Sekisui Rib Loc Australia Pty Ltd (ACN 008 040 800) v Plastream Pipe Technologies Pty Ltd (ACN 111 107 852)
[2010] FCA 813
•26 July 2010
FEDERAL COURT OF AUSTRALIA
Sekisui Rib Loc Australia Pty Ltd (ACN 008 040 800) v Plastream Pipe Technologies Pty Ltd (ACN 111 107 852) [2010] FCA 813
Citation: Sekisui Rib Loc Australia Pty Ltd (ACN 008 040 800) v Plastream Pipe Technologies Pty Ltd (ACN 111 107 852) [2010] FCA 813 Parties: SEKISUI RIB LOC AUSTRALIA PTY LTD (ACN 008 040 800) v PLASTREAM PIPE TECHNOLOGIES PTY LTD (ACN 111 107 852) File number: SAD 100 of 2010 Judge: LANDER J Date of judgment: 26 July 2010 Catchwords: PRACTICE AND PROCEDURE – preliminary discovery from prospective respondent – whether there was reasonable cause to believe the applicant might obtain relief in the Court from the prospective respondent – whether the applicant had relied on any misrepresentation by the prospective respondent so as to make out a claim under s 52 of the Trade Practices Act 1974 (Cth).
Held: Application dismissed – applicant did not make out reasonable cause ground of the application – applicant had not relied on any misrepresentation and would not be entitled to relief.Legislation: Federal Court Rules 1979 (Cth) O 15A r 6
Trade Practices Act 1974 (Cth) s 52Date of hearing: 26 July 2010 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Counsel for the Applicant: Mr N Floreani Solicitor for the Applicant: Richard Pryor & Associates Counsel for the Respondent: Mr S Doyle Solicitor for the Respondent: Allens Arthur Robinson
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 100 of 2010
BETWEEN: SEKISUI RIB LOC AUSTRALIA PTY LTD (ACN 008 040 800)
ApplicantAND: PLASTREAM PIPE TECHNOLOGIES PTY LTD
(ACN 111 107 852)
Respondent
JUDGE:
LANDER J
DATE OF ORDER:
26 JULY 2010
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The application be dismissed.
2.The applicant pay the respondent’s costs of the application.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 100 of 2010
BETWEEN: SEKISUI RIB LOC AUSTRALIA PTY LTD (ACN 008 040 800)
ApplicantAND: PLASTREAM PIPE TECHNOLOGIES PTY LTD (ACN 111 107 852)
Respondent
JUDGE:
LANDER J
DATE:
26 JULY 2010
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The applicant and the respondent entered into a head licence which commenced on 16 May 2008 under which, for payment of royalties, the applicant granted to the respondent an exclusive perpetual worldwide licence to commercialise the applicant’s SRP technology. SRP technology means all intellectual property rights owned by the applicant in connection with the patent set out in the schedule to the head licence, and includes any associated know-how of the applicant and any improvements, variations or modifications undertaken by or for the applicant. The head licence also gave the respondent an unrestricted right to sub-licence any of the rights granted to it under clause 3.1, subject to clauses 3.4 and 3.5 of the head licence.
Clauses 3.4 and 3.5 carved out of the general grant by restricting the respondent from engaging in any way in the business of pipe rehabilitation based upon the SRP technology, or selling pipe products based on or incorporating SRP technology, or selling machinery or equipment for the manufacture of those products, without the prior written consent of the applicant on each occasion.
On 22 August 2008 the respondent entered into a sub-licence with Rocla Proprietary Limited for a period of 24 months from that date, or until the sub-licence itself was terminated in accordance with its terms. In clause 11.1 the sub-licence gave an option to Rocla to purchase a complete Plastream line. The option was exercisable at any time within the first 20 months of the term, by giving notice to the respondent in accordance with clause 16.
A complete Plastream line means a production line including all components needed to produce Plastream pipe, as described in schedule 5 of the sub-licence and as that production line or those components are modified, improved or superseded from time to time by the respondent. The effect of exercising the option to purchase a complete Plastream line would be to provide Rocla access to rights under the sub-licence for an additional period.
The applicant suspects that Rocla did not exercise the option given it by clause 11.1 within the first 20 months of the term. It has asked the respondent whether the option was exercised in accordance with clause 11.1, and by way of notice as required under clause 16. The respondent has indicated that the option was exercised but has refused to provide the applicant with the documents evidencing the exercise of the option.
The applicant has now brought an application pursuant to O 15A r 6 of the Federal Court Rules to seek discovery from a prospective respondent. The applicant seeks discovery of a true copy of any document received by the respondent from Rocla in which Rocla purports to exercise the option; if the option notice was given by post, a true copy of any record relating to the date and time of receipt of the option notice by the respondent; if the option notice was given by facsimile transmission, a true copy of the facsimile receipt records or any other documents relating to the date and time of receipt of the option notice by the respondent; if the option notice was hand delivered, a true copy of any record relating to the date and time of receipt of the option notice by the respondent; if the option notice was delivered to the respondent by some other means, a true copy of any record relating to the mode of delivery of the option notice and relating to the date and time of receipt of the option notice by the respondent.
In other words, the applicant seeks only the actual document exercising the option and any documents which would evidence the date and time when the document purporting to exercise the option was served upon the respondent. The respondent objects to the making of any order under O 15A r 6 claiming specifically that the applicant cannot satisfy the first limb of O 15A r 6 because it cannot make out that there is reasonable cause to believe the applicant has a right to obtain relief against the respondent.
In my opinion, the respondent’s contention must be accepted. There is no evidence before me at the present time that if the respondent has misrepresented to the applicant that the option was exercised within the 20 months, that the applicant will suffer any damage or be entitled to any injunctive relief, and therefore be entitled to any relief.
If the option has not been exercised but the respondent represents that it has been, the applicant suffers no damage because the conduct complained of does not actually mislead or deceive the applicant because the applicant does not believe the assertion to be true. The applicant believes that the option has not been exercised. It has done nothing and will do nothing in reliance upon the representation to its detriment so as to suffer damage, because it does not believe the representation to be true. Counsel for the applicant conceded that on the evidence presently before me the applicant would not be able to make out a claim for damages in relation to a contravention of s 52 of the Trade Practices Act 1974 (Cth) even if the respondent had misrepresented to the applicant that Rocla had exercised the option. No damage has been suffered by any misrepresentation.
Further, if a misrepresentation has already been made, there is no apprehension that any damage will be suffered if the respondent continues to misrepresent the existence of the option or allows any misrepresentation to stand. That is because the applicant will continue to disbelieve the representation and therefore will not suffer any damage causally connected to the misrepresentation.
It was argued, however, that even if the applicant could not identify at this stage an entitlement to damages in relation to the exercise of the option, the applicant would be entitled to injunctive relief.
I am not satisfied that there is reasonable cause to believe that the applicant would have a right to obtain injunctive relief in relation to the misleading and deceptive conduct complained of for two reasons. First, because no damage has been or will be suffered as a result of the misleading or deceptive conduct. Secondly, because a court would not restrain the respondent from making a representation of that kind in circumstances where the restraining order would do no more than require the respondent to comply with its obligations under s 52 of the Act. I am not satisfied that there is reasonable cause to believe that the applicant has a right to obtain injunctive relief against the respondent.
The applicant also complains that the respondent may be in breach of the head licence by having sub-licensed to Rocla rights which the respondent had no right to sub-licence. The applicant relies upon clause 3.5 of the sub-licence which provides:
In exercising its rights under clause 3.1(a), Rocla must not:
(a)supply any products or services resulting from the SRP Technology for, or otherwise employ the SRP Technology in, the repair, renovation, replacement lining, relining, rehabilitation or renewal of culverts, pipelines, conduits, underground ducts, tunnels, bores or like structures;
(b)engage in any way in a business of Pipe Rehabilitation, or
(c)sell Plastream Pipe to any person who is either engaged in the business of Pipe Rehabilitation, or who intends to resell of supply the Plastream Pipe to any person who is so engaged, or for any other purpose related to Pipe Rehabilitation,
without the prior written consent of the respondent on each occasion.
It was contended that the words in paragraph (a) could be understood to allow Rocla to supply products which the head licence does not permit the respondent to sub-license. In clauses 3.4 and 3.5 of the head licence, the parties have carved out from the general rights given the respondent by providing in clause 3.4(a):
In exercising its rights under clause 3.1, RLP must not:
(a)engage in any way in the business of Pipe Rehabilitation based on, or incorporating SRP Technology, or
(b)sell pipe products based on or incorporating SRP Technology, or machinery or equipment for the manufacture of those products, or grant any sub-licence in respect of the SRP Technology or any part of it, to any person who is either engaged in the business of Pipe Rehabilitation, or who intends to sell or re-supply those products, or that machinery or equipment, or otherwise to exercise those sub-licence rights for any purposes related to Pipe Rehabilitation,
without the prior written consent of RLA on each occasion.
In the head licence, the applicant is referred to as RLA.
It was contended that the words in paragraph 3.5(a) of the sub-licence were inconsistent with the terms of paragraph 3.4 of the head licence. In my opinion, that contention cannot be accepted. If there is an ambiguity in paragraph 3.5(a), that ambiguity does not, in my opinion, allow it to be said that the respondent has given rights to Rocla greater than the rights which were given it by the head licence. That is because paragraphs 3.5(b) and 3.5(c) of the sub-licence take up the restriction which is provided for in clauses 3.4(a) and (b) of the head licence. In my opinion, there is no evidence presently before me which would allow it to be said that the respondent might be in breach of the head licence by having agreed to clause 3.5(a) of the sub-licence.
But even if I am wrong about that, it does not give rise to the relief sought under the O 15A application. The application made under O 15A is only made in relation to the exercise or otherwise of an option by Rocla, not in relation to whether the respondent has breached the head licence by entering into the sub-licence in the terms of paragraph 3.5.
In my opinion, the application seeking discovery of the option, and the documents which would prove the time and date of service of the option, should be refused.
During the hearing of the application, the counsel for the applicant sought an adjournment for the purpose of putting on further evidence to establish damage. He said that he could lead evidence to show that the applicant has entered into a separate agreement with Interflow Proprietary Limited, which has given Interflow Proprietary Limited the right to pipe rehabilitation of the kind which is defined in clause 2.11 of the head licence, and in similar terms in clause 2.15 of the sub-licence. I refuse the application for two reasons. First, this application was brought urgently and the applicant required an urgent hearing. The applicant required the respondent to react immediately and sought an early hearing of the application, to which I acceded. The time to bring any evidence of the kind referred to by the applicant was at this hearing.
But in any event, the evidence which was explained to me would not, even if it had been available, have made any difference or made the applicant’s position any stronger. In my opinion, there is no real difference between the definition of pipe rehabilitation in the head licence and the definition of pipe rehabilitation in the sub-licence. The definition of pipe rehabilitation in the sub-licence omits the words:
[A]nd also includes, for the territories of Australia and New Zealand, activities that fall within the scope of the rights granted by RLA to Interflow Proprietary Limited for those territories prior to the Commencement Date.
But the omission of those words does not affect the obligations which the head licence imposes upon the respondent, especially in clauses 3.4 and 3.5, nor the obligations which the sub-licence imposes upon Rocla, especially in paragraphs 3.5(b) and 3.5(c).
In both cases, the respondent and Rocla are restricted from engaging in any way in the business of pipe rehabilitation based upon the SRP technology. In both cases, the respondent and Rocla are prevented from selling Plastream pipe to any person who is engaged in the business of pipe rehabilitation, or who intends to resell or supply the Plastream pipe to any person who is so engaged, or for any other purpose related to pipe rehabilitation without, in the first case, the consent of the applicant and without, in the second case, the consent of the respondent.
In my opinion, the intent of the sub-licence is the same as the intent of the head licence. That is, to restrict the licensee in the head licence and the sub-licensee in the sub-licence from engaging in the business of pipe rehabilitation, or from dealing with a person who is engaged in that same business. There is no inconsistency between the licences which the applicant relied on for the purpose of establishing damage. Even if I am wrong about that and an adjournment had been granted and some breach of the head licence had been shown by reference to the words in the sub-licence, that does not address the question of the option. This is not an application for any documents in relation to the breach of the licence itself. This is an application by the applicant to obtain the document evidencing the exercise of the option and the documents which would have evidenced the time and date upon which that option had been exercised.
It was said that the respondent had engaged in misleading or deceptive conduct by claiming that the option had been exercised when the option, on the applicant’s case, could not have been exercised within the 20 months provided for in clause 11.1. However, there is nothing in the head licence which prevents the respondent giving any third party an option to purchase the rights which the respondent enjoys by reference to the head licence. There is nothing, it seems to me, in the sub-licence which would have prevented the respondent and Rocla agreeing to an extension of time within which Rocla had to exercise the option under paragraph 11.1. Nor is there, as Mr Doyle who appeared for the respondent submitted, anything in the document which would prevent the respondent giving an option to Rocla independent of the sub-licence.
The applicant assumes that the option could not have been validly exercised, because it was not exercised within 20 months of the commencement date of the sub-licence and, therefore, any representation made by the respondent to the effect that the option has been exercised must be false. That is not an assumption which is readily apparent when one considers the document itself. For all of those reasons I refused the adjournment and, for those same reasons, I dismiss the application.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate:
Dated: 6 August 2010
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