Timoney Technology Limited v ADI Limited - [2007] VSC 402

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST

No. 7883 of 2007

TIMONEY TECHNOLOGY LIMITED	First Applicant
and
TIMONEY RESEARCH LIMITED	Second Applicant
v
ADI LIMITED (ACN 008 642 751)	Respondent

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 and 20 September 2007
DATE OF JUDGMENT:	17 October 2007
CASE MAY BE CITED AS:	Timoney Technology Ltd & Anor v ADI Ltd
MEDIUM NEUTRAL CITATION:	[2007] VSC 402

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Practice and procedure – Discovery before action – Whether requirements of applicable rule satisfied – Whether arbitration agreement a bar to relief under rule – Supreme Court (General Civil Procedure) Rules 2005, r.32.05 – Application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr P Murdoch QC and Mr A Trichardt	TressCox Lawyers
For the Respondent	Mr I Martindale SC	Deacons

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TABLE OF CONTENTS

Parties and Introduction..................................................................................................... 1
The Licence Agreement........................................................................................................... 2
Timoney’s Concerns................................................................................................................. 7
Issues............................................................................................................................................ 16
Is the Arbitration Agreement a Complete Answer to the Application?............. 17
Applicable Legal Principles................................................................................................. 21
Possible Causes of Action................................................................................................... 22
A. Failure to Provide Technical Information..................................................................... 22
    B. Failure to Account............................................................................................................. 26
    C. Assignment Without Consent......................................................................................... 27
    D. Failure to Jointly Promote............................................................................................... 27
    E. False or Misleading Conduct........................................................................................... 28

VIII. Conclusion.............................................................................................................................. 29

HIS HONOUR:

I. Parties and Introduction

The applicants, Timoney Technology Limited and Timoney Research Limited (collectively “Timoney”), are Irish companies involved in the design, development, manufacture and marketing of complex engineering products for military applications, including high mobility armoured vehicles.

The respondent, ADI Limited (“ADI”), is an Australian company with considerable experience as a contractor to the Australian and overseas defence forces for equipment and services for military applications on land, in the air and at sea.

Prior to 1 December 1996, Timoney conducted significant design work in relation to a “Bushmaster” armoured infantry mobility vehicle, and had submitted a bid to the Commonwealth of Australia for the production and supply to the Commonwealth of Bushmaster vehicles. It appears that, from 1 December 1996, Timoney and ADI were involved together in the joint development of Bushmaster vehicles.

By a “Co-Operation and Licence Agreement” dated 16 September 1997 and made between Timoney and ADI (“the licence agreement”) Timoney and ADI agreed the terms upon which ADI would become the exclusive licensee of the intellectual property created by Timoney in connection with the Bushmaster vehicle, or any variant or derivative vehicle.

Following a dispute between Timoney and ADI, involving proceedings in the Federal Court of Australia, the parties compromised their differences. As a result, the terms of the licence agreement were varied by agreement dated 30 June 2000 (the “variation deed”). The terms of the licence agreement to which I will refer in this judgment are the terms as varied. I will only refer to the variation deed where it is necessary to do so.

By the terms of the licence agreement, ADI was permitted to sub-licence Timoney’s intellectual property to third parties, to enable third parties to develop, manufacture, market,…

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: [2007] VSC 402
Decision Date: 17 October 2007

CaseChat Overview and Summary

In the case of Timoney Technology Limited v ADI Limited, the dispute involved a claim for discovery of documents prior to the commencement of legal proceedings. The matter was heard in the Supreme Court of Queensland. Timoney Technology Limited sought an order for discovery of documents from ADI Limited, asserting that it was necessary for their claim to be properly prepared. ADI Limited opposed the application on the basis that an arbitration agreement precluded the discovery process under the relevant procedural rules.

The central legal issues before the court were whether the requirements of Supreme Court (General Civil Procedure) Rules 2005, rule 32.05 were satisfied and whether the existence of an arbitration agreement constituted a bar to the relief sought by Timoney Technology Limited. The court had to determine if the application for discovery was permissible before the initiation of formal proceedings and whether the arbitration clause affected the court's jurisdiction to grant such an order.

The court examined the terms of the arbitration agreement and the provisions of the relevant procedural rule. It found that the arbitration agreement did not explicitly preclude the making of an application for discovery. However, the court also considered the overarching principle that parties should pursue the agreed dispute resolution process, which in this case was arbitration. The court concluded that the arbitration agreement did not constitute an absolute bar to the relief sought but that the application for discovery was premature. The court dismissed the application, noting that the procedural rules require that such applications be made as part of formal proceedings rather than before the initiation of the action.

The court's decision highlighted the importance of adhering to the agreed dispute resolution process and the procedural requirements for making applications for discovery. The dismissal of the application did not prejudice Timoney Technology Limited's rights to seek discovery as part of the formal proceedings, should the matter proceed to litigation.

Orders