Scantech Ltd v Asbury - [2009] FCA 1480

FEDERAL COURT OF AUSTRALIA
Scantech Ltd v Asbury [2009] FCA 1480
PRACTICE AND PROCEDURE – application to amend statement of claim – where claims for misuse of confidential information, misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and breach of contractual duties and duties under the Corporations Act 2001 (Cth) – where applicants originally pleaded that the respondents had sold and offered for sale a coal analyser that was developed by using the applicants’ information, and had publicly promoted themselves as specialists in the supply, maintenance and support of the applicants’ coal analyser – where applicants sought to amend statement of claim to include allegation that respondents had serviced, and manufactured, sold and installed a retrofit kit for, the applicants’ coal analyser
Held: application allowed – order under O 13, r 2(1) of Federal Court Rules – amendments closely linked to existing allegations – prejudice to respondents can be remedied by costs.
PRACTICE AND PROCEDURE – application for split trial so that liability determined before quantum – where claims for misuse of confidential information, misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and breach of contractual duties and duties under the Corporations Act 2001 (Cth)
Held: application refused – application ought to have been made before discovery – delay already caused by allowing application to amend statement of claim – witnesses relevant to determination of liability may also be relevant to determination of quantum – no suggestion that case is likely to settle after separate determination of liability – possible to determine claim for lost royalty by reference to assumptions as to information that is confidential.
Corporations Act 2001 (Cth) s 183
Fair Trading Act 1987 (SA) s 56
Fair Trading Act 1989 (Qld) s 38
Trade Practices Act 1974 (Cth) s 52
Court Procedure Rules 2006 (ACT) r 502
Federal Court Rules O 13 r 2, O 21 r 2, O 29 r 2, O 35A r 3(1)
AON Risk Services Australia Limited v Australian National University [2009] HCA 27 discussed
Fleming’s Nurseries Pty Ltd v Hannaford [2008] FCA 591 referred to
Liberty Financial Pty Ltd v Scott [2003] FCA 226 referred to
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 referred to
Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 referred to
SCANTECH LIMITED ACN 007 954 627 and SCANTECH SERVICES PTY LTD ACN 003 785 028 v JAMES HUBERT ASBURY, REAL TIME INSTRUMENTS PTY LTD ACN 093 565 701 and RTI PTY LTD ACN 108 037 252
SAD 90 of 2008
BESANKO J
11 DECEMBER 2009
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 90 of 2008

BETWEEN:
SCANTECH LIMITED ACN 007 954 627
First Applicant

SCANTECH SERVICES PTY LTD ACN 003 785 028
Second Applicant

AND:
JAMES HUBERT ASBURY
First Respondent

REAL TIME INSTRUMENTS PTY LTD ACN 093 565 701
Second Respondent

RTI PTY LTD ACN 108 037 252
Third Respondent

JUDGE:

BESANKO J

DATE…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2009] FCA 1480
Decision Date: 11 DECEMBER 2009

CaseChat Overview and Summary

Scantech Ltd was the plaintiff and Asbury was the defendant in a case heard by the Federal Court of Australia. The dispute centred around issues of patent infringement, specifically regarding a retro-fit kit. Scantech sought amendments to its pleadings and also requested that the issue of liability be determined separately from the issues of damages and other relief.

The court had to decide whether Scantech's application to amend its pleadings should be allowed, given that it had not made the application before complying with prior orders for discovery and filing of evidence. The court also had to determine if it was in the interests of justice to order that the issue of liability be heard and determined separately from the issues of damages and other relief. The court considered the potential for further delay, the possibility that some witnesses might be relevant to both liability and damages, and the potential for settlement after a separate determination of liability.

In its reasoning, the court noted that the applicant's non-compliance with prior orders should not be a basis for allowing the amendment application. The court rejected the notion that a separate determination of liability would expedite the trial, as it would still require the assembly of expert evidence. The court also found that it was possible that some witnesses might be relevant to both liability and damages, and that there was no suggestion that the case was likely to settle after a separate determination of liability. The court was not persuaded by the applicant's argument that experts could not prepare reports based on different assumptions regarding confidentiality and that it would be unduly burdensome to require them to do so.

The court allowed the application to amend but rejected the application for a separate determination of liability. The court gave the parties the opportunity to prepare minutes of order reflecting these conclusions. The final orders provided that the parties had leave to bring in minutes of order reflecting the conclusions expressed in the reasons delivered by the court.

Orders

Orders of the court

1. The parties have leave to bring in minutes of order reflecting the conclusions expressed in the reasons delivered today.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

BESANKO J

First, the applicant ought to have made the application before orders were made for discovery or the filing of evidence. One of the advantages of an order for the determination of separate questions is that it may avoid the costs associated with the preparation of material relating to damages and other relief. Whether the applicant has complied with the orders and made discovery and filed its evidence in relation to damages is beside the point. I do not think the applicant can rely on its own non-compliance with general orders of the Court. Secondly, the order I propose to make allowing the amendments will result in further delay in any event in that the parties will need time to assemble expert evidence with respect to the retro-fit kit. Therefore, an order for the separate hearing and determination of liability would not result in a speedy trial because of the applicant’s relatively late application to amend. The parties can put their cases together on damages and other relief at the same time as they are gathering their further expert evidence. Thirdly, although it is difficult to be certain, I am not satisfied that some witnesses relevant to liability may not also be witnesses with respect to quantum. It is at least possible that officers of the applicant or the experts or both may be required to give evidence with respect to both liability and damages or other relief. Fourthly, there is no suggestion either way as to whether the case is likely to settle after a separate determination of liability. Finally, the applicant submits that if it claims damages it may do so by reference to lost royalty. It submits that the quantum of royalty may depend on the extent to which information is found to be confidential. The applicant can only be sure of that after a trial and determination of the issue of liability. I reject this submission. I am not persuaded that experts cannot prepare reports based on different assumptions as to the information which is confidential, or that it would be unduly burdensome to require them to do so.Conclusions The applicant’s application to amend will be allowed. The applicant’s application for an order that the issue of liability be determined separately is rejected. I will give the parties the opportunity to prepare minutes of order reflecting these conclusions.

Ratio Decidendi

Legal Principle Established

Established by: BESANKO J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 90 of 2008