G S Technology Pty Limited v Commissioner of Patents

REASONS FOR JUDGMENT 1 This is an appeal by the applicant pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal ("the AAT") given on 17 April 2003, whereby the AAT decided to affirm the decision of a Deputy Commissioner of Patents made on 27 February 2001 to refuse an application made by G S Technology Pty Limited ("GST") pursuant to s 223 of the Patents Act 1990 (Cth) ("the Act") for an extension of time to pay a continuation fee. Such an appeal lies to the Federal Court 'on a question of law'. 2 The grounds of the appeal to this Court are: '3.1 The AAT having found as a matter of fact that the letter from Pizzey & Co dated 4 October 1995 (the 'Pizzey letter') contained "erroneous advice" and was relied upon by the applicants agent and Mr Abaza erred in law in concluding that this reliance was not an "error or omission" within the meaning of s.223 of the Patents Act 1990 (Cth) ("the Act"); 3.2 The AAT erred in law holding that in order to establish an "error or omission", the relevant date contained in the Pizzey letter had to be placed in a reminder system. 3.3 The AAT erred in law in failing to conclude that reliance on the Pizzey letter was an "error or omission" within the meaning of s.223 of the Act. 3.4 The AAT misdirected itself by holding that "by the time the due date came around the Pizzey letter had become irrelevant." 3.5 The AAT erred in law and misdirected itself by making inconsistent findings namely:- 3.5.1 The failure to pay the continuation fees ("the failure") was "not because of any error made by Mr Stack or Mr Abaza"; and 3.5.2 The failure was "because of an omission to at least check the due date, then enter the date in a diary or an automatic reminder system and then pay on or before the due date." 3.6 That the AAT erred in law in holding that it was a proper exercise of discretion under s.223 of the Act to refuse the extension of time "because the conduct of the Applicant's representatives in failing to put in place a proper diary or reminder system was unreasonable, not without moral fault and not deserving of the granting of the indulgence".' 3 The issue on the appeal is whether the applicant has shown that legal error attended the affirmation by the AAT of the decision of the delegate of the Commissioner to decline to exercise the discretion conferred by s 223 of the Act to extend the time within which to pay the continuation fees in respect of Patent Application 32815/95 filed on 21 September 1995 by the applicant as a divisional application of application 85236/91 for a standard patent. 4 It is necessary, in considering that question, to have regard to the very extensive and complex history of applications for standard patents, provisional patents and divisional patents in respect of the claimed inventions of the applicant, and of provisions of the Act concerning, amongst other things, the time periods within which steps must be taken. It is necessary to consider the proper interpretation of sections of the Act and in particular s 223 of the Act, which interpretation has to have regard to the nature and purpose of the provision and the Act itself. 5 The result of the decision of a Deputy Commissioner of Patents to refuse an application for an extension of time to pay a continuation fee on Standard Patent Application No. 32815/95 was that the application lapsed. 6 What follows is a summary of the history of some relevant matters taken largely but not completely from the findings of the AAT: (a) In the late 1980s, George Stack (later to become a Director of GST) and Alan Grieves claimed to have invented a water meter assembly. In August 1990 they agreed that Mr Stack would apply for a patent for the assembly which when obtained would be transferred to a company: subsequently GST. (b) On 30 August 1990 provisional application No. PK 2036 was filed with the Patent Office with George Stack as the registered applicant. (c) On 26 March 1991 provisional application No. PK 5286 was filed with the Patent Office with George Stack as the registered applicant. (d) On 30 August 1991, GST caused application 85236/91 for an invention entitled Water Meter Assemblies to be filed with the Patent Office by a firm of patent and trade mark attorneys, Pizzey and Company ("Pizzeys"). That application derived priority from the two provisional applications. (e) On 25 August 1993 Petty Patent application 44897/93 was filed as a divisional application based on application 85236/91. (ea) On 24 December 1993 the first report by an examiner on application 85236/91 issued. (f)On 20 January 1994, Petty Patent Number 645740 was granted to George Stack as patentee. (g) On 9 December 1994, an application was filed for an extension of the term of Petty Patent Number 645740. (h) G S A Industries (Aust) Pty Ltd ("GSA"), the party joined, is a company which the applicant engaged by way of sub-contract for the manufacture of a part of the water meter assembly, the subject of the application for a patent. (i)Subsequently, the applicant commenced proceedings against GSA and another for infringement of its patent. (j)From December 1994 to August 1995 the legal dispute culminated in court proceedings concerning the validity of Petty Patent Number 645740 and the question as to whether the Brisbane City Council could, in effect, infringe the petty patent by relying on the protection by the right of exploitation by the Crown under Chapter 17 of the Act. (k) On 21 September 1995, Patent application 32815/95 in the name of GST was filed as a divisional application of 85236/91 filed on 30 August 1991. This became Petty Patent Number 662284, the second petty patent. (ka) Application 32815/95 was filed to maintain subject matter in view of the imminent lapsing of 85236/91 at twenty-one months after the date of the examiner's first report which issued on 24 December 1993, namely 24 September 1995. (kb) On 24 September 1995 application 85236/91 lapsed pursuant to s 142(2)(e) of the Act, because it was not accepted within twenty-one months of the examiner's first report which issued on 24 December 1993. (l)On 23 October 1995 the transfer to GST of the first petty patent, Petty Patent Number 645740 was registered. (la) On 4 October 1995 a letter was sent by Pizzeys to GST, for the attention of Mr Andrew Abaza, referring to application 32815/95 and indicating that 'annual renewals are payable in respect of Australian Patents and applications, from the third anniversary of the filing date'. The filing date was identified as 21 September 1998. (m) On 27 February 1996, a Deputy Commissioner refused to extend the term of Petty Patent Number 645740. (n) The Federal Court has found Petty Patent Number 645740 to be invalid. (o) On 10 September 1996, the Federal Court, Kiefel J, ordered that GST be registered as patentee of Petty Patent Number 662284, the second petty patent. 7 The AAT noted that prior to repeal on 24 November 2000 (and commencement of the amendment on 24 May 2001) s 39 of the Act relevantly provided in relation to divisional applications: '(1) Where a complete patent application is made (but has not lapsed or been refused or withdrawn), the applicant may, in accordance with the regulations, make a further complete application for a standard patent or a petty patent for an invention: …' 8 The AAT noted that there was no dispute between the parties that the provisions of the Act and Regulations resulted in the following: '(a) The actual filing date of the second petty patent, Petty Patent Number 662284 was 21 September 1995. (b) The effective filing date was the date of the "parent" patent, application Number 85236/91, that is, 30 August 1991. (c) Annuities were payable to maintain a pending patent application or granted patent in force. (d) The date from which the annuities were calculated was the effective filing date. Therefore, the next renewal date was 30 August 1996. (e) However, if an annuity for a divisional application nominally fell due less than 12 months since its lodgement, the due date moved to the next anniversary. (f) Consequently, the first renewal date for application number 32815/95 … was 30 August 1997 and annually thereafter.' 9 The sixth year continuation fees were due on 30 August 1997 and were not paid on or before that date. The grace period for payment of the continuation fee expired on 2 March 1998. By letter dated 10 March 1998 and received by Mr Abaza on 12 March 1998, the applicant was advised by the Patent Office that the six-year continuation fees due on 30 August 1997 had not been paid by that time or within the six-month period of grace provided for under reg 13.3 of the Patent Regulations 1991 (Cth) and that, as a result, the application had lapsed on 30 August 1997 under the provisions of s 142(2)(d) of the Act. 10 The letter from the Patents Office dated 10 March 1998 is headed 'RE: Patent Application No. 32815/95 in the name of G S Technology Pty Ltd', and the body of it reads: 'I refer to your letter in relation to the abovementioned patent application dated 28 February 1998, received 3 March 1998. I inform you that pursuant to section 227(1) of the patents Act 1990 and regulation 22.2 and 13.3 of the patent regulations, the 6th year continuation fee was payable for this application on 30 August 1997 or within 6 months thereafter (ie. by 2 March 1998). There is no record at the patent office of the relevant continuation fee having been paid. Consequently this application lapsed on 30 August 1997 pursuant to section 142(2)(d). Accordingly lapsing will be advertised in the Australian Official Journal of Patents dated 9th April 1998. If you or your client has evidence of having paid the continuation fee mentioned please advise me as soon as possible. It MAY be possible to reinstate the lapsed application under the provisions of section 223(2)(a) or section 223(2)(b) if relevant conditions exist. As the application has lapsed, a specific reply to the substance of your letter concerning the examination of the application is not appropriate. Yours sincerely …' The letter was signed by an officer whose position was "Manager Patent Support". 11 In my opinion, parts of that letter are crucially important in the present context, particularly as indicating an ongoing intention to maintain Patent application No. 32815/95. The first sentence of the letter from the Patent Office makes reference to a letter from Mr Abaza 'dated 28 February 1998, received 3 March 1998'. As a matter of fact, 2 March 1998 was the last day of the six-month grace period to pay continuation fees. It would be extraordinary for the agent of a patent applicant to write in support of the grant of an application at the very time, when for want of payment of continuation fees, the application is subject to lapse, as clearly was the case here. The letter from Mr Abaza of 28 February 1998 is, in my assessment, very strong evidence that as at that time he was not conscious of the need to pay the continuation fees in respect of application 32815/95 by 2 March 1998, and that if he was ever conscious of that date and what had to be done by it, it had slipped his memory at that time. 12 On 12 March 1998, which was 10 days after the expiry of the grace period, and the day of receipt of the advice of the Patent Office, Mr Abaza, the solicitor for the applicant lodged $180 being the Schedule 7, item 8(a) fee for the third anniversary in the sum of $115, plus an extension fee for one month of $65.00. The following day, Mr Abaza attended to the payment of an additional sum of $745.00 making a total of $925.00 for payment of the fee. On 13 March 1998, Mr Abaza also lodged an application for extension of time for payment of the fees with the Patent Office. 13 The application for extension of time recited: 'The circumstances in which, and the grounds upon which, this application is made are as follows:- An error or omission on the part of the applicant's agent as to the date of payment required as set out in the attached Declaration.' The declaration accompanying that application included: 'Patent Application No. 32815/95 was filed on 21 September 1995 and in accordance with written advice received from Pizzey & Co 4 October 1995 I was advised that annual renewals were payable on the third anniversary of the filing date. Annexed hereto and marked with the letter "A" is a true copy of the said letter. My client company and I acted in accordance with the said advice.' This declaration thus asserts that Mr Abaza acted on the basis that the renewal fee was payable on 21 September 1998. In that belief, he was in error. That error was not considered by the Deputy Commissioner or by the AAT. 14 The declaration referred to receiving the letter from the Patent Office of 10 March 1998 on 12 March 1998, and to the immediate lodging of an amount for the Schedule 7, item 8(a) fee for the third anniversary, as well as an extension fee payment for one month of $65.00. The declaration further referred to the letter from Mr Abaza dated 28 February 1998 which was referred to in the Patent Office letter of 10 March 1998 as follows: 'The advice from the Patent Office aforesaid was received following a letter from my office dated 28 February 1998 which said letter was in part response to an examiner's request dated 18 October 1996. It was not possible for my client company or myself to respond to the requisitions raised on that examination at any earlier time by reason of pending proceedings in the Federal Court concerning AU 645740. Extensive evidence has been given during the course of that proceeding which cannot be the subject of debate while considered by the Court. Those proceedings have been adjourned over to 1, 2 and 3 June 1998 and the evidence concerns novelty, obviousness and other matters also in issue in respect of the instant application. In my belief were it not for the protracted proceedings concerning Patent 645740 the error or omission of the third anniversary continuation fee would not have been misinterpreted and would have been attended to by 2 March 1998.' 15 There is no reference in Mr Abaza's declaration to a letter from Pizzeys of 4 October 1995 in respect of this misinterpretation, although the assertion that the 'error or omission of the third anniversary continuation fee would not have been misinterpreted' seems to be a reference to the erroneous advice in the letter from Pizzeys. 16 In his oral evidence before the AAT, Mr Abaza indicated that the letter had been displayed on a wall in his solicitor's office by way of a reminder, and he was asked by Mr McMurdo QC, counsel for GSA: 'The letter of 4 October 1995, had you had it on your wall, the purpose of that would have been to remind you to pay a fee at a certain date in 1998, wasn't it?' to which Mr Abaza answered: 'Correct.' 17 Mr Abaza referred to the protracted proceedings in the Federal Court and to his expectation that Patent application No. 32815/95 should already have been granted a standard patent for the relevant period, so that 'by 1998 I would have that patent and it would be a normal renewal fee.' 18 The interaction between the multi-faceted Federal Court disputation concerning the subject matter of the various applications, and the failure to pay the continuation fees by 2 March 1998, appears not to have been appreciated by the AAT. 19 Section 223 of the Act allows for an extension of time. Subsection 223(2) relevantly provides: 'Where, because of: (a) an error or omission by the person concerned or by his or her agent or attorney; or … a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.' 20 The request for an extension of time was advertised for opposition purposes on 30 April 1998. A notice of opposition by GSA was filed on 21 May 1998. 21 Prior to the advertising for possible opposition, a diary note by an officer at the Patent Office sheds light on the context in which the application for an extension to pay the continuation fees was made and, in particular, the ongoing desire on the part of the applicant to pursue Patent application No. 32815/95. That file note reads: 'I believe the extension can be advertised under Subsection 223(4) for possible opposition. I believe the advice provided to GS Technologies (Mr Abaza) of 9 October 1995 by Pizzey & Co, that renewal fees were not due until the third anniversary of filing - was clearly in error. This is not the case for divisional applications, and, in the absence of any information that this advice was corrected or that GS Technologies had otherwise been informed (or informed themselves) of the date for payment of the continuation fee - this clearly constitutes an error which enlivens the provisions of s 223.' 22 It is relevant to note that a notice of opposition was filed by GSA. However, as the Deputy Commissioner noted, GSA did not serve any evidence in support of its opposition. GST unsuccessfully sought that the opposition be dismissed in the Federal Court and in an appeal to the Full Bench of the Federal Court. 23 There was sworn evidence by George Stack before the Deputy Commissioner as follows: 'When I engaged the Patent Attorneys and my solicitor I left all matters relating to the payment of any necessary fees to them. I had assumed that any such fees would be paid within any time specified by law. I had paid to my Patent Attorneys and to my solicitor sufficient monies to allow for any necessary payments to the Patents Office and to other persons. The failure to pay the continuation fees in relation to this matter was not due to any error or omission on my part.' 24 There was also sworn evidence from Mr Abaza which referred to a letter dated 4 October 1995 from Pizzeys about which Mr Abaza said: 'At no time after receiving that letter and before receiving the letter from the Patents Office on 12 March 1998 was I aware that the necessary fees upon Patent Application 32815/95 were payable on the 30 August 1997.' 25 On 27 February 2001, the application for an extension of time was refused by the Deputy Commissioner of Patents. 26 In reasons for the decision to refuse an extension of time (which reasons might, in my view, be described as tendentious, being crafted to justify a refusal of an extension), the Deputy Commissioner said: '… a causal link between 4 October 1995 Pizzeys' letter and the failure to pay the fee has still not been established. I have found above that if the applicant made a deliberate decision to direct its attention to other matters at the expense of application 32815/95, this does not constitute an error or omission as required by section 223. The failure to pay the fee cannot itself be the error or omission. In looking for another error or omission, I considered whether GST and Mr Stack may not have understood the patent fee system. However, this was not given as a reason for the fee not being paid. GST has obtained professional advice from Mr Abaza who has acted in relation to both this application and the related petty patents before the Office and the Federal Court. From this it would seem apparent that Mr Abaza has both knowledge and understanding of the patent fee system and would understand that fees are required to maintain a patent application. Thus, this reason cannot constitute the error or omission as required by section 223. … I can find no causal link between the 4 October 1995 letter from Pizzeys and the failure to pay the fee and can find no other relevant error or omission. Acting in accordance with the letter from Pizzeys was given as the primary reason for the failure to pay the continuation fee but the applicant has not provided me with sufficient evidence to be able to determine what happened and much of what they have provided is conflicting. I believe that knowledge of the relevant facts lies squarely with the applicant or their representative but (for whatever reason) they have chosen not to give me a full and frank disclosure of those facts.' 27 I note that at no stage of the proceedings in the AAT or in the Federal Court has there been any identification of what facts should or might have been disclosed, but were not. 28 And later: 'The grant of an extension of time under the provisions of section 223 is discretionary. I have considered all the issues and have had regard to the principles outlined in the decision in Kimberly-Clark Ltd v Commissioner of Patents and Another (No3) (supra). In exercising the discretion, I need to balance: · the unlikelihood that it was in the applicant's interest for application 32815/95 to lapse against · the lack of any causal link between the letter from Pizzeys and the failure to pay the fee; · the apparent absence of any other plausible error or omission; and · the lack of a full and frank disclosure of all relevant facts Having regard to all the circumstances, I consider that in this case the balance weighs in favour of refusing the extension.' 29 The finding of the Deputy Commissioner was that there was no "error or omission" which caused the failure to pay the fee. It follows, if that reasoning be correct, that the discretion conferred by s 223 of the Act was not enlivened, and there was no need to consider its exercise. The consideration, such as it was, in relation to whether the discretion should be exercised, took into account as factors relevant to its exercise the finding that there was no plausible error or omission for the failure to pay, (a factor not relevant to the exercise of the discretion, but to its existence), and what was said to be a failure of full and frank disclosure, a conclusion that was made solely (and in my view illogically) from the finding that in the view of the decision maker there was no plausible error or omission revealed in the material provided by GST. 30 The decision by the Deputy Commissioner was the subject of review by the AAT who, on 17 April 2003, affirmed the decision of the first respondent. The appeal is in respect of that decision. The applicant has undertaken that it would not seek a costs order against the first respondent, and the first respondent agreed to abide the order of the Court and has had no further participation in the proceedings. 31 The applicant in this appeal seeks an order that the decision of the AAT be set aside and that an order extending the time for payment of the continuation fees be made. The applicant seeks a further order for the refund of the costs paid by the applicant to the first respondent. 32 As earlier indicated, the applicant's case before the AAT relied on the fact that Mr Abaza had received a letter dated 4 October 1995 sent to GST for the attention of Mr Andrew Abaza signed by Mr Tanahill, a registered patent attorney employed at the time by Pizzeys, for Mr Dan Fox. The AAT found that the letter 'contains erroneous advice about the due date for annual renewals' and commented that 'The case for the Applicant [GST] seems to be that Mr. Abaza was misled by the erroneous advice.' In this regard, I observe that the Ground 3.1 of the appeal asserts that the AAT found Mr Abaza relied on the erroneous advice. 33 The body of that letter from Pizzeys dated 4 October 1995 was in the following terms: 'RE: New Australian Patent Application We refer to our recent letter reporting the filing of the application for patent in Australia according to the below-mentioned details and advise that the application has been allocated the filing number of 32815/95. Please note that this application will lapse five years from the filing date unless a request for examination is lodged before the expiry of this period. In general the Commissioner will issue a direction to request examination at a date within this period determined by the backlog of the Patent Office. Annual renewals are payable in respect of Australian Patents and applications, from the third anniversary of the filing date. We thank you for your instructions to date in respect of the filing of this application. We will keep you advised of the progress of the application. Yours faithfully, PIZZEY & COMPANY PATENT ATTORNEYS Dan Fox NAME G S TECHNOLOGY PTY LTD ACN 011 062 767 SHORT TITLE WATER METER ASSEMBLIES FILING DATE 21 SEPTEMBER 1995' (Emphasis added) 34 It is significant, in my opinion, that GSA acknowledged in its submissions to this Court that: '… the Pizzeys letter contained an inaccurate statement about the due date for the renewal fees. The actual date for payment was 30 August 1997 whereas the terms of the Pizzeys letter suggested that the date for payment was 21 September 1998, that is, three years from the filing date of the second petty patent.' (Emphasis added) 35 Evidence was given to the AAT by Mr Stack, Mr Abaza and by a number of patent attorneys. 36 The findings of the AAT were expressed at pars 14-16 of its reasons as follows. '14. … Upon consideration of the evidence of the witnesses and the statements of other persons tendered in evidence, the Tribunal finds that: (a) It was the intention of Mr. Stack at all relevant times to use the device of divisional applications to keep the subject matter of the 1991 application alive. (b) There have been problems with prosecuting the application to grant a patent because of the ongoing disputes relating to allegations of contrary inventorship. (c) Mr. Stack transferred his patent matters from Pizzeys to Mr. Abaza in late 1995 because Mr. Abaza had been heavily involved in the ongoing litigation and it seemed to Mr. Stack that it would save time and expense if all documents and dealings went straight to Mr. Abaza. (d) When Mr. Abaza received the letter from Pizzeys dated 4 October 1995, he thinks that he probably stuck a copy of the letter on the wall behind his desk. The original letter has apparently been lost but there is in existence a photocopy of it which bears marks which indicate that the original letter probably at some stage had sticky tape on the top edge. Mr. Abaza did not make a note of the incorrect date suggested by the letter, nor did he place it into any "bring up" or "reminder" system. He believes that he probably thought that by 1998 a standard patent would have been granted as a result of the litigation. In any event he thought no more about the continuation date until he received the letter from the Patent Office in March 1998 to tell him that the application had lapsed. (e) The status reports gathered from time to time by Mr. Stack indicated the due date for continuation payment. (f) Mr. Abaza never read the status reports right through. He concentrated on other matters contained in the reports which he believed at the time were more significant. He never read the due date on any of the status reports. (g) Any competent patent attorney would have known that the information about due dates contained in the Pizzey letter of 4 October 1995, was erroneous. (h) Any competent patent attorney would have in place a system whereby relevant diary reminders would be automatically generated.' 15. It is not the case that the Pizzey letter induced Mr. Abaza to place an incorrect date in a reminder system. Indeed no date was ever placed in any system. The Pizzey letter had become irrelevant by the time the due date came around. 16. The Tribunal has come to the conclusion that the failure to pay the continuation fees on 30 August 1997 or, within six months of that date, was due to a combination of incompetence and negligence by Mr. Stack and Mr. Abaza. It was not because of any error made by Mr. Stack or Mr. Abaza. It was because of an omission to at least check the due date, then enter the date in a diary or an automatic reminder system and then pay on or before the due date.' 37 The AAT referred to some observations of Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents (1988) 84 ALR 685 at 694, concerning the statutory phrase 'an error or omission on the part of his agent or attorney' as it applied in subs 160(2) of the Patents Act 1952 (Cth), the predecessor of s 223 of the Act. The AAT also stated (wrongly in my opinion) that '[Jenkinson J] also considered whether if the discretion had been enlivened, it should have been granted to the Applicant.' 38 The observations of Jenkinson J in Kimberly-Clark at 694-695 were quoted by the AAT at par 18 of its reasons: '… the word "error" is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgment by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips. Although the latter kinds of error may be those which the draftsman had principally in mind, I do not think the phrase "error or omission" should be given by construction the restricted meaning which the delegate assigned, and accordingly I conclude that this ground of the application has been established. I do not think that the conclusion I have reached reduces s 160(2)(a) to a mere general power of extension. By no means every judgment by "the person concerned" or by "his agent or attorney" which can be shown to have been mistaken will answer the description "error or omission" in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error. Mr Handley submitted that the failure to do the act or to take the step postulated in respect of an application for exercise of the power conferred by s 160(2)(a) cannot itself be the "error or omission" by reason whereof the failure occurred. I accept that. All that is requires is once an error or omission has been established that there be some link between that error or omission and the failure to lodge the notice of opposition within three months. Other grounds of review are stated in the originating application and were the subject of submission. They relate to the exercise of the discretionary power which is enlivened when the introductory clause of s 160(2)(a) is satisfied. It is in the circumstances of this case inappropriate, in my opinion, that I deal with those grounds. The material placed before the Commissioner's delegate was in my opinion quite insufficient to permit exercise of the power conferred by s 160(2)(a) in favour of the applicant. The material does not disclose the identity or occupation or situation of the person by whom the decision whether to lodge notice of opposition was taken. It may be inferred that Mr Sandercock was not that person. Nothing is clearly disclosed in the statement of the grounds of the application or in the statutory declarations of the way in which any of the circumstances specified as errors or omissions affected the mind of that person to bring about that decision. But what may just suffice to enliven the power cannot in this case justify its exercise, in my opinion. The considerations which were identified by Bowen CJ in Vangedal-Nielsen v Commissioner of Patents (1980) 33 ALR 144 at 150 as relevant to the exercise of the power of extension conferred by s 59(1) will in my opinion be relevant also to the exercise of the power conferred by s 160(2)(a) in relation to the time prescribed by the former sub-section for lodging notice of opposition, although the relative weight of each consideration may well be different in the two different discretionary judgments. In order to make out the "proper case … justifying an extension" to which Bowen CJ referred in that case, an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent's errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct. Whether or not the error or omission of the agent which enlivened the power occurred without moral fault on his part, the applicant's claim to the exercise of the power cannot be judged without the means of evaluating the applicant's moral claim to an indulgence which will, to some extent at least, work a prejudice to the efficient operation of what Bowen CJ in that case called "the system", even if no prejudice to the applicant for a patent. Section 160(2)(a) confers a power so conditioned that in my opinion its exercise is not lightly to be granted, and a power to be invoked only upon a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary considerations upon which grant or refusal of an extension of time will depend.' 39 It seems clear that the AAT misunderstood and misapplied these observations. 40 The first sentence of these remarks indicates that the phrase "error or omission" should not be given the restricted meaning which the delegate assigned in that case. 41 The next and important observation of Jenkinson J is in relation to errors, being 'lapses of memory and accidental slips', as being within the section. His Honour's remarks in the first paragraph indicate that the fact that an error is "bizarre" or not likely "to be anticipated" did not preclude it from consideration. Rather, and this is relevant in the present case, his Honour indicated that it was errors of judgment by agents and attorneys such as "lapses of memory" or "accidental slips" (bizarre or as little to be anticipated as those errors might be) which the draftsman may have had principally in mind. 42 His Honour accepted that: '… the failure to do the act or to take the step postulated in respect of an application for exercise of the power conferred by s 160(2)(a) cannot itself be the "error or omission" by reason whereof the failure occurred.' 43 The AAT then expressed its conclusion: '19. In this case the "error or omission" is the failure to pay the continuation fee. In which case the discretion would not be enlivened. However, even if an omission of the type that occurred could be regarded as the type of omission which may enliven the power to grant an extension of time, it is the Tribunal's view that the conduct of the Applicant's representatives in failing to put in place a proper diary or reminder system was unreasonable, not without moral fault and not deserving of the granting of the indulgence. 20. In all the circumstances the Tribunal refuses to grant the extension of time and affirms the Deputy Commissioner's decision.' (Emphasis added) 44 It is very difficult to understand, having quoted the observations of Jenkinson J set out above, how the AAT could, immediately after the quotation of this passage, conclude: 'In this case the "error or omission" is the failure to pay the continuation fee. In which case the discretion would not be enlivened.' 45 Yet this is the ratio of the AAT's judgment. 46 In my judgment, the reasons of the AAT, so tersely expressed, reveal that the content and purpose of s 223 of the Act were misunderstood by the AAT, the AAT misinterpreted the phrase "error or omission" in s 223 of the Act, and the AAT made inconsistent findings as to the reason for the failure to pay the continuation fee. Further, it is plain that the discretion conferred by the section miscarried, having regard to the principles in House v The King (1936) 55 CLR 499. It may be that the AAT was induced into these errors by the approach and errors of the Deputy Commissioner. 47 What follows are my reasons for these conclusions. 48 The nature of an appeal from the AAT to this Court was described by Brennan J (as he then was) in Waterford v The Commonwealth of Australia (1986-1987) 163 CLR 54 at 77: 'A finding by [the Tribunal] on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the A.A.T. Act confers on a party to a proceeding before [the Tribunal] a right of appeal to the Federal Court of Australia "from any decision of the Tribunal in that proceeding" but only "on a question of law". The error of law which an appellant must rely on to succeed must arise on the facts as [the Tribunal] has found them to be or it must vitiate the findings made or it must have led [the Tribunal] to omit to make a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact.' 49 Where, as here, the appeal to the Federal Court concerns the exercise of an administrative discretion, the observations of Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Limited (1985-1986) 162 CLR 24 at 40 should guide the Court's consideration: 'The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned: Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B., 223 at p. 228.' 50 Section 223 of the Act is a remedial section designed to advance the purposes of the Act and, to that end, permitting the forgiving of error or mistake where it is appropriate to do so. 51 Section 223 of the Act operates in circumstances where the failure to do an act or take a step is the result of an "error or omission". This is to be contrasted with the situation where there has been a deliberate decision not to do the act or take the step. 52 That view is consistent with observations of Jenkinson J in Kimberly-Clark at 696 that: 'All that is required is once an error or omission has been established that there be some link between that error or omission and the failure to lodge the notice of opposition within three months.' 53 In Danby Pty Ltd v Commissioner of Patents (1988) 82 ALR 491 ("Danby"), Pincus J, in the context of the propriety of the mode of the exercise of discretion conferred by s 160 of the Patents Act 1952 (Cth), which is the predecessor of s 223 of the Act, noted the satisfaction of the examiner that the failure to lodge the notice of opposition in time was due to error on the part of the agent of the second respondent, and not due (for example) to the second respondent having lost interest in opposing the grant. 54 So, too, in Plant Genetic Systems NV v Paladin Hybrids Inc [1999] APO 24 ("Plant Genetic Systems"), an employee of the firm of patent agents acting for the applicant for a patent deposed: 'Since Patent Application No. 621113 is currently under opposition and application has been made to voluntarily amend the accepted claims of this application, it is apparent that it was not the intention of the Applicant to allow this application to lapse. Accordingly, the failure to attend to payment of the continuation fee by the due date of 27 April 1998 was the result of an error or omission, and was not the result of a deliberate decision not to renew this patent application.' 55 Here it is clear from all the circumstances, including the correspondence from Mr Abaza to the Patent Office of 28 February 1998 and the promptness of the application once notified that the continuation fees had not been paid, that there was never a deliberate decision not to renew the patent application in the present case. 56 The delegate of the Commissioner in Plant Genetic Systems referred to the employee's failure to record a facsimile giving change of instructions concerning the payment of future continuation fees, with the result that no reminders in respect of continuation fees were sent to the applicant for the patent. The delegate concluded: 'I think [the employee] has provided sufficient information for me to decide that she made an error or omission of the type envisaged by S.223(2)(a), and that this error or omission was the direct cause of the continuation fee not being paid by the due date. … Having decided that there has been an error or omission is not the end of the matter though, since the wording of S.223 still allows the Commissioner some discretion in the matter. In the Ferocem case [[1994] AIPC 91-057] the Federal Court indicated that in exercising discretionary powers relating to extensions of time in opposition procedures, the emphasis should be on taking all the circumstances of the case into account. In cases relating to extensions of time to restore an application, the applicant's interests are paramount because refusal of the extension is an abrupt end to the applicant's rights to its invention. One important consideration in these matters is whether the failure to pay the continuation or renewal fee was intentional. See for example Paracel Holdings Pty Ltd v Commissioner [1994] AIPC 91-053. … [The] facts suggest to me that the applicant did not deliberately allow its application to lapse. I distinguish the present case from the circumstances in the Paracel Holdings case and from those in the case discussed in Reilly v Commissioner (1996) 36 IPR 314; in both those cases it was shown that there was deliberate decision not to pay a continuation or renewal fee.' 57 In Danby, Pincus J pointed out that the mere failure cannot itself be described as an "error or omission" as the statute requires, referred to Toyo Seikan Kaisha Ltd v Nordson Corporation (1985) 5 IPR 388at 392 where it was said: 'The plain meaning of s 160(2) would require the establishment of some error or omission antecedent to the failure to perform the act or step …' His Honour went on to discuss the error or omission contended for in that case at 157: 'Here, as I understand the reasons, the error or omission was thought to be either [the failure of a person desiring to oppose the grant] to tell [an agent] to instigate a watch, or [the failure by the agent] (on the assumption that he was told to do so) to carry out those instructions.' One way of expressing the contention in support of the decision attacked [which was to grant the extension] is that it is enough to show that the person desiring to oppose gave appropriate instructions to that end, and that by an error of some kind such instructions were not carried out.' Pincus J later said: 'In my view … what happened was that instructions to oppose were firmly given but, through an error, not carried out.' His Honour dismissed the appeal against the grant of an extension of time. 58 In Danby Pincus J expressed the view, at 153, that the trend of authority on s 160 [of the Patents Act 1952 (Cth)] is in favour of a generous application of that provision. 59 In Scaniainventor v Commissioner of Patents (1981) 36 ALR 101, Fox ACJ, Franki and Northrop JJ said at 105: 'Section 160 is a remedial section and should be applied where it appears to be applicable unless there is some clear indication to the contrary.' 60 In Lehtovaara v Acting Deputy Commissioner of Patents (1981) 39 ALR 103, Northrop and Ellicott JJ said at 112: 'Sub-section (2) [of s 160 of the Patents Act 1952 (Cth)] confers a discretion but the discretion can arise not only where the agent or attorney is at fault or where the failure to do or take the step is due to circumstances beyond the applicant's control, but also where the applicant is at fault. Furthermore, the time may be extended under each sub-section even though that time has expired. The section therefore confers important and wide-ranging benefits on those entitled to them.' 61 Northrop J also noted in Husky Injection Moulding Systems Ltd v Commissioner of Patents (1990) 98 ALR 133 at 135 that: '… it is clear that the duty conferred by s 160(1) and the power conferred by s 160(2) are remedial and the exercise of the power must be construed accordingly; …' 62 In Sanyo Electric Co Ltd v Commissioner of Patents (1996) AIPC 91-283 at 37,844 the AAT set aside a decision of a delegate of the Commissioner and directed that the discretion should be exercised to extend time for a renewal fee for a patent. The AAT found that there had been errors made by Sanyo's agents. The AAT considered the principles to be adopted concerning the exercise of the discretion to extend time, and usefully summarised them: 'The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well-established and include: · in the absence of nominated factors against which the discretion is to be exercised, regard should be had to the "subject-matter, scope and purpose of the Act" - per Mr Justice Mason (as he then was) in Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (1986) 162 CLR 24 at 39-40. a FURTHER EXPOSITION OF THIS IS PROVIDED BY THE COMMENTS OF Mr Justice Davies in Chalk v Commissioner for Superannuation (1994) 40 FCR 150 at 154 where he said "… the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred." · while the Applicant has the burden of placing before the Tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described (McDonald v Director-General of Social Security (1984) 1 FCR 354 per Mr Justice Woodward at 357 and Jenkinson J at 368-369, Australian Broadcasting Tribunal v Bond Corporation Holdings Ltd and Others (1989) 86 ALR 424 per Mr Justice Burchett at 432; · it is "more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time" (per Davies J in Chalk's case, at 156, with whom Chief Justice Black and Mr Justice Cooper agreed. Similar comments are to be found in Comcare v A'Hearn (1993) 119 ALR 85, particularly at 88): · actions of the agent of a principal should not necessarily be regarded as being the actions of the principal (A'Hearn's case); · a legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially (Davies J in Chalk's case at 155).' 63 In the present case it appears to me that the AAT in fact found that there was an error on the part of the agent of GST, but that that error was neither of the two inconsistent errors which the AAT said was the error or omission, those being either 'the failure to pay the continuation fee' or 'an omission to at least check the due date, then enter the date in a diary or an automatic reminder system and then pay on or before the due date.' 64 In my opinion, the AAT in its findings identified that the failure to pay the continuation fees arose because Mr Abaza received a letter from Pizzeys which indicated that the fees were payable by 21 September 1998 and that the agent of GST, Mr Abaza, 'thought no more about the continuation date until he received the letter from the Patent Office in March 1998 to tell him that the application had lapsed'. The exercise of discretion in respect of that error was never considered by the AAT, nor was the significance of the fact that it occurred when it was plain that the applicant wished to proceed with the application; that instructions had been given by the principal to the agent to pay the fees; and that the error or omission which led to the failure to pay was the fault of the agent. 65 Most errors and omissions which lead to a failure to do an act or take a step are the result of negligence or incompetence. Where such errors and omissions are made against a clearly demonstrated desire to maintain the application (and thus not have it lapse), and where attempts are made to remedy the error or omission as soon as its consequences are discovered and the existence of the error or omission learnt, as is the case here, the considerations in favour of an extension seem to me to be quite persuasive. The decision, however, is one for the AAT. 66 In Kimberly-Clark, Jenkinson J did not consider, as the AAT claimed he did, "whether if the discretion had been enlivened, it should have been granted to the Applicant", except in the broadest sense. His Honour referred to other grounds of review at 697: 'Other grounds …relate to the exercise of the discretionary power which is enlivened when the introductory clause of s 160(2)(a) is satisfied. It is in the circumstances of this case inappropriate, in my opinion, that I deal with those grounds. The material placed before the Commissioner's delegate was in my opinion quite insufficient to permit exercise of the power conferred by s 160(2)(a) in favour of the applicant.' 67 The other "error or omission" for failure to pay the continuation fees, which the AAT appears to have found (which is inconsistent with its statement that 'In this case the "error or omission" is the failure to pay the continuation fee') is an omission on the part of Mr Abaza to 'at least check the due date, then enter the date in a diary or an automatic reminder system and then pay on or before the due date', as recorded in par 16 of its reasons, set out above. 68 The AAT accepted the Pizzey letter dated 4 October 1995 contained 'erroneous advice about the due date for annual renewals'. The letter indicated that annual renewals were payable from the third anniversary of the filing date. The third anniversary of the filing date was 21 September 1998. The AAT said at par 14(d): 'Mr. Abaza did not make a note of the incorrect date suggested by the letter, nor did he place it into any "bring up" or "reminder" system. He believes that he probably thought that by 1998 a standard patent would have been granted as a result of the litigation. In any event he thought no more about the continuation date until he received the letter from the Patent Office in March 1998 to tell him that the application had lapsed.' 69 Whether it was incompetent or negligent on the part of Mr Stack or Mr Abaza not to have placed the date in a "bring up" or "reminder system", in my view the findings of the AAT indicate that the continuation fees were not paid because when he received the Pizzey letter, Mr Abaza believed he had until September 1998 to pay them, and 'he thought no more about the continuation date until he received the letter from the Patent Office in March 1998 to tell him that the application had lapsed.' In my opinion, the reference to a failure to have a reminder system or a failure to place an incorrect date in the reminder system is truly a red herring on the question of the existence of an error or omission. 70 The findings by the AAT at par 14(g) and (h) that: 'Any competent patent attorney would have known that the information about due dates contained in the Pizzey letter of 4 October 1995, was erroneous.' and: 'Any competent patent attorney would have in place a system whereby relevant diary reminders would be automatically generated.' seems to me to overstate the position very seriously. I am, of course, conscious that findings of fact are the province of the AAT, and not the Federal Court: see Gageler "The Legitimate Scope of Judicial Review" (2001) 21 Australian Bar Review 279 and Brennan J in Attorney-General for the State of New South Wales v Quin (1990) 170 CLR 1 at 36. 71 It is possible that many patent attorneys would be aware that the dates contained in the Pizzey letter of 4 October 1995 were erroneous, (although the letter itself emanated from a well-known and respected firm of patent attorneys). One might also infer that many patent attorneys would have a system in place for the automatic generation of relevant diary reminders. Nevertheless, it seems an over-statement to say that every competent patent attorney would know that information or have that system in place. 72 Be that as it may, while those considerations obviously played a significant part in the AAT's consideration, they are irrelevant to the present question, because Mr Abaza was not a patent attorney. He was a solicitor who was involved in heavy litigation on behalf of GST, and because of that involvement had taken over dealings by GST with the Patent Office in respect of multifarious applications in respect of many patent applications, but in the capacity as agent for GST. In my judgment, assessing the conduct and state of mind of a person who is not a patent attorney against standards of what a competent attorney would have known, or would have done, to determine whether a discretion should be exercised, is wrong in principle. 73 In support of the finding of the AAT that the relevant error or omission in this case was the failure to pay the continuation fee and that that did not enliven the discretion in s 223 of the Act, GSA submitted: '… it is clear that Mr Stack and Mr Abaza were possessed of all the information required to ascertain the date for payment of the renewal fees, but failed to do so. [For example see the status reports at AB 82A and 86A]. The Tribunal found that this failure was the result of a combination of incompetence and negligence by Mr Stack and Mr Abaza but not because of "an error or omission" within the meaning of s 223 of the Patents Act. [Reasons for Decision at para 16]. It was open to the Tribunal to make this finding given that the facts as found evinced no obvious error or omission inherent in the conduct of the appellant's agents.' 74 This submission misstates what the AAT found. The AAT said that the failure to pay was 'not because of any error made by Mr. Stack or Mr. Abaza. It was because of an omission to at least check the due date, then enter the date in a diary or an automatic reminder system and then pay on or before the due date.' The AAT did not find that this omission was not an error or omission within the meaning of s 223 of the Act. 75 In my opinion, even on that finding as to the omission which caused the failure to pay the continuation fees within six months of 30 August 1997, the AAT should have found that there was an omission within the meaning of s 223 of the Act. 76 What the AAT did say, after making that finding as to the reason for the failure to pay was: '17. The circumstances were not beyond the control of the persons concerned but the question remains as to whether the conduct amounted to an error or omission by them, within the meaning of those terms in s.223 of the Act, such that a discretion should be exercised to grant an extension of time.' (Emphasis added) 77 After quoting from Kimberly-Clark, the AAT baldly concluded: 'In this case the "error or omission" is the failure to pay the continuation fee.' 78 The omission which was identified by the AAT in par 16 of its reasons is there denied by it, and the question identified in par 17 of its reasons never addressed. 79 As to the exercise of discretion, the AAT misdirected itself. In addition to the reasons earlier given, the discretion conferred on the AAT is predicated on the existence of an error or omission for the failure to do an act or take a step; it is not occasioned by identifying a failure or an omission and then considering whether that omission is of the "type of omission" which "may" enliven the power to grant an extension of time, as the AAT, by inference, posed as the relevant test in par 19 of its reasons. As Jenkinson J noted in Kimberly-Clark, an attempt to categorise errors into "types" or "categories" is likely to lead to unrealistic distinctions and is to be abjured. 80 The sole reason the AAT offered for its view that the power to grant an extension of time should not be exercised was that a failure to put in place a proper diary or reminder system was unreasonable, not without moral fault and not deserving of the granting of an indulgence. The AAT found that these factors were determinative that the discretion to grant an extension of time should be exercised against the applicant. 81 In my view, it is to be discerned from the AAT's reasoning that it is only if the conduct of the applicant's representative (which constitutes the omission for the failure to pay) is reasonable, without moral fault and deserving of the grant of an indulgence, that an extension of time would be granted. In so fettering the exercise of discretion, the AAT erred. 82 The observations of Jenkinson J in Kimberly-Clark specifically note that an extension can occur with or without moral fault on the part of the agent. Further, what his Honour in fact said about deserving an indulgence was that it was necessary to have means to evaluate the applicant's moral claim to an indulgence, so that if there has been the absence of full and frank exposure of the circumstances relevant to the failure to do the act or make the step occurred, the means to evaluate the applicant's moral claim to an indulgence will be lacking. That was not the case in the present matter. 83 For the reasons given, the appeal must be allowed and the decision of the AAT to affirm the decision to decline an extension of time must be set aside. The matter should be remitted to the AAT for consideration according to law. The second respondent should pay the costs of the applicant of and incidental to the application, to be taxed if not agreed. The question of any remission of fees seems dependent on the outcome of such reconsideration.