CPL Notting Hill Pty Ltd v Microsoft Corporation

1. The application for leave to appeal be refused.
2. The applicants pay the respondents' costs of the application for leave to appeal, as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ROBERTSON J: 1 This is an application for leave to appeal from certain orders of the Federal Circuit Court of Australia given on 4 August 2017, as amended by order of 7 August 2017. I shall refer to the applicants on the application for leave to appeal as CPL Notting Hill. I shall refer to the respondents on the application for leave to appeal as Microsoft. 2 In the substantive proceedings, CPL Notting Hill is the respondent. The causes of action in respect of which CPL Notting Hill is sued are: infringement of copyright; contravention of the Australian Consumer Law; and infringement of trademarks. 3 The orders made by the Federal Circuit Court were as follows: THE COURT DECLARES THAT: 1. It is appropriate in the interests in (sic) the administration of justice to allow and require verified discovery by the respondents, including any further respondent joined to the proceedings in accordance with order 4 below, pursuant to s. 45(1) of the Federal Circuit Court of Australia Act 1999 (Cth) as identified below. THE COURT ORDERS THAT: 1. Grant leave to the applicant to file and rely on the amended application in a case and the Court dispenses with the need for the electronic filing of the same. 2. The application in a case filed by the respondents on 22 June 2017 is dismissed. 3. The applicants file and serve a further amended statement of claim on or before 24 August 2017. 4. Grant leave to the applicants to join any further party or parties to that further amended statement of claim. 5. Directs the respondents to file and serve a defence to the further amended statement of claim on or before 14 September 2017. 6. That pursuant to regulation 14.02 of the Federal Circuit Court Rules 2001 (Cth) and subsection 45(1) of the Federal Circuit Court of Australia Act 1999 (Cth) the Respondents to give verified discovery in respect of the following categories of documents:- a) copies of all purchase orders issued by any of the Respondents to any person or entity for the importation into, purchase or distribution in Australia, of any Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs in the period 1 January 2014 to date; b) copies of all invoices issued to any of the Respondents by any person or entity in relation to the sale or supply by such person or entity in Australia, of any Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs in the period 1 January 2014 to date; c) copies of all sales ledgers and invoices which evidence the sale or supply of any Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs (with or without a computer system) by any of the Respondents to any person or entity in Australia in the period 1 January 2014 to date; d) copies of all invoices issued to any of the Respondents by any person or entity in relation to the importation into, purchase or distribution in Australia by such person or entity, of certificates of authenticity for any Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs for the period 1 January 2014 to date; and e) copies of all invoices which evidence the sale or supply of certificates of authenticity for Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs by any of the Respondents to any person or entity in Australia for the period 1 January 2014 to date; and f) copies of ledgers and bank statements evidencing the receipt and deposit of the sales of Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs and/or certificates of authenticity for Microsoft Windows 7 Professional and Microsoft Windows 7 Home Premium programs identified in category 1. c. and 1.e. above. 7. The applicants to file and serve any affidavit evidence in respect of liability, damages or additional damages on or before 1 February 2018. 8. Directs the respondents to file and serve any affidavit evidence on which they wish to rely on or before 29 March 2018. 9. Directs the applicants to file any affidavit evidence in reply on or before 27 April 2018. 10. Directs the applicants file and serve a list of objections to the respondents' evidence on or before 27 April 2018. 11. Directs the respondents to file and serve any objections to the applicant's affidavit evidence on or before 11 May 2018. 12. The matter is stood over for directions at 9:30 am on 25 May 2018. 13. Upon completion of the affidavit evidence, the Court grants leave to either party to ascertain from the Court the range of potential hearing dates and the parties have leave to provide consents (sic) orders in relation to the hearing dates if they are agreed. 14. Directs any further application for a transfer be heard and determined on 25 May 2018 of such application is filed. 15. Directs the respondents to file and serve any further application for transfer on or before 11 May 2018. 16. Liberty to apply on 2 days' notice. 17. The applicants pay the respondents' costs of the occasion by reason of the amendment. 18. The Court reserves the issue of costs in respect of the application in a case on which the order for partial discovery has been made and reserves the question of costs in relation to the application of (sic) in a case that has been dismissed. 4 The grounds set out in the application for leave to appeal concern three matters, as follows: A: ordering verified discovery in certain categories by CPL Notting Hill; B: dismissing CPL Notting Hill's application seeking compliance by Microsoft with an order made in the Federal Circuit Court on 7 September 2016; and C: dismissing CPL Notting Hill's application for the transfer of the proceeding from the Sydney Registry to the Melbourne Registry of the Federal Circuit Court: A. In declaring and ordering verified discovery by the Applicants: 1. His Honour erred in declaring that the administration of justice required verified discovery. 2. His Honour erred in admitting unverified (and contradicted) evidence of purported invoices from a third party (LDS Pty Ltd in Liq.) which were obtained under subpoena by the Respondents from the Commissioner of Police, Victoria. 3. His Honour erred in failing to give any or any proper regard to the Applicants' affidavit material which deposed to the fact that the purported invoices of LDS (which were inadmissible) obtained by the Respondents' Subpoena from the Commissioner of Police, Victoria were false and unreliable. 4. His Honour failed go have (sic) any or any proper weight to the Applicants affidavit evidence which deposed that the only Microsoft Windows software ever purchased by the First Applicant from LDS Pty Ltd was a single purchase of 50 Microsoft Windows 7 Professional licences ("50 licences"). 5. His Honour erred in holding that a merging of product codes on the First Applicant's computerised inventory system gave rise to a need for discovery when there was otherwise no evidence to suggest an alleged infringement had occurred beyond the 50 licences. B. In dismissing the Applicants' application in the case seeking compliance by the Respondents with Order 1 of His Honour Judge Street's Order of 7 September 2016: 6. His Honour failed to have regard to the failure of the Respondents swearing an affidavit: (a) exhibiting ; and (b) explaining changes for- all versions of Microsoft Windows 7 software labels both past and present used in Australia. 7. His Honour failed to have regard to the Applicants' Defence filed in the original proceeding and the issues raised therein as relevant to the Applicants' application for the Respondent's compliance with the said Order of 7 September 2016 including that there had been a labelling error in the labelling system of Windows 7 labels for "Refurbished PC". C. In dismissing the Applicants' application for the transfer of the proceeding from the Sydney Registry to the Melbourne Registry: 8. His Honour failed to have regard to the fact that all alleged infringing conduct occurred in or about Melbourne in the State of Victoria; 9. His Honour failed to have regard to the fact that all the Applicant's witnesses and legal representatives are located in Melbourne; 10. His Honour failed to have regard to the fact that the Applicants do not and have not traded or carried on business in Sydney or the State of New South Wales and there was no factual nexus of the Respondents' claim to Sydney or the State of New South Wales; 11. His Honour failed to have regard to the fact that the application for the transfer of the proceeding to Melbourne was brought at the most opportune time to ensure the expeditious determination of the proceeding and at a time when no arrangements had yet been put in place for the setting down of trial of the proceeding in Sydney. 5 The parties were agreed that leave to appeal was required by s 24(1A) of the Federal Court of Australia Act 1976 (Cth). In substance, an appeal may not be brought from an interlocutory judgment of the Federal Circuit Court exercising original jurisdiction, other than in family and child support matters, unless this Court or a judge of this Court gives leave to appeal. 6 A major question on applications for leave to appeal is whether substantial injustice would result if leave were refused, assuming the decision below to have been made erroneously: Hogan v Australian Crime Commission [2009] FCAFC 71; 177 FCR 205 at [64]. It is also relevant that in a matter of practice and procedure, rules of restraint are applied by the Court and there is a high bar to clear to obtain leave: In re the Will of F B Gilbert (dec.) (1946) 46 SR (NSW) 318 at 323. In my opinion, this is particularly the case where the interlocutory judgment is a matter of practice and procedure of another court. An example is the factors relevant to a transfer of proceedings within that court to another registry.