Cash's (Australia) Pty Ltd v Foster's Australia Ltd

REASONS FOR JUDGMENT 1 The applicant ("Cash's") seeks leave under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) to appeal interlocutory decisions on separate questions heard ahead of the trial of the proceeding ("the preliminary questions"): Foster's Australia Limited v Cash's (Australia) Pty Ltd [2013] FCA 527. The preliminary questions were raised by Cash's defence and cross-claim to the respondent's ("FAL") claim against it for relief for alleged patent and design infringements. Cash's alleged that the patents and designs were invalid and liable to be revoked because the original applications to the Commissioner of Patents and the Registrar of Designs were not made in FAL's name, but in the name of another Foster's Group company, Foster's Group Ltd, which had no entitlement to claim ownership of the relevant intellectual property. A separate hearing was held on whether Cash's is entitled to orders under s 138 of the Patents Act 1990 (Cth) and s 93 of the Designs Act 2003 (Cth) revoking the patents and designs that FAL claims have been infringed by Cash's. The Court held "no" in both instances. 2 The principles to be applied when a party seeks leave to appeal from an interlocutory decision were not in issue and are well established. The Court's discretion is unfettered but it is generally recognised that the major considerations for the Court are: a) whether in all the circumstances the judgment of the primary Judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400 per Sheppard, Burchett and Heerey JJ. 3 These considerations provide an appropriate "litmus test for the general run of cases" and generally, the Court will not grant leave to appeal unless both elements are satisfied: Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399; Rawson Finances Pty Ltd v Deputy Commissioner of Taxation (2010) 81 ATR 36 at 38 [5] per Ryan, Stone and Jagot JJ. The requirement to obtain leave reflects a policy against the bringing of appeals from interlocutory decisions except where the circumstances justify an appellant court interfering. As the authorities demonstrate, the Court will more readily grant leave where the interlocutory decision has determined a substantive right or if the questions posed for resolution on appeal have general importance beyond the concerns of the parties, than where the interlocutory decision is on a point of practice: Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227 at [10] per Heerey, Moore and Tracey JJ; Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399. 4 In this case, the answers to the preliminary questions did determine substantive rights and concerned issues of general importance. In the circumstances, the threshold for obtaining leave is not as high as an interlocutory order involving the exercise of discretion on the point of practice or procedure: Petroulias v Commissioner of Taxation [2011] FCA 795 at [43] per Reeves J; Wills v Australian Broadcasting Corporation (2009) 173 FCR 284 at 290 [31] per Rares J; Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (No 2) (1988) 165 CLR 452 at 457 per Mason CJ, Brennan and Gaudron JJ. But as the authorities caution, the discretion must be exercised on what may be a fine balancing of considerations in the particular circumstances: Sharp v Deputy Commissioner of Taxation (NSW) (1988) 19 ATR 908 at 910 per Burchett J; Décor Corp v Dart Industries Inc (1991) 33 FCR 397 at 399. 5 There was considerable argument on whether the decisions on the preliminary questions are attended by sufficient doubt. It is not necessary or appropriate for me to form a concluded view on the merits of those arguments as an application for leave should not be conducted as though it is a preliminary hearing of the appeal itself: Petroulias v Commissioner of Taxation [2011] FCA 795 at [45] per Reeves J; ACE Insurance Ltd v Trifunovski (2012) 291 ALR 46 at 49 [9] per Flick J. It is sufficient for present purposes that I am satisfied that the issues raised by the preliminary questions are complex and involve questions of statutory construction which are novel. In the circumstances I accept that the correctness of the decisions on the preliminary questions is open to dispute, though I express no view on whether an appeal would be likely to succeed. 6 The more troubling consideration is the question of substantial injustice. It was submitted for Cash's that this factor also weighed in its favour. Reliance was placed on the fact that the preliminary questions put forward for determination by the Judge would have finally determined the proceeding in its favour, if answered affirmatively. It was therefore contended that Cash's should not be put to the considerable expense and time involved in a trial of the proceeding, given that an appeal on the decision on the preliminary questions would conclude the proceeding if the appeal was successful. Costs savings and efficiencies of litigation can be a powerful reason for granting leave to appeal. However, I am not persuaded that there should be a grant of leave in this case. 7 First, it is questionable whether the appeal, if resolved in favour of Cash's, would dispose of the whole proceeding in any event. I was informed by Mr Bannon SC for FAL that sections 22A and 138(4) of the Patents Act 1990 (Cth), if applicable, introduce discretionary considerations for the Court in determining whether to revoke the patents, even if the Court found that FAL was not entitled to the patents. 8 Secondly, the fact that the separate questions were put forward does not necessarily dictate the outcome that case management principles favour the grant of leave. These proceedings were commenced in 2011 and the orderly progress and preparation for trial has already been delayed by the separate questions put forward for determination. An appeal at this stage would further delay the orderly and efficient disposition of the proceeding. The proposition that Cash's will suffer substantial injustice because of the expense and time involved in a trial on all issues is significantly diminished in the circumstance that Cash's failed to have the proceeding dismissed by obtaining affirmative answers to the preliminary questions. The consequence of having failed on those preliminary questions is that FAL is entitled to pursue its claims against Cash's. It is difficult to see how the claim for substantial injustice can be maintained merely because the consequence of failing on the preliminary questions means that Cash's must now put forward all its defences to FAL's claims against it. 9 Thirdly, I consider that it is more in the interests of the parties to progress the matter for trial and for the whole proceeding to be heard and determined than to fragment the proceeding further, notwithstanding the costs involved in progressing the matter for trial. Importantly, the fact that leave is not granted does not prevent Cash's from pursuing its other defences or from founding an appeal from the final judgment in the proceeding on the interlocutory decision on the preliminary questions: Federal Court of Australia Act 1976 (Cth), s 24(1E). I have taken into account the general importance of the issues raised by the preliminary questions that were determined. However, in the circumstances, I consider that this factor does not outweigh the desirability of the whole proceeding being heard and determined as soon as practicable. Accordingly leave to appeal is refused. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.