K-Aire Pty Ltd (ACN 074 842 265) v Polyaire Pty Ltd

Federal Court of Australia (Full Court)|2007-12-11|Before: Besanko J, Bennett JJ

REASONS FOR JUDGMENT 1 The issue that arises in this appeal requires the precise identification of the boundaries of what was litigated before, and determined by, the primary judge. In Polyaire Pty Ltd v K-Aire Pty Ltd (2003) 226 LSJS 109, Besanko J, sitting as a judge of the Supreme Court of South Australia, found in proceedings under the Designs Act 1906 (Cth) that a fraudulent imitation of the respondent's registered design had been applied to two articles ("P3" and "P4") exhibited in the action as "examples" of infringing articles, and that each of the appellants was liable for the infringement of Polyaire's monopoly in the design. Orders were made on 5 March 2003. After an unsuccessful appeal against those orders: see Polyaire Pty Ltd v K-Aire Pty Ltd (2005) 221 CLR 287 a dispute arose between the parties as to their scope and, in particular, as to the range of products manufactured and/or sold by the defendant companies which was exemplified by P3 and P4 and which, in consequence, was found to infringe Polyaire's design. This resulted in an application being made to Besanko J by Polyaire for (inter alia) a declaration to resolve in its favour any ambiguity in the orders made, or else for an amendment of those orders under r 53.10(1) of the Supreme Court Rules 1987 (SA). The application was unsuccessfully opposed by the appellants and amending orders were made. Some of those orders were final in character, some were not. From them the appellants appeal or seek leave to appeal.

The pleadings 3 The claims of infringement made by Polyaire, and found by Besanko J, were set out in paras 23 to 32 of its Fourth Further Amended Statement of Claim. It is sufficient for present to refer only to para 26. It alleged: "K-Aire and Kemalex have, since the date of the registration of the design, and before the issue of the summons in this action, and Kemalex Plastics K-Aire Sales, and K-Aire Wholesale have, since the date of registration of the design, and after the issue of the summons in this action, infringed the Plaintiff's monopoly in the design by reason that each of them has, in Australia, without the authority or licence of the Plaintiff, applied the design or an obvious or fraudulent imitation of it to airconditioning air outlet director parts and/or sold and/or offered, or kept for sale, such airconditioning air outlet director parts to which the design or an obvious or fraudulent imitation of it has been applied. Particulars of infringement (a) K-Aire is selling and/or offering for sale or has sold or offered for sale two air conditioning outlet director parts (hereinafter referred to as the first K-Aire outlet and the second K-Aire outlet respectively). (b) K-Aire Sales and K-Aire Wholesale are selling and/or offering for sale or have sold or offered for sale the second K-Aire outlet. (c) An example [P3] of the first K-Aire outlet [K-A1] is in the possession of the Plaintiff's solicitor, marked with the numeral 1 and can be inspected by arrangement with the Plaintiff's solicitor. (d) An example [P4] of the first (sic) K-Aire outlet [K-A2] is in the possession of the Plaintiff's solicitor, marked with the numeral 2 and can be inspected by arrangement with the Plaintiff's solicitors. (e) Kemalex has manufactured the first K-Aire outlet and the second K-Aire outlet. (f) Kemalex Plastics has and continues to manufacture the second K-Aire outlet. Particulars of similarity (g) The Plaintiff relies upon the overall close similarity of appearance of the first K-Aire outlet and second K-Aire outlet when compared with the design. (h) The Plaintiff says that there is no material difference between the design features of the first K-Aire outlet and the second K-Aire outlet. (i) In particular, in relation to both K-Aire outlets the Plaintiff relies upon:- (i) The overall appearance of the blades; (ii) The position of the blades relative to the frame (iii) The appearance of the ends of the blades including the spigots extending therefrom; (iv) The external appearance of the external frame; (v) The appearance of the external sides of the perimeter frame that receive the spigots of the blades; (vi) The appearance of portions of the external frame in the vicinity of each of the spigot receiving portion; (vii) The internal appearance of the internal configuration of the director part; (viii) The internal appearance of the director part when viewing the manner in which the ends of the blades are coupled to the coupling bar and the external frame; (ix) The appearance of the coupling bar. (j) Insofar as there are differences between the design and the K-Aire outlets, the Plaintiff says that such differentia do not render the design of the first K-Aire outlet and the second K-Aire outlet to be other than imitations of the design. Further, the Plaintiff says that such differentia were employed to disguise the copying of the design." (Emphasis added.) 4 By way of explanation, K-A1 was the first airconditioning air outlet director utilised by K-Aire. K-A2 was devised after Polyaire had notified K-Aire that it believed that the manufacture and sale of items in the form of K-A1 infringed its RD2. 5 The appellants' defence in answer to para 26 was to - "22.5 deny that they or any of them have applied Design 2 or an obvious or fraudulent imitation of it to any air conditioning air outlet directors; 22.6 deny that they or any of them have sold, offered for sale or kept for sale any air conditioning air outlet director parts to which Design 2 or an obvious or fraudulent imitation of it has been applied." 6 To anticipate matters, the parts highlighted in para 26 encapsulate the issue that divides the parties. It is clear both from evidence before Besanko J at the original hearing and from what has emerged in the subsequent dispute between the parties that the appellants' airconditioning outlet directors have some number of product sizes which, insofar as presently relevant, are differentiated by reference to a numerical code designation which reflects, apparently, the size of the products in question. The codes are 250, 300, 350, 400 and 450. There are further differentiations within each numerical code. It is the appellants' contention that Besanko J's orders only addressed articles with a product code "300". Polyaire's position is that the products in the codes 300, 350, 400 and 450 were all addressed at the original hearing (there was no evidence of the 250) on the basis that P3 and P4 utilised a fraudulent design which was used in each of those four codes.

The Infringement findings 7 It is not disputed that the only infringing articles actually before Besanko J were P3 and P4 and that these in fact were from the "300" code range. Equally, it is not disputed that there also was evidence that the appellants were making the articles in different sizes and that plans were tendered showing those sizes. 8 His Honour properly emphasised on several occasions in his reasons: see (2003) 226 LSJS 109 at [271] and [295]; that it was his eye "which must determine questions of infringement". He equally emphasised (at [293]) in a passage endorsed by the High Court: 221 CLR 287 at [33]; that: "even if the defendant set out to copy the plaintiff's design and even if the defendant's intention in adopting the differences between the plaintiff's registered design and the accused article was to disguise the copying, there will be no fraudulent imitation unless the accused article is in fact an imitation or copy." 9 Having discussed the expert evidence concerning the differences and similarities between RD2 and KA1 and the design genesis of KA1, Besanko J concluded (at [375]-[381]): "I find that in March 1996 Mr Colebatch [the second appellant] gave Mr Rogers [an industrial designer] instructions that: 1. He wanted a design that would produce an outlet director part which would look similar to other products in the market, and 2. He had a number of specific requirements for the outlet director he wanted Mr Rogers to design. Mr Rogers disagreed with some of the requirements (see paragraphs [122] and [123]). Two of Mr Colebatch's requirements, namely, the requirement that the blades protrude below the ceiling and the addition of a second control bar are also features of RD2. I find that Mr Rogers in designing KA1 knowingly, consciously and deliberately based his design on the plaintiff's outlet director part which embodied RD2. I make that finding having regard to a number of matters. First, Mr Rogers had an outlet director part which embodied RD2. The plaintiff was a larger seller in the market and its products, including outlet director parts, were popular. I mention at this point that I am unable to accept Mr Rogers' denial that he knew that the plaintiff was 'a large player in the market'. By 1996 he had been involved in design work for outlet directors for a number of years. He kept himself informed of the products of competitors of his client. He would have had a reasonable appreciation of the plaintiff's position in the market. Secondly, Mr Colebatch's instructions to Mr Rogers were to design a product which looked like other products in the market. Some of Mr Colebatch's specific requirements are features of RD2. Thirdly, there are substantial similarities between Mr Rogers' design and RD2. The similarities between KA1 and RD2, particularly in relation to the snap fit mechanism, the control bars and the blade ends including the spigots, are obvious. No other outlet director part similar in respect of those features to KA1 or RD2 was identified. The publication Mr Rogers identified is, to my mind, an unlikely source of the similarities to which I have referred. It follows that I do not accept Mr Rogers' denial that he modelled the snap fit for the main blade spigot on the plaintiff's outlet director part. I have already identified other areas in which his evidence was unsatisfactory. His denial on this point is a further example. By about 10 April 1996, Mr Rogers and Mr Colebatch had agreed on the design and Mr Rogers at about this time produced a model. Technical drawings were completed on 15 April 1996. The elements of fraudulent imitation are made out unless it can be said that KA1 embodies a shape or configuration which is distinctly different from RD2 (Turbo Tek Enterprises Inc and Anor v Sperling Enterprises Pty Ltd at page 349). In my opinion, the shape and configuration of KA1 is not distinctly different from RD2. There are differences, the most significant of which are the absence from KA1 of the chamfered lip and the vertical ribs on the outside of the frame. However, the features of shape and configuration which give RD2 its distinctive appearance, namely, the snap fit mechanism, the control bars and the blade ends including the spigots (despite small differences) have been copied. I find that KA1 is a fraudulent imitation of RD2. On 31 October 1996 the plaintiff notified K-Aire that it believed the manufacture and sale of KA1 infringed its monopoly in RD2. Thereafter certain changes were made to KA1 and these resulted in KA2. I have already set out the nature of the changes which were made in the context of my summary of Dr Zockel's evidence (see paragraph [349]). The major change was the removal of one control bar. Having regard to the circumstances in which the changes were made, the only issue in relation to KA2 is whether it has taken the overall distinctive appearance of RD2, or put another way, whether the shape or configuration embodied in KA2 is distinctly different from RD2. I do not think there is distinctive difference between KA2 and RD2. To my mind, the removal of the control bar and the other changes made do not result in any significant change to the appearance (in terms of shape and configuration) of KA1. I find that KA2 is a fraudulent imitation of RD2." (Emphasis added.) 10 It will be noted that the critical findings were made in relation to KA1 and KA2, not P3 and P4. This accords with the pleading of the case.

The 5 March 2003 orders and the stay application 11 Before orders were made by Besanko J following his reasons for judgment, submissions were made by both parties on the scope of the proposed orders and on whether they should be stayed pending an appeal. The first order was that there be judgment for the plaintiff on the claims pleaded at paragraphs 23 to 32 of its Fourth Further Amended Statement of Claim. No issue has been raised as to that. That was the effective finding of infringement. It related to KA1 and KA2. P3 and P4 were expressly said to be examples only. That was in accordance with the findings in the reasons for judgment. It is not entirely clear why any further declaration as to infringement was necessary. The minutes of order proposed by Polyaire, insofar as presently relevant, included: "3. That a fraudulent imitation of registered design no. 110628 has been applied to the articles referred to respectively as 'KA1' and 'KA2' ('the infringing articles') in the reasons for judgment of the Honourable Justice Besanko published on 20 February 2003. 4. That each of the first, second, fifth, sixth, and ninth defendants, whether by itself, its servants, agents or otherwise howsoever, be permanently restrained from infringing registered design no. 110628." Paralleling restraining orders were proposed against the third and fourth and seventh and eighth defendants. His Honour, in his present reasons, characterised the second of the above orders (numbered 4) as very wide and noted that he refused to make it. That controversial decision does not fall for consideration on this appeal (Coflexip SA v Stolt Comex Seaway MS Ltd [2001] RPC 9 at [10]-[21]; Welcome Real-Time SA v Catuity Inc (No 2) (2001) AIPC 91-736 at [9]-[11]; Sun Microsystems Inc v Amtek Computer Systems Corp Ltd [2006] FSR 35 at [23]-[46]; and Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 ALR 202 at [174] (Order 4)). 12 Mr Benfield, the now third appellant and a director of some number of the appellant companies, swore an affidavit in support of an application to stay the orders as proposed by Polyaire. He noted that the proposed orders would require the defendants immediately to cease to manufacture, sell and/or offer to sell products in the form of exhibits P3 and P4. Mr Benfield would have a detrimental effect on his business and those of his customers. He believed this would have a significant affect on the business of the then ninth defendant and would cause the first, fifth and seventh defendants (K-Aire Pty Ltd, K-Aire Sales Pty Ltd and Connect Aire Pty Ltd respectively) to cease operating altogether. The basis of that assertion was that an order in terms of KA2 could affect all of the products sold by K-Aire. Certainly, there was no attempt to distinguish between the products the subject of the proposed orders and products of any other size, or shape and configuration. His Honour granted the stay on the basis of irreparable harm to K-Aire's business. As Besanko J indicated in his present reasons: "It is clear and in fact was not disputed by the defendants on this application, that Mr Benfield was referring to the manufacture and sale of KA2 in all its various sizes." 13 The orders actually made were a composite of those proposed by the parties. Orders 2 and 3 were as follows: "2. A fraudulent imitation of registered design no. 110628 ('the registered design') has been applied to the articles which are respectively exhibits P3 and P4 in this action ('the infringing articles'). 3. Each of the first, second, fifth, sixth, and ninth defendants, whether by itself, its servants, agents or otherwise howsoever, be restrained from manufacturing, selling or offering for sale any article in the form of the infringing articles." Order 2, it should be noted, varied Polyaire's proposed order 2 by (inter alia) substituting "the exhibits P3 and P4" for the designations "KA1 and KA2". Order 3, altered Polyaire's form of the injunction, the restraining order being tied to the manufacture etc "of any article in the form of the infringing article". Those two changes contained the germ of the dispute in this appeal. Orders 4 and 5 (not reproduced) made parallel restraining orders to order 3 against the other defendants. In settling the minutes of order on 3 March 2005, Besanko J noted that the form of the injunctions in orders 3 to 5 were put forward by the defendants and were in "the correct form". This is puzzling as the form of order 2 (propounded by K-Aire) was not in accordance with the pleading in paragraphs 23 to 32 of the Fourth Further Amended Statement of Claim or with the first order finding for the plaintiff on those claims, but the version propounded by Polyaire was. If the plaintiff's version had been adopted, the present issue would not have arisen. 14 The orders went on to make provisions which would enable Polyaire to make an election between its claim for damages and its claim for an account of profits. Of those orders (which are clearly interlocutory in character), only the following two need be noted. Order 6.1 provided: "Each of the first, second, fifth, sixth, seventh, eighth and ninth defendants, by its proper officer, make file and serve on or before the expiration of three months after the making of this order an affidavit setting out in respect of all the infringing articles, the total number of such articles manufactured, sold and otherwise disposed of by it, the price at which each such article was sold or otherwise disposed of, the cost to the defendant of the manufacture, sale or disposal of such article, the approximate amount of profit it contends it made by the manufacture, sale or disposal of the said article, the method of allocating overheads, if any, which the defendant regards as reasonably acceptable, and the steps or reasoning by which the approximate amount has been calculated." As in order 2, this order is tied to the defined term, "infringing articles". 15 Order 14 (which dealt with the undertaking to be given by the defendants for the stay of the orders) required (inter alia) that they undertake to - "14.3 file and serve every 6 weeks an affidavit (with the first such affidavit to be filed and served by no later than close of Registry on 3 April 2003) deposing to the number of infringing articles sold, to whom such articles were sold and identifying the records kept by the defendants in respect of such sales." 16 As Besanko J noted of this obligation in his present reasons (at [14]): "In 2003 such affidavits were filed and served by Mr Benfield and by Mr Richard Colebatch … respectively, and it is clear that the disclosure given by each of the deponents is as to the sale of KA2 in all its sizes. That changed in September 2005 when the disclosure made by Mr Benfield and Mr Colebatch respectively was restricted to the sale of the articles which were of the same size as P4. That change occurred not long after the High Court handed down its two decisions in the appeal."

Polyaire's application 17 In August and then in September 2005 Besanko J made further orders to facilitate the making of the election as to remedy. From affidavits sworn by Mr Benfield and Mr Colebatch in purported compliance with those orders, it was clear that they limited the disclosure required of them to code 300 articles, these being of the same size as P3 and P4. 18 Polyaire was of the view that by so limiting their disclosure, the appellants had not complied with Besanko J's orders. Its contention was that the orders related to a grille or blade pack of the same shape or configuration as P3 and P4 and that the size of either of these was immaterial. It then applied to Besanko J for a declaration (i) that the various orders were made from 5 March 2003 onwards refer to and include "all articles having the form of Exhibit P3 and P4 in the action, regardless of the size of such articles"; or (ii) that those orders were "not limited to articles of a specific size, namely 300mm outlet directors". Alternatively, insofar as is presently relevant, it sought an order that the various orders be corrected under the 1987 Supreme Court Rules 53.10(1) "to refer to all articles (being airconditioning outlet director parts) that infringe registered design no 110628". 19 Rule 53.10(1) provides: "Mistakes in judgments or orders, or errors arising therein from any slip or omission, may be corrected by the Court at any time either on the application of a party or of its own motion."

THE PRIMARY JUDGE'S DECISION 20 His Honour indicated that each set of the orders had been drawn up and sealed. He also indicated he would deal with the matter on the basis that while "the key orders" were final orders, others were interlocutory in nature. Both of these matters are of some significance in the appeal. 21 Polyaire's submissions had a tiered character. As described by Besanko J, it had been submitted, variously, that (i) the orders made were clear and that new dates for compliance with disclosure orders should be set; (ii) if the orders were ambiguous, that ambiguity should be resolved in Polyaire's favour, if necessary, by a declaration as to their meaning; (iii) alternatively, the orders should be amended under r 53.10; or (iv) the orders should be amended under the inherent power of a court to amend orders which do not reflect the intention of the judge who made them. 22 Having had regard to the authorities which have considered the material which might be considered in determining the proper construction of orders of the court, Besanko J observed that (at [41]): "… it would be a very rare case in which, in construing orders of the Court, it would not be appropriate to consider at least the reasons for judgment. If on considering the orders in light of the reasons for judgment the meaning of the words is clear then effect must be given to those words. There is an exception to this and that is a class of case where the orders are clear but it is also apparent that they do not represent the intention of the Judge who made them." 23 On the question of possible ambiguity in the 5 March 2005 orders themselves, his Honour commented (at [46]-[47]): "There are two possible areas of ambiguity in the first set of orders. The first possible ambiguity arises because of the use of the expression 'in the form of the infringing articles' used, for example, in orders 3, 4 and 5. What does the word 'form' mean in this expression? Does it mean any article with the shape and configuration of P3 or P4? If so, the mere fact that the article was a different size would not mean that it was not in the shape and configuration of P3 or P4. In a case clearly involving an infringement of a registered design, there is a strong argument that that is what the word 'form' means and that there is no doubt about it. However, it might be said that the word 'form' is broad enough to cover the size of an object or thing. By a narrow margin, I think that there is an ambiguity. However, it is easily resolved. I would wish to make it clear, if it is not already clear, that if I am wrong in concluding that there is an ambiguity I would construe the orders in the manner advanced by the plaintiff. The other possible area of ambiguity is the use of the phrases 'all the infringing articles' in orders 6 and 7.1, 'the infringing articles' in orders 7.2 and 8, and 'infringing articles' in orders 7.3 and 14.3. Neither party suggests that these phrases are restricted only to the articles which are P3 and P4. I think that if there is an ambiguity here it is easily resolved by considering the orders as a whole. Clearly these expressions mean articles in the form of the infringing articles." 24 Besanko J then turned to examine the relevant material other than the orders themselves. His Honour's treatment of that material and his conclusions are contained in the following paragraphs ([49]-[56]): 'The allegations in the plaintiff's statement of claim were not restricted to an airconditioning outlet director part of a particular size. There was nothing in the alleged particulars of similarity between RD2 and the first K-Aire outlet and the second K-Aire outlet which referred to the size of the outlet or which suggested that size was a relevant consideration. There was nothing in the defences of the respective defendants that suggested in any way that the defendants alleged that the size of the airconditioning air outlet director part was relevant to the question of the alleged infringement of RD2. The same can be said of a document filed by the defendants and called an Outline of Defence and Counterclaim. At the trial, P3 and P4 were clearly tendered as examples of KA1 and KA2. On this application the defendants accept that they were tendered as examples of something. They submit that they were examples of physical articles of the same size and design. I do not agree. They were tendered as examples of the KA1 and KA2 designs applied to articles and it was said that such articles infringed RD2. There was clear evidence that the articles were produced in different sizes. The defendants did not suggest at trial that that fact was of any significance. The experts did not at any time suggest that the size of the articles was a relevant consideration to the questions they addressed or indeed of any significance. No witness suggested at trial that the first K-Aire outlet or KA1 or the second K-Aire outlet or KA2 was an airconditioning air outlet director part of a particular size. To the contrary there was evidence that the defendants were making the articles in different sizes and the common assumption was that they were all KA1 or KA2 outlets. There was clearly evidence before me that the defendants were making the articles in different sizes. I need only refer to the plans tendered in evidence showing the articles in different sizes and the evidence about the making of the tooling or dies. Nothing was said by the defendants during closing submissions to suggest that P3 and P4 were no more than examples of an airconditioning air outlet director part of a particular size. There is nothing in my reasons for judgment that suggests that the size of the airconditioning outlet director part was a relevant consideration. In my reasons for judgment I said the following (at [48] (sic): 'The second claim against Mr Benfield, K-Aire, Kemalex and Mr Colebatch and the claim against the other defendants is that in one way or another they were involved in the manufacture and/or sale of one or both of what were called in evidence the first K-Aire outlet ("KA1") and the second K-Aire outlet ("KA2"), and that KA1 and KA2 infringe the plaintiff's monopoly in RD2. The Colebatch defendants tendered drawings of KA1 and KA2. Although it is clear that I must compare the accused articles with the registered design, it will assist the reader's understanding of the issues if I attach to these reasons some drawings of KA1 and KA2. The former are marked "C" and the latter are marked "D".' There is nothing in my discussion of the expert evidence, or the comparison between RD2 on the one hand and KA1 and KA2 on the other, which suggests that the size of the accused articles was a matter of significance. As I have said ([11] above) after trial but before the orders were made on 5 March 2003, the defendants filed and relied upon an affidavit of Mr Benfield and made submissions on 3 March 2003 which were clearly based on the proposition that the orders which would follow from my reasons for judgment would apply to the manufacture and sale of KA1 and KA2 in all their respective sizes. The trial and my reasons for judgment proceeded on the basis that the defendants were manufacturing and selling articles in different sizes which had the shape and configuration of which P3 and P4 were examples. The trial was certainly not about P3 and P4 alone or about an airconditioning outlet director part of a particular size. I have reached the above conclusions irrespective of whether I can have regard to the respective affidavits filed and served in 2003 and after the first set of orders was made by Mr Benfield and Mr Colebatch. The plaintiff submitted that I could have regard to the affidavits whereas the defendants said I could not. I do not need to decide the point. Certainly the affidavits are eloquent testimony of the conclusions I have reached because the disclosure made therein is of the sale of KA1 and KA2 in all their respective sizes." 25 His Honour indicated he was prepared to amend the orders along the lines proposed by Polyaire in its application and he directed Polyaire to bring in detailed minutes of order showing all the amendments it sought.

The orders made 26 It is sufficient for present purposes to note that the declaratory and restraining orders of 5 March 2003 were revoked save for order 1. In their stead orders 2 and 3 provided: "2. A fraudulent imitation of registered design no. 110629 has been applied to the articles which are respectively exhibits P3 and P4 in this action. 3. Each of the first, fifth and sixth defendants, whether by itself, its servants, agents or otherwise howsoever, be restrained from manufacturing, selling or offering for sale any article ('infringing articles') which, regardless of their size, have the shape and configuration of either of exhibit P3 or exhibit P4." Orders 4 and 5 imposed parallel restraining orders on the third and fourth and seventh and eighth defendants respectively. As with previous orders, further orders were made of an interlocutory character relating to disclosure for the purposes of Polyaire's remedy election. These orders continued the disconformity between order 1 (and the pleaded case) and the reasons for judgment that referred to KA1 and KA2, and orders 2 and 3, that refer to P3 and P4. The alteration to the form of order 3, which gives rise to this appeal, was an attempt to eliminate the substance of the disconformity.

THE APPEAL AND THE APPLICATION FOR LEAVE 27 It should be said at the outset that, to the extent that Besanko J's orders were interlocutory (as they were in part), argument on the appeal was heard on the entirety of the orders without differentiation between orders in respect of which an appeal lay as of right and those requiring leave to appeal. The orderly conduct of the hearing necessitated the taking of this course and the grant of leave insofar as it was necessary. 28 The appellants' principal grounds of appeal are that his Honour erred (i) in finding there was any ambiguity in the 5 March 2003 orders; (ii) in holding that, on the proper construction of those orders, the expression "all the infringing articles" means "any article with the shape and configuration of P3 or P4"; (iii) in holding that the fact that an article was a different size would not mean that it was not in the shape and configuration of P3 or P4; (iv) in holding that there was a common assumption at the trial that articles in different sizes manufactured and sold by the defendants were all KA1 and KA2 outlets; (v) in failing to hold that the actual shape and configuration of articles other than P3 and P4 could only be determined by an examination of those articles and could not be determined by an examination of P3 and P4; and (vi) in failing to hold that he did not have jurisdiction to vary the 5 March 2003 orders. 29 Put shortly, and leaving aside the question of jurisdiction, the appellants contend that his Honour could only properly have arrived at his conclusion that the size of the outlets did not matter if (a) the finding had been made that articles of a different size to P3 and P4 were a fraudulent imitations or (b) the trial was conducted on the common assumption that size did not matter. 30 As to the first of these, it is said there were no articles of sizes other than that of P3 and P4 so that no comparison between such articles and Polyaire's design could be made. In support of this, it is said that an infringement cannot be established from a comparison of designs and that there were in fact differences in the relative dimensions of differing sizes of outlets. The appellants did not submit that the different sizes were not in fact fraudulent imitations but only that it did not follow that they were of the same shape or configuration of P3 and P4. 31 As to the alleged common assumption, the appellants contend that none of the matters relied upon by his Honour disclose any representation or concession by them that a finding in respect of P3 and P4 would be binding in respect of other articles not in evidence. It is also emphasised that the assumption cannot be drawn from the pleading or from any alleged failure on their part to suggest that size was a relevant consideration. The onus was on Polyaire. It is further contended that, even if there was a common assumption, affidavits filed and served by Mr Benfield and Mr Colebatch after the original trial were irrelevant to the construction of the orders or to the question whether the orders reflected the Court's intention. 32 On the question of jurisdiction or power to amend, the appellants contend, first, there was no ambiguity in the orders of 5 March 2003 which would enliven the Courts power to amend as order 3 itself defined what were "the infringing articles". Further, it is contended that the power to amend an order for ambiguity or failure to reflect what the trial judge intended must be at an end where that order has been the subject of appellate review by an ultimate appeal court. 33 Polyaire's principal submissions are these. First, on their proper construction, orders 3 to 5 of the 5 March 2003 orders were not ambiguous and were not limited to articles of a specific size (viz code 300 products). Secondly, there was no need to tender examples of differently sized outlets as his Honour found that the appellants created their own fraudulent design and that design was applied to all of the different sizes and series. Thirdly, the common assumption at trial, consistently with the pleadings, was that P3 and P4 were examples of KA1 and KA2 which themselves were "codes" for all emanations of size of articles to which the design was applied. Fourthly, the Court had the inherent power to correct the orders if they did not truly represent what the Court had intended to pronounce. Further, his Honour could have relied on r 3.04(f) of the Supreme Court Rules which empowered the primary judge "at any time" to correct, revoke or vary any order by a subsequent order and both Doyle CJ and Lander J in the Full Court of South Australia in Copping v ANZ McCaughan Ltd (1996) 67 SASR 525 at 526 and 567-568 respectively considered that this rule gave the court power to correct etc an order once sealed.

Consideration 34 There is no dispute that P3 and P4 were examples of something and did not themselves constitute the only infringing articles. The obvious point of divergence relates to what they exemplified and, hence, what order 2 of the 5 March 2003 orders comprehended. 35 The real dispute relates, in our view, to whether there was a commonly assumed basis upon which the trial before Besanko J was conducted and determined. His Honour had no doubts on that score. As he said at [55] of his reasons, the trial and his reasons proceeded on the basis that the defendants were manufacturing and selling articles in different sizes which had the shape and configuration of which P3 and P4 were examples. The trial, he considered, "was certainly not…about an airconditioning outlet director part of a particular size". Yet it is precisely this character which the appellants now wish to ascribe to it. 36 Obvious weight and respect need to be given to a trial judge's own appreciation of the basis upon which a trial, at which he or she presided, was conducted and determined. That appreciation, though, is not of itself conclusive of the matter if it is called into question. This said, we are not satisfied that his Honour's characterisation was incorrect. The most compelling evidence of the appellants' contemporary state of mind in relation to this is revealed in Mr Benfield's affidavit which was filed after the delivery of reasons and prior to the hearing concerning the orders to be made. That affidavit addressed the minutes of order proposed by Polyaire which in the event were not accepted and which, as we have indicated, referred not to P3 and P4 but to KA1 and KA2. It made clear that the particular examples in evidence were treated as typical of KA1 and KA2 and that KA1 and KA2 included versions of the product of four different sizes. For this reason a stay was sought as the proposed orders would prevent them selling any version of KA2. It is noteworthy that consistent with Mr Benfield's affidavit, Besanko J granted the stay on the basis that there was at least a significant risk that the business of at least some of the defendant companies would be irreparably damaged. It equally is noteworthy, as earlier noted, that the undertaking required to be given as a condition of the stay obliged the appellants to file and serve every six weeks an affidavit deposing to the number of "infringing articles sold". As the subsequent periodic affidavits again made plain, this was understood at that time to refer to all of the KA1 and KA2 ranges irrespective of size. We refer to these various affidavits, not for the bare purpose of interpreting Besanko J's orders, but for the light they throw upon the contemporary assumption of the appellants. 37 The most telling point is that the assumption was consistent with para 26 of the Fourth Further Amended Statement of Claim and with the manner in which the findings were expressed in the reasons for judgment. 38 While the appellants have challenged such matters as the use made by Besanko J, in explaining his characterisation of the trial, of the silences in the evidence on the significance of size and the use made of evidence said to have been tendered for purposes other than infringement, we are not satisfied that in the context of his explanation they have been used impermissibly or that they reveal any reversal of the onus of proof. Rather, we consider, they suggested conduct and understandings consistent with that betrayed by Mr Benfield in seeking the stay. 39 It should be emphasised that in accepting that there was a common understanding such as Besanko J found, we express no view at all on its accuracy or otherwise as to significance of size in this matter. His Honour did not have to consider that as a separate issue for infringement purposes. The case was not conducted that way. 40 Before turning to the orders and to whether they represented what his Honour intended, it is necessary to refer briefly to the appellants' contention that Besanko J had no power to correct his orders for whatever reason in any event. Insofar as this contention is based on the fact that the orders had been sealed, we consider that it must fail in light of the power conferred by r 3.04(f) of the 1987 Supreme Court Ruleswhich, as interpreted by Doyle CJ and Lander J in Copping's case, extends to correcting, varying or revoking sealed orders. We see no reason to disagree with what their Honours have said. We would note in passing that Besanko J had this power at his disposal quite apart from such inherent power as he may otherwise have possessed to correct the records of the court to make certain that they truly represented what the court had intended to pronounce: DJL v The Central Authority (2000) 201 CLR 226 at [34]. We would add, though, that the power given by r 3.04(f) would, in appropriate circumstances, permit the correction etc of orders in like circumstances to those permitted by the inherent power at common law. 41 The additional matter relied upon by the appellants in support of their no power contention is that the 5 March 2003 orders have been the subject of an unsuccessful appeal to the High Court and it was this that rendered the orders no longer amenable to revocation, variation or correction by a lower court. 42 We cannot agree with this. The question whether the orders ought be corrected for reasons of ambiguity, failure to reflect what the primary judge intended or clerical mistake, was not in issue in the appeals. They proceeded on other grounds. The question subsequently having arisen for the first time, we can see no reason why the fact of there having been an ultimately unsuccessful appeal against a judgment or order should itself preclude a trial judge from availing of a power to correct what still are his or her own orders in circumstances falling within and justified by an express power so to correct. The contrary view could defeat the interests of justice in the matter by condemning a successful party to abide by orders that are ambiguous, unintended or mistaken. 43 Turning to the 5 March 2003 orders, did Besanko J err in correcting them as he did? Order 2 of those orders, which tied fraudulent imitation to P3 and P4 which it then defined as "the infringing articles" is quite problematic, the more so as it contrives the meaning of "the infringing articles" in the discovery and disclosure orders that were made. Order 2 was clearly not intended to define and delimit what were infringing articles to P3 and P4 alone. They were tendered, and were well understood to have been tendered, as examples. But what they exemplified was given meaning only by the common assumption upon which the matter was pleaded, heard and determined. What the order conveyed required elaboration if its intended purposes as a declaration and as a definition could be realised. It is not that the language of the order was inherently ambiguous. It is that the base formula used was inapt to truly represent what the court intended in pronouncing it. In a sense the reference made to P3 and P4 had its own dictionary meaning derived from the common assumption. 44 We do not consider that it was inappropriate for Besanko J to revisit the orders. Considered in the light of his Honour's 2007 reasons and the common assumption to which he referred, it is clear that it was held in 2003 that the fraudulent imitation applied to P3 and P4 was applied as well to all versions of KA1 and KA2 outlets. The recasting of the orders was intended to eliminate any doubt that may have surrounded the meaning of "the infringing articles" in the 2003 injunctive, discovery and disclosure orders. We are satisfied that the substance of the judgment in this respect is correct. The recasting permissibly reflects the common assumption. Size was not material. What was material was that the articles in question have the shape and configuration of KA1 and KA2, of which P3 and P4 were examples. 45 It is arguable that the form of the orders could have been improved. Order 2 is still in the more limited form which, on one view, did not reflect the issues on the pleadings, the findings at trial and the common assumption upon which the original orders were made. In our respectful opinion, it may have been best if the trial judge had made an order along the lines of Order 3 as proposed by Polyaire. The pleadings alleged infringement by the first K-Aire outlet (K-A1) and the second K-Aire outlet (K-A2). The findings at trial found such infringement. However, Order 2 is limited to the particular examples of the wider class. The change to the draft, with the consequent change in the definition of "infringing articles", also threw out the sense of the later orders. 46 However, there is no cross-appeal, and no party has sought to amend the orders in this fashion.

CONCLUSION 47 The appeal should be dismissed and the appellants should pay the respondent's costs of the appeal. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn, Gyles and Bennett.

Associate: Dated: 11 December 2007 Counsel for the Appellants: Mr D Catterns QC and Mr D Gaszner

Counsel for the Respondent: Mr D Yates SC and Mr B Jenner

Supreme Court Rules 1987(SA)r 53.10(1), 3.04(f)

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