SZBKB v Minister for Immigration & Multicultural & Indigenous Affairs

[2005] FCA 1181

FEDERAL COURT OF AUSTRALIA

Checked-Out Pty Limited v Eagle Eye Inspections Pty Limited [2005] FCA 1181

CHECKED-OUT PTY LIMITED v EAGLE EYE INSPECTIONS PTY LIMITED & ORS

N169 OF 1999

EMMETT J
28 JUNE 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD169 OF 1999

BETWEEN:

CHECKED-OUT PTY LIMITED (ACN 071 965 798)

APPLICANT

AND:

EAGLE EYE INSPECTIONS PTY LIMITED
(ACN 084 722 234)

FIRST RESPONDENT

JOSEPH WILLIAMS

SECOND RESPONDENT

WAYNE THOMAS COOK

THIRD RESPONDENT

TIMOTHY BOLLINS

FOURTH RESPONDENT

DEBORAH JEAN WILLIAMS

FIFTH RESPONDENT

PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS

SIXTH RESPONDENT

KATARINA MUC trading as G H HEALEY & CO BLACKTOWN and BRUCE McCANN trading as
B E McCANN & CO SOLICITORS

SEVENTH RESPONDENT

MARK KELADA trading as MARK KELADA SOLICITORS

EIGHTH RESPONDENT

MICHAEL QUINN trading as QUINNS SOLICITORS

NINTH RESPONDENT

MICHAEL JOHN NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS

TENTH RESPONDENT

HENRY GRECH trading as GRECH PARTNERS SOLICITORS

ELEVENTH RESPONDENT

GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS
TWELFTH RESPONDENT

JUDGE:

EMMETT J

DATE OF ORDER:

28 JUNE 2005

WHERE MADE:

SYDNEY

THE COURT:

1.Orders that the three Notices of Motion currently outstanding, being those of 20 August 2004, 23 August 2004 and 12 October 2004, be stood over to the hearing date of 13 March 2006.

2.Orders that any other notices of motion currently outstanding be otherwise dismissed without any order as to costs.

3.Confirms that the Eighth Amended Statement of Claim is taken to have been filed on 18 February 2005.

4.Orders one of the second to fifth respondents to file an affidavit, no later than 29 August 2005, identifying the software that produced the document identified as JMW1.

5.Directs that directions henceforth be conducted by eCourt.

6.Orders that any request for further directions be forwarded by 29 August 2005.

7.Orders that of the sum presently held in Court pursuant to the order of 4 November 1999 of Justice Lehane, $25,000 be treated as appropriated as security for the twelfth respondent.

8.Rescinds Order 1 of Justice Emmett of 27 June 2005.

9.Orders that the costs of the twelfth respondent’s notice of motion be treated as costs in the proceeding.

10.Orders that the matter be listed for hearing commencing 13 March 2006.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD169 OF 1999

BETWEEN:

CHECKED-OUT PTY LIMITED (ACN 071 965 798)
APPLICANT

AND:

EAGLE EYE INSPECTIONS PTY LIMITED
(ACN 084 722 234)

FIRST RESPONDENT

JOSEPH WILLIAMS

SECOND RESPONDENT

WAYNE THOMAS COOK

THIRD RESPONDENT

TIMOTHY BOLLINS

FOURTH RESPONDENT

DEBORAH JEAN WILLIAMS

FIFTH RESPONDENT

PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS

SIXTH RESPONDENT

KATARINA MUC trading as G H HEALEY & CO BLACKTOWN and BRUCE McCANN trading as
B E McCANN & CO SOLICITORS

SEVENTH RESPONDENT

MARK KELADA trading as MARK KELADA SOLICITORS

EIGHTH RESPONDENT

MICHAEL QUINN trading as QUINNS SOLICITORS

NINTH RESPONDENT

MICHAEL JOHN NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS

TENTH RESPONDENT

HENRY GRECH trading as GRECH PARTNERS SOLICITORS

ELEVENTH RESPONDENT

GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS
TWELFTH RESPONDENT

JUDGE:

EMMETT J

DATE:

28 JUNE 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1. On 4 March 2005, I directed that all outstanding notices of motion be listed for hearing on 2 May 2005.  The date for hearing was subsequently changed to 27 and 28 June 2005. It transpires that there remain three outstanding notices of motion.

   THE APPLICANT’S NOTICE OF MOTION

2. On 14 October 2004, the applicant filed a notice of motion, seeking declarations that the first to fifth respondents are in default of their obligations to provide discovery and orders that their defences be struck out and judgment be entered in favour of the applicant.  The applicant relies on non-compliance with a number of orders made over a considerable period of time. 

3. On 23 October 2000, Lehane J made an order that discovery be given, not later than 13 November 2000, by the first to fifth respondents, of documents in the categories set out in a schedule dated 2 August 2000.  Lists of documents were not in fact filed in accordance with that direction.  Further, there was some considerable delay in carrying out inspection of the documents described in the list of documents that was filed, for reasons that it is not necessary at the present time to investigate.

4. On 1 September 2003, I directed the first to fifth respondents to provide to the applicant, no later than 29 August 2003, access to any computer disk on which is recorded in digital form any material relating to the form of the reports produced by the first to fifth respondents, such access to be by way of inspection on discovery and subject to any orders for confidentiality already made in relation to discovery.  It is fair to conclude that that direction was not completely complied with. 

5. After numerous further directions hearings, the proceeding was fixed for hearing in June of last year.  The hearing commenced, but was ultimately aborted because of difficulties concerning amendment and inadequacies of access to documents that ought to have been discovered. 

6. On 24 September 2004, I directed the applicant to serve on the second to fifth respondents, no later than 28 September 2004, a letter specifying the documents (including discs) which the applicant sought to inspect. I directed the second to fifth respondents to respond by identifying such documents in writing.  On 11 November 2004, I ordered the second to fifth respondents to file and serve, no later than 26 November 2004, an affidavit specifying whether any documents referred to in that order are currently, or were previously, in the possession, custody or control of any of them and if so when, and under what circumstances, they ceased to be in such possession, custody or control.  In purported compliance with that direction, the second to fourth respondents filed affidavits on 26 November 2004.

7. On 3 February 2005, I ordered that, on or before 18 February 2005, the second to fifth respondents file and serve affidavits setting out their knowledge and belief as to the location of a number of documents and physical objects, including computers and disks.  That order was not complied with in its entirety.  Affidavits were filed by two of those respondents on 18 February 2005.   The other two respondents swore affidavits on 22 February 2005.

8. On 4 March 2005, I directed the second to fifth respondents to file and serve, no later than 11 March 2005, an affidavit explaining why my directions of 3 February 2005 were not complied with.  That direction was not complied with.  However, on 16 March 2005, the solicitor for those respondents filed an affidavit purporting to satisfy the direction that I had given. 

9. In the course of various directions hearings, I have expressed my dissatisfaction with the performance of the first to fifth respondents in failing to comply with various directions.  I have indicated on several occasions that one possible sanction was to strike out their defences for non‑compliance with my directions.  I should say that the record of the first to fifth respondents in terms of their compliance with their obligations to give discovery and comply with directions is quite appalling.  On the other hand, no party in this proceeding can claim to have been totally innocent of non-compliance with directions. 

10. The applicant’s motion was fixed for hearing yesterday and today.  In support of the motion, the applicant relies upon the affidavits of Philip Julian Hardcastle sworn 12 October 2004, 2 December 2004 and 27 January 2005, together with a bundle of correspondence between the applicant and the solicitors for the second to fifth respondents.  The respondents in turn rely on the following affidavits:

    ·Joseph Miller Williams, sworn 25 November 2004

    ·Wayne Cook, sworn 25 November 2004

    ·Timothy Geoffrey Bollins, sworn 25 November 2004

    ·Deborah Jean Williams, sworn 25 November 2004

    ·Joseph Miller Williams, sworn 18 February 2005

    ·Timothy Geoffrey Bollins, sworn 18 February 2005

    ·Wayne Thomas Cook, sworn 22 February 2005

    ·Deborah Jean Williams, sworn 22 February 2005

    ·Michael Henry Atkinson, sworn 14 March 2005

    ·Joseph Miller Williams, sworn 16 June 2005

    ·Michael Henry Atkinson, sworn 24 June 2005

    ·Joseph Miller Williams, sworn 24 June 2005

    ·Joseph Williams, sworn 27 June 2005

    ·Wayne Thomas Cook, sworn 27 June 2005

    ·Timothy Geoffrey Bollins, sworn 27 June 2005

    ·Timothy Bollins, sworn 27 June 2005

    They also rely on a bundle of correspondence between their solicitors and Mr Paul Solomon, who previously acted for the applicant. 

11. I have not heard full argument on the motion because I am concerned that the time that would be taken for full investigation of the factual matters raised by the motion, on behalf of both the parties and the Court, and the costs that are likely to be incurred, would be in the interests of no one.  As I have said, I am very concerned about the attitude that has been shown by the first to fifth respondents in the past to the directions of the Court.  On the other hand, my consideration of the affidavits that I have enumerated above, indicates that there has at least been an attempt to comply with directions, albeit out of time, and that there has been some explanation, although hardly any justifiable excuse, as to why directions have not been complied with. 

12. Even if I assented to the application and ordered that the defence of the second to fifth respondents be struck out, that would probably not involve much of a saving at the hearing.  There is still a further respondent remaining in the proceeding, being a solicitor who is alleged to have been involved in infringement of copyright by the other respondents.  The claim against the solicitor depends upon establishing ownership of copyright by the applicant and infringement of copyright by the first to fifth respondents.  Even if they were not permitted to defend, it would be necessary for the applicant to prove its case against the twelfth respondent and that would involve substantially the same issues as would otherwise be raised by the defence of the second to fifth respondents. 

13. In those circumstances, I have concluded that it is in the interests of justice not to hear the motion at this stage.  I will not, however, dismiss it, but propose to stand the motion over part heard, for argument at the trial if the parties still wish to pursue it.  I propose to fix the proceeding for hearing on 14 March 2006.  The proceeding is part heard and the hearing of the substantive proceeding will be completed in the time that will then be allocated. 

14. There is one matter remaining concerning discovery.  I am reasonably satisfied, although I have not explored all of the matters in full and have not given the applicant the opportunity of addressing the Court in full on the question for the reasons I have indicated, that the second to fifth respondents should be required to file a further affidavit indicating the location of the software that generated the document identified as ‘JMW1’, insofar as that software has not already been identified in any other affidavit. 

    RESPONDENTS’ MOTION

15. The second to the fifth respondents have also filed a motion concerning the costs thrown away by the adjournment of the trial.  They have also sought further security for costs.  I have indicated that I do not consider that it is appropriate to deal with those matters until the question of non-compliance with directions for discovery has been fully explored.  Counsel for the second to fifth respondents has indicated that he is content for that motion to be stood over for hearing at the same time as the substantive proceeding is heard.  

    NOTICE OF MOTION FOR SECURITY FOR COSTS

16. By notice of motion, filed on 20 August 2004, the twelfth respondent seeks security for its costs of the proceeding.  The twelfth respondent is one of a number of solicitors who were joined in the proceeding as having either infringed copyright or participated in infringement of copyright by the first to fifth respondents.  The applicant has reached a compromise with the sixth to eleventh respondents, who are no longer parties.  Lehane J originally ordered security in the sum of $65,000, to be provided by the applicant for the costs of the respondents without indicating the extent to which that sum should be appropriated for any one of the respondents.

17. I subsequently ordered further security in the sum of $60,000, to be apportioned as to $25,000 to the twelfth respondent and as to the balance between the other respondents.  I subsequently directed that part of the security be released, for the purposes of enabling the applicant to pay fees in connection with a mediation that I directed.  Whether that has been debited to the corpus or the income of the fund provided as security is not presently known, but it should be observed that the fund held for security will no doubt be in excess of the amounts that have been ordered because of income that will have been derived in the meantime on the fund held in Court.

18. The twelfth respondent has been represented separately from the sixth to the eleventh respondents at all times.  Although it is not entirely clear why that is so, a respondent is entitled to have its own representation, as I said on an earlier occasion.  I have also previously expressed the view that the applicant’s case against the twelfth respondent is not an especially strong one.  However, I declined to order summary dismissal of the proceeding against the twelfth respondent some time ago when application for that relief was made. 

19. The substantial defence of the applicant’s claim will be in the hands of the second to fifth respondents and to a considerable extent the twelfth respondent will have the benefit of those respondents’ efforts in resisting the claim as to ownership of copyright and as to infringement.  Nevertheless, the twelfth respondent is entitled to be represented in Court for so long as he is a party to the proceeding.

20. The applicant has suggested that it might be appropriate to provide the twelfth respondent with access to transcript to avoid the costs of attending Court.  However, reading the transcript may well be a more expensive way of finding out what actually happened than by sitting in court and listening to the evidence as it is adduced. 

21. The twelfth respondent has filed an affidavit, without objection, indicating that the costs that have been incurred to date exceed $100,000 and it is clear that there are still further costs that are to be incurred in the hearing of the proceeding.  Following the settlement of the proceeding, as between the applicant and the sixth to eleventh respondents, I indicated that it may be appropriate to apportion $25,000 of the $65,000 security ordered by Lehane J to those respondents. 

22. I consider that the twelfth respondent has established an entitlement to further security.  I consider that the appropriate order is to direct that, rather than return that sum of $25,000 to the applicant, the sum be applied as additional security for the twelfth respondent.  That does not involve, therefore, any further payment by the applicant. 

23. I should indicate that there has been no further evidence by the applicant as to its financial position, although I would be prepared to assume that its position has remained generally unchanged.  That is to say, it would be unable to meet any order for costs.  Any question of security is a matter of balancing the interests of the parties.  The sum of $25,000 is unlikely to be completely adequate to compensate the twelfth respondent for the costs that might be incurred if the applicant is unsuccessful.  On the other hand, the applicant would clearly not, as I understand the position, be able to prosecute the claim if it was required to pay any further security.

24. I therefore propose to order that, of the sum presently held pursuant to the order made by Lehane J, $25,000 be treated as appropriated as security for the costs of the twelfth respondent.  The appropriate order is that the costs of the motion for security be the parties’ costs of the proceeding. 

    CONCLUSION

25. I propose to list the matter for directions on 2 September 2005, if any of the parties request further directions. Any request for directions on that date should be submitted to my associate by email, no later than 26 August 2005.  There will be no further physical directions hearing, unless the parties want it.  Otherwise, the directions will proceed on eCourt. 

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:            30 August 2005

The applicant was represented by Ms A. Wilczak
Counsel for the Second to Fifth Respondents:	Mr M Condon
Solicitor for the Second to Fifth Respondents:	Bateman Battersby
Counsel for the Twelfth Respondent:	Mr James Miller
Solicitors for the Twelfth Respondent:	RE Barros & Company
Date of Hearing:	27 and 28 June 2005
Date of Judgment:	28 June 2005