Anton Piller KG v Manufacturing Processes Ltd & Ors [1996] FCA 599 | Case summary

"The proposed order is at the extremity of this court's powers. Such orders, therefore, will rarely be made, and only when there is no alternative way of ensuring that justice is done to the applicant. ... Great responsibility clearly rests on the solicitors for the applicant to ensure that the carrying out of such an order is meticulously carefully done with the fullest respect for the defendant's rights, as Lord Denning MR has said, of applying to the court, should he feel it necessary to do so, before permitting the inspection." I do not read the concluding words of the above passage as implying any restriction upon the responsibility of the solicitors for an applicant on an Anton Piller order to ensure that the carrying out of such order is "meticulously carefully done and with the fullest respect for the defendant's rights" in every regard. An illustration of the need for such care and respect for the rights of the respondent to an Anton Piller order is to be found in Columbia Picture Industries Inc & Ors v Robinson & Ors [1987] 1 Ch 38. In that case, Scott J was required to consider an application to set aside an Anton Piller order already executed and for damages. Documents and other items not covered by the Anton Piller order had been taken during the execution of the order after a defendant had signed a receipt giving consent for their removal. His Honour, at 62-63, stated as follows:- "There is no doubt at all but that the form of this receipt ... was designed by Hamlins to protect the firm against the charge that they had taken documents or articles not covered by the order. And the practice of the firm in taking not simply documents and things which could been seen to be covered by the order but to take also documents or things which further and subsequent investigation might, but might not, prove to be covered by the order, made the need for protection obvious. I have no hesitation in saying that I find this practice an objectionable one. Conceptually at least, the consent of a respondent to an Anton Piller order might protect the executing solicitors against a charge that things not covered by the order had been taken. But, given the nature of Anton Piller orders and the circumstances of surprise and shock which almost always attend their execution, there is a very real danger in allowing the executing solicitors to go outside the terms of the order in reliance on an alleged consent on the part of the respondent." His Honour went on at 77 as follows:- "... no material should, in my judgment, be taken from the respondent's premises by the executing solicitors unless it is clearly covered by the terms of the order. In particular I find it wholly unacceptable that a practice should have grown up whereby the respondent to the order is procured by the executing solicitors to give consent to additional material being removed. In view of the circumstances in which Anton Piller orders are customarily executed (the execution is often aptly called "a raid"), I would not, for my part, be prepared to accept that an apparent consent by a respondent had been freely and effectively given unless the respondent's solicitor had been present to confirm and ensure that the consent was a free and informed one." I endorse the attitude adopted by his Honour in the above passages. See also LT Piver S.A.R.L. & Ors v S & J Perfume Co Ltd & Ors [1987] Fleet Street Reports 159. It is not disputed in this case that, during the course of the execution of the Anton Piller order, those executing the order came upon items not covered by the terms of the order which were apparently the property of J C Techforce. The items conceded to have been removed from the premises although not covered by the order are all items which J C Techforce claims to own. Appropriate courses of action available to those executing the order on behalf of J C Techforce upon their discovery of such items included the following:- (a) the making of an immediate application to the Court for an order allowing the removal from the premises of items the property of J C Techforce; (b) contacting the solicitor for the respondent for the purpose of either:- (i) negotiating through him the consent of the respondents to the removal from the premises of such items; or (ii) inviting him to seek instructions to take such items into his custody, or to place them in neutral custody, until any disputes as to respective rights of the parties concerning such items could be resolved; or (c) the preparation of a list of such items to allow appropriate steps for the recovery of such items to be initiated at a later time. The assertions by J C Techforce of ownership, and the immediate right to possession, of such documents, even in respect of documents as to which such assertions were uncontentious, did not of themselves give those executing the Anton Piller order on behalf of J C Techforce the right to use the occasion of their entry on to the premises in reliance on the order as an opportunity to seize such documents. Entry onto the premises of another gained by reason only of the compelling nature of an Anton Piller order is not, I consider, to be used for any purpose outside those fairly comprehended by the order itself. The only exception to this position which I am presently able to envisage is that which would arise were the respondents to the order to give a free consent to a departure from the strict terms of the order. Having regard to the exceptional nature of an Anton Piller order, the case will be rare, in my view, in which any consent to a course of conduct potentially adverse to it given by a respondent which has not first obtained legal advice of its own, will be regarded by a court as having been freely given. Having regard to the circumstances which prevailed at the premises on 20 December 1995, I am not satisfied that the respondents gave a free consent on that day to the removal from the premises of documents not covered by the terms of the Anton Piller order. It follows from the above, that I do not consider that the course actually adopted by those executing the Anton Piller order on behalf of J C Techforce was an appropriate one. I conclude that documents were removed from the premises following the execution of the Anton Piller order on 20 December 1995 that ought not to have been so removed. I wish to make it plain, however, that I do not consider that any person involved in the execution of the Anton Piller order sought deliberately to abuse the position in which he or she found himself or herself. In an awkward and emotionally charged situation I am satisfied that each of them acted in good faith. ALLEGATION OF OPPRESSIVE CONDUCT Wayne Robert Pearce ("Mr Pearce"), the first respondent, has given evidence both by affidavit and orally that Mr Simpson on 20 December 1995 threatened him, failed to give him an opportunity to read the documents served on him and demanded immediate access to the premises. He particularised his allegation of a threat by indicating that Mr Simpson said words to the effect that unless he provided access to the computers and documents at the premises immediately he would be in contempt of the Court. Mr Simpson's report of 21 December 1995 states that shortly after the Anton Piller was served upon Mr Pearce:- "... I [i.e. Mr Simpson] ... indicated to Pearce that I was an independent solicitor there to provide the respondents with a full understanding of the order that was being executed and to answer any of their questions. I took Pearce aside (i.e. away from Virgara, Steinhardt and Sullivan [those executing the order on behalf of the applicants]) and explained to him in everyday language the general effect of the orders that had been served on the respondents. I pointed out the consequences of failing to comply with the order. I pointed out that he was entitled to obtain other independent legal advice before the order was executed but that if he wanted, I was prepared to provide him with that advice. Pearce said that he would contact his solicitor immediately and that he would like the applicant to withhold taking further action until he had had the opportunity to do so. He then made a telephone call. After Pearce's telephone call he informed me that his solicitor was John Wadlow and that Wadlow was in transit to the premises. Whilst taking steps so far as was possible to ensure that computers and documents in the premises were not interfered with in the interim, we waited for Mr Wadlow to attend. I telephoned Mr Wadlow to inform him of the action we wished to take to ensure so far as was possible that computers and documents were not interfered with whilst waiting for Mr Wadlow to attend." Mr Simpson's report goes on to state that Mr Wadlow arrived at the premises at about 10-00 am and was provided with a copy of the sealed order and other relevant documents, that Mr Wadlow had a confidential discussion with Mr Pearce in a separate room, and that when he emerged from that room he indicated that he had arranged to have the matter called on urgently before this Court. The report further records that although some limited searching and copying of the contents of a computer hard disk occurred by consent before the hearing and determination of Mr Wadlow's application to this Court, no searching for, or inspection of, documents took place. I accept the accuracy of Mr Simpson's report. Indeed it was not put to him in cross-examination that his report was inaccurate in any way. The accuracy of his report was in material respects confirmed by the affidavit evidence of Ms Sullivan and Adam Steinhardt ("Mr Steinhardt"), neither of whom was cross-examined. Mr Simpson's conduct as recorded in the above extract from the report was, in my view, entirely appropriate. I have no difficulty in believing, however, that Mr Pearce experienced the events of 20 December 1995 as threatening, and in particular that he found Mr Simpson's advice that a failure to comply with paragraph 2 of the order of 18 December 1995 would constitute contempt of court threatening. This is not to say, however, that Mr Simpson's conduct in providing such advice was other than as was called for by the occasion. Grant William Neville ("Mr Neville"), the second respondent, gave evidence that Mr Simpson, in explaining that non-compliance with the Anton Piller order would amount to contempt of court, said that the police would be called if the respondents did not comply with the order. Mr Simpson denied making any reference to the police. Mr Pearce was clear that Mr Simpson made no reference to the police in speaking to him. I am satisfied that Mr Simpson did not refer to the police whilst speaking with Mr Neville. Mr Neville also gave affidavit and oral evidence of Dominic Virgara bursting into his room without knocking and acting in a "very threatening demanding manner". He further gave evidence of Mr Virgara swearing at Mr Pearce and being abusive during the execution of the Anton Piller order. In his affidavit evidence Mr Virgara denied bursting into Mr Neville's room without knocking and further denied being abusive or swearing at Mr Pearce or acting in an aggressive manner during the search. No application was made to cross-examine Mr Virgara. In the circumstances the accuracy of his denials are to be presumed to be accepted by the respondents. Moreover, his denials were supported by the affidavit evidence of Mr Steinhardt, who, as has already been mentioned, was not cross-examined. Mr Neville further gave evidence that at no stage on 20 December 1995 was he served with a copy of the Court's order and other related documents. Ms Sullivan gave affidavit evidence of having served a copy of the order and other related documents upon Mr Neville at approximately 10-00 am on 20 December 1995 upon her realising his identity. As mentioned above, no application to cross-examine Ms Sullivan was made. I accept her evidence in all respects. I therefore find that Mr Neville was served with the Court's order and other related documents at approximately 10-00 am on 20 December 1995. The respondents have not satisfied me that the Anton Piller order was executed in an oppressive manner, or that the conduct of Mr Simpson, or any of those involved on behalf of J C Techforce in the execution of the order, was oppressive. I consider it fair to record, however, that although I formed the view that the evidence of Mr Pearce and Mr Neville was framed, and in particular that their affidavit evidence was drawn, so as to seek to place the conduct of Mr Simpson and those who executed the Anton Piller order in as poor a light as possible, I am satisfied that the shock of the events of 20 December 1995, and the emotionally charged atmosphere in which such events were acted out, has had the result that neither Mr Pearce nor Mr Neville now has a clear recollection of the sequence of events on that day or of the exact details of all exchanges. THE APPLICATION TO STRIKE OUT THE ANTON PILLER ORDER The making of an application by notice of motion dated 22 March 1996 to discharge an Anton Piller order made on 18 December 1995 and executed 2 days later is surprising. I was not addressed on behalf of the respondents on the utility of any such order. A similar application made in Columbia Picture Industries Inc & Ors v Robinson & Ors was described by Scott J in that case as "a somewhat bizarre proposition" and "a gesture devoid of practical effect" (see p84). I accept that O35 r7(2)(c) of the Federal Court Rules authorises the making of an application at any time to set aside an interlocutory order. Although the O35 r7(2)(c) is not restricted in its application to ex parte orders, it provides a procedure whereby a respondent to an ex parte application may seek review of the decision to make the order. I do not doubt that I have jurisdiction to set aside paragraph 2 of my order of 18 December 1995 even though that portion of the order was executed over 6 months ago. The most common ground for setting aside an order obtained ex parte is that such order was obtained in circumstances of inadequate disclosure to the court. It is not suggested that this is such a case. The material here relied upon relates to the circumstances surrounding the execution of the order, namely the removal from the premises of documents not covered by the order, and the allegedly oppressive conduct said to have attended the execution of the order. As is set out above, I am not satisfied that oppressive conduct attended the execution of the order. It is conceded, however, that documents were removed from the premises that were not covered by the order. I have formed the view that such documents ought not to have been removed in the circumstances in which they were removed. The jurisdiction of the Court to set aside the order is a discretionary one. A significant factor telling against the exercise of the discretion in this case is the failure of the respondents to identify any utility which would result from the setting aside of the order. Another factor telling against the exercise of the discretion is the delay which has attended the making of the application. Complaints of the type which have been advanced in support of the orders sought by the notice of motion ought to be advanced promptly upon the grounds of complaint being seen to arise. In this case such complaints were not raised for 3 months after the execution of the order. During that 3 month period the parties attended before this Court by their respective legal representatives on 4 separate occasions. Having regard to the above factors, and to my finding that no person involved in the execution of the Anton Piller order acted in other than good faith, I decline to set aside paragraph 2 of my order of 18 December 1995. THE STRIKE OUT APPLICATION By paragraph 1 of the notice of motion the respondents seek the following order:- "That those provisions of the applicants' Statement of Claim drawn from documents seized as (sic) not part of the orders made by the Honourable Justice Branson on Monday the 18th day of December 1995 be struck out." These proceedings were commenced, in accordance with O4 r1 of the Federal Court Rules, by the filing of an application by J C Techforce. Such application sought interlocutory relief only. I point out that by reason of the provisions of O4 r3 of the Federal Court Rules such application ought subsequently to have been amended to claim final relief and to add Mr Steinhardt as an applicant. In accordance with usual practice where an Anton Piller order is sought, no statement of claim was filed with the application. Affidavits in support of the relief claimed in the application were sworn by Mr Steinhardt, a computer programmer, and now the second applicant, by Dominic Virgara, finance director of the Clements Group of Companies of which J C Techforce is a member, and by Tony Izzo, a fitter and turner, who had certain dealings with the third respondent. A comparison of the affidavit evidence filed on behalf of J C Techforce in support of its application for interlocutory relief and the statement of claim herein does not reveal the pleading of any causes of action not foreshadowed by such affidavits. What such comparison does reveal is that the drafter of the statement of claim was able to particularise documents, asserted to be the property of J C Techforce and allegedly removed from the premises of J C Techforce and provided to the third respondent, in excess of the documents said to be of that class referred to in the affidavits sworn in support of J C Techforces' application for interlocutory relief. It is not disputed that the capacity of the drafter of the statement of claim to provide such particulars was enhanced by what was discovered by those who executed the Anton Piller order on behalf of J C Techforce. I do not accept the submission made on behalf of the respondents that the applicants used the Anton Piller order as a means of finding out what allegations could be made in a subsequent action. Nor do I accept the submission, so far as I understand it, "that the Anton Piller Order contains an implied undertaking by J C Techforce that it will file a Particulars of Claim (sic) which pleads only the causes of action identified in the supporting affidavits and the actual documents which are authorised to be seized." It is not to be doubted that an applicant for an Anton Piller order owes a duty to the court of full disclosure of all relevant facts known to it. However, no applicant can disclose what it does not know. It was not put to me, nor have I any reason to conclude on the material that is before me, that J C Techforce failed to make full disclosure of all material facts known to it at the time of its application for interlocutory relief. I am satisfied that if those who executed the Anton Piller order on behalf of J C Techforce had simply observed, but not removed from the premises, the documents which are asserted to be the property of J C Techforce although not covered by the order, there would have been no impediment in the way of such documents being identified in the statement of claim subsequently filed. Is the position any different by reason only of the fact that such documents were removed from the premises in circumstances in which I have concluded that they ought not to have been removed? Ms Sullivan has sworn, and I accept, that no resort was had to such documents for the purpose of the drawing of the statement of claim. Resort was admittedly had to a list of such documents for the purpose of drawing the statement of claim. No unlawfulness can be said to have attached to the preparation of such list. Accepting, for present purposes, but without deciding, that O11 r16(c) of the Federal Court Rules or the inherent jurisdiction of this Court, would allow, in an appropriate case, the striking out of pleadings which were drawn from materials obtained in contravention of an order of the Court, I am not satisfied that this is an appropriate case. Counsel for the respondents made reference in written submissions to s138 of the Evidence Act 1955 (Cth) ("the Evidence Act"). Section 138 of the Evidence Act gives the Court a discretion to exclude improperly or illegally obtained evidence: it is not directly concerned with pleadings. Nonetheless, it may be accepted that a pleading might be struck out as having a tendency to cause prejudice, embarrassment or delay in the proceedings, within the meaning of O11 r16(b) of the Federal Court Rules, if it were plain that the pleading party could not lawfully call any evidence at trial to substantiate the pleading. However, in my view, the discretionary nature of s138 of the Evidence Act has the consequence, at least in the circumstances of this case, that the determination of any issues which might arise under the section should be reserved for the trial judge. I decline to strike out any part of the statement of claim. THE JOINDER OF MR STEINHARDT AS AN APPLICANT Finally the respondents contend that Mr Steinhardt ought not to be allowed to remain as an applicant in these proceedings, as I understand it, because without joining as an applicant for interlocutory relief, he swore an affidavit in support of the claim by J C Techforce for such relief, and attended on behalf of J C Techforce at the execution of the Anton Piller order, having earlier given an undertaking not to disclose to J C Techforce any confidential information of the respondents which he might obtain during the course of the execution of such order. No attempt was made on behalf of the respondents to establish that Mr Steinhardt has, or proposes to, disclose to J C Techforce any confidential information of the respondents gained by him on 20 December 1995. Mr Steinhardt was identified in the Anton Piller order as the person to perform all searching of computers and computer records in pursuance of the order for two reasons. First, as a computer programmer and the alleged author of the software programme a subject of the ordered search, he had the necessary skills and knowledge to perform such searches. Secondly, unlike those persons directly associated with J C Techforce, he was not involved in a business which was in competition with that of the respondents. Neither of these reasons is in any way undermined by the claims now made by Mr Steinhardt in these proceedings. Mr Steinhardt claims relief in these proceedings as the owner of the copyright in certain computer software. J C Techforce claims relief in the proceedings in the capacity, amongst others, of the exclusive licensee of such copyright. Section 120 of the Copyright Act 1968 (Cth) clearly discloses an intention that such claims should be entertained in the same proceedings. In my view, the public interest would be in no way advanced by requiring Mr Steinhardt to commence proceedings separate from those of J C Techforce to pursue his claims against the respondents. No suggestion was advanced in this case that Mr Steinhardt, if refused leave to join J C Techforce as an applicant in these proceedings, should be restrained from commencing fresh proceedings. In my view this final contention of the respondents is without substance. I will entertain an application that Mr Steinhardt formally be granted leave to join J C Techforce as an applicant in these proceedings. No order will be made on the notice of motion other than an order for costs, as to which I will hear counsel. I certify that this and the preceding pages are a true copy of the Reasons for Decision of the Honourable Justice Branson. Associate: Dated: Counsel for the Applicants : Mr A C Collett Solicitors for the Applicants : Johnston Withers Counsel for the Respondents : Mr J A Wadlow Solicitors for the Respondents : Wadlow Solicitors Hearing Dates : 9 & 10 July 1996

Anton Piller KG v Manufacturing Processes Ltd & Ors

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