Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group

Federal Court of Australia|2009-07-01|Before: McKerracher J

Each statement of claim will be struck out with liberty to re-plead within six weeks.
The applicant is to pay the respondents' costs of the motions to be taxed if not agreed.
The applications are otherwise dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website.

WESTERN AUSTRALIA DISTRICT REGISTRY WAD 219 of 2006

BETWEEN: LYNX ENGINEERING CONSULTANTS PTY LTD (ACN 059 949 469)

AND: THE ANI CORPORATION LIMITED TRADING AS ANI BRADKEN RAIL TRANSPORTATION GROUP (ACN 000 421 358)

BRADKEN RESOURCES PTY LTD (ACN 098 300 988)

WORLEYPARSONS SERVICES PTY LTD (ACN 001 279 812)

INTRODUCTION 1 These applications are brought by the second and third respondents (which will be described collectively as Bradken) and the fourth respondent (WorleyParsons). Judgment pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (FCA) is sought. Alternatively, these respondents seek an order under O 11 r 16 of the Federal Court Rules (FCR) to strike out substantial parts of the statements of claim on the basis that they disclose no reasonable cause of action or have a tendency to cause prejudice, embarrassment or delay in the proceedings.

The respondents' motions 2 The Bradken motion seeks dismissal of the applicant's claim pursuant to s 31A(2) FCA in relation to those claims based on allegations of misuse of confidential information or infringement of copyright or breach of s 52 of the Trade Practices Act 1974 (Cth) (TPA) on the grounds that they have no reasonable prospect of success. Alternatively, those respondents seek pursuant to O 11 r 16 FCR the striking out of [5]‑[41], [42]-[51] and [52]-[58] of the amended statement of claim. 3 The amended motion for WorleyParsons is more complex. In essence, its seeks the same relief but also dismissal pursuant to s 31A FCA or O 11 r 16 FCR of the whole of the claims of misuse of confidential information or, alternatively, so much of them as is constituted by information: 1. disclosed in Australian Patent Application No. 749848 (31293/99); 2. disclosed in the journal article 'R&D Optimises Stainless Steel Optimises Ore Car Bodies', Railway Gazette International, October 1999, pp 643-646; and/or 3. otherwise in the public domain, including by reason of the public use of the Lynx Golynx Wagon. 4 In relation to the copyright claim, WorleyParsons seeks dismissal in these terms: (a) the whole of the applicant's claimed infringements of copyright in artistic works by the manufacture of ore wagons be dismissed pursuant to s 77 of the Copyright Act 1968 (CA) and s 31A FCA; (b) alternatively to (a) above, the applicant's claimed infringements of copyright in artistic works by the manufacture of ore wagons in the period after 17 June 2004, be dismissed pursuant to s 77(2)(a) or s 77(2)(b) of the CAand s 31A of the FCA; (c) so much of the applicant's claimed infringements of copyright in artistic works by reproduction of the said works in the course of or incidental to the manufacture of ore wagons in relation to the period after 17 June 2004, be dismissed pursuant to s 77A of the CAand s 31A FCA; (d) so much of the applicant's claimed infringements of copyright in literary works as is alleged to be constituted by three dimensional reproductions of the said literary works be dismissed pursuant to s 31A FCA or, alternatively, struck out pursuant to O 11 r 16 FCR; (e) so much of the applicant's claimed infringements of copyright as are alleged to be constituted by WorleyParsons publishing the said works be dismissed pursuant to s 31A FCA or, alternatively, struck out pursuant to O 11 r 16 FCR; and (f) so much of the applicant's claimed infringements of copyright as are alleged to be constituted by selling or by way of trade offering or exposing for sale or hire or exhibiting in public be dismissed pursuant to s 31A FCA or, alternatively, struck out pursuant to O 11 r 16 FCR. 5 Consequential striking out of other pleadings are also sought. As I propose striking out the entire statement of claim, I make clear that I am not for present purposes specifically addressing the claims concerning detinue or conversion or breaches of the TPA other than to the extent those claims are based on the specific facts which in my view have not been adequately pleaded as to the primary pleas. (Breach of confidential information and breach of copyright).

STATUTORY FRAMEWORK 6 Section 31A FCA reads as follows: Summary judgment (1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is prosecuting the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. 7 As observed by Heerey J in Duncan v Lipscombe Child Care Services Inc (2006) 150 IR 471, s 31A FCA was introduced to establish a lower standard for strike outs (either of claims or defences) than that previously laid down by the High Court's decisions in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125. Nevertheless, while the test is lower, as Barrett J in Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 held, for the purposes of the comparable provision in New South Wales ('without reasonable prospects of success') meant 'so lacking in merit or substance as to be not fairly arguable'. In Swain v Hillman [2001] 1 All ER 91, Court of Appeal per Lord Woolf MR said at 92: The words "no real prospect of succeeding" do not need any amplification, they speak for themselves. The word "real" distinguishes fanciful prospects of success ... they direct the court to the need to see whether there is a "realistic" as opposed to a "fanciful" prospect of success. 8 However s 31A(3) FCA makes it clear that the proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success. 9 Section 31A FCA would require these respondents to satisfy the Court that there is no real issue of fact or law to be decided and only the conclusion for which they contend can be said to be reasonable: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 at [45] and see also the Full Court in Jefferson Ford Pty Ltd v Ford Motor Company Australia Ltd and Others (2008) 167 FCR 372 at [21]- [23], [71]-[74] and [122]-[134]. 10 There are slightly differing views in relation to the extent to which the Court should enquire into the merits of a matter in circumstances where a question of law will decide the issue. See for example the Full Court in Jefferson 167 FCR 372 at [23] per Finkelstein J and at [34] per Rares J compared with Gordon J at [128]-[131]. 11 The law on s 31A FCA has been exhaustively analysed. While there is no doubt that the bar has been lowered for summary dismissal, it is still a serious matter to dismiss a proceeding at an early stage. None of those cases would suggest otherwise. To those I would also adopt the observations of Graham J in J F Keir Pty Limited v Sparks [2008] FCA 611 at [9]- [15] and Gilmour J in Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955. It is clear that, despite the bar being lowered, the Court should approach the question of summary dismissal with considerable caution. For all the reasons expressed in these authorities, as I apprehend it, the lowering of the bar or relaxing of the standard was intended only to give a power which the Court may exercise in the more obvious instances.

BACKGROUND 12 The applicant (Lynx) designs, manufactures and supplies railway wagons for carrying freight and bulk materials. In or around 1996, Lynx together with the first respondent (ANI) responded to an invitation to tender from BHP Iron Ore Ltd (BHP) for the design, manufacture and supply of gondola ore cars. The tender was unsuccessful. In early 1997, the process was repeated in a subsequent proposed tender to another company, Hamersley Iron Ore Limited (Hamersley) for the design of such wagons. For that purpose Lynx supplied ANI with drawings and technical information. That tender was unsuccessful. 13 In 2000 there was a further tender to Hamersley. That tender also did not succeed. 14 The essence of the complaint arises from the circumstance that some time later ANI and Bradken manufactured and supplied both BHP and Hamersley with railway wagons known, respectively, as the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car. Lynx says that in doing so ANI and Bradken used information contained in the drawings supplied from Lynx to ANI. It says that ANI thereby breached a duty of confidentiality that it owed Lynx as to the drawings and technical information or, alternatively, that it infringed the copyright held by Lynx in the designs and drawings. 15 WorleyParsons is joined in the proceedings because the wagons which were supplied were designed by a WorleyParsons subsidiary. Lynx alleges that such design, it is said, was at the instruction or direction of, or otherwise materially involved ANI and Bradken. 16 I am informed that over 2,500 documents were discovered (primarily by the respondents) approximately a year prior to this particular hearing. 17 Shortly put, each of the respondents contends that with the significant amount of time that has elapsed since these proceedings were commenced, together with the very substantial discovery that has been given, Lynx is still unable to plead a cause of action. In those circumstances, it is said that the claim is hopeless or at least falls within the ambit of the lower threshold to which s 31A FCA is directed. Alternatively, the respondents seek to strike out the pleading, recognising that leave to re-plead may be permitted. 18 For reasons set out below, I consider that the applicant's pleading against each of the respondents is deficient in a substantive sense. It will be struck out. This is the first strike out application. I will give leave to amend. Although other substantive evidence and arguments (eg the permissibility of reverse engineering and confidential material entering the public domain) were advanced in support of dismissal of the application, in my view any consideration of those arguments should await the finalised form of any amended pleading. It may well be that defences can be raised and considered at that stage but first, precise breaches need to be pleaded.

PROCEDURAL HISTORY 19 The proceedings have considerable history. On 20 December 2006 an application was brought for what was then non-party discovery against WorleyParsons. This was granted on 23 April 2007: Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited [2007] FCA 578. Lynx relies in part upon that judgment as support for the argument that it is arguable that it will be entitled to relief against WorleyParsons. (I consider the earlier decision does not directly afford support of this nature. The relevant tests for non party‑discovery and for summary dismissal are different). 20 There was a further decision in WAD 219 of 2006 (Lynx Engineering Consultants Pty Ltd v ANI Corporation Limited & Others (No 2) (2007) 163 FCR 372 by Siopis J). The issue concerned preliminary discovery. Additionally, I gave a further brief decision in each of the matters on 23 April 2008 (Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group [2008] FCA 555). This concerned orders for confidential undertakings. 21 In related proceedings in the New South Wales District Registry, Emmett J delivered reasons on 29 August 2008 (Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2008] FCA 1257). In those proceedings the position of the parties is reversed, at least insofar as Bradken and Lynx are concerned. The New South Wales proceedings are concerned with Australian Patent application no.749848 for an invention entitled 'Side Reinforced Bulk Material Transport Container'. One of the issues in those proceedings is an appeal by Bradken from part of a decision of a delegate of the Commissioner of Patents to reject the opposition to the patent application filed by Bradken. In that proceeding Lynx cross-appeals. The other proceeding is a claim by Bradken that in a letter of 11 October 2007 to BHP Billiton Iron Ore Pty Ltd, Lynx made unjustifiable threats in contravention of s 128 of the Patents Act 1990 (Cth). 22 If the Western Australian proceedings are not dismissed, it is possible that the New South Wales proceedings will be transferred to the Western Australian District Registry. The motions to transfer in the New South Wales proceedings have been adjourned pending amendment in those proceedings by Lynx and pending determination of this summary dismissal application brought in connection with these proceedings.

THE AMENDED STATEMENT OF CLAIM AGAINST THE FIRST THREE RESPONDENTS (ANI and BRADKEN) 23 It is necessary in my view to set out some portions of the amended statement of claim in detail. This is required in order to determine whether or not there is, amongst a quite lengthy pleading, sufficient appropriate material for the respondents to be put on notice with some precision as to the case they are required to meet. 24 The pleaded events commence in 1996. In that year, Lynx had designed a new or improved wagon body suitable for carrying freight and bulk materials for use in the rail freight market in Australia. It had devised a prototype design together with the requisite technical specifications and manufacturing information and details necessary to enable manufacture and supply of such a wagon.

Confidential Information 25 Confidential information was developed in that project and was imparted to ANI for the purposes of a tender to be made jointly by ANI and Lynx under an agreement defined as the 1996 Confidentiality Agreement. The confidential information was described in this way: Lynx 1996 Confidential Information 7. The applicant is and was at all materials times the owner of and entitled to deal with and exploit in trade the: (a) information as referred to in para 6 above, which was of a confidential character, including involving trade secrets, method and know-how, in relation to the design and manufacture and achieving appropriate design compliance parameters in respect of a new or improved design of a rail freight wagon for use in and supply to the Australian rail market ("Lynx 1996 Confidential Information"); together with (b) copyright subsisting in Australia in certain literary works and artistic works, within the meaning of those terms as provided for in s.10(1) of the Copyright Act 1968 (Cth) ("Copyright Act"), which embodied, recorded or evidenced the Lynx 1996 Confidential Information (hereinafter referred to collectively and severally as "the Lynx 3CR12 Copyright Works"). Particulars of the Lynx 1996 Confidential Information (1) The subject information is contained in various technical drawings and written specifications and various correspondence, and comprised and included: (a) manufacturing specifications; (b) general engineering parameters; (c) masses and loads data; (d) detailed design forces; (e) structural analysis calculations; (f) details of analysis methodology; (g) linear elastic finite element analysis; (h) track limiting dimensions and related data, the substance of which information was concerned with and related to the means of achieving a new or improved design feature(s) of a rail freight wagon as at circa 10 April 1996. (2) The features and advantages as referred to in (1) above included the following: (a) the Lynx 3CR12 Wagon would have a reduced weight, increased carrying capacity and a reduced aerodynamic drag; (b) the design features of the Lynx 3CR12 Wagon had the effect of providing a significant improvement in respect of the payload to tare ratio, reduction of operational costs (fuel savings), as well as an improved fatigue life, which carried with it the advantage of the wagon requiring less maintenance; (c) the prospect of further reductions in weight of the Lynx 3CR12 Wagon were possible, due to improvements, modifications or enhancements of the said design, which was then the subject of ongoing R&D by the applicant; (d) the requirement for refurbishment of side walls and floors, in terms of maintenance costs, were produced as a result of the said design features of the Lynx 3CR12 Wagon; and (e) the Lynx 3CR12 Wagon would enable iron ore to slide better during the unloading process, thereby enabling the angle of 6.7 degrees on the side walls and end walls to be reduced, with a consequential advantage to the design of the wagon being an increased carrying capacity. (3) Document entitled "Scope of Work for Fabrication of New Generation Ore Car Bodies for BHP Iron Ore" dated April 1996. (4) Facsimile from the applicant, through Mr Kris Kilian ("Mr Kilian"), to the first respondent, through Mr Doug Cummings ("Mr Cummings"), dated 1 May 1997. (5) The drawings and other documentary materials recording or evidencing the above matters are in the possession of the applicant's solicitors and available for inspection by appointment. (6) The documents referred to in sub-para (1)(a)-(i) and (3) hereof are collectively and severally referred to as the "Lynx 1996 Confidential Documents"). (7) The applicant will refer at the trial of the within proceedings to each of the above documents for their full purport and effect. 26 It is pleaded that in performance of the '1996 Confidentiality Agreement' Lynx disclosed the Confidential Information to ANI for the sole purpose of the combined tender. As to the particulars of disclosure, the following detail is provided: Particulars of Disclosure of the Lynx 1996 Confidential Information (1) Facsimile from the first respondent, through Mr Cummings, to the applicant, through Mr Kilian, dated 11 April 1996. (2) Facsimile from the first respondent, through Mr Cummings, to the applicant, through Mr Kilian, dated 19 April 1996, and the accompanying 5 pages of design drawings and technical information. (3) Facsimile from the applicant, through Mr Kilian, to the first respondent, through Mr Cummings, dated 23 April 1996, together with attached drawings marked: (a) LYN-M-001 - Ore Car Drawing; (b) LYN-M-002 - Ore Car Details; (c) LYN-M-003 - Ore Car Details; and (d) LYN-M-001 - Sow. (4) Letter from the applicant, through Mr Kilian, to first respondent, through Mr Bob Irving, dated 15 July 1996. (5) The applicant will refer to the said documents at the trial of the within proceedings for their full terms and effect. (6) The applicant is presently unable to provide further particulars but may do so after discovery and/or interrogatories herein. (emphasis added) 27 The pleaded position is the same in 1997 except that the particulars include 'various further revisions, improvements and modifications as reflecting the applicant's ongoing R and D'. There was a further separate agreement for 1997. Confidential information was imparted again in anticipation of that agreement being executed. The Confidential Information is the same as in 1996 with the addition of certain documents. There is reference to documents and references to outcomes achieved but there is no indication of what it is in the documents that is confidential. The particulars are described as follows: Particulars of Disclosure of the Lynx 1997 Confidential Information (1) The applicant refers to and repeats the particulars subjoined to para 7 herein and otherwise refers to and relies upon the matters pleaded in para 17 herein in respect of the Lynx 1996 Confidential Information being incorporated into and forming an integral part of the Lynx 1997 Confidential Information. (2) First respondent's transmission of a document concerning Hi Wagon Specification, dated 21 April 1997, and sent to the applicant by Mr Cummings, for the attention of Mr Kilian, and comprising 29 pages. (3) Facsimile transmission from the applicant, through Mr Kilian, to the first respondent, through Mr Cummings, dated 1 May 1997. (4) The applicant will refer to the said documents at the trial of the within proceedings for their full terms and effect. (5) The applicant is presently unable to provide further particulars but may do so after discovery and/or interrogatories herein. (emphasis added) 28 The process is repeated for the year 2000. It is again pleaded that certain confidential information was disclosed pursuant to the 2000 Confidentiality Agreement. In this regard there is a repetition of the material disclosed under the previous two Confidential Information agreements in 1996 and 1997. Once again various documents are listed. Again, there is no indication of what is contained in the documents and of that, what is confidential. The particulars of this disclosure to the respondents by Lynx is explained as follows: 27. On or about 7 August 2000, in performance of its obligations arising under the 2000 Confidentiality Agreement, the applicant, through Mr Kilian, disclosed the Lynx 1997 Confidential Information in respect of the Lynx Golynx design, to the first respondent, through Mr Walshe. Particulars of Disclosure of the Lynx 1997 Confidential Information (1) The applicant repeats and relies upon the particulars subjoined in para 7 in respect of the Lynx 1996 Confidential Information. (2) The applicant repeats and relies upon the particulars subjoined in para 16 in respect of the Lynx 1997 Confidential Information. (3) Letter from the applicant, through Dr Kilian, to the respondent, through Mr Walshe, dated 1 August 2000, enclosing various drawings and documents as relevant to Project: J10170, Title: Hi Tender - Golynx MK111 Ore Car, and identified by specific drawing or document numbers and description of same, and comprising 34 separate categories of documents. (4) Facsimile from the applicant, through Mr Kilian, to the first respondent, through Mr Walshe, dated 7 August 2000, detailing the various drawings and documents as forwarded to the first respondent, and being: Ref Drawing or Document No. Description 1 51220101 General Arrangement 2 51220102 Under Frame General Arrangement 3 51220104 Side Walls General Arrangement 4 51220105 Fabrication Tolerance Diagram 5 51220106 Critical Weld Diagram 6 51220201 Centre Sill Details 7 51220301 Bolster Details Sheet 1 8 51220302 Bolster Details Sheet 2 9 51220401 Transom Details 10 51220501 Longitudinal Reinforcement Details 11 51220601 Centre Sill 'End b' Detail - GA 12 51220602 Tile Plate and Fitment Plate Details 13 51220611 Centre Sill 'End A' Detail - GA 14 51220801 Floor Plate Detail 15 51220901 End Wall Assembly Detail End A 16 51220902 End Wall General Arrangement 17 51220903 End Wall Plate Details 18 51220904 End Wall Items 19 51221001 Bolster and Transom Columns GA 20 51221002 Bolster and Transom Columns Details 21 51221101 Side Wall Upper Section General Arrangement 22 51221102 Side Walls Upper Section Item Details 23 51221201 Side Walls Lower Sections GA 24 51221202 Side Walls Lower Sections Plate Details 25 51221301 Miscellaneous Wall and Floor Details GA 26 51221302 Miscellaneous Wall and Floor Details 27 51221501 Handle, Car Holder and Ste Details 28 51221601 Piping Fitments - General Arrangement 29 51221602 Piping Fitments - Details Sheet 1 30 51221603 Piping Fitments - Details Sheet 2 31 51221701 Handbrake - General Arrangement 32 51221702 Handbrake - Details 33 MTO 34 Appendix B

(5) Facsimile from the first respondent, through Mr Walshe, to the applicant, through Mr Kilian, dated 17 August 2000, enclosing a further document as provided by the applicant to the first respondent under the letter referred to in (1) above, acknowledging receipt of the documents referred to in (1) above. (6) The applicant will refer to the said documents at the trial of the within proceedings for their full terms and effect. (7) The applicant is presently unable to provide further particulars but may do so after discovery and/or interrogatories herein. (emphasis added) 29 The breach of the Confidentiality Agreements is then pleaded, the complaint being, first that ANI has, without the applicant's licence or authority: (i) disclosed or allowed the Lynx Confidential Information to be disclosed to persons other than as provided for, in relation to Approved Purpose, by the said confidentiality agreements, and each of them including, relevantly, the second respondent and/or third respondent; (ii) copied or caused to be copied the various documents and drawings provided by the applicant to the first respondent under the terms of the said confidentiality agreements, and each of them (hereinafter the said documents are referred to collectively and severally as the "Lynx Confidential Documents"); (iii) used the Lynx Confidential Information in relation to the manufacture, sale and supply or offering for sale or supply, of a rail freight wagon, including (but not limited to) that known as the Bradken 9100 wagon, and done so by disclosing and communicating the Lynx Confidential Information and the Lynx Confidential Documents to, at least, the second respondent and/or third respondent, each of whom received the said Lynx Confidential Information well knowing that same was confidential and proprietary of the application, and without giving consideration therefore; (iv) thereafter, in breach of the said obligations of confidence, the first, second and third respondents, and each of them, have unlawfully made use of the said confidential information otherwise than for the purpose for which it was supplied to the first respondent, and have unlawfully made profits for themselves by manufacture and marketing of the Bradken 9100 rail wagon, and otherwise by exploiting the said confidential information by purporting to licence or otherwise authorise other parties to manufacture or market the said product. Particulars of Breach (1) The Lynx Confidential Information has been copied and disclosed to persons and entities the identity of whom the applicant is unable to supply until after discovery and inspection and the administration and answering of interrogatories herein, for the purpose of manufacturing and supplying rail wagons designed for carrying of freight and bulk materials in the Australian rail freight market, including (but not limited to) the applicant's wagon design marketed under and by reference to the name Bradken 9100. (2) The applicant refers to and relies upon the third respondent's annual report 2005, a copy of which is in the possession of the applicant's solicitors and available for inspection by appointment. (3) The applicant further refers to and relies upon the contents of the internet site at www.railways.pilbara.net.au as at 1 August 2006, in relation to the Bradken 9100 wagon, especially the reference to the Bradken 9100 as at 25 December 2004, and located at the third respondent's ore car repair workshop roads and depicted in a photograph appearing on the said web page. (4) The applicant will refer at the trial of the within proceedings to the said documents, and each of them, for their full terms, purport and effect thereof. (5) The applicant cannot, until after discovery, give particulars of the said acts of manufacture, offering for sale, exposure for sale by the first respondent, the second respondent and/or the third respondent, in respect of the Bradken 9100 car (wagon), but will rely upon all such acts. (6) The applicant is presently unable to provide further particulars but may do so after discovery and/or interrogatories herein.

Inference 30 An aspect of its case which Lynx says is important is the inference which is to be drawn from the complexity of the design and technical requirements of rail wagons. It is to be inferred, Lynx contends, that the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car must have been designed with and by use of the Lynx Confidential Information because they have 'the same or substantially identical two (sic-to) features evident in the wagons made to the applicant's design'. Those features are set out as follows: (a) specifically shaped internal walls which, with the addition of internal reinforcements, enables significant reduction and simplification of external reinforcements; (b) stainless steel construction leading to reduced weight since thinner plates are able to be used for the car walls, in contrast to traditional use of mild steel for the car walls; (c) external reinforcements comprising two continuous rings; (d) corners of the car have been rounded off to reduce aerodynamic drag; (e) increase in loading capacity as a result of lesser slope in the side walls and enhanced overall design due to increase of structural strength, as a result of adopting the stainless steel material and continuous reinforcement rings; (f) specifically shaped internal walls which, in combination with internal reinforcements, enable significant reduction and simplification of external reinforcements, thereby leading to increased loading capacity, structural rigidity and discharge capability; (g) external vertical reinforcements incorporating clamping sills; (h) specifically shaped end walls; (i) handbrake arrangement; (j) workshop lifting lug; and (k) floor ridge running longitudinally for full length of car, one on each side, resulting in additional stiffness to car floors. 31 Once again it is said that Lynx is presently unable to provide further particulars but 'may do so' after discovery and/or interrogatories herein. 32 These features of the wagons which are said to lead to the inference of misuse of confidential information (and also infringement of copyright) are the closest that Lynx comes to describing the actual physical features of the design which are said to be protected and which it asserts have been copied. The question will be whether the description of these factors is precise enough for the purposes of the pleaded case.

Copyright plea 33 As to the copyright plea, there is a pleading that the documentary materials comprising, recording or evidencing the Lynx Confidential Information were prepared by employees of Lynx, Mr Kilian, Mr Vladimir Mazur and/or Dr Kilian during the normal course of their duties. Reliance is placed on s 35(6) CA. 34 The alleged infringement of the copyright is expressed in these terms: Copyright Claim 43. Between the month of August 2000, or thereabout, and the date of issue of the application herein, the first, second and third respondents, and each of them, have infringed the applicant's copyright in the Lynx Copyright Works by, without the licence of (sic) authority of the applicant, doing and/or causing or authorising the doing in Australia of the following acts: (a) reproducing the Lynx Copyright Works and/or the literary and/or artistic works comprised therein, or any of them, or a substantial part thereof, in a material form; (b) publishing the Lynx Copyright Works and/or the literary and/or artistic works comprised therein, or any of them, or a substantial part thereof; (c) selling or by way of trade offering or exposing for sale, or by way of trade exhibiting in public the Lynx Copyright Works, the literary and/or artistic works comprised therein, or any of them, or a substantial part thereof, where, to their knowledge, the making of the Lynx Copyright Works, the literary and/or artistic works comprised therein, constituted an infringement of the copyright of the applicant. Particulars of Copyright Infringement (1) Between the month of August 2000 and the date of issue of the application herein, the first respondent, second respondent and/or third respondent, without the applicant's licence or authority, copied or caused to be copied the Lynx Copyright Works and the drawings and/or literary material contained therein, and, in particular, copied or caused to be copied the drawings as referred to in para (3) of the particulars subjoined in para 27 herein. (2) Between the month of August 2000 and the date of issue of the application herein, the first respondent, second respondent and/or third respondent, without the licence or authority of the applicant: (a) produced or caused or authorised the production of, in Australia, materials utilised for reproduction of the copies referred to in (1) hereof; (b) printed or caused or authorised the printing of, in Australia, reproductions of the copies referred to in (1) hereof; (c) published or caused or authorised the publication of, in Australia, technical drawings and specifications and other documentary materials containing design and manufacturing details in respect of rail wagons designed for carrying of freight and bulk materials in the Australian rail freight market, which materials comprised a compilation of the reproductions referred to in sub-para (2)(b) hereof; (d) sold, by way of trade, offered for sale or exposed for sale or caused or authorised the sale, or by way of trade offered for sale, in Australia, the Lynx Confidential Works and/or the literary or artistic work comprised therein, constituted an infringement of the copyright of the applicant; and (e) by way of trade exhibited or caused or authorised the exhibition of, in Australia, the Lynx Copyright Works.

Further particulars 35 Lynx has provided lengthy responses to requests for further and better particulars of the amended statement of claim. 36 A typical request was for Lynx to state separately, in relation to each of the Bradken 9100 Wagon, the Rio Tinto Pilbara Iron Ore Car and the FMG Wagon, which elements or features of the design of the said wagons are alleged to have resulted from the use by the respondents of the Lynx Confidential Information or the Lynx Copyright Works. 37 I accept the submission made for WorleyParsons that this is a fairly straightforward and central question to be resolved in the dispute. Indeed it is difficult to think of a more basic issue. 38 Typically though, the answers have been very incomplete. Beyond the reference to internal walls and stainless steel construction etc as pleaded in the amended statement of claim, the response from Lynx is to the following effect: (b) Further than the above, it is not otherwise possible for the applicant to state separately, in relation to the design of wagons (or cars) of a type referred to in the SOC as the: (i) Bradken 9100 Wagon, (ii) Rio Tinto Pilbara Iron Ore Car; and (iii) FMG Wagon, which elements or features of the design of the said wagons are alleged to have resulted from the use by the respondent of the Lynx Confidential Information and the Lynx Copyright Works, by reason of the fact that various elements or features of design from one wagon or car are incorporated in and reflected by the features of the design of each of the other wagons. The nature of the case to be relied upon at trial by the applicant in support of the said allegation is as stated above, and which matter is to be read together with the further matters referred to in sub-paragraph (a) above. 39 In essence the complaint of the respondents is that the case that Lynx runs is no more than saying that: Everything we've got in our designs is confidential. Your design looks like ours … We infer copying but we can't prove that until trial … Since we say you copied, you now have an onus to disprove that you copied. 40 To illustrate the difficulties, senior counsel for WorleyParsons has pointed to the listed 'handbrake arrangement' in the pleading and asked the rhetorical question: Is it the fact that there is a handbrake or is it something else? [for example] the spring coil on the handbrake arrangement [which] is not in the public domain? If the precise feature was specified, it is argued, it would then be open to the respondents to understand the case that was put against them and to respond. 41 In response to this, the written submissions for Lynx contend as follows: 29. Insofar as the confidential information relied upon by the applicant, and comprising the Lynx 1996, 1997 and the 2000 Confidential Information is concerned, each of these are separate bodies of information and are duly particularised, and, importantly, with the subject particulars, relevantly, specified so that the context within which the information complained of as being unlawfully disclosed or used by the respective respondents meets the requisite criteria. (Terrapin Ltd v Builders Supply Co (Hayes) Ltd (1967) RPC 375 at 392 per Roxburgh J O'Brien v Komesaroff (1982) 150 CLR 310 at 328 Per Mason J (as he then was) (with whom the other members of the Court agreed). Specific Claim - Confidential Information 30. The applicant in the present case has made a specific, not a global, claim for protection, in relation to the subject information, and which, in particular, extends beyond identification of documents to identifying certain features and advantages included in the design of a new or improved design of a rail freight wagon: (a) as at circa April 1996 (Lynx 1996 Confidential Information). Pursuant to the 1996 Confidentiality Agreement, as pleaded in para 8, the particulars of disclosure of the relevant Lynx 1996 Confidential Information are particularised in (1)-(4) therein; and (b) in relation to the Lynx 1997 Confidential Information, which concerned an extension of the project in respect of the Lynx 3CR12 Wagon Project, extended to various modifications, enhancements and improvements to the Lynx 3CR12 Wagon design ("Improved Lynx 3CR12 Design"). 42 The question remains as to whether even this explanation descends to any specifics in a meaningful way. 43 Bradken complains that there are three principle issues arising from the absence of particulars of the claim and they are as follows: 1. the claim for breach of confidence must identify the information that is confidential and how it has been misused. Neither of those issues is identified in the statement of claim; 2. a claim for breach of copyright must plead, amongst other things: (a) the matters over which copyright is asserted; and (b) the exact manner in which the copyright has been infringed. Again, it is contended the statement of claim does not deal with these matters in any comprehensible manner; and 3. claims for breach of s 52 and s 53 of the TPA both require a misrepresentation to be conveyed. The pleading does not reveal what the misrepresentation is and how it was conveyed.

THE STATEMENT OF CLAIM AGAINST WORLEYPARSONS 44 The statement of claim against WorleyParsons is, relevantly, in similar terms. The link between WorleyParsons and the other respondents is also pleaded. But for present purposes the same issues arise. WorleyParsons would say that its position is stronger than that of the other respondents as it has no contractual link in any way with Lynx. While that may be correct, it is not a topic that presently falls for consideration.

THE PRINCIPLES 45 The position taken for Lynx is that it is not able to provide all of the detail for which the respondents press. Much of that information is solely within the knowledge of the respondents. It is not uncommon in cases where knowledge of the nature of the breach (if any) resides within the respondents, that it will be necessary to rely upon inferences to be drawn. The respondents on the other hand point to the very extensive discovery already given and to considerable latitude already afforded to Lynx in previous judgments. Bradken for its part issued a request for further and better particulars of the statement of claim. The first request was made by Bradken on 17 August 2006 after service of the original statement of claim on 2 August 2006. On 5 September 2006 in response to the request, Lynx provided a limited amount of information responding to the request for particulars indicating that further responses would be provided after discovery had been given by the parties. 46 On 16 March 2007 after giving substantial discovery, Bradken pressed the question of the outstanding particulars to which it received a response from Lynx indicating that particulars would not be supplied at that stage but would be supplied after it had completed an application for preliminary discovery against WorleyParsons who had now been joined as the fourth respondent. WorleyParsons made its non-party discovery available for inspection by Lynx on 28 May 2007. Lynx did not commence proceedings against WorleyParsons until 13 November 2007. Through 2007 and 2008, Bradken made repeated requests for responses to its request for further and better particulars. 47 Notwithstanding those requests and despite indicating in its correspondence on several occasions during the period that the provision of particulars was imminent, Lynx did not respond to the outstanding requests for further and better particulars. Those which have been supplied, according to the respondents do not answer the deficiencies in the pleadings identified above.

Confidential Information 48 The complaint of the respondents is that the Lynx pleading does not identify either: · the information that is alleged to be confidential in the documents which are alleged to constitute the Lynx Confidential Information; or · the subset of that information which is alleged to have been misused or disclosed by Bradken. 49 Precision is required to identify the confidential information, the copyright and then, in each instance, the breach. The need for precision does not preclude the possibility of proof of a breach by inference. But there must at least be precision in identification of what it is that constitutes the breach. Clearly most applicants cannot give chapter and verse of precisely when, how and by whom a breach was committed. But what constitutes the breach must be identified. 50 In Retractable Technologies Inc v Occupational and Medical Innovations (2007) 72 IPR 58, Greenwood J said at [90]: In seeking the court's intervention to restrain use of confidential information it is essential that the applicant demonstrate with precision the information said to be confidential and the content of use sought to be attached. Assertions of confidentiality at high levels of abstraction will not establish a basis for relief against a disclosee. In the case of an innocent third party who simply seeks reliance upon a contract struck without notice of a relationship of confidentiality between the primary disclosor and any other party or breach, the requirement for precision is even more acute. The starting point is the identification of the relevant confidential information: Moorgate Tobacco Co Ltd v Philip Morris Ltd (No. 2) (above) per Deane J at CLR 438; ALR 208; IPR 560; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443; 74 ALR 428 at 438; 10 IPR 53 at 63; 13 ALD 254 at 263 per Gummow J; O'Brien v Komesaroff (1982) 150 CLR 310 at 326-8; 41 ALR 255 at 266 per Mason J; Liberty Financial Pty Ltd v Scott (No 4) (2005) 11 VR 629; [2005] VSC 26 at [13] and [35] per Harper J; Pioneer Concrete Service Ltd v Galli (1985) VR 675 at 711; 4 IPR 227 at 241 per Crockett, Murphy & Ormiston JJ. (emphasis added) 51 As observed by Mason J, as his Honour then was, in O'Brien v Komesaroff (1982) 150 CLR 310 at 326-328, a global claim for protection will not be sufficient. The party asserting confidentiality must be able to identify some particular pieces of information and show that they were confidential or that an obligation of confidence had arisen in respect to them. 52 In Ammon v Consolidated Minerals Ltd (No 3) [2007] WASC 232 at [286]-[310] Martin CJ noted that conventionally the three features identified by Megarry J in Coco v AM Clark (Engineers) Ltd (1969) RPC 41 at 47 are taken to be normally required if, apart from a contract, a case of breach of confidence is to succeed. First there must be the necessary quality of confidence about the information concerned. Secondly, that information must have been imparted in circumstances importing an obligation of confidence, and thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it. In relation to the quality of confidence, it is necessary to know not only what was the information conveyed, but also what parts of that information were distinct from the elements of it which were common knowledge. There can be no breach of confidence in revealing something that is already common knowledge. 53 As to the second element in Coco, the Full Court said in Smith Kline and French Laboratories (Australia) Ltd v Secretary to the Department of Community Services and Health (1991) 28 FCR 291 at 304: …In considering these problems, and indeed the whole question, it is necessary not to lose sight of the basis of the obligation to respect confidences: "It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained." (Moorgate Tobacco Co Ltd v Phillip Morris Ltd (No 2) (1984) 156 CLR 414 at 438, per Deane J) … To avoid taking unfair advantage of information does not necessarily mean that the confidee must not use it except for the confider's limited purpose. Whether one adopts the "reasonable man" test suggested by Megarry J or some other, there can be no breach of the equitable obligation unless the court concludes that a confidence reposed has been abused, that unconscientious use has been made of the information. … We would add that, in our opinion, courts exercising equitable jurisdiction should not be too ready to import an equitable obligation of confidence in a marginal case. There is the distinction between use of confidential information in a way of which many people might disapprove, on the one hand, and illegal use on the other. Not only the administration of business and government, but ordinary communication between people, might be unduly obstructed by use of too narrow a test, such as that which the appellants put forward here. 54 In Amway Corp v Eurway International Ltd [1974] RPC 82 where, at 86-7, Brightman J said: I asked the plaintiffs' counsel if he could point in his literature to some particular piece of information which he said was confidential and which he claimed the defendants were wrongly using. He told me that he pointed to nothing in issue here but to the entirety of the plaintiffs' documentary material which is in evidence. It seems to me that a claim for abuse of confidential information cannot really be dealt with in that way. If I made an order restraining the defendants from using for their own purposes any of the documentary material contained in the plaintiffs' business literature, but did not identify the particular information that the defendants are not to impart, they would be placed in a most embarrassing situation. I do not know how they could decide what business methods, literature and paperwork to avoid using in order to keep clear of contempt of court, and I think that that is an insuperable difficulty in the plaintiffs' claim under this head. 55 Lynx also contends that another answer to the complaints of the respondents is that it relies upon the springboard doctrine. I must observe that I struggle to see where this doctrine has been clearly pleaded but in any event it is no answer to the absence of the requisite precision. In Meagher, Gummow & Lehane's Equity Doctrines and Remedies (4th ed) at [41‑075] the springboard doctrine is described as follows: [41-075] This "doctrine" is attributed to Roxburgh J in Terrapin Ltd v Builders Supply Co (Hayes) Ltd [1967] RPC 375; the Court of Appeal in the same case (Terrapin Ltd v Builders Supply Co (Hayes) Ltd [1960] RPC 128 at 130) expressed the principle as forbidding use of information by a defendant "as a springboard" for activities detrimental to the plaintiff, even when all the information has otherwise reached the public domain; because he has a start over other members of the public, the defendant must be placed under a special disability in the field of competition. He therefore may be restrained from use for that period which competitors would need to put their produce on the market by, for example, "tooling-up" and organising production and distribution: Potters-Ballotini Ltd v Weston-Baker [1977] RPC 202 at 206; Harrison v Project & Design (Redcar) [1978] FSR 81. If the defendant has only known of and has not wrongly used the information before it became public, then the doctrine does not apply to him and he is subject to no special restraint thereafter: Peter Pan Manufacturing Corp v Corsets Silhouette Ltd [1963] RPC 45 t 55; [1963] 3 All ER 402 at 408; [1964] 1 WLR 96. (emphasis added) 56 However when one approaches a claimed breach of confidential information, the starting point must be the identification of the relevant confidential information. A basic threshold is the requirement that the applicant identify with specificity that confidential information which has been misused. 57 Although the pleading under consideration in this instance raises definitions of confidential information by reference to drawings and documents at various dates or indeed by outcomes that Lynx has achieved, there is no assertion of precisely what it is that has breached the asserted obligations of confidence. A starting point for this difficulty is the absence of any pleading of precisely what it is that is confidential. 58 Whatever difficulty Lynx may have in identifying precisely the manner in which the confidential information has been misused, it must at least identify with some precision what it is about the information which attracts the legal or equitable notion of being confidential. 59 It appears to be asserted by Lynx that every aspect of the design is confidential as the design is referred to in confidentiality agreements. I do not consider that such a reference meets the test of precision required. The materials relied upon by Lynx show, as would be expected, that there are many features of the design which could not be considered confidential. Lynx must isolate for example, with some precision, what it is about the 'handbrake arrangement' for example which was then confidential. 60 By way of illustration of the pleading deficiency, one of the fundamental difficulties (which in turn has also given rise to foreshadowed defences) is that a substantial number of the documents containing the Lynx Confidential Information include information which it is said cannot possibly attract the necessary character of confidentiality. This, it is argued, is the difficulty in failing to descend to particularity as to the confidential element of the information which it is said has been breached. For example Bradken contends the following: (a) the wagon designs depicted in the Lynx 1996 Confidential Information and the Lynx 1997 Confidential Information were depicted in their most general form and represented, in respect of most if not all of its features, standard designs used in the industry for a long period prior to that time; (b) the Lynx Golynx Wagon (depicted in the documents said to contain the 'Lynx 2000 Confidential Information') has been publicly available since at least as early as approximately February 1999; (c) on 7 October 1999, Lynx published a patent specification in relation to an invention entitled 'Side Reinforced Bulk Material Transport Container. That specification essentially concerns a container to the design of the wagon depicted in the 'Lynx 2000 Confidential Information'; (d) the publication of articles from as early as 1999 in relation to the use of the Lynx Golynx Wagon and the 'enhancements and improvements' used in that wagon; and (e) certain of the information contained in the documents said to have been provided by Lynx to ANI in 1996 and 1997 was general in nature and cannot be said to be confidential.

Copyright 61 Insofar as the copyright infringement claim is concerned, for similar reasons the same complaint pertains, namely: · there is no indication as to which of the Lynx Copyright Works are alleged to have been reproduced by Bradken; and · there is no pleading as to the manner in which the works are alleged to have been reproduced. 62 In relation to the copyright claim, there is no articulation of the basis on which Lynx contends copyright subsists in the works, what works have been reproduced and whether Lynx contends that Bradken infringed copyright as a result of a two dimensional reproduction or by way of a three dimensional reproduction directly or indirectly.

Section 52 TPA 63 In relation to the pleading under s 52 of the TPA, Lynx argues that Bradken has conducted itself in a manner that is false and misleading in trade and commerce, in that it has represented: · that a wagon described in the statement of claim as the Bradken 9100 Wagon has the sponsorship or approval of Lynx; · that Bradken has the sponsorship or approval or is otherwise affiliated with Lynx; · that Bradken has a lawful entitlement to exploit the Bradken 9100 Wagon; and · that the design features of the Bradken 9100 Wagon are as a result of its own design efforts. 64 Lynx argues that the design for the Lynx Golynx Wagon is 'well and favourably known' in the Australian rail freight market. It says that the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Car have 'significant design and performance advantages, which are the same or substantially identical to' the Lynx Golynx Wagon such that it would be conveyed to a relevant member of the public that the Bradken wagons were subject to the sponsorship or approval of Lynx. 65 Once again, however, the pleading and particulars do not descend to any detail as to the significant design and performance advantages of the wagons which are central to the pleaded case. 66 The further difficulty with the s 52 TPA pleading is that while it does plead representations, it does not go on to show why those representations were misleading. In particular, the representations are not linked in any meaningful way to any particular conduct said to demonstrate the falsity of the representations. 67 As the s 52 case in large measure repeats (with a different outcome) the elements relied upon for the claims for breach of confidence and breach of copyright, the s 52 claim should also be struck out for the same reasons that the other two claims are to be struck out.

CONCLUSION 68 In my view the respondents' complaints are made good. The analogy of the notional coiled spring on the handbrake arrangement is apposite. The respondents must be told with precision what feature of the Lynx Confidential Information or Lynx Copyright Works they used without the appropriate authority and how it is that they breached s 52 of the TPA. The generality of the matters listed in the amended statement of claim is not brought into focus by the extensive particulars which have been filed. For the most part, those particulars simply reiterate what was in the statement of claim and rely on various documents which are said to set out the confidential information. 69 It will be necessary to strike out the current version of the amended statement of claim. There is little point in keeping small sections of it. I will give liberty to re-plead as this is the first occasion on which there has been any strike out application. I am mindful that there were substantial other arguments to which I have only briefly alluded but I consider that until the final form of the statement of claim is in, it would be premature to consider those arguments. No doubt they will be taken into account one way or another in producing the final form of the statement of claim together with particulars. What I wish to stress at this stage is that I am simply dealing with the fundamental pleading point which has been raised. I am not dealing with the question of whether or not the case is ultimately arguable. It cannot presently be concluded that it should be dismissed. 70 For the reasons given, I will order that:

Each statement of claim will be struck out with liberty to re-plead within six weeks.
The applicant is to pay the respondents' costs of the motions to be taxed if not agreed.
The applications are otherwise dismissed.

I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Counsel for the Applicant: RJL McCormack

Solicitor for the Applicant: Karp Steedman Ross-Adjie

Counsel for the Second and Third Respondents: SK Dharmananda

Solicitor for the Second and Third Respondents: Corrs Chambers Westgarth

Counsel for the Fourth Respondent: MH Zilko SC with DJ Pratt

Solicitor for the Fourth Respondent: Jackson McDonald

Date of Hearing: 10 September 2008

Trade Practices Act 1974(Cth)s 52

Federal Court of Australia Act 1976(Cth)s 31A, 31A(2), 31A(3)

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