SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 4)

[2012] FCA 1041

FEDERAL COURT OF AUSTRALIA

SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 4) [2012] FCA 1041

Citation:		SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 4) [2012] FCA 1041
Parties:		SMA SOLAR TECHNOLOGY AG and SMA AUSTRALIA PTY LTD ACN 127 198 761 v BEYOND BUILDING SYSTEMS PTY LTD ACN 128 030 302 and IPEVO PTY LTD ACN 143 970 978
File number:		NSD 817 of 2011
Judge:		PERRAM J
Date of judgment:		19 September 2012
Catchwords:		PRACTICE AND PROCEDURE – Amendment of pleadings – whether pleading should be amended
Cases cited:		Aon Risk Services Australia v Australian National University (2009) 239 CLR 175 cited Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261 applied
Date of hearing:	18 & 19 September 2012
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	14
Counsel for the Applicants:	M Darke, H Pintos-Lopez
Solicitor for the Applicants:	Corrs Chambers Westgarth
Counsel for the First Respondent:	The first respondent did not appear
Counsel for the Second Respondent:	C Amato
Solicitor for the Second Respondent:	Addisons

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 817 of 2011

BETWEEN:

SMA SOLAR TECHNOLOGY AG
First Applicant

SMA AUSTRALIA PTY LTD ACN 127 198 761
Second Applicant

AND:

BEYOND BUILDING SYSTEMS PTY LTD ACN 128 030 302
First Respondent

IPEVO PTY LTD ACN 143 970 978
Second Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	19 SEPTEMBER 2012
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The applicants be granted leave to file in Court a further amended statement of claim in the form handed up by Mr Darke during the course of argument.

2.The applicants pay the costs of the second respondent thrown away by reason of the amendment.

3.The second respondent be granted leave to file an amended defence in response to the further amended statement of claim.

4.Access to Exhibit 22 be limited to the parties and their advisers.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 817 of 2011

BETWEEN:

SMA SOLAR TECHNOLOGY AG
First Applicant

SMA AUSTRALIA PTY LTD ACN 127 198 761
Second Applicant

AND:

BEYOND BUILDING SYSTEMS PTY LTD ACN 128 030 302
First Respondent

IPEVO PTY LTD ACN 143 970 978
Second Respondent

JUDGE:	PERRAM J
DATE:	19 SEPTEMBER 2012
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On the second day of the trial, 18 September 2012, the applicants applied for leave to file a further amended statement of claim.  I granted leave on the first day of the trial for a further amended statement of claim to be filed (SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 2) [2012] FCA 1015), but it was never filed because it became apparent that further amendments were necessary. The differences between the proposed further amended statement of claim and its predecessor consist of three sets of amendments to the particulars to paragraph 23. The amendments to particular (a) and the amendment to particular (f) are noncontroversial and the second respondent does not oppose a grant of leave in respect of those particulars. It does, however, oppose a grant of leave in respect of particular (g). Paragraph 23 of the proposed pleading (and its predecessors) is as follows:

   The Second Respondent’s Conduct

   23.The Second Respondent:

   (a)has actively participated with and encouraged the First Respondent to engage in the First Respondent’s conduct pleaded in subparagraphs 22(a) and 22(b); and/or

   (b)has acted in concert with the First Respondent and with a common design to carry out the acts pleaded in paragraphs 15 and/or 16 and subparagraphs 22(a) and 22(b); and

   (c)has aided, abetted, counselled, procured or induced the First Respondent’s conduct pleaded in paragraph 22(c); and/or

   (d)has been knowingly concerned in, or party to, the First Respondent’s conduct pleaded in paragraph 22(c).

2. Subparagraph (g) of the proposed particulars is as follows:

   Particulars

   …

   (g)Further or in the alternative to paragraph (f) above, it is to be inferred from:

   (i)the matters referred to in paragraphs (a)-(e) above;

   (ii)the First Respondent’s use of the sign SUNNY ROO, registered Australian Trade Mark No 1312858, the sign the subject of Australian Trade Mark application No 1389705, and other Sunny Names and Logos in respect of its Solar Products; and

   (iii)the Second Respondent’s failure to take any step to prevent the First Respondent’s use of the above in respect of the First Respondent’s Solar Products,

   that the Second Respondent licensed the First Respondent to use the sign SUNNY ROO, registered Australian Trade Marks No 1312858, the sign the subject of Australian Trade Mark application No 1389705, and other Sunny Names and Logos in respect of its Solar Products.

3. There is a relationship between particular (f) and particular (g).  Particular (f) was added as a result of the grant of leave on the first day of the trial to which I have already referred.  It puts a case that the active participation, encouragement, action in concert etc. referred to in paragraph 23 is to be made good by demonstrating that the use by the first respondent of the mark or sign ‘Sunny Roo’ happened under licence from the second respondent.  The licence the subject of particular (f) was a written document which was discovered to the applicants on 27 August 2012, a few weeks before the trial was due to commence.

4. After a case in the form of particular (f) was pursued on the first day of the trial, counsel for the second respondent indicated that one possible reason that that allegation could not succeed was that the use which had occurred was not a use which was in terms covered by the wording of the licence agreement.  The point here was that the licence agreement related to particular trade marks and some of the use of which complaint was made was not use of those marks.  The applicants have foreshadowed that an issue will be joined in relation to that defence, at least by means of a textural argument that, properly construed, the licence agreement does in fact cover the signs the use about which complaint is made.  However, on the second day of the trial Mr Darke, who appeared for the applicants, foreshadowed that an endeavour would also be made to pursue a case that, quite apart from the terms of any written licence agreement, it was plain that what had existed was an arrangement between the two respondents which involved a licence, whether written or implied.  It was in those circumstances that the proposed amendment to include particular (g) was pursued on the second day of the trial.

5. Ms Amato, who appeared for the second respondent, submitted inter alia that the applicants had not adequately explained why it was that such a substantive amendment was being pursued only this late in the piece.  Mr Darke indicated from the bar table that the explanation was the one to which I have already made reference, namely that particular (g) is a response to the second respondent’s foreshadowed defence to particular (f).  It is true that, as Ms Amato submits, the High Court did say in Aon Risk Services Australia v Australian National University (2009) 239 CLR 175 that it was necessary for a party seeking an amendment to bring forth an explanation as to why the discretion ought to be exercised in its favour. However, later cases have made clear that this is not an absolute requirement and the nature of the explanation which needs to be given can fluctuate with the circumstances: see, for example, Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261 at [51] where the Full Court said:

   Aon Risk is not a one size fits all case.  Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case.  As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application.

6. It seems to me in those circumstances that the explanation which has been proffered by the applicants is a sufficient one.

7. Ms Amato also submitted that the late raising of the amendment exposed the second respondent to a risk of prejudice and that this was a ground for declining to grant leave to amend as well.  Of course, were real prejudice shown, I would not hesitate to accept that it may, in some circumstances, be appropriate to refuse an amendment application.  However, in the present circumstances, I am not satisfied that the second respondent is likely to suffer any prejudice.  The present application is being determined on the morning of the third day of the trial.  The application to amend itself was commenced on the second day of the trial and during the course of argument, the question of prejudice arose.  There was an indication from the bar table at that time that there were various potentialities in respect of prejudice but it was not possible at that time for the second respondent to be more specific. 

8. In order to bring about more clarity to the situation, the application was conveniently postponed to the third day so that other matters could be attended to on the second day.  At that time, I indicated to the second respondent’s counsel that I would be content to receive any affidavit evidence in relation to the topic of prejudice which was sought to put on.  This morning, when the question of prejudice was revisited, no attempt was made to put on such an affidavit.  I did indicate, for completeness, that I would be content to receive an explanation from the bar table as well.

9. The prejudice, as I understood it, consisted of difficulties in respect of two witnesses.  The first of these witnesses, Mr Smith, is the sole director of the second respondent.  When I inquired whether Mr Smith was available to give evidence or not, the answer I received was that it was not possible to say whether he was available or whether he was not available.  In circumstances where, as the sole director of the second respondent, he must have some knowledge of the fact that these proceedings are continuing, I am disinclined to infer any inability on the second respondent’s part to call Mr Smith if necessary.  There was no evidence to that effect before me and there was no contention to that effect before me either.  I infer from the fact that he is the sole director of the second respondent that he is in fact available to give whatever instruction and/or evidence is necessary in order to meet the case put forward by particular (g).

10. The second person in respect of whom there was said to be a difficulty was a solicitor, Ms Katrina Brown, of a firm known as Nautilus.  Nautilus’ role in these proceedings appears to be constituted by its retainer by formerly the first and, at some stage, the second respondent.  There appears to have been correspondence between Nautilus and the applicants’ solicitors on at least 13 April 2011.  The allegation in particular (g)(iii) is that the second respondent failed to take any step to prevent the first respondent using the mark.  It is not at once obvious to me why Ms Brown would have anything relevant to say about that topic.  One might imagine that the allegation in particular (g)(iii) may be proved ultimately by the absence of evidence to the effect that there was a complaint.

11. When I pressed Ms Amato about this she referred me to particular (e) of paragraph 23 which is as follows:

    Particulars

    …

    (e)Following the Applicants’ solicitor’s letter of 13 April 2011 to the solicitor for the Respondents, the Second Respondent has neither denied nor attempted to deny that it has engaged in conduct involving use of Sunny Names and Logos in connection with the First Respondent’s Solar Products.

12. Here the contention was that it was possible that the applicants would seek to prove the matter in particular (g)(iii) by means of the correspondence in particular (e) and, if that was so, some light might be thrown on that correspondence by the evidence of Ms Brown.  I reject this argument.  I do so for two reasons.  First, I do not think that the effort to prove particular (g)(iii) will necessarily involve any consideration of the correspondence of 13 April 2011 or its sequelae.  Secondly, even if it does, the kind of prejudice being discussed is, at least as far as I can see, so exiguous as to not to constitute a sufficient reason for refusing to grant the amendment. 

13. In all of those circumstances, I am satisfied that, if the amendments to the particulars to paragraph 23 are granted, the second respondent will not suffer any prejudice thereby.  Accordingly, I grant leave to the applicants to file in Court a further amended statement of claim in the form handed up by Mr Darke during the course of argument.

14. I order that:

    1.The applicants be granted leave to file in Court a further amended statement of claim in the form handed up by Mr Darke during the course of argument.

    2.The applicants pay the costs of the second respondent thrown away by reason of the amendment.

    3.The second respondent be granted leave to file an amended defence in response to the further amended statement of claim.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:       20 September 2012