Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd

REASONS FOR JUDGMENT ON APPLICATION FOR LEAVE FOR CORPORATE RESPONDENT TO REPRESENTED OTHER THAN BY A SOLICITOR

The Proceedings and Contentions 1 On 22 June 1999, Termi-Mesh Australia Pty Ltd ("Termi-Mesh") commenced proceedings in this Court against Josu Manufacturing Pty Ltd ("Josu Manufacturing") claiming injunctions, damages and declaratory relief. By its statement of claim Termi-Mesh says it manufactures, supplies and installs subterranean stainless steel termite barriers under the name "Termi-Mesh". It has franchisees carrying on business under the name "Termi-Mesh" in forty nine licensed territories. Josu Manufacturing is said to be a manufacturer, supplier and installer of termite barriers under the name "JOSU" in competition with Termi-Mesh. Termi-Mesh says it has an exclusive licence dated 9 November 1992 from Vasilios Toutountzis to exploit Patent 639256, which is referred to in the statement of claim as the Termi-Mesh Patent. 2 Termi-Mesh asserts that Josu Manufacturing has, since 16 April 1999, published or caused to be published a document entitled THE JOSU LICENCE. The document is said to make a number of representations concerning the Termi-Mesh business and products. These representations, which are set out in the statement of claim, are said to reflect upon the Termi-Mesh products, their installation, their prices compared with the prices of Josu products, the validity of the Termi-Mesh Patent, its vulnerability to challenge and the desire of the Commissioner of Patents to see the patent revoked. All these representations are said to be untrue and to constitute misleading or deceptive conduct on the part of Josu Manufacturing in contravention of s 52 of the Trade Practices Act 1974 (Cth). Alternative pleas of injurious falsehood are also raised. 3 The relief claimed by Termi-Mesh includes: 1. An injunction restraining Josu Manufacturing from publishing or distributing the offending document. 2. An order for retrieval and delivery up of the document. 3. An injunction restraining repetition of the alleged representations. 4. Damages at common law and under the Trade Practices Act. 5. Declaratory relief in relation to the validity of the Patent and other matters. 4 A first directions hearing was held on 25 June and adjourned to 2 July. Mr Broomhead, a director of Josu Manufacturing, appeared on behalf of that company, having filed a number of affidavits. On 2 July an interlocutory injunction was granted restraining Josu Manufacturing from publishing the document entitled THE JOSU LICENCE. The injunction also restrained the company from making any further statements or representations to any party attributing to IP Australia and the Commissioner of Patents particular views as to the validity of Patent 639256. 5 To that point in the proceedings Mr Broomhead had been permitted to appear on behalf of Josu Manufacturing, although he is not a legal practitioner. However, on 19 July the following orders were made: "1. The respondent on or before 2 August 1999 do file and serve any affidavit and submissions in support of the grant of leave for the respondent to defend the proceedings without a solicitor. 2. The applicant do file and serve any affidavit and submissions in reply by 9 August 1999." The directions hearing was adjourned to 23 August in Brisbane to hear argument on the leave application. Although Termi-Mesh is based in Perth, Josu Manufacturing is based in Brisbane and the 23 August happened to coincide with the date of Full Court sittings in Brisbane at which I was present. A further order was made on 19 July that Josu Manufacturing had leave to defend the application without a solicitor for the limited purpose of complying with the directions. It was also required to file and serve a defence by 16 August. 6 A defence was filed on 16 August. It failed, for the most part, to meet directly the allegations in the statement of claim. It showed plainly enough the difficulties faced by Mr Broomhead in seeking to defend the action without legal advice. It is not easy to distil from the document any clear line of thought which would enable identification of the basis of the defence. It appears, however, to be asserted that the document, the subject of the Termi-Mesh statement of claim, was a confidential document produced in connection with negotiations between Termi-Mesh and Josu Manufacturing and was never published by Josu Manufacturing. 7 By an affidavit sworn on 2 August 1999, Mr Broomhead described Josu Manufacturing as "a small company, which was set up to control licenses and manufacturing of the JOSU Termite Control Fitting and to help sell patents held by others." Allegations were made in correspondence from Termi-Mesh's patent attorneys in October 1998 that Josu Manufacturing was infringing Termi-Mesh's patents. At or after that time Termi-Mesh, through one Tony Sala, is said to have approached an organisation called Action Negotiators to organise a meeting with a view to Termi-Mesh acquiring the licence for the JOSU Termite Control Fitting. According to Mr Broomhead, it was in the light of these meetings that Josu Manufacturing, which he intended to wind up, was to be kept in existence until the end of the financial year. It had no more business other than a probable sale of a licence. It had, he said, no assets or funds. 8 Mr Broomhead went on to say in his affidavit: "The intention is to close the company and the first hint that the company will incur costs the company will be placed in liquidation." The only point in keeping the company in existence, according to his affidavit, was to "refute the untruths presented by Termi-Mesh". There was further affidavit material, in part argumentative, going to the bona fides and conduct of Termi-Mesh, the correctness of things which Josu Manufacturing had said and the content of without prejudice negotiations between the two companies. 9 The question whether Mr Broomhead should have leave to represent Josu Manufacturing was heard on 23 August in Brisbane and judgment reserved until today.