3D Funtimes Limited v Intellec Development Group Pty Ltd

REASONS FOR JUDGMENT 1 On 16 November 2010, the applicant, 3D Funtimes Limited, commenced a proceeding against the respondent, Intellec Development Group Pty Ltd. Among the relief claimed was a claim for damages and injunctions arising from an alleged infringement of 3D Funtimes's patent and trade mark in relation to a toy known as the "Noah's Ark Stacker Toy". The applicant also claimed: 5. Orders at common law for the delivery up to the Applicant of: 5.1 all dies and tooling; 5.2 all toys known as "Noah's Ark Stacker Toys"; and 5.3 all packaging for such toys, the property of the Applicant and in the possession or control of the Respondent. 2 The applicant also claimed an interim injunction precluding the respondent from selling the toys. 3 The respondent did not enter an appearance before the first directions hearing. On 13 December 2010, in the absence of the respondent, I made orders granting the interim injunction. 4 By a notice of motion dated 16 December 2010, the applicant claimed summary judgment for the delivery up by the respondent of the tooling, the toys and the packaging. 5 The respondent appeared by its director, Mr McHutchison at the directions hearing on 22 December 2010. At that directions hearing, I made directions that the respondent file and serve any affidavits in opposition to the application for summary judgment by 14 January 2011 and file and serve its submissions in opposition to the applicant's application for summary judgment by 27 January 2011. 6 I also directed that the respondent file and serve its defence and any cross-claim by 21 January 2011. 7 By the time of the hearing of the applicant's application for summary judgment, the respondent had not filed any affidavit, nor had it filed any submissions. Neither had the respondent complied with the direction to file and serve its defence and any cross-claim by 21 January 2011. 8 The respondent did not appear at the hearing of the applicant's application for summary judgment on 31 January 2011. 9 At the hearing of its application for summary judgment, the applicant relied upon two affidavits of Mr Romyn dated 5 November 2010 and 16 December 2010 respectively. 10 After the conclusion of the hearing on 31 January 2011, I made orders that the respondent deliver up to the applicant the tooling, but dismissed the application for summary judgment in respect of the applicant's claim for delivery up of the packaging and the toys. 11 I said that I would publish reasons for judgment later. These are the reasons. 12 In summary, the evidence of Mr Romyn showed that Mr Romyn had a patent, which was subsequently assigned to the applicant, in respect of the toy and wanted to produce and sell that toy. In about September 2006, the applicant contracted with the respondent for the manufacture of the tooling to be used in the manufacture of the toys. Whilst the tooling was being manufactured, which occurred over a number of months, the applicant and the respondent developed a business relationship and negotiations were commenced with a view to the companies merging. The applicant moved its premises to the same premises at Profit Pass, Wangara, occupied by the respondent. The tooling, when manufactured, was located at those premises, and in mid-2009, commercial production of the toys commenced at those premises. Thereafter, the relationship between the applicant and the respondent broke down and the anticipated merger did not occur. In April 2010, the respondent excluded the applicant from access to the Profit Pass premises at which the tooling, the packaging and the manufactured toys were located, by changing the security pass code on the gates to the respondent's premises. The applicant has demanded that the respondent deliver up the tooling, the packaging and the toys. The respondent has declined to do so. 13 The applicant relied upon s 31A of the Federal Court of Australia Act 1976 (Cth). That section relevantly provides as follows: 31A(1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is prosecuting the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. … 31A(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. 14 The applicant claimed that the respondent had no reasonable prospect of defending the applicant's claim that the respondent was liable in detinue in respect of the tooling, the packaging and the manufactured toys and, therefore, in respect of that part of its claim, the applicant sought orders that the respondent should deliver up the tooling, the packaging and the toys. 15 I deal first with the claim for the delivery up of the tooling. 16 A party in possession of goods will be liable in detinue when a person with an immediate right to possession demands delivery of the goods and the party in possession refuses to deliver the goods. 17 Mr Romyn deposed that the applicant had engaged the respondent to manufacture the tooling in about September 2006. The manufacture of the tooling took place over a number of months and the respondent issued invoices to the applicant for progress payments in respect of the manufacture of the tooling. The applicant deposed that three invoices were issued. The invoices which were annexed to Mr Romyn's affidavit contained the following statement: "All goods remain the property of [the respondent] until final payment is received". 18 For the purposes of a summary judgment application, I will act on the basis of taking the respondent's case at its highest that the evidence permits. I will, accordingly, assume that the retention of title clause referred to in the invoices, did form part of the contract for the manufacture and delivery of the tooling between the applicant and the respondent. 19 The three invoices issued by the respondent were as follows: Invoice dated 15 October 2006 in the amount of $81,818.00; Invoice dated 28 August 2007 in the amount of $903,100.00; and Invoice dated 26 September 2008 in the amount of $143,000.00. 20 Mr Romyn deposed that each of the invoices has been paid in full. There is no evidence to the contrary from the respondent. On that evidence, the property in the goods passed to the applicant. 21 As previously mentioned, the tooling was manufactured and installed at the respondent's premises at a time when the relationship between the parties was on a good footing and each anticipated entering into a merger with the other. However, it is the uncontradicted evidence of Mr Romyn that in April 2010, the respondent changed the security pass code on the gates of the Profit Pass premises and has, ever since, excluded the applicant from access to those premises. 22 By a solicitor's letters dated 4 June 2010 and 18 October 2010 respectively, the applicant demanded that the respondent deliver up the tooling. Notwithstanding the demands, the respondent has refused to deliver up the tooling. 23 The power to grant summary judgment is a power which should be exercised with great caution. However, as I mentioned, the respondent has chosen not to file any evidence. Accordingly, the evidence of Mr Romyn is uncontradicted. I am of the view that the evidence as it stands, demonstrates that the applicant is the owner of the tooling, that the respondent is in possession of the tooling, that the applicant has made demand for the delivery up of the tooling and that the respondent has failed to comply with the demand. 24 I am of the view, therefore, that the respondent has no reasonable prospect of successfully defending the applicant's claim that the respondent is liable in detinue to deliver up the tooling to the applicant. 25 Accordingly, there will be judgment in favour of the applicant for the delivery up of the tooling as identified in the three invoices which are referred to above. 26 As to the applicant's claims for summary judgment in relation to the delivery up of the packaging and the toys, Mr Romyn's evidence on the question of the applicant's ownership of the packaging and the toys is equivocal and I am not prepared, on the state of the evidence as it appeared in the affidavits of Mr Romyn, to make orders for summary judgment on those claims. Accordingly, the applicant's claims for summary judgment for the delivery of the packaging and the toys are dismissed. I certify that the preceding twentysix (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.