RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd

INTRODUCTION 1 The respondent ("Wimmera") moves on an amended notice of motion filed on 19 July 1999. The primary relief now sought by the motion is summary dismissal pursuant to O 20 r 2, which provides as follows: "(1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding - (a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or (c) the proceeding is an abuse of the process of the Court, the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding. (2) The Court may receive evidence on the hearing of an application for an order under sub-rule (1)." Wimmera submits that the proceeding is vexatious and that in one respect no reasonable cause of action is disclosed. 2 Wimmera may succeed only if the Court is persuaded to the requisite high level of satisfaction, variously described in the authorities, that a ground described in rule 2 is established: cf Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 (Dixon J); General Steel Industries Incorporated v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130 (Barwick CJ); Webster v Lampard (1993) 116 ALR 545 at 547-548 (Mason CJ, Deane and Dawson JJ).

BACKGROUND FACTS 3 The proceeding arises out of Australian Patent Application No 676,682 (45513/93) lodged by the applicant ("RGC") and Wimmera's opposition to that application. The invention the subject of the patent application ("the Invention") is entitled "Treatment of Titaniferous Materials" and has been said to be in respect of a Synthetic Rutile Enhancement Process (both "the SREP" and "the Process"). In short, Wimmera alleges that RGC obtained the Invention from Wimmera through unauthorised use of confidential information which Wimmera had disclosed in confidence to certain research organisations, but which they, in breach of confidence, had disclosed to RGC. 4 RGC lodged its complete specification on 28 July 1993. The application was accepted on 20 March 1997. On 19 June 1997, Wimmera filed a notice of opposition under s 59 of the Patents Act 1990 (Cth) ("the Act") and Patents Regulation 5.3. The resultant proceeding before the Commissioner for Patents ("the Commissioner") is still on foot ("the Opposition Proceeding"). 5 On 19 September 1997, Wimmera filed and served in the Opposition Proceeding a statement setting out the grounds of its opposition and particulars pursuant to Patents Regulation 5.4 ("the Opposition Statement"). Section 59 of the Act provides, in effect, that Wimmera can oppose the grant on one or more of three specific grounds. The one relevant here is that RGC was not entitled to a grant. Section 15 of the Act identifies the classes of persons to whom a patent for an invention may be granted. The relevant class is "the inventor". Wimmera's only ground of opposition is that it, and not RGC, is the inventor and that RGC obtained the Invention from Wimmera. 6 On 18 June 1998 RGC commenced this proceeding ("the Court Proceeding" and "this proceeding"). RGC's application was accompanied by a statement of claim comprising sixty-seven paragraphs. The causes of action pleaded were founded on the making of the "obtaining allegation" and "non-obtaining allegations". The making of the obtaining allegation was pleaded in paras 5-11. It is alleged to have been made in the form of four representations which were, in summary, as follows: · that Wimmera had, in the Opposition Proceeding, represented to the Commissioner that RGC had obtained the Invention from Wimmera by the unauthorised use of confidential information which Wimmera had disclosed on a confidential basis to various research organisations, including the Commonwealth Scientific and Industrial Research Organisation ("CSIRO"), Australian Nuclear Science & Technology Organisation ("ANSTO"), the Chemistry Centre of Western Australia ("CCWA") and the Mineral Processing Laboratory ("MPL") ("the research organisations") ("the Opposition Representation"); and · that Wimmera had made representations to ANSTO, CCWA and MPL that RGC had obtained the Invention from Wimmera in the manner just described (respectively, "the ANSTO Representation", "the CCWA Representation" and "the MPL Representation"). (I will call all four representations "the Obtaining Representations"). 7 RGC pleaded that the Obtaining Representations were all made in trade or commerce and were false and were made in contravention of s 52 of the Trade Practices Act 1974 (Cth) (the "TP Act"). 8 Whether the Obtaining Representations are true is the only issue in the Opposition Proceeding. 9 I turn now to the non-obtaining allegations. These were pleaded in paras 21-65 of the statement of claim (paras 12-20 were prefatory). In summary, RGC pleaded that Wimmera, by its conduct over a lengthy period, represented to RGC that as from 22 November 1993 it no longer regarded the obtaining allegation as true and that it would not repeat it. The statement of claim pleaded that RGC acted to its detriment on that assurance by spending money in developing and operating the SREP from 22 November 1993 to 19 September 1997 and otherwise. It pleaded that the making of that representation constituted misleading or deceptive conduct in contravention of s 52 of the TP Act because Wimmera subsequently made the Obtaining Representations. As well, RGC pleaded that Wimmera was estopped from repeating the obtaining allegation. Finally, RGC pleaded the making of a contract in or about June 1994 in respect of the SREP technology by which Wimmera undertook not to repeat the obtaining allegation. 10 RGC filed an amended application on 17 July 1998 but the only difference between it and the original application was that the original one did not include paragraph 7 (the paragraph numbers went from six to eight, omitting seven) whereas the amended application included a seventh paragraph. The amended application claimed the following relief: "1. A Declaration that the invention described in Patent Application No. 676,682 (45513/93) ('the Patent Application') was not obtained by the Applicant from the Respondent by the unauthorised use of information which was confidential in character and which was disclosed on a confidential basis by the Respondent to various research organisations, including to the Commonwealth Scientific & Industrial Research Organisation ('CSIRO') or Australian Nuclear Science and Technology Organisation ('ANTSO') [sic], or to any other person. 2. A Declaration pursuant to s.15(1) of the Patents Act 1990 that the Applicant is the person to whom the patent which is the subject of the Patent Application may be granted, in terms of s.15(1) of the Patents Act 1990. 3. A Declaration that neither the Applicant's Synthetic Rutile Enhancement Process nor any part of it was obtained by the Applicant from the Respondent by the unauthorised use of information which was confidential in character and which was disclosed on a confidential basis by the Respondent to various research organisations, including to the CSIRO or ANSTO, or to any other person. 4. An order that the Respondent by itself, its servants or agents be restrained from, in trade or commerce, representing to any person, including but without limitation the Commissioner of Patents, (a) that the invention as described in the Patent Application was obtained by the Applicant from the Respondent by the unauthorised use of information which was confidential in character and which was disclosed on a confidential basis by the Respondent to various research organisations, including to the CSIRO or ANTSO [sic], or to any other person; (b) that the Applicant is not the person to whom the patent which is the subject of the Patent Application may be granted in terms of s.15(1) of the Patents Act 1990; or (c) that the Applicant's Synthetic Rutile Enhancement Process or any part of it was obtained by the Applicant from the Respondent by the unauthorised use of information which was confidential in character and which was disclosed on a confidential basis by the Respondent to various research organisations, including to the CSIRO or ANTSO [sic], or to any other person; 5. Damages pursuant to s.82 of the Trade Practices Act 1974. 6. Further or other orders pursuant to s.87 of the Trade Practices Act 1974. 7. Damages for breach of contract. 8. Interest. 9. Costs. 10. Any such further orders as the Court thinks fit." 11 Paragraphs 1 to 3 above were based on the obtaining allegation, paragraphs 4 to 6 were said to be based on both the obtaining allegation and the non-obtaining allegations, while paragraph 7 arose solely from the non-obtaining allegations. 12 On 22 June 1998 RGC's patent attorneys wrote to the Commissioner seeking a direction pursuant to Patents Regulation 5.10(1) that RGC's evidence in answer not be served until three months after the determination of the Court Proceeding. Wimmera opposed the making of that direction. On 5 August 1998 the Commissioner issued a decision refusing to give the direction. On 27 August 1998 RGC commenced proceeding NG 891 of 1998 in this Court under the Administrative Decisions (Judicial Review) Act 1974 (Cth) seeking review of the Commissioner's decision. 13 On 20 October 1998 RGC filed a notice of motion seeking an order restraining Wimmera from taking any further step, including the step of seeking a hearing date, in the Opposition Proceeding. I heard that motion on 14 and 15 December 1998 concurrently with the trial of the ADJR proceeding and dismissed both on 18 January 1999 (Wimmera had undertaken to the Court that if it succeeded in the Opposition Proceeding it would not request the Commissioner to amend the Register of Patents by inserting its name as patentee of the Invention until any appeal by RGC was determined). I will have occasion later to refer to my Reasons for Decision delivered on 18 January 1999 (see (1999) AIPC 91-459). 14 Having failed to obtain an injunction restraining Wimmera from prosecuting the Opposition Proceeding, RGC moved by notice of motion filed in Court on 8 March 1999 for an order that the directions hearing in the Court Proceeding be stood over to 8 September 1999, or, in the alternative, an order that the Court Proceeding be stayed pending the determination of the Opposition Proceeding. For reasons not presently relevant, I indicated that the Court Proceeding should progress until the filing of RGC's affidavits on the non-obtaining issues and that the case should then be reviewed. I dismissed RGC's motion with costs and made directions for the progression of the Court Proceeding. 15 By a notice of motion filed on 21 May 1999, RGC sought leave to file and serve a further amended application and an amended statement of claim. On 28 May 1999, by consent I ordered that the Court Proceeding be dismissed in so far as it concerned the causes of action alleged in paras 21-65 of the statement of claim (the non-obtaining allegations) and any claims for relief arising from those causes of action, and that RGC pay Wimmera's costs thrown away as a result of the consequential further amendment of the amended application and of the amendment of the statement of claim. 16 On 1 June 1999, with leave, RGC filed the further amended application and an amended statement of claim. By the further amended application, RGC has omitted the claim made in para 7 of the amended application set out earlier for damages for breach of contract, that is, it has reverted to the form of its original application filed to commence the Court Proceeding on 18 June 1998. 17 The amended statement of claim pleads, in re-cast paras 1-24, facts showing that RGC is the inventor, the making by Wimmera of the Obtaining Representations, that the Obtaining Representations were made in trade or commerce, that they were untrue, and that by reason of these matters Wimmera engaged in conduct that was misleading and deceptive in contravention of s 52 of the TP Act. Paragraph 25 pleads that by reason of Wimmera's conduct RGC had suffered loss and damage and paragraph 26 pleads that Wimmera threatens and intends to repeat and continue its conduct. 18 I now turn to the present motion in more detail. As filed on 6 July 1999, Wimmera's notice of motion sought in its first two paragraphs orders that: "1. The proceeding be dismissed pursuant to O 20 r 2. 2. Alternatively, the proceeding be stayed pursuant to O 20 r 2." 19 The motion was returnable for, and fixed for hearing on, 20 July 1999. 20 By an amended notice of motion filed on 19 July 1999 Wimmera sought in paras 1 and 2 the following orders: "1. The proceeding be dismissed pursuant to O 20 r 2. 2. Alternatively, the proceeding be stayed pursuant to O 20 r 2 pending the hearing and determination of the opposition proceeding in relation to Australian Patent Application No 676682 (45513/93) before the Commissioner for Patents." 21 RGC made it clear that it would consent to an interim stay generally of the kind described in para 2. The hearing commenced on 20 July on the understanding that an order of that kind would be made by consent in any event. Accordingly, on that day by consent but without admissions I ordered that the proceeding be stayed pending the hearing and determination of the Opposition Proceeding or earlier order of the Court. The hearing on 20 July did not have to be concluded as a matter of urgency and the Court Proceeding was stood over part heard and was later fixed for further hearing on 6 December 1999 when the hearing was concluded. In the meanwhile, the Opposition Proceeding had been fixed for hearing to commence on 21 February 2000. 22 It remains to note the other orders sought in Wimmera's notice of motion. In the alternative to summary dismissal, Wimmera seeks an order under O 29 r 2 for determination, as of a preliminary issue, of the question whether its conduct as alleged in the amended statement of claim, that is, the making of the Obtaining Representations, was "in trade or commerce" within the meaning of s 52 of the TP Act. Finally, further or in the alternative, Wimmera seeks an order pursuant to O 62 r 3(2) that: (a) Wimmera have leave to tax the costs the subject of this Court's order in its favour of 28 May 1999; and (b) the costs the subject of that order be paid forthwith after taxation.