Trade Practices Commission v International Technology Holdings Pty Ltd

[1995] FCA 58

IN THE FEDERAL COURT OF AUSTRALIA )No. QG 74 of 1994
QUEENSLAND DISTRICT REGISTRY     )
GENERAL DIVISION                 )

BETWEEN:  TRADE PRACTICES COMMISSION

Applicant

AND:INTERNATIONAL TECHNOLOGY HOLDINGS PTY. LTD.

(ACN 054 128 666)

First Respondent

AND:EUROPARK INTERNATIONAL PTY. LTD.

(ACN 062 455 556)

Second Respondent

AND:AUSTRALIAN TECHNOLOGIES PTY. LTD.

(ACN 054 711 081)

Third Respondent

AND:GARTH WILLIAM EATON

Fourth Respondent

AND:WILHELMINA FRANCISCA EATON

Fifth Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:                  Drummond J
DATE OF ORDER:              15 February, 1995
WHERE MADE:                 Brisbane

THE COURT ORDERS THAT:

1. The respondents' notice of motion is dismissed.

1. The respondents shall pay the applicant's costs of and incidental to the notice of motion.

1. Leave to the applicant to tax these costs is refused.

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

IN THE FEDERAL COURT OF AUSTRALIA )    No. QG 74 of 1994
QUEENSLAND DISTRICT REGISTRY     )
GENERAL DIVISION                 )

BETWEEN:  TRADE PRACTICES COMMISSION

Applicant

AND:INTERNATIONAL TECHNOLOGY HOLDINGS PTY. LTD.

(ACN 054 128 666)

First Respondent

AND:EUROPARK INTERNATIONAL PTY. LTD.

(ACN 062 455 556)

Second Respondent

AND:AUSTRALIAN TECHNOLOGIES PTY. LTD.

(ACN 054 711 081)

Third Respondent

AND:GARTH WILLIAM EATON

Fourth Respondent

AND:WILHELMINA FRANCISCA EATON

Fifth Respondent

Coram:   Drummond J
Date:    15 February, 1995
Place:   Brisbane

REASONS FOR JUDGMENT

The respondents in the action, three companies and a Mr. and Mrs. Eaton, who are associated with the companies, apply to be released from undertakings given to the court on their behalf by their then counsel.

Mr. Eaton appears today on behalf of himself and his wife, and seeks leave to appear on behalf of the corporate
respondents.  The issues raised by Mr. Eaton's own application are identical with those raised by the application, insofar as it relates to the corporate respondents.  I will therefore give him leave to appear on their behalf.

In the action, the Trade Practices Commission sues for injunctive relief in respect of what are alleged to be misleading representations made to the public on behalf of the first and second respondents and involving the other respondents.  The representations are alleged to have been made with respect to an automatic car-parking system, in the context of the respondents soliciting investment in the system by the public.  The representations fall into two main classes.  Firstly, representations with respect to the association of the World Bank and the Australian Government with the development of the system.  Secondly, representations with respect to the ownership of the system's technology and with respect to the control of marketing rights with respect to the system by the respondents.

The background to the action is a dispute between the respondents and a Mr. Van Der Horst, once employed by a company associated with Mr. Eaton, who is the holder of two registered patents relating to an automatic car-parking system.  Mr. Van Der Horst asserts that the respondents' system infringes his patents, something denied by the respondents.

The respondents' undertakings were given on 18 August, 1994, in the course of an application by the Trade Practices Commission for an interlocutory injunction then sought by it to restrain the respondents, until trial, from making a number of representations that can be grouped into the two classes I have mentioned.  The undertakings are expressed to operate until trial or earlier order.  Mr. Eaton says that he caused the undertakings to be given on behalf of himself and the other respondents in circumstances in which he wanted a short time to gather evidence to show that the respondents' technology was different from, and did not infringe, Mr. Van Der Horst's.  He says he expected on 18 August, 1994 that he would need only a period of a week or two to gather that evidence and bring the matter back to court.  I accept what he says about his state of mind at the time the undertakings were given.  It is supported by his affidavit of 18 August, 1994.  The order of 18 August, 1994 expressly grants the respondents liberty to apply on seven days' notice to release them from their undertakings, although a party is always entitled, without leave being reserved, to do that.

The undertakings were, I am satisfied, given in circumstances in which Mr. Eaton understood the general nature of the obligations the respondents thereby assumed.  He did not dispute this in argument and the fact that, although unrepresented, he has appreciated the need to apply to the Court for release from the undertakings, which he says he originally intended would operate only for a short period, confirms this.  I am satisfied that Mr. Eaton, and thus the other respondents, well understood that the undertakings were the price they had to pay to obtain the adjournment which they sought on 18 August last for their own purposes.

I proceed, in the circumstances of this case, on the basis that the undertakings so given should not be discharged unless the Court is satisfied by evidence that relevant circumstances have so changed since they were given, that it would be unjust to hold the persons who gave them to the restrictions thereby imposed on them.  See APM Investments Pty. Ltd. v Trade Practices Commission & Others (1983) 49 A.L.R. 475 at 488, 510.

The respondents have not attempted to put any evidence before me which could possibly justify their being discharged from the undertakings, insofar as they relate to the representations set out in paragraph 1(a), (d), (f), (g), (h), (i) and (j) of the order of 18 August last.

As to the undertakings insofar as they relate to paragraphs 1(a), (c) and (e), there is material before me that shows that the respondents have obtained since 18 August last evidence which suggests that the respondents may be able to show that their system does not infringe Mr. Van Der Horst's patents, although there is of course a body of evidence to the contrary.  But even if the respondents' evidence of non-infringement were to be accepted after a contested hearing, that would not be sufficient in my opinion, without more, to entitle the respondents to make the representations of the kind set out in these three paragraphs of the order of 18 August, 1994 without risk of being found to have engaged in misleading conduct in making them.  The respondents would only be entitled to represent, in the course of trade or commerce, that they had exclusive lawful international rights of the kind referred to in paragraph 1(e), e.g., if they could show some basis for such a wide ranging entitlement, such as the prospect of being entitled to patent protection on a wide-ranging basis, or to an internationally protectable reputation in their system.  There is no evidence before me that comes near suggesting they may be able to make out such a case.  The respondents, moreover, have had ample time since 18 August, 1994 to accumulate such evidence if it is available.

As to the representations in paragraph 1(c) of the order, while there is evidence which, if accepted, would show that this was not misleading, there is also a body of contradictory evidence.  There is also a question mark raised about the reliability of the respondents' title to the technology in question, in view of the evidence of the liquidator of a company, Parktec International Pty. Ltd., with which Mr. Eaton was associated, about the circumstances in which Mr. Eaton produced to the liquidator very late in the piece, an unstamped assignment by Parktec International Pty. Ltd. to the first respondent of certain rights to technology that look like those of which the respondents are now claiming ownership.  Mr. Eaton conceded in the course of argument that this assignment relates to part of the technology which is the subject of the respondents' claims of ownership and in respect of which they are alleged to have made representations such as those referred to in paragraphs 1(b), (c) and (e).

On the evidence before me, I am not prepared to find that such a change of circumstances since 18 August, 1994 would entitle the respondents to be released from their undertakings with respect to these kind of representations either.  The notice of motion, insofar as it claims relief in paragraph 1, will therefore be dismissed.

As to the relief claimed in paragraph 2 of the notice of motion, it is plain that the owner of the registered patents referred to therein, Mr. Van Der Horst, not being a party to these proceedings, there is no basis for an order under s. 97(3) the Patents Act 1990.  The notice of motion, insofar as relief is claimed in paragraph 2, will also therefore be dismissed.

I certify that this and the preceding
five pages are a true copy of the
reasons for judgment herein of the
Honourable Justice Drummond.

Associate:

Date:        15 February, 1995