Power v Bettergrow Pty Ltd - [2018] QCA 80

[2018] QCA 80

COURT OF APPEAL

MORRISON JA
PHILIPPIDES JA
BOWSKILL J

Appeal No 13105 of 2017
DC No 131 of 2017

PAUL DAVID POWER First Appellant

PDP GROUP (QLD) PTY LTD Second Appellant
ACN 069 059 294

BETTERGROW PTY LIMITED Respondent
ACN 062 888 117

BRISBANE

THURSDAY, 3 MAY 2018

JUDGMENT

MORRISON JA: The appellants, Power and PDP Group, sued the respondent, Bettergrow, Paul Schembri and his wife, Lorraine Schembri, in respect of alleged breaches of an Australian patent. The central relief sought in the proceedings was the delivery-up of a machine described as the Mark III, which was in the possession of Paul Schembri. The contention was that Schembri’s possession and use of the Mark III breached the appellants’ rights under the patent. Bettergrow counterclaimed, seeking revocation of the patent.

The litigation was compromised and a settlement deed was entered into between all the relevant parties. By the time of the events relevant to these proceedings, a family dissolution meant that Mrs Schembri was no longer involved in her husband’s business activities. She was, however, a party to the settlement deed. In summary, it was agreed that Schembri could retain possession of the Mark III and use it under licence from Power and PDP Group. In that respect PDP Group and Power granted Schembri an irrevocable licence to use the Mark III, and to replace it with a similar machine. Schembri was to pay a licence fee and provide various invoices in respect of the product needed for the use of the machine.

Subsequently, PDP Group and Power issued proceedings in the District Court contending that Schembri had breached the settlement deed by failing to pay the licence fee, not giving requisite notice of the appointment of additional suppliers and not giving the appropriate invoices.

No breach was alleged against Bettergrow, but it was said to be “jointly and severally liable pursuant to the deed”. Bettergrow sought summary judgment, which was granted and the claim against it was dismissed. From that decision PDP Group and Power have appealed.

The Settlement Deed

The recitals to the settlement deed identified the litigation over the alleged breaches of the patent and that relief had been sought against, inter alia, Bettergrow and Schembri. Recital F recorded that Schembri “has operated a business using the Mark III as a sole trader” since December 2013. Recital G recorded that the parties “have agreed to settle all disputes and matters in issue the subject of or in any way related to the proceedings without admission of liability on the terms of this Deed of Settlement”.

The operative provisions of the deed of settlement were as follows:

(a)Schembri was entitled to retain possession of and continue to use the Mark III under licence from PDP Group and Power: clause 2.1;
(b)Schembri was granted an irrevocable licence to use the Mark III, and the ability to build and use a replacement for the Mark III, as long as the replacement was used on the same…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Power v Bettergrow Pty Ltd

Details

AGLC: Power v Bettergrow Pty Ltd [2018] QCA 80
Case: [2018] QCA 80
Decision Date: 3 MAY 2018

CaseChat Overview and Summary

In Power v Bettergrow Pty Ltd, the appellants, Paul David Power and PDP Group, appealed against a summary judgment decision that dismissed their claim against Bettergrow Pty Limited. The appellants had entered into a settlement deed with Bettergrow, Paul Schembri, and Lorraine Schembri, following a patent dispute. The settlement deed allowed Schembri to retain and use a machine under licence from the appellants, subject to certain conditions, including the payment of a licence fee. The appellants later initiated proceedings against Schembri for alleged breaches of the settlement deed, including failure to pay the licence fee. They also claimed that Bettergrow was jointly and severally liable for Schembri’s breaches. Bettergrow sought summary judgment, which was granted, leading to the present appeal.

The central legal issue was whether the settlement deed imposed joint and several liability on Bettergrow for Schembri’s breaches. The Court of Appeal considered the terms of the settlement deed and the surrounding circumstances known to the parties at the time of the agreement. The Court held that the settlement deed did not impose joint and several liability on Bettergrow. The deed explicitly outlined Schembri’s obligations and did not include Bettergrow in those obligations. The Court found that there were no clear words in the deed suggesting that Bettergrow would be liable for Schembri’s actions, especially given that Bettergrow had no involvement in Schembri’s business. The Court also noted that Bettergrow had its own limited obligations under the deed, such as maintaining confidentiality and not challenging the patent’s validity. The reservation in clause 4.5 of the deed, which allowed the appellants to take proceedings against Bettergrow for breaches, did not extend to making Bettergrow a guarantor for Schembri’s performance.

The Court of Appeal upheld the primary judge’s decision, finding no error in the interpretation of the settlement deed. The appeal was dismissed, and the appellants were ordered to pay Bettergrow’s costs of the appeal.

Orders