Falkenhagen v West [2019] FCA 2055

File number(s):

QUD 508 of 2019



Date of judgment:

22 November 2019


PRACTICE AND PROCEDURE – consideration of an application for summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) and rule 26.01 of the Federal Court Rules 2011 (Cth) in terms of particular paragraphs of the statement of claim

Date of hearing:

22 November 2019

Date of last submissions:

22 November 2019




General Division

National Practice Area:

Intellectual Property


Patents and Associated Statutes



Number of paragraphs:


Counsel for the Applicant:

A Wrenn

Solicitor for the Applicant:

Arnell Cooper Lawyers

Counsel for the Respondents:

S C Russell

Solicitor for the Respondents:

Jeff Guy


QUD 508 of 2019






First Respondent


Second Respondent




22 NOVEMBER 2019


1.    The application is dismissed.

2.    The applicant pay the respondents’ costs of the application.

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



1    This is an application for summary judgment under the Federal Court Rules 2011 (Cth). The application is concerned with seeking particular relief based upon the claims in paras 37 and 38 of the statement of claim for particular orders which emerge from, in a conclusionary way, the framing of the statement of claim. Paragraphs 37 and 38, which are the subject of the application for the present orders, are these.

37.    The Applicant seeks an order pursuant to s 192(1)(1)(b) and/or (c) of the Patents Act 1990 directing the Commissioner to rectify the Register in order that Australian Patent Application No 2016240396 and International Patent Application PCT AU2016/050229 recorded Eric Alan Falkenhagen as the named Patent Applicant.

38.    The Applicant seeks a direction pursuant to s 192(4) of the Patents Act 1990 directing the Registrar to serve the copy of any order made pursuant to s 192(1)(b) and/or (c) of the Patents Act 1990 on the Commissioner.

2    Those two paragraphs for relief arise out of a contest on the state of the pleadings between the applicant and the first respondent, Mr West, and a company called Polemaster Pty Ltd. The controversy on the face of the pleadings goes to a range of matters but, for present purposes, it is sufficient to note that the applicant’s case in the proceeding is that in September 2017, the applicant and Mr West entered into an oral agreement, the elements of which, in summary, are these:

(a)    The Applicant would assign to Polemaster the sole rights to the intellectual property in the relevant invention.

(b)    In consideration of the assignment, the Applicant would be registered as a 30% shareholder in Polemaster.

(c)    In consideration of the assignment, Mr West would pay an amount of $1,500,000 to the Applicant.

(d)    Polemaster would operate the business development, deployment and operations of the invention.

(e)    Mr West would finance the business development, deployment and operation of the invention by Polemaster until it made a profit.

(f)    The Applicant and Mr West would share in the profits made by Polemaster in the ratio 30% and 70% respectively, no doubt in accordance with the net profit distributions reflected in the contended shareholding.

3    That is the agreement which is asserted. The pleading goes on to set out a number of factual matters that relate to those paragraphs of the pleading. Those factual matters are concerned with aspects of payments which were made, the relationship between patent attorneys and the question of whether the assignment would be held in escrow, questions relating to applications in particular jurisdictions in relation to the patent filings and other matters. The scope of that pleading is the subject of the controversy reflected, in part, by the defence and then, in part, by the reply.

4    As to the defence, Mr West and Polemaster admit a range of matters pleaded in the statement of claim but, most materially, the respondents say that as to the agreement pleaded in September 2017, the applicant and Mr West agreed in terms which are fundamentally different to those asserted by the applicant. The respondents say that the agreement of September 2017 comprehended these elements.

5    First, Mr West would, at his cost, incorporate a company to be called Polemaster.

6    Second, the applicant would assign the auger IP rights to Polemaster.

7    Third, Mr West would cause 10% of the share capital in Polemaster to be issued to the applicant.

8    Fourth, Mr West would, alone or in combination with other investors, provide Polemaster with sufficient funds to progress patent applications and develop a working prototype of the auger. Various particulars are pleaded in support of that. Other aspects of the ongoing engagement between the applicant and Mr West are pleaded in the defence which leads to a proposition that, on 27 September 2017, the applicant and Mr West and Polemaster, it seems, agreed certain things, which are then pleaded. The defence goes on to put in issue various matters which are pleaded in the statement of claim.

9    One aspect of para 5 of the defence, which sets out the elements of the September 2017 agreement so far as the respondents are concerned, is, of course, as I mentioned, that Mr West would cause 10% of the share capital in Polemaster to be issued to the applicant. These events, which are said to have been the subject of the agreement in 2017 at least as to this question of the share issue, seems to have resulted in a factual matter, evident now from the affidavits, that the 10% of the shares in Polemaster were transferred to the applicant in October this year. The applicant, on this interlocutory application, seeks to, in effect, take the defendant at its word by saying that, in effect, “Since you contend that an element of the agreement was that you would transfer 10 per cent of the shares in Polemaster to me, the Applicant, and you have failed to do so, it thus follows that there is a total failure of consideration.

10    I am proceeding with this interlocutory application on the footing that it is accepted between the parties that the 10% of the shares in Polemaster were not transferred until October 2019 and, for the purposes of this application, I am proceeding on the footing that there was a failure in or about September 2017 to perform the promise that 10% of the shares in Polemaster would be issued to the applicant. However, it is important to remember that this is just one, put anecdotally, element or part of the scope of the contended controversy in the proceedings at large.

11    In the course of this application, it is not open to the Court to simply select one segment of a contended element of the contended agreement and then treat that failure of that part as the total failure of consideration of the entire agreement because the question of what is the agreement, when it was made and what its elements are, are matters of fundamental factual contest and the Court will need to resolve those factual questions. They will inevitably involve questions of credit about aspects of the evidence given by the witnesses, and it will result in findings of fact about the contentious questions of fact and it will then involve questions of determination of the relevant law and the application of the relevant law to the facts as determined.

12    As it stands on the face of the present material, it is simply not possible for the Court to determine, on an interlocutory basis that there has been a total failure of consideration in the context of the contested pleaded agreements with a view to forming a view that the respondents have no prospect of success on the controversy as pleaded in the case. That being so, it is simply not a proper matter for a summary judgment application in the way framed.

13    Accordingly, the application must necessarily be dismissed with costs.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.


Dated:    22 November 2019