Polyaire Pty Ltd v K-Aire Pty Ltd (No 4) - [2007] SASC 36

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
POLYAIRE P/L v K-AIRE P/L & ORS (NO 4)
[2007] SASC 36
Judgment of The Honourable Justice Besanko
7 February 2007
PROCEDURE - JUDGMENTS AND ORDERS
Application by plaintiff for declarations or orders amending previous orders of the Court - Plaintiff alleges defendants not complying with previous orders - Trial as to liability before question of account of profits or damages determined - Defendants found liable and required to make disclosure of information before plaintiff required to elect between an account of profits and damages - Whether orders final orders - Construction of orders - Consideration of circumstances in which extrinsic material may be considered in construing orders - Question as to whether previous orders are ambiguous - Application allowed - Previous orders final in nature or based on orders which are final in nature - Some ambiguity in previous orders - Court may have regard to such extrinsic material as is relevant in resolving ambiguity - Plaintiff to draft detailed minutes of order
Corporations Act 2001 (Cth), s 440D; Designs Act 1906 (Cth); Supreme Court Rules 1987, r 53.10; Supreme Court Rules 2006, r 8; Supreme Court Rules 1947, O 28, r 10, referred to.
Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (2003) 226 LSJS 109; K-Aire Pty Ltd v Polyaire Pty Ltd (2003) 60 IPR 512; Polyaire Pty Ltd v K-Aire Pty Ltd (2005) 221 CLR 287; Polyaire Pty Ltd v K-Aire Pty Ltd (No 2) (2005) 218 ALR 761; Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (No 2) (2006) 242 LSJS 90; Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (No 3) [2006] SASC 147; The Commissioner of Taxes v British Australian Wool Realisation Association Ltd [1932] VLR 109; D'Angola v Rio Pioneer Gravel Co Pty Ltd [1977] 2 NSWLR 227, discussed.
Licul v Corney (1976) 180 CLR 213; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246; HEST Australia Ltd v McInerney (1998) 71 SASR 526; TAG Pacific Ltd v McSweeney (1992) 34 FCR 438; Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 93 FLR 263; Australian Energy Limited v Lennard Oil NL (No 2) [1988] 2 Qd R 230; Athens v Randwick City Council (2005) 64 NSWLR 58; Lawrie v Lees (1881) 7 App Cas 19; Gikas v Papanayiotou [1977] 2 NSWLR 944; Owston Nominees No 2 Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558; Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653, considered.

POLYAIRE P/L v K-AIRE P/L & ORS (NO 4)
[2007] SASC 36

BESANKO J: This is an application by a plaintiff in an action in this Court for certain declarations or orders. The defendants in the action oppose the making of the declarations or orders sought by the plaintiff. The application raises issues as to the proper construction of orders made in the action on 5 March 2003, 25 August 2005 and 30 September 2005 respectively.
The action
The plaintiff brought the action against nine defendants, and sought various forms of relief. It alleged a number of causes of action but only one is relevant for present purposes. It alleged that, in one form or another, each of the defendants was involved in the infringement of a registered design that the plaintiff owned. The registered design relates to an article called an airconditioning air outlet director part (“outlet director part”). The article was commonly referred to in the evidence at the trial as a “blade pack”. The registered design is No 110628 and it was registered under the Designs Act 1906 (Cth) in the name of the plaintiff for a period of one year commencing on 21 March 1991. The period of the registration of the design was extended for 11 years from 30 July 1990. I have previously referred to this registered design as “RD2” and will continue to do so.
As I have said, the plaintiff alleged that in one form or another each of the defendants was involved in the infringement of RD2. For present purposes, it is not necessary for me to set out the allegations of the involvement of each defendant in the infringement. The general allegation of infringement in the plaintiff’s statement of claim (Fourth Further Amended Statement of Claim) was in the following terms:
“K-Aire and Kemalex have, since the date of the registration of the design, and before the issue of the summons in this action, and Kemalex Plastics K-Aire Sales, and K-Aire Wholesale have, since the date of registration of the design, and after the issue of the summons in this action, infringed the Plaintiff’s monopoly in the design by reason that each of them has, in Australia, without the authority or licence of the Plaintiff, applied the design or an obvious or fraudulent imitation of it to airconditioning air outlet director parts and/or sold and/or offered, or kept for sale, such airconditioning air outlet director parts to which the design or an obvious or fraudulent imitation of it has been applied.
Particulars of infringement
(a)K-Aire is selling and/or offering for sale or has sold or offered for sale two airconditioning outlet director parts (hereinafter referred to as the first K-Aire outlet and the second K-Aire outlet respectively).
(b)K-Aire Sales and K-Aire Wholesale are selling and/or offering for sale or have sold or offered for sale the second K-Aire outlet.
(c)An example of the first K-Aire outlet is in the possession of the Plaintiff’s solicitor, marked with the numeral 1 and can be inspected by arrangement with the Plaintiff’s solicitor.
(d)An example of the first [sic] K-Aire outlet is in the possession of the Plaintiff’s solicitor, marked with the numeral 2 and can be inspected by arrangement with the Plaintiff’s solicitors.
(e)Kemalex has manufactured the first K-Aire outlet and the second K-Aire outlet.
(f)Kemalex Plastics has and continues to manufacture the second K-Aire outlet.”
As can be seen, the accused articles are referred to in the plaintiff’s statement of claim as the first K-Aire outlet and the second K-Aire outlet respectively. I have previously referred to these articles as “KA1” and “KA2” respectively, and will continue to do so. The plaintiff alleged in the above paragraph in its statement of claim that an example of KA1 was in the possession of its solicitor, that it was marked with the numeral 1 and could be inspected by arrangement (paragraph (c) above). It alleged that an example of KA2 was in the possession of its solicitor, that it was marked with the numeral 2 and could be inspected by arrangement (paragraph (d) above).
During the trial before me, the example of KA1 referred to in the statement of claim was tendered and became exhibit P3 and the example of KA2 was tendered and became exhibit P4. KA1 and KA2 are airconditioning outlet director parts or blade packs.
On 10 May 1999 a Judge of this Court decided that questions of liability in the action should be decided before questions of relief including an account of profits and damages. He made the following order:
“That this matter proceed on a determination of all issues arising as to the liability (if any) of the defendants including the issues of breach of the Deed and infringement of registered designs numbered 84267 and 110628 (including the validity thereof) separately from and before all issues in the proceedings as to the liability (if any) of the defendants for damages and/or an account of profits and the quantum thereof.”
During the trial I heard evidence, including expert evidence, as to whether RD2 had been applied, or an obvious or fraudulent imitation of it had been applied, to KA1 and KA2. It seems that KA1 was manufactured and sold for a short period of time in 1996. It was then modified and the modified article is KA2.
Quite clearly, the plaintiff’s case at trial concerning infringement was not limited to the two articles, P3 and P4. They were examples of airconditioning outlet director parts or blade packs being manufactured and sold by the defendants which the plaintiff alleged infringed RD2. On this application the defendants do not dispute that, nor, I might add, could they sensibly do so. It was also clear during the trial that KA1 and KA2 were each manufactured and sold in different sizes and there were references in the evidence to 300, 350, 400 and 450 as indicating differing sizes of KA1 and KA2.
I delivered reasons for judgment on 20 February 2003: Polyaire Pty Ltd v K-Aire Pty Ltd and Ors (2003) 226 LSJS 109. I found that a fraudulent imitation of RD2 had been applied to KA1 and KA2 and that each of the defendants was liable for the infringement of the plaintiff’s monopoly in RD2. On 5 March 2003 I made orders to give effect to my reasons for judgment. The orders I made were (relevantly) as follows:
“1.There be judgment for the plaintiff on the claims pleaded at paragraphs 23 to 32 of its Fourth Further Amended Statement of Claim.
2.A fraudulent imitation of registered design no 110628 (‘the registered design’) has been applied to the articles which are respectively exhibits P3 and P4 in this action (‘the infringing articles’).
3.Each of the first, second, fifth, sixth, and ninth defendants, whether by itself, its servants, agents or otherwise howsoever, be restrained from manufacturing, selling or offering for sale any article in the form of the infringing articles.
4.Each of the third and fourth defendants, whether by himself, his servants, agents or otherwise howsoever, be restrained from directing or procuring any person to manufacture, sell or offer for sale and from acting in concert with any person to manufacture, sell or offer for sale any article in the form of the infringing articles.
5.Each of the seventh and eighth defendants, whether by itself, its servants, agents or otherwise howsoever, be restrained from aiding and abetting any person to manufacture, sell or offer for sale and from acting in concert with any person to manufacture, sell or offer for sale any article in the form of the infringing articles.
6.For the purpose of enabling the plaintiff to make an election between its claim for damages and its claim for an account of profits, and reserving liberty to the plaintiff to apply for further directions before making the election:
6.1     Each of the first, second, fifth, sixth, seventh, eighth and ninth defendants, by its proper officer, make file and serve on or before the expiration of three months after the making of this order an affidavit setting out in respect of all the infringing articles, the total number of such articles manufactured, sold and otherwise disposed of by it, the price at which each such article was sold or otherwise disposed of, the cost to the defendant of the manufacture, sale or disposal of such article, the approximate amount of profit it contends it made by the manufacture, sale or disposal of the said article, the method of allocating overheads, if any, which the defendant regards as reasonably acceptable, and the steps or reasoning by which the approximate amount has been calculated;
6.2     The third defendant make, file and serve on or before the expiration of three months after the making of this order, an affidavit setting out in respect of all the infringing articles manufactured, sold or otherwise disposed of by each of the first, second, fifth, sixth, and ninth defendants, the approximate amount of profit the third defendant contends he made from such activity by each of the said defendants, the amount of any further deduction to which he claims he is entitled in respect thereof, and the steps or reasoning by which the approximate amount has been calculated;
6.3     The fourth defendant make, file and serve on or before the expiration of three months after the making of this order, an affidavit setting out in respect of all the infringing articles manufactured, sold or otherwise disposed of by each of the first, fifth, sixth, seventh and eighth defendants, the approximate amount of profit the fourth defendant contends he made from such activity by each of the said defendants, the amount of any further deduction to which he claims he is entitled in respect thereof, and the steps or reasoning by which the approximate amount has been calculated;
6.4     Each of the defendants on or before the expiration of three months after the making of this order make discovery on oath of all documents relating to the manufacture, sale or other disposal of the infringing articles and of all documents relied upon by the defendant for the purpose of making his or its affidavit referred to in the preceding sub-paragraphs hereof, and permit the plaintiff to inspect such documents by arrangement between the parties.
7.There be an order that each defendant on or before 1 month after the making of this order:
7.1     deliver up to the plaintiff all of the infringing articles in its possession or control (provided that each defendant may retain not more than five of each such article for his or its records);
7.2     render each die used in the production of the infringing articles incapable of producing such articles; and
7.3     verify on oath that he or it has complied with each of his or its obligations under this order 7 and in so doing set out specific details of how each such die has been rendered incapable of producing infringing articles.
8.Further consideration of the plaintiff’s entitlement to damages from or an account of profits by the defendants in respect of their respective involvement in the manufacture, sale or offer for sale of the infringing articles be adjourned to a date to be fixed.
….
14.Upon the undertaking of the defendants to:
14.1diligently prosecute an appeal against these orders;
14.2   preserve until further order all existing records relating to the manufacture, sale or other disposal of any infringing articles; and
14.3   file and serve every 6 weeks an affidavit (with the first such affidavit to be filed and served by no later than close of Registry on 3 April 2003) deposing to the number of infringing articles sold, to whom such articles were sold and identifying the records kept by the defendants in respect of such sales.
the operation of orders 3, 4, 5, 6 and 7 be stayed pending the finalisation of the said appeal or further order.
15.The parties may apply for further orders and directions.”
I will refer to these orders as the first set of orders.
Before the first set of orders were made, the parties made submissions as to the scope of the proposed orders and the question whether they should be stayed pending an appeal. These arguments took place on 3 March 2003. A number of points should be noted about the submissions which were made. First, the plaintiff sought very wide orders; in effect, orders that the defendants be restrained from infringing the plaintiff’s monopoly in RD2. I refused to make such orders because I did not think it appropriate to make such a general order. Secondly, Mr Bruce Victor Benfield, the fourth defendant, swore an affidavit wherein he said that the defendants would appeal and that restraining orders in relation to the manufacture and sale of KA2 would have a very serious effect on the business of one or more of the defendants. It is clear and in fact was not disputed by the defendants on this application, that Mr Benfield was referring to the manufacture and sale of KA2 in all its various sizes. Counsel for the defendants submitted that this should be taken into account in determining whether there should be a stay of the orders. Thirdly, counsel for the defendants, in the course of his submissions, referred to the damage which could or would be done if the dies were altered before the appeal was determined and if the appeal was determined in favour of the defendants. It is clear from evidence given at the trial that his reference to the dies was a reference to dies used to manufacture KA2 in all its sizes. I decided to stay the operation of orders 3, 4, 5 and 7 in the first set of orders.
The defendants’ appeal to the Full Court of the Federal Court was successful and my orders relating to the infringement of RD2 were set aside: K‑Aire Pty Ltd v Polyaire Pty Ltd (2003) 60 IPR 512.
The plaintiff then appealed to the High Court of Australia. It was successful and my orders were reinstated: Polyaire Pty Ltd v K-Aire Pty Ltd (2005) 221 CLR 287; Polyaire Pty Ltd v K-Aire Pty Ltd (No 2) (2005) 218 ALR 761. The first decision of the High Court was handed down on 16 June 2005 and the second decision was handed down on 11 August 2005.
Paragraph 14.3 of the first set of orders required an affidavit to be filed and served by the defendants deposing to, among other things, the number of infringing articles sold. In 2003 such affidavits were filed and served by Mr Benfield and by Mr Richard Colebatch, who is the third defendant, respectively, and it is clear that the disclosure given by each of the deponents is as to the sale of KA2 in all its sizes. That changed in September 2005 when the disclosure made by Mr Benfield and Mr Colebatch respectively was restricted to the sale of the articles which were of the same size as P4. That change occurred not long after the High Court handed down its two decisions in the appeal.
The action then came back before me for the making of further orders. On 25 August 2005 I made the following orders (relevantly):
“1.     Paragraph 2 of the order made on 5 February 2001 be revoked.
2.The defendants produce to the plaintiff on or before 22 September 2005 for inspection all of:
2.1     the invoices and related sales documents for the period 1 January 1998 onwards in respect of all the infringing articles (being exhibits P3 and P4 in this action); and
2.2     unmasked copies of any invoices and related sales documents in respect of all the infringing articles (being exhibits P3 and P4 in this action) previously produced by the defendants which had been produced with information thereon masked.
3.     Paragraphs 6, 7 and 14 of the order made on 5 March 2003 be revoked.
4.For the purpose of enabling the plaintiff to make an election between its claim for damages and its claim for an account of profits, and reserving liberty to the plaintiff to apply for further directions before making the elections:
4.1     Each of the first, second, fifth, sixth, seventh, eighth and ninth defendants, by its proper officer, make file and serve on or before 12 December 2005 an affidavit setting out in respect of all the infringing articles (being exhibits P3 and P4 in this action), the total number of such articles manufactured, sold and otherwise disposed of by it, the price at which each such article was sold or otherwise disposed of, the cost to the defendant of the manufacture, sale or disposal of such article, the approximate amount of profit it contends it made by the manufacture, sale or disposal of the said article, the method of allocating overheads, if any, which the defendant regards as reasonably acceptable, and the steps or reasoning by which the approximate amount has been calculated.
4.2     The third defendant make, file and serve on or before 12 December 2005, an affidavit setting out in respect of all the infringing articles manufactured, sold or otherwise disposed of by each of the first, second, fifth, sixth, and ninth defendants, the approximate amount of profit the third defendant contends he made from such activity by each of the said defendants, the amount of any further deduction to which he claims he is entitled in respect thereof, and the steps or reasoning by which the approximate amount has been calculated;
4.3     The fourth defendant make, file and serve on or before 12 December 2005, an affidavit setting out in respect of all the infringing articles manufactured, sold or otherwise disposed of by each of the first, fifth, sixth, seventh and eighth defendants, the approximate amount of profit the fourth defendant contends he made from such activity by each of the said defendants, the amount of any further deduction to which he claims he is entitled in respect thereof, and the steps or reasoning by which the approximate amount has been calculated;
4.4     Each of the defendants on or before 12 December 2005 make discovery on oath of all documents relating to the manufacture, sale or other disposal of the infringing articles and of all documents relied upon by the defendant for the purpose of making his or its affidavit referred to in the preceding sub-paragraphs hereof, and permit the plaintiff to inspect such documents by arrangement between the parties.
5.     There be an order that each defendant on or before 22 September 2005:-
5.1     deliver up to the plaintiff all the infringing articles in its possession or control (provided that each defendant may retain not more than five of each such article for his or its records);
5.2     render each die used in the production of the infringing articles incapable of producing such articles; and
5.3     verify on oath that he or it has complied with each of his or its obligations under this paragraph 5 and in so doing set out specific details of how each such die has been rendered incapable of producing infringing articles.
6.The defendants file and serve on or before 22 September 2005 an affidavit deposing to the number of infringing articles sold, to whom such articles were sold and identifying the records kept in respect of such sales in the period from 1 October 2003 until 25 August 2005.
7.     The parties may apply for further orders.”

I will refer to these orders as the second set of orders.
The orders for disclosure in the second set of orders relate to the articles themselves, but there was evidence at the trial that the articles were also sold as part of a package or kit which comprised all the components necessary to install a ducted airconditioning system. For the purpose of enabling it to make an election between its claim for damages and its claim for an account of profits, the plaintiff then sought orders for disclosure in relation to the packages or kits. The orders sought by the plaintiff were opposed by the defendants. I ruled in favour of the plaintiff: Polyaire Pty Ltd v K-Aire Pty Ltd and Ors (No 2) (2006) 242 LSJS 90 and on 30 September 2005 I made the following orders:
“1.For the purpose of enabling the plaintiff to make an election between its claim for damages and its claim for an account of profits, and reserving liberty to the plaintiff to apply for further directions before making the election:
1.1     Each of the first, second, fifth, sixth, seventh, eighth and ninth defendants, by its proper officer, file and serve on or before 12 December 2005 an affidavit setting out in respect of all packages or kits which comprised all of the components necessary to install a ducted airconditioning system (‘the packages’) which included the infringing articles (being the exhibits P3 and P4 in this action):-
1.1.1   the components comprised in the packages;
1.1.2details of which such components the relevant defendant manufactured and which were acquired from third parties and the name of such third party;
1.1.3the total number of the packages manufactured (if they were manufactured by the relevant defendant) sold and otherwise disposed of by it;
1.1.4the price at which each such package was sold or otherwise disposed of;
1.1.5the cost to the defendant of the manufacture (if applicable), sale or disposal of such package;
1.1.6the approximate amount of profit it contends it made by the manufacture, sale or disposal of the said package;
1.1.7the method of allocating overheads, if any, which the defendant regards as reasonably acceptable; and
1.1.8the steps or reasoning by which the approximate amount has been calculated.
1.2     The third defendant, file and serve on or before 12 December 2005, an affidavit setting out in respect of all the packages manufactured, sold or otherwise disposed of by each of the first, second, fifth, sixth and ninth defendants, the approximate amount of profit the third defendant contends he made from such activity by each of the said defendants, the amount of any further deduction to which he claims he is entitled in respect thereof, and the steps or reasoning by which the approximate amount has been calculated.
1.3     The fourth defendant, file and serve on or before 12 December 2005, an affidavit setting out in respect of all the packages manufactured, sold or otherwise disposed of by each of the first, fifth, sixth, seventh and eighth defendants, the approximate amount of profit the fourth defendant contends he made from such activity by each of the said defendants, the amount of any further deduction to which he claims he is entitled in respect thereof, and the steps or reasoning by which the approximate amount has been calculated.
1.4     Each of the defendants on or before 12 December 2005 make discovery on oath of all documents relating to the manufacture, sale or other disposal of the packages and of all documents relied upon by the defendant for the purpose of making his or its affidavit referred to in the preceding sub-paragraphs hereof, and permit the plaintiff to inspect such documents by arrangement between the parties.
2.     The parties may apply for further orders.
3.The costs of the attendance on 25 August 2005 shall be costs in cause on the plaintiff’s claim for damages. The cost of the attendance on 31 August 2005 are to be the plaintiff’s costs in any event.”
I will refer to these orders as the third set of orders.
On 17 January 2006 the date for compliance in paragraphs 4.1, 4.2, 4.3 and 4.4 of the second set of orders and paragraphs 1.1, 1.2, 1.3 and 1.4 of the second set of orders was extended to 10 February 2006.
On 9 February 2006, Mr Benfield swore an affidavit in purported compliance with the orders referred to in the preceding paragraph. On 22 September 2005 Mr Benfield had sworn an affidavit in purported compliance with orders 5 and 6 made on 25 August 2005. On 10 February 2006, Mr Colebatch also swore an affidavit in purported compliance with the orders referred to in the preceding paragraph.
The affidavit sworn by Mr Benfield on 9 February 2006 was sworn on his own behalf as fourth defendant and on behalf of WRGAS Pty Ltd previously known as Connect Aire Pty Ltd (the seventh defendant) and T & S Manufacturing Pty Ltd (the eighth defendant). In the affidavit he states:
“9.Between about 10 September 1996 and about November 1996, the Blade Pack that is Exhibit ‘P3’ in these proceedings (‘the P3 Blade Pack’) was the Blade Pack from a ‘300X300 Ultravent’, or ‘UV300’, Ultravent Kit. The eighth defendant was not incorporated until after the date on which production of the P3 Blade Pack had ceased and has never sold or disposed of any P3 Blade Pack.
10.From November 1996 (when production of the P3 Blade Pack ceased), the Blade Pack that is Exhibit ‘P4’ in these proceedings (‘the P4 Blade Pack’) was the Blade Pack from a ‘300X300 Ultravent’, or ‘UV300’, Ultravent Kit and SDU kit.
11.Since its incorporation on 20 August 1997, the eighth defendant has (amongst other things) engaged in the sale of Ultravent Kits and SDU Kits including P4 Blade Packs.”
It is clear that the disclosure that is made by Mr Benfield in his affidavit relates to a blade pack of the same size as P4, namely, a blade pack that is part of what the defendants call “300 x 300 Ultravent”, or “UV 300”, Ultravent Kit.
The affidavit sworn by Mr Colebatch on 10 February 2006 was sworn on his own behalf and on behalf of the first defendant, K-Aire Pty Ltd, the second defendant, Kemalex Pty Ltd, the fifth defendant, K-Aire Sales Pty Ltd, the sixth defendant, K-Aire Wholesale Pty Ltd, and the ninth defendant, ACN 078 898 281 Pty Ltd (which conducts business under the registered business name “Kemalex Plastics”). In his affidavit he states:
“9.Between about 10 September 1996 and about November 1996, the Blade Pack that is Exhibit ‘P3’ in these proceedings (‘the P3 Blade Pack’) was the Blade Pack from a ‘300X300 Ultravent’, or ‘UV300’, Ultravent Kit.
10.From November 1996 (when production of the P3 Blade Pack ceased), the Blade Pack that is Exhibit ‘P4’ in these proceedings (‘the P4 Blade Pack’) was the Blade Pack from a ‘300X300 Ultravent’, or ‘300S’, Ultravent Kit and a ‘300X300 Side Directional Unit’, or ‘300SSDU’, SDU Kit.
11.The P3 Blade Pack and the P4 Blade Pack were, at various times during the respective periods in which they were produced:
11.1in the case of the P3 Blade Pack, sold as part of a 300S Ultravent Kit; and
11.2 in the case of the P4 Blade Pack, sold as part of a ‘300S’ Ultravent Kit and a ‘300SDU’ SDU Kit.”
It is clear that, as with Mr Benfield, the disclosure made by Mr Colebatch relates to a blade pack that is of the same size as P3 and P4.
The plaintiff contends the orders relate to an outlet director part or blade pack of the same shape or configuration as P3 and P4 and that the size of the outlet director part or blade pack is immaterial. The plaintiff contends that in limiting disclosure to an outlet director or blade pack of the same size as P3 and P4, the defendants have not complied with the orders. In the application now before me it seeks the following orders (relevantly):
“2.A declaration that the orders made on 5 March 2003, 14 September 2005 and 28 November 2005 refer to and include all articles having the form of exhibits P3 and P4 in the action, regardless of the size of such articles.
3.Further, or alternatively, a declaration that the orders made on 5 March 2003, 14 September 2005 and 28 November 2005 are not limited to articles of a specific size, namely 300 mm outlet directors.
4.Alternatively, an order that the orders made on 5 March 2003, 14 September 2005 and 28 November 2005 be corrected under Supreme Court Rule 53.10(1) to refer to all articles (being air conditioning outlet director parts) that infringe registered design no 110628.
5.Alternatively, an order that the orders made on 5 March 2003, 14 September 2005 and 28 November 2005 be amended under Supreme Court Rule 53.10(2) to refer to all articles (being air conditioning outlet director parts) that infringe registered design no 110628.”
I mention for the sake of completeness that the second and ninth defendants are in administration and the actions against them are effectively stayed: Corporations Act 2001 (Cth), s 440D; Polyaire Pty Ltd v K-Aire Pty Ltd and Ors (No 3) [2006] SASC 147.
The plaintiff’s application
The immediate issue is whether the defendants have complied with the orders requiring disclosure. However, those orders are based on the orders made on the finding of liability in the plaintiff’s favour and ultimately the question must be considered having regard to those orders. As I understand it, that is why the plaintiff has sought the relief it has, rather than seeking other relief to enforce the particular orders requiring disclosure.
The plaintiff’s first submission is that the orders are clear and that all I need do is say so and fix new time limits for the filing and serving of affidavits of disclosure. In the alternative, it submits that if the orders are ambiguous I should resolve the ambiguity in its favour and if necessary make a declaration as to the meaning of the orders. In the alternative to the making of a declaration, the plaintiff submits that I should amend the orders under r 53.10(1) or (2) of the Supreme Court Rules 1987. Those rules apply, rather than the Supreme Court Rules 2006: r 8. Rule 53.10(1) and (2) provides as follows:
“(1)Mistakes in judgments or orders, or errors arising therein from any slip or omission, may be corrected by the Court at any time either on the application of a party or of its own motion.
(2)Where a judgment or order requires amendment in any particular on which the Court did not adjudicate, it may be amended in an application.”
There is also an inherent power to amend orders which do not reflect the intention of the Judge who made them. I can decide this matter by reference to the inherent power rather than r 53.10(1) and (2) which is broader terms than its predecessor: Supreme Court Rules 1947-1986 O 28 r 10.
Before examining the orders themselves it is convenient to consider the principles which are relevant to the task of construing orders of the Court. I mention that each set of orders has been drawn up and sealed.
The first point to note is that the orders made on 5 March 2003, 25 August 2005 and 30 September 2005 consist of orders which are final in nature and orders which are interlocutory in nature. In its written submissions the plaintiff seemed to suggest that the orders were interlocutory in nature. The plaintiff referred to the observations of Gibbs CJ in two of the leading authorities on the distinction between interlocutory orders and final orders: Licul v Corney (1976) 180 CLR 213 at 213; Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248. It was said in those cases that the distinction between interlocutory orders and final orders turns on the legal effect of the orders rather than their practical effect, and that it is necessary to consider whether the orders finally dispose of the rights of the parties.
In its oral submissions I took the plaintiff to be proceeding on the basis that at least some of the orders were final orders. The authorities I was taken to by the plaintiff were authorities dealing with final orders. As I have said, at least some of the orders are final orders. In a case where there is a split trial, the orders which determine liability have been held to be final orders: HEST Australia Ltd v McInerney (1998) 71 SASR 526; TAG Pacific Ltd v McSweeney (1992) 34 FCR 438. It seems to me that a number of the orders made on 5 March 2003 are final orders although it is true that some of the orders made on that day and on the two subsequent occasions are procedural in nature and undoubtedly interlocutory. It is also true that the defendants were given leave to appeal from my orders made on 5 March 2003 to the Full Court of the Federal Court: K-Aire Pty Ltd v Polyaire Pty Ltd (2003) 60 IPR 512 at 513 [4]. However, that was by consent and the question whether the orders, or at least some of them, were final orders appears not to have been considered.
It is appropriate for me to approach the issues on this application on the basis that the orders are final orders because the key orders are properly so described and because although the interlocutory orders could, without much difficulty, be altered or supplemented they are based on orders which are final orders.
It is as well to note at the outset that at this point I am not being asked to amend orders so that the issues can be re-opened. Nor is there any question here of a supplemental order, the need for which arises from circumstances after the order was made.
The proper construction of the orders raises a question as to the material which may be considered in order to determine that question and whether the nature of material which may be considered depends upon whether there is an ambiguity in the orders.
The plaintiff referred to a number of authorities which have discussed the material which may be considered in determining the proper construction of orders of the Court.
In Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 93 FLR 263, Macrossan J considered that in construing a court order he could have regard not only to the order itself but also to the reasons for judgment which lay behind the order and the notice of objection which led to the appeal. In that case, the relevant orders were made on appeals against assessments by the Federal Commissioner of Taxation. His Honour concluded by reference to the relevant material that a particular point had been ‘fairly involved in and so should be regarded as decided by the appeal’ (at 267). His Honour’s approach did not seem to turn on whether or not there was an ambiguity in the court orders.
In Australian Energy Limited v Lennard Oil NL (No 2) [1988] 2 Qd R 230, the proper construction of a declaration made by McPherson J was in issue. Andrews CJ (with whom Kelly SPJ agreed) considered that it was appropriate to construe the declaration in its context and that context included, inter alia, the reasons for judgment and, in that case, the agreement to which the declaration related. Andrews CJ said (at 232):
“It is proper as I would hold and I understood there to be no dispute finally about this that we have regard to the reasons of McPherson J expressed in reaching his decision and the reasons also of Connolly and Thomas JJ agreed in by me, in coming to our conclusions in the appeal from McPherson J’s decision, which latter are to be found in Australian Energy Limited v Lennard Oil NL [1986] 2 Qd R 216. It is appropriate that we be advised here of surrounding circumstances and extrinsic evidence acted upon by McPherson J in reaching his findings as to the agreement between AEL and Lennard embodied in the letter dated 29 March 1979 referred to above. Some argument was at first directed to the effect that it is open to the court to construe the declaration only if it was shown to be ambiguous. I would hold that its meaning emerges only when considered with the written agreement of 29 March 1979 of which it is either explanatory or complementary or both. I would further hold that it is necessary in order fully to understand the effect of the declaration to examine the reasons expressed by McPherson J in coming to his decision and the extrinsic evidence and surrounding circumstances relied upon by him. This is not so much to construe the words of the declaration as to understand it in its place in the context of the matter and thus give it its true construction. Although the circumstantial background of Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 86 ATC 4062 is different from that of this case, I would respectfully deem correct and apposite here the ruling of Macrossan J to the effect that the meaning of words in an order should in an appropriate case be considered in, inter alia, the wider context of the reasons for judgment. … Also in point is Gordon v Gonda [1955[ WLR 885.”
Thomas J expressed what he considered to be the relevant principles in the following way (at 243-244):
“Some submissions were directed to the use that may be made of reasons for judgment, and other materials concerning the conduct of the trial, in construing the formal order of the court. In my view reasons for judgment may be referred to as a form of extrinsic evidence and as a relevant surrounding circumstance in construing an order, but I do not think that they can be used to fill a gap or to supply a casus omissus, or to give a different meaning to words that on their face are not susceptible of more than one meaning. Whilst there is a good deal of authority as to limited occasions upon which a court may amend its formal order (Coppins v Helmers (1968) 88 WN (Pt 1) (NSW) 455, 461-462; (1969) 72 SR (NSW) 273, 278 (on appeal); Gikas v Papanayiotou [1977] 2 NSWLR 944), little assistance is available on the question of the proper construction of a judgment, and the materials that may be used in relation thereto. In Gordon v Gonda [1955] 2 All ER 762, it was held that the meaning of an ‘unambiguous’ declaration could not be altered by recourse to the pleadings, although it seems that Evershed MR would have been prepared to examine the pleadings in order to see whether this caused the declaration to assume some different aspect (see at 765F). I do not think that it would be necessary for an ambiguity to appear on the face of a judgment before it would be permissible to refer to materials such as the pleadings and the reasons for judgment. It would suffice if the language was ‘susceptible of more than one meaning’ (cf Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 350, 352). There is no reason why such materials may not be used as an aid in determining whether or not there is a casus omissus or in deciding whether or not a judgment ‘covers the field’.
The material which may be considered in construing orders of the Court was discussed in Athens v Randwick City Council (2005) 64 NSWLR 58. Santow J made the following observations (at 78-79):
“I should at this point acknowledge that there is a slight but perceptible divergence between two lines of authority in relation to whether recourse may be had to the reasons for judgment or indeed any other extrinsic material when construing an order. These two lines of authority may be described as representing weak and strong variants of the same principle.
One trend of authority (the weak variant) is that it is seldom permissible to go behind an order and examine the reasons for judgment as an aid to construction of that order, the exception being where the order is ambiguous: see Justice P W Young, ‘Construing court orders’ (1998) 72 Australian Law Journal 117; McNair Anderson Associates Pty Ltd v Hinch [1985] VR 309 at 311–312; Repatriation Commission v Nation (1995) 57 FCR 25 at 33–34.
The other trend of authority (the strong variant) is that the meaning of words in an order should in an appropriate case be considered by reference to the reasons for judgment, themselves finding their context in the overall proceedings: see for example Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230 at 232; Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 93 FLR 263 at 267; Ecrosteel Pty Ltd t/as Packs Business Form Brokers v Pefor Printing Pty Ltd (Santow J, 12 November 1997, unreported). I prefer the latter line of authority.
Both lines of authority therefore permit recourse to the reasons for judgment in resolving ambiguity.
Ambiguity in orders is resolved primarily by reference to the originating judgment. The premise for doing so is that the judicial officer making the orders must be taken thereby to have intended to give effect to that judgment. However, if the language of the orders proves intractably obscure, then the orders must fail pro tanto.
The making of orders is not always a mechanical extrapolation from the originating judgment. There may be room for a range of possible orders, and possible meanings of those orders, which would conform. Then the wider context of the proceedings can have an important bearing, particularly the pleadings which should identify the orders sought. When the meaning of an order is ambiguous, and that ambiguity is not able to be resolved solely by reference to the judgment itself, resort may be had to the proceedings and in particular the pleadings, which provide an interpretive context. Thus it can be highly relevant to know what the successful claimant sought by way of relief. The judgment may need to be understood by reference to how the parties put their cases.”

In my opinion, it would be a very rare case in which, in construing orders of the Court, it would not be appropriate to consider at least the reasons for judgment. If on considering the orders in light of the reasons for judgment the meaning of the words is clear then effect must be given to those words. There is an exception to this and that is a class of case where the orders are clear but it is also apparent that they do not represent the intention of the Judge who made them.
In the latter type of case, the orders may be amended by an exercise of the inherent power of the Court. In Lawrie v Lees (1881) 7 App Cas 19, Lord Penzance said (at 34-35):
“I cannot doubt that under the original powers of the Court, quite independent of any order that is made under the Judicature Act, every Court has the power to vary its own orders which are drawn up mechanically in the registry or in the office of the Court – to vary them in such a way as to carry out its own meaning, and where language has been used which is doubtful, to make it plain. I think that power is inherent in every Court.”
In Gikas v Papanayiotou [1977] 2 NSWLR 944, Needham J reviewed the authorities and made an order amending a decree previously made. Allsop J did the same in Owston Nominees No 2 Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558. His Honour said (at 577) that an amendment could be made even if, as he put it, “the orders are doubtful or ambiguous and on one reading do not reflect the intention of the Court and on another reading do”. (See also The Commissioner of Taxes v British Australian Wool Realisation Association Ltd [1932] VLR 109; D’Angola v Rio Pioneer Gravel Co Pty Ltd [1977] 2 NSWLR 227; K Mason “The Inherent Jurisdiction of the Court” (1983) 57 ALJ 449.)
If the orders are ambiguous then that ambiguity must be resolved by the usual process of construction, having regard to such extrinsic material as may be relevant. That material would include not only the reasons for judgment, but also the pleadings, the course of the trial and the submissions of the parties prior to the making of the orders. Once the ambiguity has been resolved, the Court may adopt one of a number of possible approaches. In some cases no more may be required than simply a decision as to the meaning of the orders and then the making of consequential orders. In other cases, it may be appropriate to grant a declaration as to the proper construction of the orders (Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653) or to amend the orders to remove the doubt or ambiguity (Owston Nominees No 2 Pty Ltd v BranirPty Ltd (supra) at 577).
I have looked carefully at the orders. I can focus on the first set of orders because similar words are used in the second and third sets of orders and the same questions of construction arise.
There are two possible areas of ambiguity in the first set of orders. The first possible ambiguity arises because of the use of the expression “in the form of the infringing articles” used, for example, in orders 3, 4 and 5. What does the word “form” mean in this expression? Does it mean any article with the shape and configuration of P3 or P4? If so, the mere fact that the article was a different size would not mean that it was not in the shape and configuration of P3 or P4. In a case clearly involving an infringement of a registered design, there is a strong argument that that is what the word ‘form’ means and that there is no doubt about it. However, it might be said that the word “form” is broad enough to cover the size of an object or thing. By a narrow margin, I think that there is an ambiguity. However, it is easily resolved. I would wish to make it clear, if it is not already clear, that if I am wrong in concluding that there is an ambiguity I would construe the orders in the manner advanced by the plaintiff.
The other possible area of ambiguity is the use of the phrases “all the infringing articles” in orders 6 and 7.1, “the infringing articles” in orders 7.2 and 8, and “infringing articles” in orders 7.3 and 14.3. Neither party suggests that these phrases are restricted only to the articles which are P3 and P4. I think that if there is an ambiguity here it is easily resolved by considering the orders as a whole. Clearly these expressions mean articles in the form of the infringing articles.
I turn now to examine the relevant material other than the orders themselves.
The allegations in the plaintiff’s statement of claim were not restricted to an airconditioning outlet director part of a particular size. There was nothing in the alleged particulars of similarity between RD2 and the first K-Aire outlet and the second K-Aire outlet which referred to the size of the outlet or which suggested that size was a relevant consideration. There was nothing in the defences of the respective defendants that suggested in any way that the defendants alleged that the size of the airconditioning air outlet director part was relevant to the question of the alleged infringement of RD2. The same can be said of a document filed by the defendants and called an Outline of Defence and Counterclaim.
At the trial, P3 and P4 were clearly tendered as examples of KA1 and KA2. On this application the defendants accept that they were tendered as examples of something. They submit that they were examples of physical articles of the same size and design. I do not agree. They were tendered as examples of the KA1 and KA2 designs applied to articles and it was said that such articles infringed RD2. There was clear evidence that the articles were produced in different sizes. The defendants did not suggest at trial that that fact was of any significance. The experts did not at any time suggest that the size of the articles was a relevant consideration to the questions they addressed or indeed of any significance. No witness suggested at trial that the first K-Aire outlet or KA1 or the second K-Aire outlet or KA2 was an airconditioning air outlet director part of a particular size. To the contrary there was evidence that the defendants were making the articles in different sizes and the common assumption was that they were all KA1 or KA2 outlets.
There was clearly evidence before me that the defendants were making the articles in different sizes. I need only refer to the plans tendered in evidence showing the articles in different sizes and the evidence about the making of the tooling or dies. Nothing was said by the defendants during closing submissions to suggest that P3 and P4 were no more than examples of an airconditioning air outlet director part of a particular size.
There is nothing in my reasons for judgment that suggests that the size of the airconditioning outlet director part was a relevant consideration. In my reasons for judgment I said the following (at [48]:
“The second claim against Mr Benfield, K-Aire, Kemalex and Mr Colebatch and the claim against the other defendants is that in one way or another they were involved in the manufacture and/or sale of one or both of what were called in evidence the first K-Aire outlet (“KA1”) and the second K-Aire outlet (“KA2”), and that KA1 and KA2 infringe the plaintiff’s monopoly in RD2. The Colebatch defendants tendered drawings of KA1 and KA2. Although it is clear that I must compare the accused articles with the registered design, it will assist the reader’s understanding of the issues if I attach to these reasons some drawings of KA1 and KA2. The former are marked “C” and the latter are marked “D”.”
There is nothing in my discussion of the expert evidence, or the comparison between RD2 on the one hand and KA1 and KA2 on the other, which suggests that the size of the accused articles was a matter of significance.
As I have said ([11] above) after trial but before the orders were made on 5 March 2003, the defendants filed and relied upon an affidavit of Mr Benfield and made submissions on 3 March 2003 which were clearly based on the proposition that the orders which would follow from my reasons for judgment would apply to the manufacture and sale of KA1 and KA2 in all their respective sizes.
The trial and my reasons for judgment proceeded on the basis that the defendants were manufacturing and selling articles in different sizes which had the shape and configuration of which P3 and P4 were examples. The trial was certainly not about P3 and P4 alone or about an airconditioning outlet director part of a particular size.
I have reached the above conclusions irrespective of whether I can have regard to the respective affidavits filed and served in 2003 and after the first set of orders was made by Mr Benfield and Mr Colebatch. The plaintiff submitted that I could have regard to the affidavits whereas the defendants said I could not. I do not need to decide the point. Certainly the affidavits are eloquent testimony of the conclusions I have reached because the disclosure made therein is of the sale of KA1 and KA2 in all their respective sizes.
Conclusions
I would be prepared to amend the orders along the lines sought by the plaintiff in its application. However, I think it is appropriate to deliver these reasons and then adjourn briefly. The plaintiff should bring in detailed minutes of order showing all the amendments it seeks and they should be formulated so that, as far as possible, and consistently with these reasons, further disputes as to the proper construction of the orders are avoided.