Fleming's Nurseries Pty Ltd v Hannaford

INTRODUCTION 1 By notice of motion dated 7 February 2008, the applicants, Fleming's Nurseries Pty Ltd ('Fleming's Nurseries') and Her Majesty the Queen in right of Canada ('Canada'), seek an order that, pursuant to O 29 r 2 of the Federal Court Rules, there be a separate trial of all issues of liability in the proceeding, prior to any trial of issues of quantum of damages and/or an account of profits. Tony Hannaford, Roselyne Nurseries Pty Ltd ('Roselyne Nurseries') and Geoffrey Robert Britton are the respondents in the original proceeding. 2 It is convenient at this point to set out the applicants' claims and Mr Hannaford's cross-claim, as currently pleaded, and the major issues that would be in contest at trial.

THE CLAIMS AND CROSS-CLAIM 3 The present action was commenced by the applicants, initially against Mr Hannaford, by an application filed with a statement of claim, on 9 November 2005. Pursuant to the orders of Justice Weinberg dated 10 March 2006, leave was granted to Mr Hannaford to file and serve his cross-claim dated 28 February 2006 against the respondents. Further, on 29 May 2007, Justice Marshall granted the applicants leave to join Roselyne Nurseries and Mr Britton to this action on and from 23 March 2007. The matter has been transferred into my docket following the publication of a Notice to Practitioners dated 15 April 2008. 4 According to the Further Amended Statement of Claim dated 23 March 2007, the applicants' case against Mr Hannaford may be summarised as follows: 1. Canada has, since 3 February 1994, been the registered proprietor under the Plant Variety Rights Act 1987 (Cth) or the Plant Breeder's Rights Act 1994 (Cth) (PBRA), of the plant breeder's rights in the cherry plant variety prunus avium 'Sumtare', known as Sweetheart ('Sweetheart cheery'). In particular, Canada claims rights conferred by s 11 of the PBRA in relation to the Sweetheart cherry. 2. Mr Hannaford conducts an orchard business, growing and selling fruit, at Torrens Valley Orchards, Gumeracha in South Australia under the registered South Australian business name "Torrens Valley Orchards". 3. Canada alleges that Mr Hannaford has, without its licence, authority or consent, propagated and planted Sweetheart cherry trees. Further, Canada alleges that Mr Hannaford has, without the licence, authority or consent of Canada, licensed Roselyne Nurseries and Mr Britton to propagate Sweetheart cherry trees. Canada claims that these acts constituted a contravention of s 53(1)(a) of the PBRA, and thereby an infringement of Canada's rights in Australia in respect of the Sweetheart cherry plant variety, as conferred by the PBRA. Amongst other things, Canada seeks declaratory and injunctive relief and damages or an account of profits pursuant to s 56(3) of the PBRA, and delivery up of the Sweetheart cherry plant varieties in Mr Hannaford's possession. 4. Fleming's Nurseries conducts a nursery business selling, among other plants, Sweetheart cherry trees and Black Star cherry trees pursuant to Non-Propagation Agreements. 5. Between 1997 and 2004, Fleming's Nurseries sold and supplied to Mr Hannaford Sweetheart cherry trees under a number of Non-Propagation Agreements. In 2004, Fleming's Nurseries also sold and supplied Black Star cherry trees to Mr Hannaford under a Non-Propagation Agreement. 6. These Non-Propagation Agreements containa term to the effect that Mr Hannaford would not undertake or attempt to propagate, or part with possession of, the cherry trees supplied under these agreements. 7. Fleming's Nurseries alleges that Mr Hannaford has, without its licence, authority or consent, propagated or attempted to propagate the Sweetheart and Black Star cherry trees. Fleming's Nurseries also alleges that Mr Hannaford parted with possession of the Sweetheart and Black Star cherry trees, and permitted Roselyne Nurseries or Mr Britton to propagate or attempt to propagate these cherry trees. By reason of these acts, Fleming's Nurseries claims that Mr Hannaford has breached his obligations under the Non-Propagation Agreements, entitling Fleming's Nurseries to seek relief against him. Fleming's Nurseries seeks injunctive relief and damages against Mr Hannaford, as well as other relief. 5 Likewise, Canada's case against Roselyne Nurseries and Mr Britton, as pleaded in the Further Amended Statement of Claim dated 23 March 2007, may be summarised as follows: 1. Roselyne Nurseries carries on a plant nursery business known as "Roselyne Nurseries". Mr Britton is, amongst others, a director and shareholder of Roselyne Nurseries and is involved in its plant nursery business. 2. Canada alleges that Roselyne Nurseries and Mr Britton have, without its licence, authority or consent, propagated Sweetheart cherry trees and sold them. 3. Canada alleges that Mr Britton has procured, induced and/or directed the infringing acts of Roselyne Nurseries, or, acted in concert with Roselyne Nurseries and is thereby a joint tortfeasor in those acts. There is an equivalent allegation against Mr Hannaford in relation to both Roselyne Nurseries and Mr Britton. 4. Accordingly, Canada claims that there was an infringement by Roselyne Nurseries and Mr Britton of Canada's rights in Australia in the Sweetheart cherry plant variety under the PBRA. 5. Against all respondents, Canada claims declaratory and injunctive relief, damages and/or an account of profits, and delivery up of Sweetheart cherry plants in their possession. 6 As stated above, Mr Hannaford also made a cross-claim against Canada. According to Mr Hannaford's Further Amended Defence and Cross-Claim dated 15 August 2007, Mr Hannaford advanced claims including the following: 1. The Sweetheart cherry plant variety, although originally bred by the Agriculture Canada Research Station in Canada, was imported into Australia by the Tasmanian Department of Agriculture in 1986. Thereafter, this variety of cherry tree was released from quarantine and grown by various industry participants in Tasmania as well as available for release and use in Australia. Therefore, the Sweetheart cherry plant variety was not a new variety in 1994 when Canada was granted the rights under the PBRA. 2. For these reasons, Mr Hannaford asserted that, as at the time Canada made applications for Plant Breeder's Rights and as at the time those rights were granted, facts existed which, if known, would have led the decision-maker to refuse the rights. In particular, the Sweetheart cherry tree plant variety would not have been registrable under the PBRA because the statutory criteria under ss 43(1)(b) and 43(1)(e) - that the variety is distinct and has not been exploited or has been only recently exploited - were not met. Accordingly, Canada's rights ought to be revoked under s 54(3) of the PBRA.