Practice And Procedure - stay of proceedings - concurrent proceedings in Canada in which relief sought under Trade Practices Act 1974 - dispute as to title to copyright in computer programme for special effects in film and video - whether stay or adjournment of Australian proceeding appropriate

Trade Practices Act 1974

Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538

Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd [1992] FCA 72; (1992) 34 FCR 287

Australian Commercial Research and Development Ltd v ANZ McCaughan Merchant Bank Ltd (1989) 3 All ER 65

Green v Australian Industrial Investment Ltd [1989] FCA 482; (1989) 25 FCR 532

(applicants on the motion): Allen Allen and Hemsley.

THE COURT ORDERS THAT the applicants on the Motion bring in short minutes before the Court at 9.30 a.m. on 14 March 1994, to give effect to the reasons for judgment published today.

Note: Settlement and entry of orders are dealt with by Order 36 of the Federal Court Rules.

GUMMOW J This proceeding was commenced by application and statement of claim filed 6 October 1993. The first applicant ("DA Technology") is incorporated in the State of Victoria. The second respondent ("Mr Tregaskis") is an Australian citizen but now resides in Canada. Mr Tregaskis was a shareholder in DA Technology. He also was a director between 1985 and mid-1992, when he resigned and the company ceased operations. Mr B.F. Gracey also was a director. In addition, from May 1987 Mr R.S. Lewis and Mr G.F. Lord were directors. They represented an investor in the company, Pacific Coast Innovations Ltd. The business of DA Technology was the development and exploitation of computer software and the provision of services relating to the development and use of such software.

2. Whilst actively involved in the day to day management of DA Technology, Mr Tregaskis wrote a computer programme for the creation of special effects and three dimensional animation in video film and other images. There is a dispute as to whether in so doing Mr Tregaskis acted as an employee of the company or as an independent contractor. The programme has been called "Flame" and the litigation primarily concerns the title to the copyright therein, as a literary work.

3. The evidence on the present motion indicates that by early 1991 Flame had been largely completed for use on new computer hardware. It had the potential to utilise the capacities of this new hardware to take moving images from cinematographic film and alter them, add to them and animate those images to create special effects indistinguishable from the original film. This technology is far removed from the familiar cartoon animation or what are called "go-motion" animations which use numerous sequential photographs of models. The new technology gives a sense of reality to special effects which hitherto has not been possible. An example, but one not using Flame, appears in the film "Jurassic Park". There, computer generated images of dinosaurs and other creatures in motion were seamlessly integrated with live footage of the actors.

4. The second applicant ("Citicomp") is incorporated in the State of New South Wales. It is a related corporation of Softimage Inc. ("Softimage") a Quebec corporation which carries on business of graphics software development and distribution. It was accepted by the respondents that for the purposes with which this judgment is concerned no distinction is to be drawn between Citicomp and Softimage. Softcapital Inc. ("Softcapital"), a Delaware corporation, is a wholly owned subsidiary of Softimage and it, in turn, is the parent company of Citicomp.

5. The first respondent ("Discreet Logic") is another Quebec corporation. Its business is the development and licensing of two dimensional image processing software for use in the film and video industries.

6. In a real sense the dispute in Australia, Canada and elsewhere is between two Canadian businesses, Softimage and Discreet Logic, and concerns entitlement to exploit the copyright in Flame. The root of title to that copyright finds its way back to events which occurred when Mr Tregaskis lived and worked in Australia.

7. The evidence on the present motion indicates that on 22 May 1992, after discussions between Mr Tregaskis and Mr Gracey, a written agreement was entered into, on the face of it between Mr Tregaskis and DA Technology. These events took place in this country. The document ("the Tregaskis assignment") recites that DA Technology will cease to operate on or around 30 June 1992. It appears to have been drawn without the benefit of any legal assistance and its meaning is open to debate. It is sufficient for present purposes to indicate that on one reading it is open to the construction that on 1 July 1992 the ownership of and all rights to Flame were to be transferred by DA Technology to Mr Tregaskis, so that thereafter neither DA Technology nor Mr Gracey would have any further claims in respect of Flame. As will appear, the circumstances surrounding entry into the Tregaskis assignment are the subject of hot dispute.

8. By instrument dated 31 July 1992, and "in consideration of one dollar and other consideration", Mr Tregaskis assigned all his right, title and interest in Flame to Discreet Logic. That assignment and the copyright in Flame were registered in the Canadian Copyright Office on 7 July 1993. The registration number of the assignment was 44,726 and the number of the copyright was 425,197. The Canadian copyright legislation provides for a registration system which, very broadly, resembles that which formerly existed in Australia under Part IV of the Copyright Act 1912.

9. By a distribution agreement stated to have been made on 19 December 1992, Discreet Logic granted to Softimage the exclusive right to distribute Flame in countries including the United Kingdom, France and Italy ("the Distribution Agreement"). The "Initial Term" of the agreement was defined so as to end on 31 January 1994. The agreement (section 4.01) contained a warranty by Discreet Logic that it was the sole and exclusive legal and beneficial owner of all rights, title and interest in Flame. Section 11 provided for arbitration of disputes, to be conducted in the Province of Quebec.

10. The evidence on the present motion indicates that in late February or early March 1993 Softimage received information that copyright for Flame might not have been transferred effectively to Discreet Logic and might still remain with DA Technology. Softimage also was informed that DA Technology was offering for sale all rights to Flame.

11. Softimage then approached DA Technology and agreements were entered into between DA Technology and the related corporation of Softimage, Citicomp, for the purchase of all the assets of DA Technology. There was an agreement for sale of business assets dated 13 May 1993 ("the 13 May 1993 agreement") and an assignment of Flame dated 28 July 1993. Both of these instruments are stated to be governed by the law of this country.

12. On 16 June 1993 Softimage informed Discreet Logic that, through Citicomp, it had acquired all the right, title and interest to Flame from DA Technology. After further dealings between the respective attorneys for the parties, Discreet Logic, by letter dated 22 June 1993, purported to terminate the Distribution Agreement. Issues arising from the purported termination of the Distribution Agreement are before Mr A.K. Paterson QC as arbitrator, pursuant to section 11 thereof. The claimant in the arbitration is Softimage, and Discreet Logic is the respondent. That is to say, in substance, the moving party is in the same interest as the applicants in this Court.

13. The central issues in the arbitration are the rights and liabilities of the parties in relation to the purported termination. The range of these issues is, from the material before me, a matter of debate between the parties. However, section 6.01 of the Distribution Agreement contained a covenant by Softimage that it would not "at any time expressly or implicitly claim any right, title or interest in the Product". That term would include Flame. One of the grounds advanced by Discreet Logic in support of the termination of the Distribution Agreement on 22 June 1993 was a breach of section 6.01 on the part of Softimage by making a claim to the title to Flame.

14. The relief sought by Softimage in the arbitration includes a declaration that Discreet Logic terminated the Distribution Agreement unlawfully and without cause. In its statement of defence and counter-claim Discreet Logic states (para. 10) that Softimage's allegation that it had obtained title to Flame was a reason for the termination. In later paragraphs Discreet Logic asserts that Softimage concealed from it DA Technology's claim and that its silence was intended to and prevented Discreet Logic from pursuing the matter with DA Technology before Softimage went ahead and purportedly acquired rights itself from DA Technology (paras. 31-34). In para. 35 Discreet Logic pleads:

"As of January 14, 1994, the issue as to title to Flame has been

submitted to the courts of Quebec, Canada, California and Australia in

six actions. This Arbitration Board is not seized of the title issue.

Alternatively, if it should be determined for any reason that the

issue of title to Flame falls within the scope of this arbitration,

Discreet Logic reserves the right to require full proof of Softimage's

allegations under oath and to make full answer and defence.

Notwithstanding anything in this pleading, Discreet Logic denies that

Softimage directly or indirectly has any interest in or title to

Flame."

Among the relief sought by Discreet Logic in its defence and counter-claim is an order that Softimage cause Citicomp to assign to Discreet Logic all of its right, title and interest in Flame including rights relating thereto allegedly acquired from DA Technology.

15. Thus, there is force in the submission that if the arbitration takes a course which leads to the making of such an order, the result may be, as a practical matter, to render moot a large part of the proceeding in this Court.

16. As I have indicated, registration No. 425,197 was effected by Discreet Logic on 7 July 1993. Then, on 28 July 1993 (following its dealings with DA Technology) Citicomp registered the copyright in Canada under entry No. 425,871. These entries represent inconsistent assertions of title to Flame.

17. On 14 September 1993, that is to say several weeks before the institution of the proceeding in this Court, Discreet Logic made an application to the Trial Division of the Federal Court of Canada. The respondents are the Registrar of Copyrights, Softimage, Citicomp and DA Technology. An order is sought that the Register be rectified by expunging the entry in the name of Citicomp.

18. In this Court, the respondents move for an order that the proceeding be permanently stayed. Alternatively, a stay is sought until judgment in the Federal Court of Canada proceeding and until the disposition of any appeal from that decision. As matters developed at the hearing of the motion, which took place in Sydney, the respondents in the alternative seek an order that the motion itself and the proceeding be stood over until a date in October 1994. This is on the footing that whilst it is not expected that the Canadian Federal Court proceeding will have been heard and disposed of this year a result well before October is expected in the arbitration.

19. The adjournment of the present proceeding in this fashion does not involve a permanent stay. It involves an approach akin to that followed in Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd [1992] FCA 72; (1992) 34 FCR 287. This means that what was laid down by the High Court of Australia in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 is not directly applicable. In that litigation what was at issue was the grant or refusal of a permanent stay.

20. In Sterling Pharmaceuticals, the respondent successfully moved this Court to stand the proceeding out of the list pending the determination of a concurrent New Zealand proceeding. The New Zealand proceeding was brought under the Fair Trading Act 1986 (N.Z.) which contained provisions very similar to the Trade Practices Act 1974 ("the T.P. Act"). Lockhart J (at 294) rejected the submission for the applicant that the principles expounded in Voth, relating to the stay of proceedings in Australia where there were other proceedings pending in a foreign country between the same parties for the same cause of action, applied to a motion of the kind under consideration by him. His Honour said:

"There is obviously a substantial difference between a motion for a

permanent stay or dismissal of a proceeding and a motion for a

temporary stay or lengthy adjournment of a case.

. . . The court remains in full control of the proceeding before it

when it is stayed only temporarily or where, as I propose, the

proceeding will be stood out of the list for a substantial time until

later this year."

"I am alive to the fact that a party who has properly invoked the

jurisdiction of an Australian court is prima facie entitled to have

his case heard and determined by that court notwithstanding that he

institutes proceedings in a foreign court. I have approached the case

on this prima facie assumption. However, in all the circumstances,

having balanced the advantages and disadvantages to each party in the

Australian proceeding, I am satisfied that the interests of justice

are best served by acceding to the motion of (the respondent). I do

not think it necessary, however, that the Australian proceeding be

stayed even on a temporary basis. I think it preferable that the

Australian proceeding be stood out of the list to a date late this

year with liberty being reserved to either party to restore the matter

to the list on reasonable notice in the event that circumstances

change. If the matter is not restored to the list then the court will

be able to determine later this year what is the appropriate course to

take in the light of the circumstances then existing, including the

then position of the New Zealand proceeding. In this way the

interests of both parties are best served as well as the interests of

justice generally including the interest of the contestants in the New

Zealand proceeding."

21. I turn now to consider the nature of the proceeding in this Court as it appears from the application and statement of claim. The applicants seek various declarations concerning the Tregaskis assignment. Declarations are sought that the instrument is not binding on DA Technology, that it did not effect any assignment of copyright in Flame to Mr Tregaskis, that misleading and deceptive conduct was engaged in by Mr Tregaskis in procuring its execution, and that Discreet Logic and Mr Tregaskis hold copyright in Flame on trust for Citicomp. Declarations are also sought that all proceeds of the use and disposition of Flame are held by Mr Tregaskis on trust for Citicomp, and that he is not permitted to use or disclose Flame otherwise than as directed by DA Technology and Citicomp. Orders are sought that the Tregaskis assignment be set aside pursuant to s. 87 of the T.P. Act and s. 41 of the Fair Trading Act 1985 (Vic.). There is also a claim for a declaration, which in the course of argument on the present motion it was suggested by counsel would more appropriately be for an order, that the Tregaskis assignment be set aside as having been obtained under duress.

22. It is alleged in the statement of claim that by reason of the 13 May 1993 agreement, between DA Technology and Citicomp, the former has assigned to the latter the entire copyright in Flame in each of the countries set out in the schedule to the Copyright (International Protection) Regulations made under the Copyright Act 1968. Those countries include Canada, the United States, France, Germany and Great Britain. The complaint is made that not only did Mr Tregaskis purport to assign to Discreet Logic copyright in Flame but that he has disclosed to Discreet Logic and used for his own and its benefit the object code and source code of Flame. This is alleged (para. 17) to be information which is confidential in character.

23. The allegation also is made by DA Technology and Citicomp (paras. 25-28) that, in effect, Mr Tregaskis acted as he did in relation to the Tregaskis assignment pursuant to a prior understanding with Discreet Logic.

24. In para. 32 it is contended that the Tregaskis assignment is void because Mr Gracey had no authority to execute it, and did not execute it, on behalf of DA Technology. Then it is alleged (paras. 33 and 34) that the execution of the document was procured by "economic duress" exercised by Mr Tregaskis. There follow (paras. 35-39) allegations of misleading or deceptive conduct by Mr Tregaskis with which it is said Discreet was knowingly concerned. Paragraphs 40-46 allege breach by Mr Tregaskis of fiduciary duties owed by him to DA Technology, and paras. 47-50 breach of a duty of confidence by Mr Tregaskis, being a duty not to disclose information concerning Flame. Finally (para. 51) it is said that at a meeting in January 1993 ("1992" is a misprint) between Mr Gracey on behalf of DA Technology and Mr Tregaskis, DA Technology rescinded the Tregaskis assignment.

25. In the Federal Court of Canada proceeding, the amended defence of the respondents, who include Softimage, Citicomp and DA Technology, is dated 23 December 1993. Before me, counsel for the Softimage interests agreed that the issues therein are effectively co-terminous with those in this Court.

26. The validity of the Tregaskis assignment is dealt with in paras. 158-174 of the amended defence. The respondents contend that Mr Tregaskis was not an independent contractor and deny that title to Flame vested in Mr Tregaskis. They also deny that he acquired any rights to Flame pursuant to the Tregaskis assignment. They say that the instrument is void for want of approval "by the appropriate organs" of DA Technology, and that Mr Gracey lacked any express or implied authority to bind DA Technology. It is further contended that the Tregaskis assignment is voidable and should be set aside for economic duress and for breach of duties said to be imposed upon Mr Tregaskis by s. 232 of the Corporations Law. It is also alleged in para. 173:

"173 In procuring the execution of the May 22 Document, Tregaskis

has, in trade or commerce between Australia and places outside

Australia, engaged in conduct that was misleading and deceptive or

likely to mislead and deceive in breach of Section 52 of the Trade

Practices Act 1974 of Australia. The May 22 document should be set

aside or annulled or the court should refuse to enforce it pursuant to

Section 87 of the Trade Practices Act 1974."

It is then alleged (paras. 175-178) that the purported assignment of 31 July 1992 by Mr Tregaskis to Discreet Logic was of no effect because Mr Tregaskis had no title to Flame to transfer. The respondents seek dismissal by the Federal Court of Canada of the motion seeking to rectify the Register of Copyrights by expunging the entry in favour of Citicomp. The respondents also seek declarations that the assignments of Flame to Mr Tregaskis and from Mr Tregaskis to Discreet Logic are void, and should be set aside or annulled. Alternatively, they contend that the Court should refuse to enforce these assignments.

27. The litigation in this Court, in the Federal Court of Canada and the arbitration in Quebec have not exhausted the litigious appetite of these contestants. There are three proceedings in the Quebec Superior Court. The first was instituted by Discreet Logic on 28 June 1993 against Softimage. An order was obtained ex parte for seizure before judgment of a copy of the Flame source code in the possession of Softimage being that purchased by Citicomp from DA Technology. Motions to quash the order have been stood over to a date to be fixed. For its part, in a proceeding commenced 6 July 1993, Citicomp seeks an order for seizure from Discreet Logic before judgment of one copy of Flame as commercially released and in its most advanced stage, and a declaration of copyright ownership. This proceeding also is not far advanced towards trial. In the third proceeding in the Quebec Superior Court, commenced this time by Softimage on 20 July 1993, Softimage seeks against Discreet Logic an order for the specific performance of the Distribution Agreement despite its purported termination by Discreet Logic. An application for a provisional injunction has been dismissed.

28. In the United States District Court for the District of Central California a proceeding was commenced on 28 July 1993 by Softimage, Softcapital and Citicomp seeking against Discreet Logic a declaration of ownership of copyright and various injunctive and other orders. The complaint alleges false advertising, unfair competition, negligent and intentional interference with economic advantage, misappropriation of trade secrets and copyright infringement. In September 1993 a Judge of that Court (McLaughlin J) stayed the action until final determination of the Canadian litigation, including the arbitration. Upon that happening and after the disposal of any review or appeal, the parties may petition the United States court to lift the stay. The Court issued the following summary of reasons for the stay:

"(i) The fundamental and threshold issue whether Citicomp acquired

ownership rights to the DA Flame per agreement with DA Tech entered

into 5/13/93 is identical in pending Canadian cases and instant case.

. . .

(ii) The law of Australia and/or Canada governs the question of

ownership rights, not the law of the United States.

(iii) The parties and material witnesses may not be amenable to

process within this District, but may have already submitted to

Canadian jurisdiction by the filing of three prior lawsuits.

(iv) All cases and arbitration between these parties were filed in

Canada before the instant action was filed.

(v) The parties to the Canadian cases and arbitration are identical to

the parties herein.

(vi) The ability of this Court to grant full relief to the prevailing

party will not be impaired by awaiting the finality of Canadian

proceedings.

(vii) Duplicative proceedings regarding ownership rights will be

avoided.

(viii) The possibility of inconsistent rulings will be avoided."

29. Mr Tregaskis has sworn an affidavit in the proceeding in the Federal Court of Canada in which, among other things, he deals with the events surrounding the execution of the Tregaskis assignment on 22 May 1992 at his house. Orders have been made by the Federal Court for the cross-examination, before trial, of Mr Tregaskis and other deponents whose affidavits have been filed. They include Mr Gracey. The cross-examination will be conducted out of Court, in the case of Mr Tregaskis at the offices of Martineau Walker, solicitors for Discreet Logic. It is unlikely that the matter in the Federal Court will be heard and disposed of in 1994. However, it should be noted that this proceeding is more advanced in preparation than that in this Court.

30. On 21 October 1993 the Federal Court of Canada (Denault J) dismissed an application by Softimage, Citicomp and DA Technology for an order staying the proceeding in that Court, pending the final determination of the pending proceedings in the Superior Court of Quebec and in this Court. Notice of appeal against his Lordship's judgment was filed on 29 October 1993. The appeal has not been heard.

31. A timetable for the preparation and conduct of the arbitration was fixed on 9 February 1994. The hearing of the arbitration is set down to commence on 17 May and to continue on successive business days until it is concluded. The parties expected to receive the award of the arbitrator in the course of July.

32. The evidence on the present motion indicates the considerable commercial importance both to what I might call the Softimage camp and the Discreet Logic camp in obtaining a prompt resolution of their disputes. The various dealings in the title to Flame comprise an important element in those disputes. The turning of Flame to full commercial advantage, including further development of it, requires the removal of the various clouds over title.

33. As I have indicated, the applicants on the present motion seek, in the first instance, a permanent stay of the proceeding in this Court. In response, the respondents to the motion (the applicants in the proceeding) submit that the proper application of the governing principles laid down in Voth, supra favours the refusal of a stay.

34. Voth supports the propositions that in a case such as the present (a) it is the task of the applicants on the motion to show that the exercise of jurisdiction should be declined because Australia is a "clearly inappropriate forum" and (b) the issue is not one of a comparative suitability of this and any forum in Canada or elsewhere, nor of the appropriateness of any of such other forum. Consistently with what was said in Voth (171 CLR at 570), even if this Court were to decide that the more appropriate forum was to be found in Canada, it would not necessarily follow that Australia was a clearly inappropriate forum. Voth also indicates that an order for a stay may be made with the imposition of conditions as to the conduct of the proceedings in the other forum (see 171 CLR at 590-591).

35. In Voth the action brought in the Supreme Court of New South Wales was for damages for professional negligence in the giving of advice relating to the taxation affairs of the plaintiffs. The acts on which reliance was placed for the cause of action had been committed in the State of Missouri with the result that any tort, if one had been committed, had been committed there. The operation of the rule in Phillips v Eyre had the result that, even if the matter were to be litigated in Australia, the accountant would be liable only if this were the case under the law of Missouri. No proceeding yet had been commenced in Missouri; cf Amchem Products Inc. v Workers' Compensation Board (1993) 102 D.L.R. (4th) 96. The majority of the High Court held that New South Wales was clearly an inappropriate forum in which to permit the action to proceed.

36. The jurisdiction of this Court is conferred by s. 86 of the T.P. Act. Whilst there are claims in the accrued jurisdiction, the claims of contravention of Part V of the TP Act and to relief under Part VI thus are significant aspects of the proceeding. There is also an Australian public interest in the application of a statute of this nature by a court selected by the Parliament.

37. The importance of such considerations, in dealing with an application for a stay of a proceeding brought in this Court under the T.P. Act, where there are concurrent proceedings outside Australia in which reliance is placed upon a common law cause of action, is reflected in the judgment of French J in Green v Australian Industrial Investment Ltd [1989] FCA 482; (1989) 25 FCR 532 at 539, 545.

38. If the matter were to be classified under Australian law, remedies of the special kind found in Part VI, including s. 87, would be treated as procedural in character and thus as matters for the court of the forum; see Stevens v Head [1993] HCA 19; (1993) 176 CLR 433 at 454-460.

39. It will be noted that in Sterling Pharmaceuticals, the other forum, New Zealand, had legislation closely resembling the particular provisions of the T.P. Act which were material in the litigation.

40. In Australian Commercial Research and Development Ltd v ANZ McCaughan Merchant Bank Ltd (1989) 3 All ER 65 at 72-73, Sir Nicolas Browne-Wilkinson V-C dealt as follows with a submission that the claim of the plaintiff in the English proceeding, brought at common law, could also be brought in England under the T.P. Act:

"The Australian Act provides a statutory remedy in addition to common

law remedies in relation to the provisions of services to Australians

both in relation to acts done in Australia and apparently in certain

circumstances to acts done outside Australia by non-Australians but

having an impact within Australia. I have considerable doubts whether

the English court if called on to adjudicate on this matter would

apply the Australian Trade Practices Act 1974 as part of the

applicable law in this action. It may be that it would do, but it

seems to me unlikely. Even if the English court did apply the Trade

Practices Act in deciding this case, it is manifest that the

Australian courts are very much better qualified to deal with that Act

than any English court would be."

In that case, the plaintiff had commenced two sets of proceedings. Here Softimage is the moving party in the arbitration and in this Court, whilst Discreet Logic initiated the Canadian Federal Court proceeding.

41. Evidence from Australian senior counsel has been filed in the proceeding in the Federal Court of Canada to deal with the operation of the Australian statute. The Softimage interests not only rely upon the T.P. Act, as moving parties in this Court, but also, in response to the action in the Federal Court of Canada brought by Discreet Logic, seek there to counter attack by reliance on the Australian statute. How then, counsel for the Discreet Logic interests submits, may they properly complain if a stay is sought against them in this Court? Nevertheless, it is far from clear that in any of the proceedings in Canada relief would be given of the particular nature formulated with some precision, for example, in s. 87 of the T.P. Act. The parties opposing such a course might be expected to urge the Canadian court to adopt an approach similar to that of the Vice-Chancellor. In addition, considerations of comity do not favour the placing of the Canadian court in the position of dealing with an attempt to apply the T.P. Act, including its remedies, when the Australian court has stayed a proceeding in which essentially the same relief is sought.

42. In these circumstances, I would not at this stage treat this Court as providing a clearly inappropriate forum within the meaning of the principles laid down in Voth.

43. However, that is not the end of the matter. As I have indicated, the applicants on the motion also seek an order with effect similar to that achieved in Sterling Pharmaceuticals and, in the present litigation, by the United States District Court in September 1993. That is to say, an order is sought that the motion itself, together with the proceeding, be stood over until later this year, the expectation being that the award in the arbitration will by then have been handed down.

44. Counsel for DA Technology and Citicomp opposed that course. He stressed that the Tregaskis assignment was concluded in Australia and dealt with copyright in a work which was made in Australia, by a then Australian resident, even if the copyright is protected internationally. However, as I have indicated, in substance the present dispute is between on the one hand the Softimage camp and on the other the Discreet Logic camp, both of which are Canadian corporations.

45. Counsel also said that any delay here would render the Softimage interests vulnerable to delay in preparation of the proceeding against them in the Federal Court of Canada and on the counterclaim in the arbitration. However, such a circumstance may be dealt with by the imposition of an appropriate condition in the orders made here. A condition also may be imposed to protect such juridical advantage as the applicants have by bringing their action here in reliance upon the T.P. Act and, as a matter of comity, to protect the position of the Federal Court of Canada. There is, in my view, no significant difficulty in the determination in Canada of what I might call the common law issues (including those arising under the Corporations Law), even though this may require evidence as to any relevant differences in the case law.

46. On the other hand, counsel for the respondents, the applicants on the motion, point to the issue of title in Flame as involved not only in this proceeding but also at least in the currently active proceedings in the Federal Court of Canada and the arbitration. He submits that in truth this is a Canadian business dispute, albeit one with international ramifications, including an Australian root of title to the disputed item of intellectual property. Counsel further submits that I should not find that there is any relevant juridical disadvantage in the procedure for cross-examination of, for example, Mr Tregaskis out of rather than inside a Canadian court. I accept that submission.

47. In addition, counsel for the respondents points to the following circumstances - (i) the multiplicity of proceedings commenced in Canada before the proceeding in this Court, (ii) the advanced state of preparation of the arbitration and, to a lesser extent, of the Federal Court proceeding, (iii) the virtual certainty that even if it were prepared with all due speed, the Australian proceeding would not receive a hearing date in 1994, given the state of the lists here for long matters, (iv) the substantial legal costs which already have been incurred in the Canadian litigation, (v) the substantial body of evidence and number of witnesses which must come from Canada (this also being so, for example, to resolve the issue as to the alleged arrangement or understanding between Discreet Logic and Mr Tregaskis pleaded in paras. 25-28 in the statement of claim in this Court).

48. In all the circumstances, I have come to the conclusion that the interests of justice are best advanced by making an order of the kind sought by the respondents which will have the effect of standing over but not staying the present proceeding. Such relief must be conditioned by cross-undertakings. These will protect the interests of the Discreet Logic parties in having an expeditious determination of the Canadian litigation and those of the Softimage parties as applicants seeking relief in this Court under the T.P. Act. Of course, if the Softimage parties were successful in Canada on the title issue, then further agitation of it in their application for relief in this Court might become moot.

49. The orders will be made upon the giving of cross-undertakings, those by the Discreet Logic interests given as the price for obtaining the standing over of the proceeding against them, and those by the Softimage interests given as the price of escaping a longer adjournment of their proceeding in Australia.

50. The orders I would propose to make are as follows:

UPON the respective parties by their counsel giving to the Court

undertakings as follows:

(a) the applicants, DA Technology Australia Pty Limited and

Citicomp Pty Limited, without further leave of this Court,

will not, during the pendency of the notice of motion filed

in this Court on 12 November 1993, take any further steps to

seek relief in the Federal Court of Canada in proceeding No.

T-2235-93, by reliance upon ss. 52 and 87 of the Trade

Practices Act 1974,

(b) the second applicant will use its best endeavours to procure

that Softimage Inc. also takes no such steps,

(c) the respondents, Discreet Logic Inc. and Gary Graeme

Tregaskis, in the proceeding in this Court will not assert

against the applicants any estoppel by reason of the conduct

of the proceeding in the Federal Court of Canada in a manner

complying with terms (a) and (b) hereof, and

(d) subject to the above undertakings, Discreet Logic Inc., DA

Technology Australia Pty Limited and Citicomp Pty Limited

each will, and Citicomp Pty Limited will use its best

endeavours to procure that Softimage Inc. will, prosecute

diligently the arbitration between Softimage Inc. and

Discreet Logic Inc., instituted 23 September 1993, and the

proceeding in the Federal Court of Canada.

THE COURT ORDERS THAT:

(1) The notice of motion filed 12 November 1993 be stood over to

14 October 1994 at 9.30 a.m. before me and costs be reserved.

(2) There be liberty to restore the said motion to the list on 7

days' notice.

51. The intent of the reservation of costs in the above orders is that they be dealt with on 14 October. The intent of the granting of liberty to apply is that this be availed of if there be alleged breach of any of the above undertakings.

52. The only order made today will be to stand the motion over to Monday next, 14 March at 9.30 a.m. for the bringing in of short minutes to give effect to the reasons published today.