Gold Peg International P/L v Kovan Engineering

REASONS FOR JUDGMENT 1 The applicant has brought proceedings alleging conduct in breach of ss 52 and 53(c) and (d) of the Trade Practices Act 1974 (Cth), breaches of an agreement governing copyright ownership in certain drawings, as between the applicant and the first respondent, and infringement of copyright in certain drawings being artistic works under s 10(1) of the Copyright Act 1968 (Cth). 2 The drawings are of a cooker. The applicant sought leave to amend its pleadings on the eighth day of the proceeding. Two of the applicant's four witnesses have completed their evidence and an expert witness whom the applicant has called has commenced, but not completed, his evidence. The amendments sought include amendments to particulars of an agreement alleged to have been made in 1992, amendments to particulars of copyright infringement and a further allegation of breach of the agreement, being a breach which only came to light during the course of the proceedings. 3 The respondents oppose the application on the grounds that the proposed amendments are late and that there has already been opportunity to plead the case which the applicant seeks to advance. The respondents particularly point to the fact that there have been four prior versions of the statement of claim. Furthermore, the respondents complain that conversations now sought to be relied on as constituting an agreement have not been particularised, nor has an averment that the silence of one party to a conversation constituted agreement. 4 It is also contended by the respondents that the preparation of cross‑examination, particularly in a case such as this where issues of credit are involved, requires careful preparation and the case now sought to be advanced is markedly different from the currently pleaded case. The respondents have prepared witness statements for answering a case based on an oral agreement in 1992, as presently particularised. The case now sought to be advanced is that the agreement between the applicant and the first respondent was made in 1992 constituted by conversations in the period from about 1989 until early 1992. 5 The respondents submit that clarity is needed in respect of the applicant's proposed amended particulars covering copyright infringement. It is asserted that the first respondent is unable to determine which, if any, parts of cookers it may be entitled to make and the respondents therefore seek leave to file and serve an amended defence and cross‑claim, seeking declarations and injunctions in respect of the "Kovan Drawings", a phrase already used in the current defence to describe drawings prepared by, or at the request of, the first respondent during the course of manufacturing cookers for the applicant. 6 The applications by the applicant and the respondents for leave to amend pleadings are made pursuant to Federal Court Rules ('FCR'), O 13 r 2. Rule 2 relevantly provides as follows: " (1) Subject to the following provisions of this rule, the Court may, at any stage of any proceeding, on application by any party or of its own motion, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit. (2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings. . . . (7) An amendment may be made even if the effect of the amendment is to add or substitute a new claim for relief or foundation in law for a claim for relief if the new claim for relief (whether by way of substitution for an existing claim for relief or foundation in law or not) or foundation in law: (a) arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party applying for leave to make the amendment; . . ." 7 The applicant supports the application for leave to amend on the basis that amending the particulars of an agreement made in 1992 and already pleaded, merely follows what has emerged in the oral evidence during the course of the hearing. Next, it is submitted that some of the proposed amended particulars merely seek to treat certain terms of the agreement as implied as a matter of law. Thirdly, the applicant has offered to recall relevant witnesses for further cross‑examination should that be needed to ensure fairness to the respondents as a result of any amendments. 8 The applicant noted that the addition of an extra allegation of breach of the agreement was not strongly complained about (paragraph 15 of the statement of claim). Finally, it was submitted that the proposed amended particulars of copyright infringement have the effect of confining the ambit of the case, thus facilitating the efficient disposition of the balance of the proceeding (paragraph 22 of the statement of claim). 9 The applicant relies on the statements of principles to be found in The State of Queensland & Another v J L Holdings Pty Limited (1996-1997) 189 CLR 146 ("Queensland v JL Holdings") in particular at 155 per Dawson, Gaudron and McHugh JJ: "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties."