FEDERAL COURT OF AUSTRALIA
RLA Polymers Pty Ltd v Nexus Adhesives Pty Ltd [2010] FCA 1088
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Citation: |
RLA Polymers Pty Ltd v Nexus Adhesives Pty Ltd [2010] FCA 1088 |
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Parties: |
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File number(s): |
VID 1150 of 2007 |
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Judge: |
RYAN J |
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Date of judgment: |
6 October 2010 |
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Date of hearing: |
29 September 2010 |
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Place: |
Melbourne |
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Division: |
GENERAL DIVISION |
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Category: |
No Catchwords |
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Number of paragraphs: |
60 |
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Counsel for the Applicant: |
Mr M Derham QC with Mr A Nash |
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Solicitor for the Applicant: |
Blake Dawson |
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Counsel for the Respondents: |
Mr J Wilson SC with Mr T Wodak |
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Solicitor for the Respondents: |
GPZ Legal Pty |
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IN THE FEDERAL COURT OF AUSTRALIA |
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VICTORIA DISTRICT REGISTRY |
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GENERAL DIVISION |
VID 1150 of 2007 |
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BETWEEN: |
RLA POLYMERS PTY LTD (ACN 004 709 915) Applicant
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AND: |
NEXUS ADHESIVES PTY LTD (ACN 121 120 036) First Respondent
JONATHAN CHARLES CLEWLOW Second Respondent
ISHU SOFAT Third Respondent
BRETT NIXON Fourth Respondent
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JUDGE: |
ryan j |
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DATE: |
6 october 2010 |
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PLACE: |
MELBOURNE |
REASONS FOR RULING ON ADMISSIBILITY
OF WITNESS STATEMENTS OF ROBERT TURNER
1 A challenge has been made by Counsel for the applicant (“RLA”) to the admissibility of two witness statements by Robert Turner which the respondents seek to adduce in evidence. A first statement, which was provided to RLA on 22 February 2010, annexed a report of some seven pages purporting to answer questions posed to Mr Turner by the solicitors for the respondents. However, that witness statement has now been withdrawn by the respondents and it is unnecessary furtherto consider the objections made to it on behalf of RLA.
2 At the end of the hearing on 29 September 2010, I indicated in a summary way which of those passages from Mr Turner’s second and third witness statements to which objections had been taken would be excluded as inadmissible. At the same time, I indicated that other disputed passages from Mr Turner’s second and third witness statements were ruled, at least provisionally, to be admissible. I now indicate my reasons for those rulings.
A) Second Witness Statement dated 18 August 2010
(i) Executive Summary
3 Mr Turner has prefaced this witness statement with an “Executive Summary” purporting to set out his “conclusions”, the basis for reaching which, he says, “is contained in the body of my report below”. Several of the conclusions are tendentious and, if they are supported by passages in the body of his witness statement, it is to those passages that the Court will have regard rather than any purported “executive” summary. That is particularly so where, as here, it is not always immediately apparent which passages in the body of the statement are relied on as supporting the conclusions in the summary. For these reasons, the “Executive Summary” is inadmissible.
(ii) Paragraph 13
Of these companies only two, BASF and Nuplex offer resins with a proven track record for the manufacture of flooring adhesives and also provide excellent local technical support and start-up formulation guidance.
4 This paragraph follows paragraph 12 which asserts that only three manufacturers in Victoria supply resins suitable for the production of adhesives like Nexus 820 and Nexus 840. I regard paragraph 13 as admissible on the basis that it expresses Mr Turner’s understanding of certain aspects of the flooring adhesive industry in Victoria. A review of the evidence as a whole will determine whether that understanding is accurate.
(iii) Paragraphs 18, 19, 20 and 21
5 Counsel for the respondents did not press the admissibility of these paragraphs and they are accordingly excluded from the evidence.
(iv) Paragraph 22
The initial formulation was based on a 90/10 blend of Valtac 5016/610 acrylic dispersion. Subsequent development work showed that application performance enhancements were obtained by the adoption of a three polymer blend of Acronal A323, Valtac 5216 and Valtac 610 in the ratio of 30/60/10 gave the best performance characteristics for Nexus 820.
6 Counsel for RLA forcefully criticised this paragraph as failing to identify the “initial formulation” or “subsequent development work” to which Mr Turner is referring. Despite those criticisms, I consider that the paragraph should be admitted and the applicant be given an opportunity to demonstrate by cross-examination that it is unsupported by an accurate analysis of the work undertaken by the respondents on Nexus 820.
(v) Paragraph 24
Ishu Sofat’s experience and her notes on the ‘Development of Nexus 820’ (Attachment RT-5) clearly demonstrate the methodology that she used in the development of this product. She gives an entirely credible account of the development process she has adopted in formulating Nexus 820. Her background and experience as a formulation chemist is well documented.
7 I consider that the first sentence of this paragraph is admissible although the weight to be given to it will depend on the extent to which the witness can justify the assertion it contains. The remaining sentences are conclusionary and impermissibly seek to usurp the function of the Court in the evaluation of Ms Sofat’s credibility and her relevant experience. Those sentences will be excluded from the evidence.
(vi) Paragraph 25
A review of Sofat’s development notes, annotations to raw material data sheets and communications with Mr O’Brien demonstrates a chemist’s inquiring mind developing an understanding of the use of polymer blends to modify the performance and application characteristics of an adhesive necessary to develop commercially saleable flooring adhesives.
(vii) Paragraph 26
Ishu Sofat’s experience gained as Latex Technical Manager for RLA Polymers is relevant to and directly transferable to the development acrylic flooring adhesive formulations. Both technologies are based on surfactant-stabilised emulsions, the fillers, thickeners, preservatives, Ph modifiers and the methods of manufacture are common to both technologies.
(viii) Paragraph 27
PE265 and Nexus 820 are similar in their chemical composition. Both products show a similar chemical profile when subjected to chemical analysis. All acrylic sheet vinyl adhesives share similar chemical characteristics.
10 The first two sentences of this paragraph are inadmissible. The first does not indicate the criteria by which Mr Turner judged PE265 and Nexus 820 to be similar in chemical composition. The chemical analysis to which the second sentence refers is not identified. Nor does it appear whether it was carried out by Mr Turner or some other person. Only the last sentence can be admitted in evidence.
(ix) Paragraph 28
11 The admissibility of this paragraph was not pressed by counsel for the respondents and it is accordingly excluded from the evidence.
(x) Paragraph 29
Both formulations use calcium carbonate as the filler. Calcium carbonate is the industry standard filler used by all manufacturers of these products. Whilst silica can be used as a filler, OH&S considerations, due to the risks of silicosis to workers would have ruled out the use of this as an alternative filler.
12 Only the first sentence of this paragraph is admissible. The source of the information relied on to establish that calcium carbonate is used by all manufacturers of flooring adhesives is not stated. Nor does it appear in whose mind silica would have been ruled out as an alternative filler.
(xi) Paragraph 34
The use of different solvents as the base for the gum rosin solution is an indication of an independent development path.
13 This sentence is inadmissible. It does not indicate from what the practice, presumably of Nexus, is different. Nor does it appear why, if it has occurred, the use of different solvents is an indication of an “independent development path.”
(xii) Paragraph 40
14 The admissibility of this paragraph was not pressed by counsel for the respondents. It is accordingly excluded from the evidence.
(xiii) Paragraph 42
Both PE 656 and Nexus 820 formulations show evidence of these minor formulation modifications taking place. For example in Nexus 820 the replacement of ammonia with sodium hydroxide, as the operators did not like working with ammonia.
15 The second sentence of this paragraph is inadmissible because it does not specify when the modification in question occurred. Nor does it indicate the source of the information as to why ammonia was replaced with sodium hydroxide.
(xiv) Paragraph 43
Based on an analysis of Ishu Sofat’s development notes and supporting documentation, I conclude that Ishu Sofat is a competent formulation chemist with years of experience in developing water based emulsion formulations.
(xv) Paragraph 44
Her development notes show an enquiring chemists mind, developing expertise specifically required to formulate and manufacture, a commercially saleable sheet vinyl flooring adhesive.
(xvi) Paragraph 45
There is clear evidence in the development notes and supporting documentation to show that the formulation for Nexus 820 was developed using independent development processes based on starting point formulations provided by BASF.
18 This paragraph cannot be admitted into evidence as the “clear evidence” relied on for the argumentative conclusion is not identified or incorporated by reference.
(xvii) Paragraph 46
19 The prefatory words to this paragraph recite;
There are a number of distinctive differences in the Nexus 820 formulation when compared to PE 265 that support this conclusion.
There then follows a list of eight matters which are said to constitute the distinctive differences, including;
2. Valtac emulsions are not equivalent to the Acronal emulsions; they are competitive products that compete in the same market place for the production of similar acrylic adhesives. RM Data Sheets Attachment RT-3, RT-6.
No objection has been taken to the other matters asserted in the list forming part of paragraph 46. However, sub-paragraph 2 refers to polymer data sheets and starting point formulations issued by Nuplex. It makes no reference to BASF material of a similar kind so as to indicate a basis for the asserted lack of equivalence between Valtac and Acronal. Accordingly, sub-paragraph 2 will be excluded.
(xviii) Paragraphs 48 and 49
20 Paragraph 48 commences with the assertion “The formulations are very different when actual percentages are used, as shown below”. There is then set out a table which lists the percentages in which various ingredients are to be found in the BASF starting formulation No. 2366-1, in Nexus 820 and PE265. The next paragraph, 49, introduces a similar table in which the ingredients are expressed as a comparison of “the dry film composition in terms of ingredient per 100 parts of acrylic resin for the dry film.”
21 I consider it appropriate to admit these paragraphs into evidence as indicating assumptions on which Mr Turner has based his opinion. As Spigelman CJ observed in Australian Securities and Investments Commission v Rich (2005) 4 ACSR 326; [2005] NSWCA 152, at [136];
The issue for a trial judge is whether the opinion expressed to be based on the facts proved or assumed is correct. In determining this issue, the judge will have regard, amongst other things, to the reasoning process (based on those facts) used by the expert. The mere fact that the expert’s opinion is based on facts that are assumed (and not proved) at the time the expert gives evidence is no reason to exclude the evidence at that stage. The assumed facts may be proved later by other evidence. The fact that the opinion was initially formed or later reinforced by reference to other facts, not said by the expert in his evidence to be proved or assumed, is irrelevant to the question of admissibility. Once the opinion is capable of being based on the proved facts, it is admissible. The fact that the expert’s opinion was at one time – or even still is – reinforced by undisclosed facts and reasoning processes is irrelevant to the admissibility of the opinion (although these matters may go to weight).
22 It will be a matter for determination after all the evidence is in whether the quantities and percentages set out in Mr Turner’s tables are correct and, if so, whether they support his opinion which I regard as capable of being based on the facts contained in the tables.
(xix) Paragraph 50
Comparing the formulations in this way clearly demonstrates that Nexus 820 was not developed using the PE265 formulation as the starting point but was developed using the BASF starting point formulation.
23 I have decided on balance to admit this paragraph as a statement of an inference which Mr Turner considers, in the light of his experience in formulating flooring adhesives, to be available from a comparison of the formulations set out in the tables appended to paragraphs 48 and 49 of his statement. Whether it is the only, or preferable, inference, will depend on a review of the whole of the evidence and the weight to be accorded to that which tends in favour of, and that which tends against, the inference.
(xx) Paragraph 53
There is also a clear distinction between the solvents used by both companies to dissolve the gum rosin. This again points to independent development processes being adopted in the development of Nexus 820.
24 Although this paragraph does not specify the distinction on which Mr Turner relies, I consider that it should be left in evidence as pointing to an inference which Mr Turner considers to be available. Whether the Court is ultimately persuaded to draw that inference will depend, in part, on whether a significant difference of the kind for which Mr Turner contends is made out by other evidence.
(xxi) Paragraph 54
25 The admissibility of this paragraph was not pressed by counsel for the respondents and it is, accordingly, excluded.
(xxii) Paragraph 55
Nexus Adhesives Pty Ltd was a small, new company at the time it developed Nexus 820 and Nexus 840. The level of Documentation and testing which it produced and conducted; according to the information given to me is entirely consistent with what I would expect of a new, start up company with limited manpower resources.
26 This paragraph is not an expression of opinion within Mr Turner’s established expertise and it is excluded from the evidence. He does not indicate what aspects of a company cause him to regard it as “small”. Nor does he indicate any understanding, or assumption, about the manpower resources available to Nexus which he characterises as “limited”. “The information given to me” is not identified. Nor is the level of documentation and testing kept or carried out by Nexus which Mr Turner regarded as consistent with that to be expected of a new, start up company.
(xxiii) Paragraph 56
In a large organization, by necessity, formal reporting structures are required to be maintained. However in a small startup company, at least initially, those procedures are more likely to be much less structured and then develop over time as the organization grows. For instance I would not expect any development or progress reports to appear, as there is no intended recipient of the report, after all who writes reports to themselves. What I do see is a development workbook that charts the progress of the development, factory formulations and a product data sheet and material Safety Data Sheets. This is all I would expect to be produced by a company the size of Nexus Adhesives.
27 This paragraph suffers from many of the same vices as paragraph 55 and is excluded for the same reasons. Specific defects include the failure to identify the “development work”, or “factory formulations”, a “product data sheet” and “material Safety Data Sheets” on which Mr Turner relies.
(xxiv) Paragraph 57
Roberts 656 and Nexus 840 are similar in their chemical composition, as are all the unfilled pressure sensitive adhesives on the Australian market. These are not complex products to develop or produce.
28 I regard this paragraph as expressing opinions within Mr Turner’s experience and expertise. Criticisms of its lack of particularity in referring to the claimed similarities and the comparative degree of complexity involved in developing or producing pressure sensitive adhesives go to the weight to be given to this expression of opinion, not to its admissibility.
(xxv) Paragraph 58
Given the simplicity of the formulations this is not surprising. The development processes for both these products are in the public domain, being provided by the manufacturers of the pressure sensitive acrylic dispersion.
29 This paragraph is inadmissible because it does not identify the formulations which are said to be simple. In particular, it is not made clear whether Mr Turner is referring to “start-up” formulations provided by suppliers of ingredients for pressure sensitive adhesives or the formulae according to which Roberts 656 and Nexus 840 are manufactured. Similarly, it is not stated how the formulations in the former category are said to be “in the public domain.”
(xxvi) Paragraph 61
The composition of Nexus 840 is consistent with the current formulation of Nexus 840 with formulation changes responding to market feedback to adjust application characteristics and improve in-can stability.
30 This paragraph must be excluded. Perhaps because the question which it purports to answer was not well drafted, it does not make clear what was the “composition” of Nexus 840 which is said to be consistent with the “current formulation” or when that original “composition” came into existence. Nor has there been any attempt to identify the “market feedback” which led to adjustments reflected in the current formulation or when those adjustments were made.
(xxvii) Paragraph 62
Both Roberts 656 and Nexus 840 are similar in their chemical composition. They are both very simple pressure sensitive acrylic adhesive formulations. All formulations by other manufacturers of unfilled pressure sensitive adhesives share similar chemical compositions.
31 Apart from the first sentence, this paragraph should be excluded from the evidence because it does not identify the “formulations” of the two products which are said to be very simple. Nor does it identify the two adhesive formulations or the other manufacturers and their products which are said to share the similar “chemical compositions.”
(xxviii) Paragraphs 63, 65, 66 and 67
32 The admissibility of these paragraphs was not pressed by counsel for the respondents and accordingly, each of them is excluded from the evidence.
(xxix) Paragraph 68
The point of differentiation between Roberts 656 and Nexus 840 is that Nexus has evaluated a number of formulations and selected a blend of two acrylic dispersions to base their product on based on their trials and the recommendation of Phillip O’Brien. Roberts 656 has only ever been based on one acrylic dispersion.
33 I have regarded this paragraph down to the expression “to base their product on” as admissible. However, the claim that the process followed by Nexus has been “based on their trials and the recommendations of Phillip O’Brien” has not been substantiated by any reference to the trials or any recommendation of Mr O’Brien. That part of the first sentence is accordingly excluded. The last sentence in paragraph 68 has been excluded because there is nothing to indicate the evidence in support of the assertion that Roberts 656 has only ever been based on one acrylic dispersion. That sentence has also been excluded from the evidence.
(xxx) Paragraphs 69, 70, 71 and 72
34 Counsel for the respondents did not press the admissibility of any of these paragraphs and they are all, accordingly, excluded from the evidence.
(xxxi) Paragraph 73
PE265, Roberts 656, are not complex formulations as has been asserted by RLA, they are in fact very much stock standard formulations basic design of which has been used by flooring adhesive manufacturers since the 1970’s. What did change in the 1990’s was the development of acrylic polymer emulsions with improved plasticiser resistance. Plasticiser is an ingredient added to sheet vinyl to improve flexibility and resilience. This was a major cause of flooring adhesive failures in the 1980’s.
35 I regarded the first and last sentences of this paragraph as inadmissible. The first sentence does not give any particulars of the “basic design” of the “stock standard formulations” or of the flooring adhesive manufacturers who, Mr Turner claims, have used them since the 1970’s. Similarly, the last sentence recites a conclusion drawn from unstated evidence.
(xxxii) Paragraph 74
The introduction of these new raw materials was accompanied by the publication of starting point formulations from the acrylic emulsion suppliers to promote these new emulsions.
36 This paragraph has been excluded because it does not enable the reader to identify the acrylic emulsion suppliers who have published starting point formulations. Nor does it specify what those formulations are.
(xxxiii)Paragraph 77
I cannot draw the same conclusion. The use of testing of competitors products is standard industry practice adopted by all manufacturers seeking to develop competitive products for sale in the same market place. It is in fact standard practice at RLA.
37 I have excluded the first and last sentences from this paragraph. The first is tendentious and purports to express a conclusion about an ultimate fact which is outside the province of an expert witness in a case like the present. The last sentence is objectionable because it does not indicate the nature of testing by RLA of competitors’ products or when, or how frequently, it occurs so as to justify the conclusion that it is “standard practice”.
(xxxiv)Paragraph 78
After careful reading of Ishu Sofat and Phillip O’Brien’s witness statements and supporting documentation, it is my conclusion that using starting point formulations from BASF and the experience of both Ishu Sofat and Phillip O’Brien has formed the basis for the development of both Nexus 820 and Nexus 840.
38 On balance, I regard this expression of opinion by Mr Turner as admissible because it identifies the evidence and other factors on which it is based. Of course, it may emerge from cross-examination of Mr Turner or otherwise, that the evidence to which he points is unreliable or is not to be accepted. Likewise, his perceptions of the experience of Ms Sofat and Mr O’Brien may be inaccurate. However, these are all matters going to the weight to be attached to the paragraph and not to its admissibility.
(xxxv) Paragraph 79
Having been in the position of having to bring new flooring adhesives to market, the most time consuming task is acquiring the raw materials upon which to base the product development. Once obtained the development process and the refinement of the formulations is a relatively rapid process.
39 This paragraph has been admitted. It points to an aspect of Mr Turner’s experience on which he bases his conclusion as to what is the most time-consuming task in developing a new flooring adhesive and bringing it to market. The fact that the conclusion seems, on its face, surprising and the vagueness inherent in the expression “relatively rapid process” are both matters to which cross-examination of Mr Turner can be directed.
(xxxvi)Paragraph 80
40 The admissibility of this paragraph was not pressed by counsel for the respondents and accordingly, it is not admitted into evidence.
Third witness statement dated 22 september 2010
(xxxvii) Paragraphs 14 and 15
14 Failures of sheet vinyl flooring installations were at this time, commonplace.
15 BASF, who supplied acrylic emulsions to the Roberts Company at this time, had developed a new technology, plasticiser resistant, acrylic emulsion for flooring adhesives.
41 I regard these paragraphs as admissibly reciting part of the history of the development of adhesives for sheet vinyl flooring up to 1991. The accuracy of these recitals and the weight to be given to them in the resolution of the issues in this case can be explored in cross-examination.
(xxxvii) Paragraph 18
42 The admissibility of this paragraph was not pressed by counsel for the respondents and accordingly, it has not been admitted into evidence.
(xxxviii) Paragraph 19
(xxxix) Paragraph 26
(xl) Paragraphs 27 and 28
27. The results of the FTIR and Gas Chromatography testing, shows that as, I had asserted, these results clearly show that all of the of the [sic] sheet vinyl adhesives, (with the exception of Bostik Instant Pro, which has Vinyl Acetate as the major polymer base), that all other Australian manufacturers products tests,
i. Have an almost identical acrylic polymer backbone.
ii Incorporate calcium carbonate as the filler.
iii. A similar amount of filler.
iv. Have similar Total Solids.
v. Contain rosin as the tackifying agent.
vi. Contain a hydrocarbon solvent.
vii. Contain an acrylic or methylcellulose thickener.
28. In the case of the pressure sensitive adhesives, analysis, in TABLE 3, this shows that all of the products are almost identical in composition, differing only in colour and the amount of water added to reduce product cost.
45 Although Mr Turner, in these paragraphs, does not fully identify the parts of the FTIR and Gas Chromatography test on which he relies as supporting his conclusions, I consider that they should be admitted into evidence on a similar basis to paragraph 26 discussed at [44] above.
(xli) Paragraph 29
From the information that has been obtained from this testing regime, I have also been able to demonstrate how easy it is to reverse engineer all of these products, or in fact any adhesive formulation.
46 This paragraph has been excluded because it does not identify the information from either the FTIR test or the Gas Chromatography test which is said to demonstrate the ease of “reverse engineering” the products in question or “any adhesive formulation.” Nor has Mr Turner indicated in any measurable way what he means by it being “easy” to reverse engineer one of the relevant products.
(xlii) Paragraph 30
As stated previously manufacturers of PS acrylic emulsions do not issue starting point formulations because they are so simple and in the public domain.
47 This statement about pressure sensitive emulsions is not admissible because no basis for it in Mr Turner’s experience has been demonstrated and because there is no indication of where “in the public domain” starting point formulations for pressure sensitive emulsions are to be found.
(xliii) Paragraph 33
48 The admissibility of this paragraph was not pressed by counsel for the respondents and, accordingly, it has not been admitted into evidence.
(xliv) Paragraph 34
He has also ignored and failed to comment on the distinct differences in the formulation, specifically the inclusion of Plastilit 3060 and Calgon in the Nexus 820 formula.
49 This paragraph has been admitted as a legitimate expert comment on the report of another expert, Mr Bate. Whether Mr Turner’s criticism is valid must await an evaluation of Mr Bate’s evidence, perhaps in the light of any cross-examination directed at this part of Mr Turner’s evidence.
(xlv) Paragraph 36
50 The admissibility of this paragraph was not pressed by counsel for the respondents and, accordingly, it has been excluded from the evidence.
(xlvi) Paragraphs 38 and 40
38. In order to assess the formulations of both RLA PE 265 and Nexus 820 for similarities that might indicate that Nexus 820 had been copied from the PE 265 formula” I have compared, the formula for PE265 with Nexus 820 and the two start-up formula 2366-1 and 2522-1 from BASF.
…
40. There results are in fact quite surprising, for they actually show that PE265 formulation is, in fact, more similar to the BASF start-up formulations than Nexus 820.
51 I regard paragraphs 38 and 40 as an appropriate introduction to a comparison of the respective formulations for PE265 and Nexus 820 and the start up formulae which are said to have been provided by BASF. These paragraphs have therefore been admitted.
(xlvii) Paragraphs 41, 42 and 43
52 The admissibility of these paragraphs was not pressed by counsel for the respondents and, accordingly, they have been excluded from the evidence.
(xlviii) Paragraph 44
The Nexus 820 formulation, on the other hand, shows its similarity to the BASF’s 2366-1 formulation, in that both the level of and type of plasticiser is identical. Nexus 820 incorporates Plastilit 3060 plasticiser as recommended in BASF’s 2366-1 start-up formulation. It is less similar to the BASF 2366-1 formula.
53 This paragraph has been criticised by counsel for RLA as difficult to understand. However, I have provisionally admitted it into evidence. If it is unintelligible when examined against the text of the start up formulations with which the Nexus 820 formulation has been compared, that can be demonstrated by cross-examination of Mr Turner.
(xlix) Paragraph 45
Nexus 820 is substantially dissimilar to both PE 265’s and BASF’s starting point formulation 2366-1 for the following reasons:-
i. Nexus 820 has a higher filler level than BASF 2366-1.
ii. A lower level of filler than BASF’s 2522-1 formula.
iii. A higher level of filler than the PE 265 formulation.
iv. A higher level of gum rosin than both PE265 and BASF 2366-1, but a lower level than BASF’s 2522-1 formulations.
v. Incorporates a sequestering agent, 25% Calgon, which is a wetting agent, added to aid wetting out and the incorporation of fillers during manufacture. This addition adds the benefit to Nexus 820 formulation that:- because of its incorporation into the formula; once the mixing of the product is complete, the fillers have been fully wetted out and the product viscosity and application characteristics are stabilised.
vi. The importance of the addition of calgon as an ingredient, is that it ensures that the product that is manufactured today and immediately packed off after QC has been completed, has the same application characteristics as tested and approved in the lab, when the flooring installer opens a pail of Nexus 820 and uses it on a job.
54 This paragraph seems to express a conclusion as to the extent to which Nexus 820 differs from the formulation for PE265 and the two starting point formulations disseminated by BASF. It may be a matter for argument whether the differences noted by Mr Turner are sufficiently significant to warrant the conclusion for which the respondents contend. However, that does not make the paragraph inadmissible.
(l) Paragraphs 46 and 47
55 Counsel for the respondents did not press the admissibility of these paragraphs and they have, accordingly, been excluded from the evidence.
(li) Paragraph 50
I support Sofat in stating that the timeframe in which Nexus 820 was developed is within the normal Australian adhesive industry timeframe. Particularly since Nexus 820 is based on old technology with, similar formulations of flooring adhesives, utilising an acrylic polymer, gum rosin, and calcium carbonate, as the filler were first being developed and introduced in the 1970’s.
56 Counsel for the respondents did not press the admissibility of the second sentence of this paragraph. The first sentence does not indicate the passages from Ms Sofat’s witness statement which Mr Turner supports. Nor does he specify his understanding, presumably shared by Ms Sofat, of “the normal Australian adhesive industry timeframe.” However, while these defects may be vulnerable to cross-examination and may affect the cogency of Mr Turner’s conclusion on what is a reasonable time for the development from a starting point formulation of an adhesive like Nexus 820, they do not render the first sentence inadmissible.
(lii) Paragraph 57
57 Counsel for the respondents did not press the admissibility of this paragraph and it has, accordingly, been excluded from the evidence.
(liii) Paragraph 63
PE265 is not a complex product to develop or produce. It only contains five main ingredients and is simple to manufacture.
58 Although it embodies two highly generalised statements, this paragraph is not, for that reason, inadmissible. Its generality goes to the weight to be accorded to it rather than its admissibility.
(liv) Paragraphs 69 and 70
59 Counsel for the respondents did not press the admissibility of these paragraphs and they, accordingly, have also been excluded from the evidence.
(lv) Paragraph 71
The Applicant has asserted that Nexus copied the formulations and substituted “Equivalent” raw materials to hide the fact. I disagree with that statement. Whilst most raw materials are common to all manufacturers, the polymer systems are not. Neither are they equivalent raw materials, they are independent products that compete in the same marketplace. ATTACHMENT 5 is a summary Comparing BASF and NUPLEX Emulsions.
I disagree with that statement. From my reading of both the development notes and witness statements’ Sofat, O’Brien, Clewlow, Nixon and both Nexus 820 and Nexus 840 are the result of independent design and innovation.
60 It is not appropriate for Mr Turner to characterise what RLA has “asserted” against the respondents, unless the assertion is of a primary fact which, in Mr Turner’s opinion, is not made out. It follows that Mr Turner’s disagreement with the assertion attributed to RLA is irrelevant. For this reason the first two sentences of paragraph 71 have been excluded, as has the penultimate sentence. The last sentence is also inadmissible for the reasons explained at [8] and [17] above in relation, respectively, to paragraphs 25 and 44 of Mr Turner’s second witness statement.
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I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. |
Associate:
Dated: 6 October 2010
