Royale Biotech Group Limited v Hi Globe International Trading Limited
[2021] NZHC 2176
•23 August 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-1080
[2021] NZHC 2176
UNDER the Copyright Act 1994 BETWEEN
ROYALE BIOTECH GROUP LIMITED
Plaintiff
AND
HI GLOBE INTERNATIONAL TRADING LIMITED
Defendant
Virtual hearing: 20 August 2021 Appearances:
No appearance for the plaintiff JRE Wach for the defendant
Judgment:
23 August 2021
JUDGMENT OF JAGOSE J
This judgment was delivered by me on 23 August 2021 at 3.00pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Solicitors:
James & Wells Solicitors – Auckland Branch AJ Park Law Limited, Auckland Branch
ROYALE BIOTECH GROUP LTD v HI GLOBE INTERNATIONAL TRADING LTD [2021] NZHC 2176 [23
August 2021]
[1] By this proceeding, the plaintiff (“Royale Biotech”) alleges the defendant (“Hi Globe”) infringed its copyright in the design of a plastic bottle by (a) authorising the manufacture of bottles contended to be substantial reproductions of that design, and (b) importing such bottles into New Zealand.1
[2] Although it is not pleaded as such, it appears Royale Biotech notified the Ministry of Business, Innovation, and Employment’s chief executive of its claim of copyright in the bottles’ design, and requested the chief executive to detain any pirated copies of the item or items, as the case may be, that are in, or at any time come into, the control of the Customs.2 The chief executive accepted the notice, with the consequence it remains in force until either revoked by Royale Biotech or, in proceedings under s 141(1) of the Copyright Act 1994, this Court orders the notice be discharged.3 As a consequence of the notice’s acceptance, the chief executive determined the imported bottles appeared to be pirated copies to which the notice applied.4
[3] Royale Biotech then commenced this proceeding under s 141(3) for a decision on whether the imported bottles were pirated copies of its design. Hi Globe counterclaims under s 141(1) for an order the accepted notice be discharged, and under s 141(2) for an order the detained bottles be released.
[4] On Royal Biotech’s subsequent failure to progress its claim, Hi Globe now seeks Royal Biotech’s claim be struck out as an abuse of process and the goods be released as a consequence of that ‘abandonment’; alternatively, ‘unless’ orders to comparable ends.
Applicable law
Rule 15.1 of the High Court Rules 2016 provides:
15.1 Dismissing or staying all or part of proceeding
(1) The court may strike out all or part of a pleading if it—
1 Copyright Act 1994, pt 7.
2 Section 136.
3 Section 136D.
4 See Burden v ESR Group (NZ) Ltd [2015] NZHC 1649 at [14].
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
(2) If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3) Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4) This rule does not affect the court’s inherent jurisdiction.
The principles are well-understood: pleaded facts are presumed true; the target pleading must have no prospect of success; and the jurisdiction is exercised only in clear cases.5 An ‘abuse of the process of the court’ is “improper use of [the court’s] machinery”;6 use of that process “for a purpose or in a way significantly different from its ordinary and proper use”.7
[6]Section 140 of the Copyright Act provides:
140 Detention of pirated copy
(1) Where the chief executive has formed an opinion that an item that is in the control of the Customs may be a pirated copy to which a notice accepted under section 136(3)(a) relates, that item shall be detained in the custody of the chief executive or any Customs officer until—
(a)the chief executive is served with an order made in proceedings under section 141(1) that the notice be discharged; or
(b)the chief executive is served with an order made in proceedings under section 141(2) that the item be released; or
(c)any proceedings under section 141(3) in respect of that item (including any appeal) are determined by a decision that the item is not a specified item that is a pirated copy; or
(d)any proceedings under section 141(3) in respect of that item, including any appeal, are abandoned; or
5 See Gartside v Sheffield, Young & Ellis [1983] NZLR 37 (CA) at 45; Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267; and North Shore City Council v Attorney-General [2012] NZSC 49, [2012] 3 NZLR 341 at [146], all endorsed by the Supreme Court in Sandman v McKay [2019] NZSC 41, [2019] 1 NZLR 519 at [113].
6 Simon Goulding, DB Casson and William Blake Odgers Odgers on Civil Court Actions (24th ed, Sweet & Maxwell, London 1996) at [10.15] as cited in Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [87].
7 Attorney-General v Barker [2000] 1 FLR 759 (QBD) at 764.
(e)10 working days have elapsed since notice was served under section 139 and the chief executive has not been served with notice of proceedings brought under section 141(3) by a person other than the importer or exporter;—
whereupon the item shall, subject to subsection (3), be released to the person entitled to it.
(2) The chief executive may in any particular case extend the period referred to in subsection (1)(e) to 20 working days if he or she considers it appropriate to do so in all the circumstances.
(3) The chief executive or any Customs officer shall not release any item under subsection (1) unless—
(a)any other legal requirements as to importation or exportation of the item are satisfied; and
(b)any requirements made pursuant to any regulations made under this Act requiring the deposit of a security have been satisfied; and
(c)the release of the item is not otherwise contrary to law.
Discussion
[7] After a promising start, Royale Biotech breached timetable directions leading to trial for 22 November 2021. It has not opposed Hi Globe’s counterclaim, or served its briefs of evidence and nominations for the common bundle, when due. Its last substantive step in the proceeding, of filing an amended statement of claim at some odds with its initial claim, was on 18 May 2021. Its solicitors then were given leave to withdraw from its representation.8 It appears to have exited (without changing) its registered address. I am satisfied from proof of service subsequent documents properly have been served on that address, as well as electronically communicated to Royale Biotech’s email address.9 But there has been no response from it at all.
[8] Given in particular the fundamental role Royale Biotech’s issue and maintenance of this proceeding has in preventing release of the bottles to Hi Globe under s 140(1)(d) and (e), I conclude Royale Biotech’s failure to maintain the proceeding’s progress thus is abusive; use of the proceeding effectively to prevent release of the bottles to Hi Globe, a purpose “significantly different from its ordinary
8 Royale Biotech Group Ltd v Hi Globe International Trading Ltd HC Auckland CIV-2020-404- 1059, 14 July 2021 (Minute of Fitzgerald J) at [3].
9 To avoid doubt, being satisfied in terms of High Court Rules 2016, r 9.73(5)(a), and noting both Jason Wach’s email memorandum of 20 August 2021 and the intended affidavit’s ultimate paragraph, I direct the intended affidavit of Ranjini Vasanthan be accepted for filing, and read and used, in this proceeding.
and proper use’. I therefore will strike out Royale Biotech’s amended claim (and, to avoid doubt, its initial claim).
[9] There is a question if by such strike out the proceeding is abandoned for the purpose of s 140(1)(d). Despite, or perhaps because, procedural rules provide for express notice of abandonment,10 or proceedings being deemed abandoned,11 the word ‘abandoned’ in this context has not been the subject of judicial scrutiny. The paragraph also refers to “any proceedings”, but ‘any’ may mean either ‘each’ or ‘all’. Section 2 expressly defines ‘proceedings’ as “includ[ing] a counterclaim”.12
[10] Although (or, again, perhaps because) ‘abandonment’ has a “highly artificial and technical” meaning in maritime law,13 New Zealand courts have preferred to adopt a definition of “[t]he action or process of surrendering, forsaking, giving up completely or leaving something or someone unprotected”.14 That definition arguably anticipates some deliberate commission or omission on the part of the abandoner.
[11]Other legal dictionaries confirm the affirmative nature of the word:15
(1) The relinquishment of an interest or claim. Abandonment must be final and complete and requires intention (although it may be proved by reference to a course of action that shows the gradual formation of an intention to abandon).
(2) Abandonment is of particular significance in relation to legal proceedings. Rules of Court can make provision for the method by which an action may be abandoned … .
10 See, for example, High Court Rules 2016, r 15.19.
11 See , for example, Court of Appeal (Civil) Rules 2005, r 43.
12 But, at least for the purpose of strike out, High Court Rules’ r 15.1(2) distinguishes ‘proceeding’ and ‘counterclaim’.
13 Rankin v Potter (1873) LR 6 HL 83 at 144. See also Court Line Ltd v R, The Lavington Court
[1945] 2 All ER 357 (CA) at 362–363.
14 Carter v Ports of Auckland Ltd CA122/04, 29 August 2005 at [16]–[18]; albeit in a maritime context, citing Butterworths New Zealand Law Dictionary (now Peter Spiller New Zealand Law Dictionary (9th ed, LexisNexis, Wellington, 2019 at 1)). Ray Finkelstein and others Australian Legal Dictionary (2nd ed, LexisNexis, Victoria, 2016) at 2 uses the same definition, adding “Complete relinquishment of property or a claim in law”, exemplified in the context of “Courts and judicial system[:] The relinquishment of an interest or claim. Abandonment of action occurs when proceedings are ceased …”. Spiller adds “Courts[:] The discontinuance of a claim. See Mailley v Police [2011] 3 NZLR 223, 230”, but there is nothing in that decision to such effect.
15 Daniel Greenberg (ed) Jowitt’s Dictionary of English Law (5th ed, Sweet & Maxwell, London, 2019) vol 1 at 4. Similarly, ‘abandonment’ is defined as “[t]he relinquishing of a right or interest with the intention of never reclaiming it”: Bryan Garner (ed) Black’s Law Dictionary (11th ed, Thomson Reuters, Minnesota, 2019) at 2.
Similarly, the word “[s]ignifies ‘leaving completely and finally; giving up all concern in’”.16 It does not sit well with the position here, in which the amended claim only is to be struck out for the would-be abandoner’s inaction. It is unclear if, given the counterclaim, the proceeding then may be dismissed.17 Even so, such dismissal does not attribute to Royale Biotech the meaning the word’s definitions carry. Although strike out for abuse of process or consequent dismissal may in one sense be described as relinquishment of Royale Biotech’s claim, that consequence cannot be said its intention.
[12] The better view is Royale Biotech’s noted failures to meet its timetable obligations — and to respond to Hi Globe’s informal present application, particularly in circumstances of the clear and signalled consequences ultimately sought by Hi Globe — inferentially are its gradually-formed intentional omissions, culminating in its ‘final and complete’ abandonment of the proceeding, as struck out. I therefore will declare Royale Biotech’s proceeding under s 141(3) in respect of the imported bottles is abandoned. If Hi Globe’s counterclaim then was to be discontinued, I would dismiss the proceeding in its entirety.
Result
[13]I:
(a)strike out Royale Biotech’s statement of claim dated 8 July 2020 and amended statement of claim dated 18 May 2021;
(b)declare Royale Biotech’s proceeding under s 141(3) in respect of the imported bottles is abandoned; and
(c)on Hi Globe’s filing and service of a notice of discontinuance, dismiss
this proceeding in its entirety (save for the question of costs).
16 Daniel Greenberg (ed) Stroud’s Judicial Dictionary of Words and Phrases (10th ed, Sweet & Maxwell, London, 2020) vol 1 at 1, citing Kallooar v R [1964] 50 WWR 602.
17 High Court Rules, r 15.1(2).
Costs
[14] As the successful party, Hi Globe is entitled to an award of costs. If that is to be pursued, I reserve their quantum for determination on short memoranda of no more than five pages — annexing a single-page table setting out any contended allowable steps, time allocation, and daily recovery rate — to be filed and served by Hi Globe within 10 working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.
—Jagose J
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