Cementech Pty Ltd v Boral Masonry Ltd

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 132 of 2014

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 260 of 2014

REASONS FOR JUDGMENT 1 These are two applications for security for costs by the respondent in each of two separate proceedings based on the same patent. In the first proceedings, now intituled Cementech Pty Limited v Adbri Masonry Pty Ltd after the removal of Austral Masonry (NSW) Pty Ltd as a party, commenced in the Supreme Court of New South Wales on 2 August 2013, Cementech seeks findings that Adbri infringed its patent for a matrix for masonry elements and a method of manufacture thereof in respect of a masonry production commonly known as Besser type blocks. In the second proceedings, commenced in this Court on 10 February 2014, Cementech sued Boral Masonry Limited for infringement of the same patent during the period between 2008 and early 2013.

How the issues arise 2 The patent was filed on 1 March 2007, but was only granted on 29 November 2012. In the meantime, it appears to have been amended in a substantial way in a number of respects. Adbri and Boral say that those amendments give rise to issues that will involve different priority dates and questions of whether Cementech's earlier attempts to use a product or a method that reflects a subsequent amendment to the patent might amount to a prior use affecting its validity. 3 It is common ground that, for the purposes of s 1335 of the Corporations Act 2001 (Cth), Cementech does not presently appear to have sufficient assets to suggest that it will be able to meet any order that it pay the costs of Adbri and Boral or either of them were it to fail in either or both of its proceedings. 4 The critical issues in the argument before me are, first, whether an order that Cementech provide security will stultify the proceedings by reason of its impecuniosity and, secondly, if I were not minded to so find, what amounts of security ought be ordered in each proceeding and on what basis.

Should the Boral proceedings be stayed? 5 Prior to the commencement of the hearing today, Cementech and Boral had proposed short minutes of order in which it was noted that Cementech would institute proceedings against Austral for infringement of the patent in suit. Indeed, those proceedings were commenced in this Court on Monday, 26 May 2014. Cementech and Boral proposed to agree that their proceedings should be stayed pending the final determination of the Austral proceedings and any appeal, on conditions that: 1. if the Austral proceedings were either permanently stayed, dismissed or discontinued, or a final determination were made that had the effect of invalidating claims 1, 2, 3 and 18 of the patent, Cementech would consent to an order that its proceedings against Boral be dismissed and that it pay Boral's costs. 2. Cementech would not contend against Boral that any finding of fact or law made in the Austral proceedings was binding in the Boral proceedings or in any proceeding in relation to the patent. 3. if the Court in the Austral proceedings issued a certificate of validity in relation to the patent pursuant to s 19 of the Patents Act 1990 (Cth), Cementech would not rely on s 19(2) against Boral and would consent to a direction under s 19(3) that s 19(2) not apply in relation to any award of costs against Boral, in those proceedings or any other proceeding in relation to the patent. 6 In s 19(2), the Parliament has expressed a prima facie public policy that, where a court has determined, as reflected in a certificate of validity in other proceedings, that the validity of a claim was questioned, then a person who subsequently challenges that same claim unsuccessfully will ordinarily be obliged to pay the patentee's full costs of the proceedings as between solicitor and client in respect of that claim. There is obvious commonsense in that public policy. 7 I refuse to grant a stay on the conditions that Cementech and Boral proposed, having regard to the requirements of Part VB of the Federal Court of Australia Act 1976 (Cth) and, in particular, to the achievement of the overarching purpose. In my opinion, a stay on those conditions would not facilitate the just resolution of the present dispute according to law as quickly, inexpensively, and efficiently as possible. It would subject the Court to multiple proceedings on the same patent in which Boral would have been free to argue that a considered decision of the Court on the validity of claims was not to have the prima facie effect that the Parliament intended in s 19(2). The conditions would defeat the express policy of the Parliament, and commonsense, that if Boral's subsequent challenge to that claim were unsuccessful, it should pay the whole of Cementech's solicitor-client costs in respect of its unsuccessful challenge. 8 The efficient disposal of the Court's overall caseload would be significantly impeded by the parties' suggestion that Boral should be completely free of the Parliamentary public policy expressed in s 19(2) that it be at risk for re-litigating an issue that had already been determined. And, it would cause other litigants to be displaced in their ability to have access to the Court by reason of those further proceedings clogging the Court's lists. It is not appropriate for parties to agree on terms that do not have proper regard to the public policy in s 19(2) and the overarching purpose. I am of opinion that the conditions proposed are not appropriate ones on which to order a stay.

Background - Adbri's claim for security 9 The Adbri proceedings were conducted initially in the Supreme Court. Originally they had been commenced solely against Austral. On 2 August 2013, about a week after their commencement, Cementech joined Adbri. Adbri had received a letter of demand on 28 June 2013 with the then-proposed version of Cementech's pleading of infringement against it. The evidence of Adbri's solicitor, Wayne McMaster, indicated that Adbri commenced work in preparing its defence and cross-claim from 28 June 2013, although the proceedings had not yet been instituted against it. 10 Adbri foreshadowed that it would seek security for costs and, on 10 October 2013, it filed a notice of motion in the Supreme Court for security. It sought a total of $500,000 by way of security. This was based on the evidence of Mr McMaster. He estimated that the total cost, in a solicitor-client assessment, of preparing a defence and cross-claim impugning the validity of the patent would be $279,100. He estimated that, in addition, there would subsequently be further costs for reviewing and preparing evidence totalling $417,900, and that the costs for the general conduct of the matter up to the time at which the infringement of validity evidence was complete would amount to another $204,975, totalling $901,975. From that acorn, Adbri developed its claim for the figure of $500,000 as the amount it sought by way of security. (All the amounts claimed by both Adbri and Boral exclude goods and services tax.) 11 Mr McMaster said, in his affidavit of 28 November 2013, that the actual costs incurred by Adbri between 28 June 2013, being the date of receipt of Cementech's letter of demand, and 26 November 2013, were approximately $235,000. Those included the costs attributed to work of a senior associate who had billed $136,404, which, according to the scale of fees, is equivalent to approximately 250 hours of work. Mr McMaster said that he considered that those costs had been reasonably and properly incurred by Adbri from the commencement of the dispute, having regard to the vague and imprecise nature of Cementech's allegations of infringement, the significant cross-claim, number of grounds of invalidity investigated by Adbri, and the number of interlocutory disputes and associated voluminous correspondence necessitated as a result of the involvement of Adbri. 12 Mr McMaster's reference to voluminous correspondence was borne out by the large number of letters and emails passing between the solicitors that formed part of his affidavit evidence. However, that correspondence seemed to have done little to advance the proceedings to any satisfactory degree. Why such material is put into evidence on such applications is a mystery. It does not advance the ability of the Court to determine a real issue in dispute. It adds unnecessarily to the bulk of the material given to the Court for its consideration. Nor does such correspondence generally articulate or identify what is really necessary for the Court to decide. Such repeated exchanges of correspondence is a practice that is unfortunately too common and rarely achieves anything. It is a practice antithetic to achieving the overarching purpose in Pt VB of the Federal Court of Australia Act. 13 The Court only needs to be given material that will assist to determine the dispute. Judges should not be expected to read volumes of letters passing between solicitors that are no more than acrimonious or other debating positions, or other material in which they seek to sort out differences at great length and, no doubt, great cost to their clients, which do nothing to elucidate the real issues for the Court to decide. 14 Adbri's costs, as estimated by Mr McMaster, were reviewed by a costs assessment expert, Deborah Vine-Hall, in her affidavit of 29 November 2013. She opined that it was reasonable to predict that Adbri's likely costs at the conclusion of evidence stage could be at least the amount of about $900,000 estimated by Mr McMaster. She was, of course, considering the assessment exercise in light of the provisions of the New South Wales costs legislation, before the proceedings were transferred to this Court.

Background - Boral's claim for security 15 Boral filed its interlocutory application on 9 April 2014, and sought $420,000 by way of security. The issues in the two proceedings as to infringement are slightly different, in that the Boral proceedings involve a closed period between 2008 and 2013. Boral sold the relevant business in 2012 and then ceased to be responsible for any alleged infringing conduct. Its solicitor, Simone Mitchell, estimated that the costs of preparing a defence and cross-claim, and dealing with the pleadings on a solicitor-client basis, would be $160,780, those of preparing evidence would be $271,200, and that the general costs of the conduct of the matter up to the completion of the evidence would be a further $53,840, totalling, together with costs incurred to date, application fees and disbursements, $561,254.

The common background 16 In the Supreme Court proceedings, Cementech originally claimed a declaration that its exclusive licence agreement with Austral included a provision that required Austral to join with it as plaintiff in infringement proceedings, and to be liable for half of the costs and disbursements of any enforcement action. 17 On 17 December 2013, Stevenson J made a declaration that, on the proper construction of the licence agreement between Cementech and Austral, the latter was obliged to pay Cementech one half of the costs and disbursements incurred by Cementech in the bringing and prosecuting of the proceedings in which Adbri had by then become a party, as and when those costs and disbursements were incurred by Cementech except insofar as the incurring of those costs and disbursements was not reasonably necessary for the bringing and prosecuting of those proceedings: Cementech Pty Limited v Austral Masonry (NSW) Pty Limited [2013] NSWSC 1888 at [50]. His Honour also ordered that the balance of the proceedings be transferred to this Court. 18 As a result of his Honour's decision, there was no further role for Austral to play in the proceedings, and I removed it as a party when the matter first came before me. An appeal from his Honour's decision has been heard by the Full Court and judgment is reserved. 19 Cementech is a company conducted by members of the Rafidi family. Its patriarch, Iyad Rafidi appears to be its controlling mind. His sons, Jesse and Joel, who are directors of Cementech, have offered undertakings that, in their final evolution today, were to the effect that, upon the determination of the proceedings, in the event that Cementech were ordered to pay the relevant respondent's costs incurred in them, in any amount as may be ordered by the Court or taxed, each individual would personally pay such costs for or on behalf of Cementech to the extent that that company was unable to pay such costs, to the extent that he had sufficient assets and financial resources to do so. The latter qualification was not present in the original form of the undertaking proffered at the commencement of the hearing today. 20 I will refer, for simplicity, to Iyad Rafidi as Mr Rafidi in these reasons. He gave affidavit evidence and was cross-examined. He said that his two sons were directors of Cementech and that it had developed the technology the subject of the patent. He said that Austral had ceased production from its Port Kembla operation in February 2013, and that some of its licence fees due to Cementech remained unpaid because of a dispute between Austral and Cementech that is now the subject of the proceedings commenced two days ago. 21 Mr Rafidi is a man who has had a great deal of business involvement in a range of enterprises, some of which do not appear to have been as successful as he would have hoped. It appears that, in some earlier proceedings, his evidence on certain matters was regarded by other judges as less than reliable, a matter that he readily admitted. Those circumstances included his having admitted to being party to relying on a document that he knew to have been fabricated in proceedings in the Supreme Court of New South Wales before Young CJ in Eq in 2002: Russo v Resource Developments International Pty Ltd [2003] NSWSC 239. Mr Rafidi accepted today that what he had done was wrong on that occasion. 22 Mr Rafidi said that, in the past, he had been assisted by business associates and colleagues when he had experienced times of need and that he had been able to call on them when he needed funding, but that this was a matter of their own generosity and not of any legal or other obligation. He said that the people who were standing behind the present litigations involving the patent were himself and his two sons and that they collectively did not have any significant assets. He said the people who stood to benefit from the litigation were himself, his two sons and members of his family and that they had, so he asserted, no capacity to meet an order for security for costs. He said that his wife owned the family home, but that it was fully mortgaged to the National Australia Bank. 23 In a subsequent affidavit, Mr Rafidi said that he understood that Adbri believed that its costs in defending the proceedings would exceed $1 million and that Cementech was "a $2 company having no capacity to meet such an order for costs, were it recoverable. I do not have money or finances sufficient to meet such an order or application". He said that he did not have financial resources, separate to those of Cementech, sufficient to meet further or additional orders for security for costs and that the property in which he and his sons lived was at Sylvania Waters and was fully mortgaged. 24 Mr Rafidi accepted that a property at Rhodes or Canada Bay was held in his name. But, he said that he held it as trustee, a fact that he had not previously disclosed. He revealed this information in his affidavit of 25 May 2014 following Ms Mitchell's identification of his being the registered proprietor of that property in one of her affidavits. In that affidavit, Mr Rafidi also responded to other evidence given by Ms Mitchell. Australian Securities and Investments Commission (ASIC) searches showed that he, his sons and brother were officers of, or associated with, a large number of companies, most of which were, effectively, inactive. Mr Rafidi asserted that none of this large number of companies held sufficient funds or resources to meet orders for security of costs and that, substantively, the most that could be said to be available from those companies was an amount of about $265,000. Most of that sum is related to the asset that Cementech claimed was represented by Austral's liability for unpaid licence fees of $220,000. 25 Mr Rafidi also referred, in his affidavit of 25 May 2014, to the position of Alphalite Pty Limited which he said had been incorporated pursuant to advice of accountants, Grant Thornton. It had a paid-up capital of $13,001,415. He said that Alphalite does not trade and has never traded. He said that the arrangement for which Grant Thornton had advised Brick & Block Company Pty Limited, his former umbrella corporate vehicle, to incorporate Alphalite was never proceeded with. On the other hand, he asserted that Alphalite's paid-up capital of about $13 million did not amount to that company having "tangible assets of this magnitude to which we could look to provide security for costs". But Mr Rafidi gave no explanation as to what that paid-up capital represented or what the asset and liability position of the company was. Nor, signally, did Mr Rafidi provide any financial accounts for any of the corporations with which he had been associated as evidence of what their actual financial positions were. He gave evidence that he is currently involved in other litigation against Bankwest over previous business dealings. He gave no explanation as to the sources of funds for that litigation or for the three sets of proceedings that he has caused Cementech to institute in respect of the patent in suit. 26 Mr Rafidi and his son, Jesse, are also associated with a company, Ad-Tek Pty Ltd. On its website, that company claims that it is a construction chemical specialist organisation. Mr Rafidi provided little information about the financial position of that company. 27 Earlier, in the Supreme Court proceedings, on 30 July 2013 Mr Rafidi had said in an affidavit that "Cementech is a solvent company and has capacity to meet such orders as may be made against it in this litigation", albeit that that was at a time just before Adbri had been joined as a party. 28 During the course of submissions made to Stevenson J on the application with which he dealt in the judgment to which I have referred, senior counsel then acting for Cementech referred to evidence Mr Rafidi had given in which he doubted that he would be able to get money from his bank that would be sufficient to satisfy the claims for security in the order of the amount that was then being sought by Adbri. Mr Rafidi did not give any evidence, and Cementech did not lead any other evidence, of any efforts to obtain funds from any financial institution to support its pursuit of the various infringement proceedings that it has brought. 29 Cementech's solicitor, Trevor Hall, swore an affidavit in the Supreme Court on 15 November 2013 in which he said that Cementech had spent about $22,500 in preparing its pleadings and doing experimentation in respect of Adbri's products that it claimed were infringing. He argued that, having regard to Mr McMaster's evidence, an amount about $32,500 should be ordered for security in favour of Adbri. 30 Cementech also relied on the affidavit of Timothy Rybak, who was a specialist legal costs consultant. Mr Rybak said that his evidence was prepared urgently. He contested a number of views of Ms Vine-Hall. He expressed the view that the total amount that would be recoverable on a standard party/party costs order for Adbri's costs and disbursements up to the time of the close of evidence was between $90,000 and $110,000. Mr Rybak's report bears the hallmarks of having been prepared urgently and, where it conflicts with Ms Vine-Hall's views, I prefer hers as being more reasoned.

Cementech's submissions 31 Cementech argued that there should be no order for security for costs because, based on Mr Rafidi's evidence, such an order would stultify its ability to conduct either of the proceedings. It argued that there was a public interest in its being able to litigate the validity of, and to enforce, the claims in its patent. It contended that, because each of Adbri and Boral were significant, large companies associated with well-resourced public companies, and Cementech was a small, family-held company, no particular predisposition to ordering security to protect the interests of the two respondents should be assumed. It argued that the cross-claims challenging the validity of the patent should not be the subject of any grant of security because such cross-claims were not inherently defensive by nature. It submitted that the context, nature and extent of the matters that any such cross-claim would raise in either of the proceedings was not known. It argued that, as was evident from Mr McMaster's affidavit of 9 October 2013, a great deal of work had been done by Adbri from the day of the letter of demand, of 28 June 2013, to advance both invalidity and a defence of non-infringement which, by 28 November 2013, totalled about $235,000. Cementech noted that neither respondent's evidence had sought to distinguish between the costs of its substantive defence against the infringement of the patent's claims and the other aspects of its defence and cross-claim that asserted that the patent was invalid. Cementech argued that it was evident that, by reason of the work already done, Adbri was very close to being able to file and serve its defence, as indeed it had offered to do, within 28 days, in a letter of 31 March 2014. Alternatively, if security were ordered, Cementech argued that it should not include an allowance for that part of the defences consisting of the positive cross-claims that the patent was invalid, and any security should not be in the quantums asserted.

Consideration 32 I accept that Mr Rafidi's business career has demonstrated that one thing he does not wish to do is to go bankrupt, and that his proffer of a guarantee is likely to have some substantive value. His sons' offers of guarantees are not backed by assets. 33 I am not satisfied by the evidence of Cementech that it is without resource or assets to marshal to be able to provide security. Mr Rafidi's evidence in chief did not include what he subsequently offered in the course of cross-examination, namely, that he would provide a detailed explanation of his assets and liabilities and those of the companies in which he was interested or involved. The absence of that material and the fact that there is no explanation as to how Cementech is funding the three patent infringement cases and its proceedings involving Bankwest, together with the late revelations of the real property interest that Mr Rafidi says, and I am prepared to accept, he held simply as a bare trustee, leave me unsatisfied that I am in a position to find that these two litigations would not be able to proceed if security for costs were ordered. 34 There is just too much that has not been explained or revealed, and has been left hanging, in the material put forward by Cementech to enable me to be satisfied that it lacks resources, as it claims. It may well be that what Mr Rafidi has said is completely accurate, but Cementech, bearing the evidentiary onus on this point, has failed, in my opinion, to discharge it. It is of concern that I have been left unaware of the nature and extent of the asset that is represented in the books of Alphalite as its $13 million paid-up capital. Whether that is an intangible asset, such as intellectual property rights or goodwill in respect of a business, or a tangible asset or a mix of both classes of assets has been left unexplained in the evidence. Had it wished to do so, Cementech could have explained what that apparently significant asset represented. 35 Accordingly, I am satisfied that it is appropriate to make an order for the payment of security for costs by or on behalf of Cementech.

What quantum of security should be ordered 36 That leaves the making of an assessment as to the appropriate amounts that should be ordered for security and the staging of their payment. In that respect, Adbri and Boral have the onus. As I have mentioned, neither has sought to identify any distinction between the costs that would be attributable to the defence of the infringement claims and their positive cross-claim. In Probiotec Ltd v University of Melbourne (2008) 166 FCR 30 at 46-47 [62]-[64], I discussed, with the agreement of Finn and Besanko JJ, the relevance of defences and cross-claims and the relationship between claims made in patent litigation, saying: "A factor which may be relevant in the exercise of a discretionary judgment in making an order for costs is the responsibility of the party against whom the order is sought for the costs incurred by the successful party. Evaluating that responsibility may require an examination of not only the nature and degree of the involvement of each of the parties, but of the essential claims themselves. Where the validity of a patent is in issue in litigation, the ways in which the issue arose, was contested and may impact on the various parties, ordinarily, will be significant factors in the formation of the discretionary judgment to order costs under provisions such as s 43(2) of the Act. Under s 121 of the Patents Act, a defendant to infringement proceedings is entitled to apply by way of counterclaim for revocation of the patent. Likewise, it is a defence to an infringement proceeding to deny validity of the patent: Baygol Pty Ltd v Huntsman Chemical Company Australia Pty Ltd (t/as RMAX) [2004] FCA 1248 at [31] per Tamberlin J. In Baygol [2004] FCA 1248 at [31]-[34], Tamberlin J examined the legislative history of the relationship between a cross-claim and a defence in proceedings for infringement and revocation of a patent. He concluded that revocation proceedings could be instituted as a defence to an infringement action. But, he pointed out that in each case it was a question of ascertaining the substance and effect of the revocation suit so as to determine whether in truth it was defensive in character, because if successful, the infringement action would be defeated. Such a characterisation had importance on the question of the provision of security for costs in that case and others, such as Farmitalia Carlo Erba SrL v Delta West Pty Ltd (1994) 28 IPR 336 at 339-341 per Heerey J. In Farmitalia 28 IPR at 339 Heerey J recognised that the formality of pleadings or the position of parties in litigation may not be determinative of the substance of their position and role in litigation. A person who initiates proceedings may sometimes be, in effect, the true defendant, although the form of the proceedings might not suggest that to be so. So in Willey v Synan (1935) 54 CLR 175 a collector of customs relied on his statutory power to issue a notice to the plaintiff requiring him to commence an action for the recovery of seized silver coins if he were to forestall a statutory condemnation of them. Once the action was commenced, the collector of customs sought security for costs against the foreign plaintiff. The Court concluded that in effect, the collector was the real actor and the initiator of the proceedings, because the notice was a step taken by him to obtain a condemnation of the goods: Willey 54 CLR at 179-180 per Latham CJ, 185-186 per Dixon J, with whom Rich J agreed. Dixon J said (Willey 54 CLR at 186): 'I do not think we should be influenced by the consideration that in all probability the plaintiff would have brought an action even if the Collector had not proceeded under sec. 207. In fact he did so proceed and thus made it necessary for the plaintiff to sue or allow the forfeiture to take place.'" 37 The task for me, on the inadequate material led by Adbri and Boral, is to ascertain the substance and effect of the cross-claim for revocation that each foreshadowed, so as to determine whether it will be completely defensive in character. Each of them asserted that, if security is ordered and the proceedings are stayed because Cementech is unable to provide the security, it will not proceed with its cross-claim. However, that is obviously a matter of common sense, given that the only person who can enforce the validity of the patent is the person whose proceedings would then be stayed. That argument has a circularity about it that is unattractive in the present circumstances. 38 The way in which counsel argued that the cross-claims will have a defensive aspect suggests that there is some substance, at least in part, in that argument. One of the issues will be the relevant priority date or dates that ought to be determined and what impact the prior uses may have had on the validity of the patent at that time or those times, having regard to any substantive change or changes in the nature of the specification in the patent and its claims as amendments were progressively made. It is impossible to undertake the present task with any precision because of the lack of any cross-claim before me, or any substantive evidence by those who could best inform me as to its precise content. 39 Doing the best I can, I am of opinion that about 60% of the costs of the defence, including the cross-claim, would be attributable to the truly defensive task and that 40% of the costs estimated would be attributable to the, in effect, positive case of invalidity that would not involve a duplication or crossing over of work. 40 While I appreciate that the two different estimates, for Adbri and Boral, deal with two different cases, I am mindful that Adbri's estimate of its costs is very much greater than that of Boral and that Adbri's costs include, on the evidence, a significant component in respect of the period between 28 June 2013 and when it brought its application for security on 10 October 2013 that had been foreshadowed earlier. I have had regard to the evidence and, making an appropriate discount for what will be necessary in pleading those aspects of the defence and cross-claim that will truly not be defensive, I consider that I should order security in favour of Adbri in respect of further costs up to the costs up to the close of pleadings of $120,000 and $220,000 in respect of further costs up to the close of the evidence, and that I should award $90,000 in respect of Boral's costs of its defence and $170,000 in respect of its further costs up to the close of its evidence. 41 I will also order that the parties may revisit the amounts fixed for the preparation of evidence, having regard to the nature of the defences and cross-claims, including any issues concerning alleged invalidity, when those are filed, lest the estimate that I have made does injustice to any of the parties, including Cementech. 42 Each of Adbri and Boral asked for an order that if the amount of security were not paid within 28 days or some other fixed time, the proceedings should be dismissed rather than merely stayed or for liberty to apply to seek to have the proceedings dismissed. They contended that they would be in some way prejudiced by the proceedings being stayed but not dismissed while Cementech pursued its claim against Austral. 43 I am of opinion that it would not be appropriate to make any such order at this time. If, and when, any relevant prejudice were demonstrated, were the proceedings to be stayed, either Adbri or Boral can make such application based on the circumstances then obtaining as it sees fit. 44 Each of Adbri and Boral also sought an order for the costs of the interlocutory application. While they have had some success, it has not been an entire victory. I will order that Cementech pay 60% of the respondent's costs in each application. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.