U & I Global Trading (Australia) Pty Ltd v Tasman-Warajay Pty Ltd Tasman-Warajay Pty Ltd & Anor v U & I Global Trading (Australia) Pty Ltd

[1996] FCA 1066

IN THE FEDERAL COURT OF AUSTRALIA       No QG 177 of 1994
QUEENSLAND DISTRICT REGISTRY  
GENERAL DIVISION  

BETWEEN:U & I GLOBAL TRADING (AUSTRALIA) PTY LTD

(ACN 062 370 610)

Applicant

AND:TASMAN-WARAJAY PTY LTD

(ACN 060 662 428)

Respondent

AND:TASMAN-WARAJAY PTY LTD

(ACN 060 662 428)

First Cross-Claimant

AND:TASMAN-ENGINEERS PTY LTD

(ACN 010 675 662)

Second Cross-Claimant

AND:U & I GLOBAL TRADING (AUSTRALIA) PTY LTD

(ACN 062 370 610)

Cross-Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:  Drummond J
DATE OF ORDER:  28 November 1996
WHERE MADE:  Brisbane

THE COURT ORDERS THAT:

1.  The applicant’s notice of motion (filed 20 September 1996) is dismissed.

2.  Kevin William Lewis and Michael David Perry be added as second cross-respondents to the action.

3.  The applicant pay two thirds of the first and second cross-claimants’ costs of and incidental to the applicant’s notice of motion.

4.  The applicant pay the first and second cross-claimants’ costs of and incidental to their notice of motion (filed 4 September 1996).

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 177 of 1994
QUEENSLAND DISTRICT REGISTRY  
GENERAL DIVISION  

BETWEEN:U & I GLOBAL TRADING (AUSTRALIA) PTY LTD

(ACN 062 370 610)

Applicant

AND:TASMAN-WARAJAY PTY LTD

(ACN 060 662 428)

Respondent

AND:TASMAN-WARAJAY PTY LTD

(ACN 060 662 428)

First Cross-Claimant

AND:TASMAN-ENGINEERS PTY LTD

(ACN 010 675 662)

Second Cross-Claimant

AND:U & I GLOBAL TRADING (AUSTRALIA) PTY LTD

(ACN 062 370 610)

Cross-Respondent

CORAM:Drummond J

DATE:28 November 1996

PLACE:Brisbane

REASONS FOR JUDGMENT

In this action the applicant, U & I Global Trading (Australia) Pty Ltd, seeks relief under ss 128 and 129 the Patents Act 1990 (Cth) in respect of allegedly
unlawful threats by the respondent, Tasman-Warajay Pty Ltd.  The action was commenced in December 1994.  Tasman-Warajay defends by relying on a standard patent application lodged by Tasman-Engineers Pty Ltd in October 1991 and on a petty patent applied for in September 1994 and granted to Tasman-Engineers on 14 February 1995.

Tasman-Engineers is related to Tasman-Warajay and was joined in this action on 29 November 1995.  Both companies have cross-claimed against U & I Global for relief in respect of its alleged infringement of the petty patent from February 1995, ie, from the date of grant of the petty patent.  U & I Global answers the cross-claim by alleging the invalidity of the petty patent:  want of novelty appears to be the main issue.

U & I Global applies by motion on notice for orders striking out the amended defence and cross-claim on the grounds that those proceedings are frivolous or vexatious or are an abuse of the process of the court; alternatively, striking out of the pleading is sought on the ground that there has been such delay on the part of Tasman-Warajay and Tasman-Engineers in complying with directions as to warrant that course being taken now.  Alternatively, U & I Global seeks a stay of this action until another action, QG 41 of 1996, is determined.  In QG 41 of 1996 the parties are Ausbelt Splicing Services (International) Pty Ltd and Tasman-Engineers.  Ausbelt is unrelated to U & I Global.

On 27 February 1996, the Commissioner of Patents dismissed Ausbelt's opposition to Tasman-Engineers' standard patent application.  Ausbelt has appealed and that appeal is the subject matter of QG 41 of 1996.  The issues raised include the want of novelty of the invention the subject of Tasman-Engineers’ standard patent application, which is the same application referred to in the defence in this action, QG 177 of 1994.  There is a considerable overlap between the two actions in so far as the question of the novelty of the invention the subject of both the petty patent and the standard patent application is concerned.

It is obvious that no estoppels can arise as between the parties to the present action before me, QG 177 of 1994, if, as U & I Global contends, action QG 41 of 1996 should be heard first in the event that the striking out applications fail.  However, U & I Global does not offer any undertaking to accept any decision in action QG 41 of 1996 as governing the issue in the present action of the validity of the petty patent.  That is  understandable since it is not a party to action QG 41 of 1996 and has no relationship with Ausbelt.  Nevertheless, I regard it as material to the proposition that the present action should be stayed pending the determination of action QG 41 of 1996.  In the absence of estoppels and an undertaking, there can be no guarantee that the alternative course proposed by U & I Global will, in effect, resolve any significant issue in the present action.

So far as the striking out application based on the assertion that Tasman-Warajay and Tasman-Engineers’ pleadings raise a case that is frivolous or vexatious or an abuse of process is concerned, the core submission by U & I Global is that there has been such delay on the part of Tasman-Warajay and Tasman-Engineers in progressing this action that I should infer that those parties have no intention of bringing the matter to trial in a timely fashion, but are motivated instead by something entirely different, viz, by a desire to keep this unresolved litigation hanging over U & I Global’s head to coerce it out of engaging in the business of selling the kind of goods the subject of the action which, by implication, U & I Global asserts it is perfectly entitled to do notwithstanding the claims raised by Tasman-Warajay and Tasman-Engineers.

It seems to me that there is no substance in this attack on the material before me.  The action has progressed to a stage where, subject to any complication caused by the joinder of the directors of U & I Global, which is the subject of Tasman-Warajay and Tasman-Engineers’ motion which I also have before me today, it appears to be ready to be set down for trial, at least on the issue of liability.  On 14 June last a Judge of the Court directed that that issue be tried separately from the other issues in the action.

This consideration is sufficient in itself to give the lie to the theory that U & I Global advances in support of its proposition that Tasman-Warajay and Tasman-Engineers are engaged in what is an abuse of the process of the court.  But in addition, it is relevant in the context of such an application, in my opinion, to have regard to U & I Global’s own conduct in progressing the proceedings.  In my view, it has been guilty of extensive delay in finalising its own position as to the witness statements it intends to rely on at the trial.  Taking into account that consideration and taking into account the summary chronology of the action which is annexed to Mr MacDonald's affidavit, I am of the view that there is no substance whatsoever in the allegation that Tasman-Warajay and Tasman-Engineers’ proceedings involve an abuse of the process of the court or are frivolous or vexatious.

I have already dealt, in the brief reasons I have given, with the alternative attack mounted on the defence and cross-claim which it is said should be struck out because of persistent non-compliance with directions.  That attack is, in my view, unfounded for the reasons that I have given.

So far as the further alternative claim by U & I Global to stay the present proceedings until action QG 41 of 1996 is resolved is concerned, I have explained why I do not think the stay application should succeed.  But the two actions, as I have said, do involve factual issues with respect to the validity of the petty patent and the invention the subject of the standard patent application that overlap, if not completely, to a very great degree indeed.

This consideration, in my opinion, makes it desirable that both actions be brought together and in effect determined at one and the same time by one and the same judge, if that is a practical course.  I have already mentioned that a direction has been given in the present action to separate and to try first issues of liability.  In action QG 41 of 1996, the only issues are those which are closely related to issues which will have to be determined so far as liability is concerned in action QG 177 of 1994.  That suggests to me that it is very likely to be a practicable course to run both actions together.   However, careful attention will need to be given to structuring the action to ensure there is not unnecessary duplication of representation of parties.

What I propose to do is dismiss U & I Global’s notice of motion, but direct that action QG 177 of 1994 be brought before me for further directions at 10.15 am on Thursday, 19 December.  I also propose to vacate the direction given by Spender J in action QG 41 of 1996 adjourning those proceedings to 9.30 am on 13 December for further directions and will direct instead that action QG 41 of 1996 be brought before me for directions at the same time, 10.15 am on 19 December.

I will further direct that all parties in both actions give consideration to how a hearing of both actions which proceeds together should be structured and in particular to what representation should be permitted to each of the parties in each of the actions.

I have already mentioned the application by Tasman-Warajay and Tasman-Engineers seeking joinder of Mr Lewis and Mr Perry, directors of U & I Global, in these proceedings and that the only relief sought against U & I Global and intended to be sought against Mr Lewis and Mr Perry is in respect of the activities of U & I Global since the date of grant of the petty patent in February 1995. 

Whether Tasman-Warajay and Tasman-Engineers will make out any such entitlement to relief against U & I Global will depend on whether U & I Global's activities since November 1994, touched on in the affidavits of Mr Lewis and Mr Perry, do amount to, or can be shown to amount to, an infringement of the intellectual property rights of Tasman-Warajay and Tasman-Engineers.  It is not appropriate at this stage, in view of the case sought to be made out against U & I Global and its directors, to attempt to form any judgment on that issue, notwithstanding what Mr Perry and Mr Lewis have to say in their material.

The affidavits of Mr Perry and Mr Lewis show that, as directors of U & I Global, they have controlled and directed its activities in material respects since February 1995.  It seems to me that, given their relationship with U & I Global, it is highly unlikely that, if they were to be joined now, that would inject any significant delay into bringing the main action to a state where it is ready for trial, at least on the issue of liability.  I therefore propose to make an order in terms of paragraph 1 of the respondents' notice of motion.

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

Associate:

Date:  28 November 1996