FEDERAL COURT OF AUSTRALIA

CQMS Pty Ltd v Simco Mining Products and Services Pty Ltd (No 2) [2017] FCA 1636

ORDERS

THE COURT ORDERS THAT:

1.    The name of the respondent appearing on the Court heading of documents filed in this proceeding be changed to “Simco Mining Products and Services Pty Ltd ACN 143 658 100”.

2.    The respondent file and serve an amended defence and any cross-claim by 4.00 pm on 2 November 2017.

3.    In the event that the respondent does not comply with order 2:

(a)    it is declared that the respondent:

(i)    has infringed claims 1 to 5 of Australian Innovation Patent 2012100453 (‘453 Patent);

(ii)    has authorised, procured or induced the infringement of, or joined in a common design to infringe, claims 1 to 5 of the ‘453 Patent.

(b)    the respondent, whether by itself, its servants, agents or otherwise, be restrained from:

(i)    infringing any of claims 1 to 5 of the ‘453 Patent;

(ii)    authorising, procuring or inducing the infringement of, or joining in a common design to infringe any of claims 1 to 5 of the ‘453 Patent.

(c)    the respondent deliver up or destroy, on oath to the applicants or their nominated agent:

(i)    all products that infringe any of claims 1 to 5 of the ‘453 Patent, including the Omega Tooth and the Omega Adaptor (as defined in the Amended Statement of Claim filed on 20 September 2016) in the possession, custody or control of the respondent, together with any materials by which the respondent marketed, promoted or offered to make or sell any product that infringes any of claims 1 to 5 of the ‘453 Patent;

(ii)    all tooling and dies for production of any product that infringes any of claims 1 to 5 of the ‘453 Patent, including the Omega Tooth and the Omega Adaptor (as defined in the Amended Statement of Claim filed on 20 September 2016).

(d)    there be an inquiry into damages suffered by the applicants or into the profits made by the respondent in respect of the conduct the subject of this proceeding and that the respondent pay to the applicants any such amount determined by that inquiry.

(e)    the cross-claim filed on 22 March 2013 is dismissed.

(f)    the respondent pay the applicants’ costs of and incidental to the proceeding on a party and party basis to be taxed forthwith.

4.    In the event that the respondent complies with order 2:

(a)    the applicants file and serve an amended reply to the respondent’s defence and a defence to any cross-claim by 4.00 pm on 29 November 2017;

(b)    the proceeding be listed for review on a date to be fixed after 29 November 2017.

5.    The applicants’ costs of the application be costs in the cause.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DOWSETT J:

1    On 12 December 2016, I made orders allowing the applicants to amend the originating application and statement of claim. At the same time, I ordered that the respondent file and serve an amended defence and any cross-claim by 4 pm on 10 February 2017. It seems that there was already an existing cross-claim, but that fact is irrelevant for present purposes. No such amended defence and/or cross-claim has yet been delivered. There is no satisfactory explanation for such failure. The solicitor for the respondent informs me that he was ill during January and February, and I am content to accept that assertion, but it offers no real explanation for the delay thereafter.

2    It is fair to say that the applicants did not seek to enforce compliance with the order until, in July of this year, I caused inquiries to be made of the parties as to the progress of the matter. This apparently prompted the applicants to contact the respondent, although the solicitor for the respondent asserts that he did not receive such communication. Subsequently, on 31 August 2017, the Court indicated to the parties that the matter had been listed for a case management hearing at 10.15 am on 11 October 2017. I went on leave on 1 September 2017, so that 11 October 2017 was the first convenient date after my return from leave.

3    On 14 September 2017, the solicitors for the applicants wrote to the solicitors for the respondent setting out the history of the dealings between the parties and indicating as follows:

Please note that if your client’s amended defence and any cross-claim is not filed and served by 22 September 2017, then our clients may file and serve an application to have the proceedings dealt with summarily and will seek their costs for doing so (including the court filing fee).

4    As I have said, until July of this year, the applicants had shown no interest in expediting the matter. Nonetheless, by September, they were indicating their desire to get on with it. Whatever reasons there may have been for the delay between February and July of this year, the respondent has had adequate opportunity since July to rectify the position and has failed to do so. The solicitor indicates now that the respondent will be able to comply with the order within a period of three weeks.

5    There is some suggestion that the respondent abstained from advancing the proceedings in order to save money, given that the applicants were not demonstrating any interest in pursuing it. That is an indefensible position. If the respondent really wanted to save money, it ought to have taken the matter up with the applicants for the purpose of determining whether or not it was to proceed. Although I consider that the applicants ought to have done more between February and July, it cannot seriously be suggested that they are, in any significant way, responsible for the delay.

6    The applicants now seek that I either grant judgment by default, pursuant to rule 5.23, or make a self-executing order pursuant to rule 5.23(2)(e) that, in the event of the respondent’s non-compliance with the order to deliver an amended defence and/or cross-claim within three weeks of today, the action stand dismissed. The solicitor for the respondent submits that any such default order would only be for the relief to which the applicants are entitled, implying that it would be necessary that they demonstrate a basis for any further order. It was well-settled, before the adoption of the present rules, that previous rules in not dissimilar terms meant that the terms of an order to be entered in default of compliance with an order were to be determined on the face of the statement of claim as it stood, and not by reference to any evidence which might have been called at a subsequent trial.

7    A similar approach has been taken by a number of judges at first instance under the current rules. These cases include the decision of Flick J in Speedo Holdings B.V. v Evans (No. 2) [2011] FCA 1227, that of Greenwood J in National Heavy Vehicle Regulator v Countrywide Marketing Pty Ltd [2015] FCA 351 and the decision of Kenny J in KerryJ Investment Pty Ltd v Xiamen Fengwei Energy Technology Co Ltd [2013] FCA 361.

8    The respondent has not sought to advance any other reason for not making the orders sought in the applicants’ draft (which has been provided to me). It has asserted that because the matter was listed by me before the applicants indicated an intention to seek such an order, it ought not be made. I cannot follow the logic of that argument. It is also said that because there is a cross-claim, the order should not be made. Again, I cannot entirely understand that argument. If the respondent proposed to rely upon the cross-claim as a defence to the claim, then it should have so indicated in accordance with the order made in December last year.

9    In the circumstances, I intend to make orders in terms of paragraphs 1 to 4 of the draft which I initial and place with the papers. As to the question of the costs, I order that they be the applicants’ costs in the cause.

Associate:

Dated:    1 February 2018