machine in March 1990. There is no evidence that Mr Evgenidis had any relevant technical expertise.
Finally there is a generalised assertion that in about 1989 Ansell was aware former employees had been approached by RGA and that some had accepted positions in that business. But Mr McPherson says that it was not until December 1989 when Ansell learned that Mr Cook had a senior position at RGA that Ansell received information about the Braeside machine "which suggested the use by others of information owned by Ansell and which Ansell considered reliable."
Such evidence as there is which alleges contribution by former Ansell employees to the design and construction of the Braeside machine could not in my opinion found any reasonable belief that such contribution may have taken place. In any case the evidence is confined to the RGA period and does not extend to the time the machine was owned by ARG or the earlier period when it was constructed by Allford. In the event, little or no reliance was placed on this evidence by counsel for Ansell. The failure to establish any Ansell-originated contribution to the Braeside machine is the other side of the coin to the positive evidence as to the design and construction of the machine by persons who had no connection with Ansell.
The evidence of Mr Kosior in my opinion takes the matter no further. The fundamental problem for Ansell is that Mr Kosior was retained at a time when all attention was focussed on a possible claim for misuse of confidential information rather than infringement of copyright. He is a chemist, not a mechanical engineer. He prepared a confidential report which reviewed the evidence of ARG as to the design and construction of the Braeside machine but he does not seem to have been provided with any plans of the Ansell machine or the preliminary comparison of the two machines prepared by Mr McPherson and referred to in par 6 of Mr Stern's affidavit.
The essence of Mr Kosior's evidence is that the technical information about the Braeside machine disclosed in the affidavits of Messrs Abouav, Green and Seng is within the public domain - or at any rate already known to him (Kosior) and disclosed in literature which he searched last year on the instructions of Ansell. He says in his affidavit sworn 6 May 1992:
"4. Subject to my comments in the confidential exhibit hereto, in my opinion, it is possible for persons of the technical background and experience of Mr Green, Mr Cady and Mr Norford (as referred to in Mr Green's affidavit) to construct a latex dipping production line such as ... the Braeside Machine. In my opinion, however, it would be necessary to undertake substantial tests and experiments before a latex dipping production line constructed from that literature could successfully be put into operation. Thus, while the literature available would be essential for a group of persons, such as those described in Mr Green's affidavit as being responsible for the design of the Braeside Machine, it would not of itself be sufficient. The construction of such a line would require expertise in various areas, including in particular mechanical engineering and chemical engineering."
He then exhibits as a confidential exhibit a short statement "which assesses the information contained in the affidavits referred to above".
Without disclosing the contents of Mr Kosior's confidential statement I think I can make the observation that it is in substance concerned with some of the processes of the Braeside machine (as disclosed in the ARG affidavits) and their alleged similarity to processes which the Ansell machine used when it was in existence. The thrust is that the similarity between the two is unlikely to be coincidental.
But Mr Kosior has never seen the Braeside machine or the Ansell machine or (as far as the evidence discloses) any plans of either machine. His evidence might be of use were a claim for misuse of confidential information in contemplation, but is of no assistance in ascertaining whether a claim for breach of copyright might exist.
By contrast, Mr McPherson who is a mechanical engineer, who was familiar with the Ansell machine and its plans and who has inspected the Braeside machine, produced a list of alleged copying features - all of which seem to have been abandoned.
On the evidence I am not satisfied that there is reasonable cause to believe that Ansell has or may have a right to obtain relief against ARG for infringement of copyright in the plans for the Ansell machine.
At this stage I should mention that at a late stage of the argument counsel for Ansell put it that "the right to claim relief" in r.6(a) might encompass a remedy under s.116 of the Copyright Act 1968 (the Act). This contention was put by way of rebuttal to ARG's argument that Ansell had to show reasonable cause to believe it had a claim against ARG, as distinct from its predecessors in title to the Braeside machine, and that there was no case that any alleged copying took place after ARG acquired the machine. Section 166 provides:
"116.(1) Subject to this Act, the owner of the copyright in a work or other subject-matter is entitled in respect of any infringing copy, or of any plate used or intended to be used for making infringing copies, to the rights and remedies, by way of an action for conversion or detention, to which he would be entitled if he were the owner of the copy or plate and had been the owner of the copy or plate since the time when it was made.
(2) A plaintiff is not entitled by virtue of this section to any damages or to any other pecuniary remedy, other than costs, if it is established that, at the time of the conversion or detention -
(a) the defendant was not aware, and had no reasonable grounds for suspecting, that copyright subsisted in the work or other subject-matter to which the action relates;
(b) where the articles converted or detained were infringing copies - the defendant believed, and had reasonable grounds for believing, that they were not infringing copies; or
(c) where an article converted or detained was a plate used or intended to be used for making articles - the defendant believed, and had reasonable grounds for believing, that the articles so made or intended to be made were not or would not be, as the case may be, infringing copies."
Even if I were satisfied that the evidence was sufficient to establish reasonable cause to believe that there may have been an infringement of Ansell's copyright by Allford and/or RGA, which I am not, I think that on the evidence disclosed in this case the defences in s.116(2) would be available to ARG, thus excluding any pecuniary remedy.
As to any other remedy, there has been no demand by Ansell for delivery up of the Braeside machine so as to found a claim in detinue. Any claim hereafter for injunctive or other discretionary relief would face formidable obstacles. On Mr McPherson's evidence Ansell had in December 1989 what it considered reliable information as to the use of information owned by Ansell in connection with the Braeside machine. Ansell inspected the machine in March 1990 and March 1991, on the second occasion with the sole and specific purpose of ascertaining whether there had been any misuse of Ansell information and with the knowledge that ARG were about to embark on major alterations, as in fact occurred.
Also, as a discretionary ground for refusing relief in the present application, I think that if Ansell's real complaint is against wrongful infringement by others then it should seek preliminary discovery against those others in an application when they will have an opportunity to be heard.
Reasonable Inquiries; O.15A r.6(b)I do not think Ansell has satisfied this requirement. It had ample opportunity to inspect the Braeside machine but did not fully avail itself of it. For the reasons already mentioned, I do not think the inspection of March 1990 can be treated as not forming part of that opportunity. As to the inspection on 19 March 1991, if it was "brief" that was entirely a matter of choice by Messrs McPherson and Foster. Mr McPherson accepts that no time limit was imposed by ARG on the inspection.
I am not impressed by the excuse that this inspection "was undertaken before Ansell had received detailed legal advice as to the evidence it would need before a decision could be made as to whether it had a good cause of action" (McPherson affidavit sworn 7 May 1992, par 13). The carefully phrased language leaves open the possibility that there may have been some legal advice before the inspection, albeit not "detailed", and Mr Stern's affidavit is silent on the point.
In any event, Mr McPherson is a man of substantial qualifications and experience in mechanical engineering. He has also held senior administrative positions. He graduated from Swinburne Institute of Technology in 1976 with a Diploma in Mechanical Engineering and is a member of the Institute of Engineers of Australia. He was the Engineering Director of Ansell in Malaysia in 1981-1982 and later became Group Engineering Manager for Ansell in Australia, "primarily responsible ... for the new design of machines and the factories as a whole." He has spent the last fifteen years in work involving rubber latex dipping machines and has visited over a dozen plants around the world. His responsibilities involve him in all aspects of Ansell's business activities and require him to be familiar with the technology used by Ansell in its various plants.
Although Mr McPherson is not a lawyer and may not be familiar with the precise terms of s.21(3)(a) of the Act, he can, I think, be credited with an understanding that engineering plans may be the subject of copyright and that it is an infringement of copyright to use plans to construct a machine without the consent of the owner of the copyright. Certainly such basic legal concepts would be part of the stock of knowledge of Ansell, given its long history of in-house mechanical engineering.
Objectively speaking, when there was apprehension that the Braeside machine (which Mr McPherson had inspected a year earlier) might have involved some misuse of proprietary information in the Ansell machine, infringement of copyright in Ansell's plans is one obvious possibility. The Braeside machine is large and complex (about 17 metres long). Ansell had kept plans for its machine. If someone had copied the Ansell machine, the most likely way to do it (if not the only way) was by using the Ansell plans. At some stage prior to the launching of the present application someone in the Ansell camp must have thought of the possibility of infringement of copyright. There is no logical reason, and no explanation proffered, why the same thought should not have been occurred in March 1991.
Possession of Documents; O.15A r.6(c)Mr Abouav deposes that:
"ARG is not in possession of any drawings originating with Ansell or specifically concerning Ansell machines. The modifications made by ARG to the (Braeside) machine were not made with reference to any information originated from Ansell or on the basis of any drawings originating from Ansell."
This evidence is not challenged and is consistent with the history of the Braeside machine.
Mr Green's evidence is that there were drawings done by Mr Cady at the time the Braeside machine was built for Allford. When Mr Green carried out modifications to the machine for RGA there were sketches made but no formal drawings. These were retained by sub-contractors of RGA. All drawings which came into existence at the time of the construction by Allford or modification by RGA would not then have been in the possession of ARG and there is no ground for believing they ever came into that company's possession. I conclude therefore that the requirement of r.6(c) is not made out.
Inspection of Machine; O.15A r.12I would with respect not agree with the view of O'Loughlin J. in CCA Beverages (Adelaide) Limited v Hansford (unreported 15 November 1991 at 7) that the word "also" in the introductory words in r.12 mean that "an order under this rule can only be made if, first, an order has been made for 'pre-action' discovery." The ordinary meaning of these words is that they convey powers on the Court to make an order for inspection whenever any application is made under O.15A, irrespective of whether any other order is made.
Nevertheless, when inspection is sought against a prospective respondent the discretion under r.12 should doubtless be exercised keeping very much in mind the criteria of r.6(a) and (b). It would for example be contrary to the policy lying behind O.15A to order inspection where it had not been shown there was reasonable cause to believe that the applicant might have a right to obtain relief, the achieving of which might be assisted by the inspection sought.
For this reason, and also for the reason that Ansell already has had inspections, I decline to make an order under r.12.
DiscretionAs I have found that none of the jurisdictional facts under r.6 are established, the discretion conferred by the rule is not enlivened.
But in any case there would in my reasoning be strong factors weighing against the exercise of the discretion in favour of Ansell.
ARG gave Ansell, a commercial rival, an adequate opportunity to inspect without being under any legal or moral obligation to do so. ARG gave fair warning that Ansell should make the most of this opportunity because extensive modifications were about to be carried out. Apart from anything else, this to my mind answers the argument that ARG must have something to hide when it opposes the orders presently sought. In the circumstances it would be unfair to make orders against ARG and require it to open its doors to technical and legal advisers of Ansell.
OrdersThe application will be dismissed with costs, including reserved costs.
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