The City of Sydney v Streetscape Projects

Supreme Court of NSW|2012-02-01|Before: Einstein J, Mr J

Judgment 1This judgment deals with final orders in the matter of The City of Sydney v Streetscape Projects (Australia) Pty Limited & Anor [2011] NSWSC 1214 ("the Main Proceedings"). 2Pursuant to directions made by the Court on 13 October 2011, the parties have exchanged draft Short Minutes of Order. There is substantial agreement as to the appropriate form of orders. Where there is disagreement, the parties have provided written submissions.

Order 1 3The purpose of Order 1 is to generally restrain the first defendant from making use of the City's intellectual property. The order contains a carve out provision to recognise Streetscape's right to ownership of certain improvements pursuant to clause 5(c) of the Second Deed of Variation. 4The Order is agreed between the parties except for the following words at the end of Order 1(a), which the defendants seek to delete: "provided that that part which is used to attach such item to a pole shall not be included in the above exception". 5The plaintiff seeks to include these words to ensure that the rights to street furniture bestowed on Streetscape by virtue of clause 5(c) does not extend to include the attachments to these improvements. 6In the Main Proceedings at [257]-[262] the Court held that the purpose of clause 5(c) was to remove the City's discretion under clause 7.11 of the Licence Agreement in relation to ownership of: [259] ...improvements attached to the Smartpole. The purpose of clause 5(c) is to remove this discretion to ensure the company owns any street furniture or accessories designed by Streetscape. 7Clause 5 (c) did not extend further than addressing the improvement itself. In this sense clause 5 (c) altered clause 7.11 (b) and (c) of the Licence Agreement, it did not override and is not inconsistent with clause 7.11 (d). Therefore, despite ownership of the improvement, clause 7.11(d) of the Licence Agreement is clear that: "Notwithstanding clause 7.11(c), the Licensor shall at all times own the Intellectual Property in that part of the Improvement which is used to attach the Improvement to the Smartpole pole." 8In other words, irrespective of Streetscape's automatic ownership of the improvement, the City retains ownership of that part of the improvement used to attatch it. This position is unchanged whether the City has discretion to determine ownership or not. Therefore the plaintiff's proposed Order 1(a) accurately reflects the reasons for judgment and accordingly I make that order.

Order 3 9Order 3 restraints the first defendant from disclosing to others details of the City's intellectual property. The defendants object to subparagraphs 3(c) and (e) - (h) of the plaintiff's Short Minutes of Order. 10The first defendant contends that there is no basis for the Court to make an order restraining disclosure on the basis of copyright ownership. The defendant contends that this is not a right provided to a copyright owner under the Copyright Act . The first defendant's position is that, paragraph 99 of the Commercial List Statement sets out the documents which the plaintiff identified as forming its confidential information. Accordingly, any document which is not referred to in paragraph 99 of the Commercial List Statement does not contain confidential information. 11The effect of the defendants' submissions concerning the deletion of Order 3(c) is that there would be no restraint in relation to the use or disclosure of post-Licence Agreement improvements to the Smartpole. This would be contrary to the Court's finding that under the licence agreement ownership of improvements and modifications to the Smartpole drawings are the property of the City. The Orders must reflect this finding. 12Accordingly, Order 3(c) appropriately extends the restraint on the defendants beyond the documented poles to "improvements" to the pole types and accessories. Order 3(c) is supported by the Court's finding at [256] that Streetscape Projects has no right to any Improvements to "Smartpole" poles post licence agreement. Order 3(c) is also supported by the Court's finding at [268] that the material to be kept confidential by Streetscape Projects is defined in the contract and that Streetscape Projects has a contractual obligation to keep that material confidential whether or not all of it had the necessary degree of confidence at the time of the contract or any time subsequent. It also follows the finding at [224] that such provisions were consistent with the City's intent that the "Smartpole" system would be constantly evolving and that it was important that the City protect its rights as the system developed. 13Orders 3(e) - (g) (relating to drawings of the S1, S2 and S3 extrusions) are also appropriate in the light of the findings that the intellectual property in those extrusions is the property of the City. Order 3(h) (relating to drawings of the poles and accessories referred to in Order 1) is also appropriate. The defendants accept that there should be an order restraining the manufacture and sale of the poles and accessories referred to in Order 1. Consistent with that order, there should also be a restraint on the use of information in the drawings relating to those poles and accessories (in the terms of Order 3(h)). Such an order is also consistent with an order for delivery up of the drawings of those poles. 14I make the plaintiff's proposed Order 3 in its entirety.

Order 5 15The defendants do not object to Order 5(b) which restrains the first defendant from using moulds based on or derived from any of the information or drawings referred to in Order 3. However, the defendants object to Order 5(a) which restrains the use of the moulds used in the manufacture of S1, S2 or S3 extrusions and the use of moulds used in the manufacture of the poles and accessories referred to in Order 1. The basis for the objection is that the restraint in Order 1 is sufficient. 16Order 1 does not refer to the use of the moulds, but only pole types and accessories. It is therefore appropriate that this further restraint is ordered. Further, it is not absolutely necessary to list the S1, S2 and S3 extrusions separately because they are covered in 5(b) by virtue of Order 3(d) - (g). However, for the sake of clarity it is appropriate that the extrusions are listed. 17I make the plaintiff's proposed Order 5 in its entirety.

Restraints on the second defendant - Orders 2, 4, 6 and 8 18Orders 2, 4, 6 and 8 seek the same orders against Mr Obeid as against the first defendant. 19The defendants object to these orders because they contend there is no basis for such relief in the judgment. I do not accept this submission. 20The injunctions against the second defendant propounded in Orders 2, 4, 6 and 8 of the plaintiff's Short Minutes of Order fall into in two categories: (a)Orders restraining the second defendant from causing or permitting Streetscape Projects to manufacture the poles referred to in Order 1, disclose or use the information in Order 3, use the moulds referred to in Order 5, or use the Registered Design referred to in Order 7; and (b)Orders restraining the Second Defendant from disclosing or using the information referred to in Order 3 and using the Registered Design referred to in Order 7. 21Both categories of orders were sought by the plaintiff in paragraphs 6 and 7 of the Seventh Further Amended Summons. Further, the orders are supported by findings in the Main Proceedings. Relevantly these findings were: (1)Moses Obeid was knowingly involved in Streetscape Projects' breach of fiduciary duty in relation to the manufacture and sale of "Smartpole" poles in the UAE (see [450] of the reasons for judgment) and involved deliberate conduct on the part of Moses Obeid carried out for his own purposes and inconsistently with the rights which accrued to the City and hence were dishonest and fraudulent (see [450] (12) of the reasons for judgment); (2)Moses Obeid was actively involved in Streetscape Project's vesting of its knowledge, skills and intellectual property relating to the "Smartpole" and Streetscape International and Streetscape International's use of that knowledge, skill and intellectual property to manufacture and sell "Smartpole" poles in the UAE (see [478] and [479] of the reasons for judgment); (3)Moses Obeid was also knowingly involved in Streetscape Projects' breach of duty of confidence to the City (see [482] of the reasons for judgment); (4)Moses Obeid understood the commercially valuable nature of the information provided to Streetscape Projects by the City and that the information had been provided on a confidential basis (see [470], [471] and [474] of the reasons for judgment) and had an equitable duty of confidence to the City. Notwithstanding that duty, he engaged in the conduct described above in relation to the UAE (see [478] - [480] of the reasons for judgment); and (5)Moses Obeid, notwithstanding his equitable duty of confidence to the City, continued to breach that duty after the expiry of the Licence Agreement in September 2009. 22The first category of injunctions is appropriate for the additional reason that it is necessary to ensure the effectiveness of the orders against the first defendant in Orders 1, 3, 5 and 7. The Court has found that there should be injunctions against the first defendant on the basis of breach of fiduciary duty and breach of duty of confidence. The Court found that the second defendant participated in each of these breaches. In the light of these findings, it is appropriate to make orders against the second defendant restraining him from causing or permitting the first defendant from breaching its obligations. 23I make Orders 2, 4, 6 and 8.

Order 9 24Order 9 makes provisions for the Court's finding at [309] - [316] that the effect of clause 5(a) of the Second Deed of Variation was to vest the intellectual property in the "Adepole (catalogue item 41100)" to Streetscape. For this reason, any relief appropriate in relation to Smartpoles generally is not appropriate as against the Adepole. 25The defendants raise two objections to this carve out provision which both seek to extend their rights in relation to the Adepole. Dealing first with the defendants' prayer to delete the wording "within the boundaries of the Adelaide City Council". This prayer has no substance. Certain paragraphs of the judgment leave open the question of whether sales of the Adepole are limited to use within "the boundaries of the Adelaide City Council", however it is clear from paragraph [506] that this limitation was intended. This accords with the Court's evidentiary findings that Mr Obeid represented to the City that the Adepole would only be sold with the boundaries of the Adelaide City Council. Accordingly, those words should not be deleted and Order 9 should be made in full. 26The second objection concerns two aspects of the definition of "Adepole (catalogue item 41100)" in the plaintiff's Short Minutes of Order. 27First, the defendants seek to extend the definition of Adepole to include "modifications or improvements made to that pole subsequent to the Second Deed of Variation". Initially the plaintiff opposed this but later indicated it consented. Such a concession is appropriate and accurately reflects the reasons for judgment. 28Second , the defendants object to the definition of "Adepole (catalogue item 41100)" including the words " being an extrusion and cladding but excluding accessories ". 29This restriction is necessary to properly identify what the parties intended by the expression "Adepole (catalogue item 41100)" in clause 5(a). In particular, it was a reference to a pole and not accessories. In that regard, "Adepole (catalogue item 41100)" refers to the item which appears in the schedule to the First Deed of Variation. That item appears under the heading "Smartpoles" and separate from the headings concerning accessories (Smart Lighting, Smart Traffic, Smart Signage and other such items). To permit the definition of "Adepole (catalogue item 41100)" to include accessories would go beyond what was fairly contemplated by the parties.

Order 19 30Order 19 is related to Order 9 and therefore it is appropriate to deal with it out of numerical order. Order 19 varies clause 5(a) of the Second Deed of Variation in accordance with paragraph [352] of the judgment in the Main Proceedings. The purpose of this Order is to limit the vesting of intellectual property in the Adepole to reflect the misleading representations made by the defendants to the City. 31The inclusion of the word "only" is appropriate as it properly reflects the reasons for judgment (paragraphs [352] and [506]). However, some of the remainder of the plaintiff's proposed order seeks to go beyond the Court's findings. Taking into account the party's submissions, the most appropriate form of Order 19 is: Order pursuant to s.87(2)(b) of the Trade Practices Act varying clause 5(a) of the Second Deed of Variation such that it has the effect from the date of entering in the Deed that the City vested intellectual property in the Adepole (catalogue item 41100) only to the extent that that pole is designed for the Adelaide City Council and is sold only to that Council by the addition of the following words in that clause after the words "vests in the Licensee": "only to the extent necessary to enable the Licensee to manufacture and supply the Adepole (catalogue item 41100) to the Adelaide City Council for use by the Adelaide City Council within its boundaries."

Order 13 32Order 13 deals with the delivery up of documents and drawings containing the City's intellectual property. The defendants object to Order 13, contending for the deletion of subparagraphs (a) - (b) and (e). 33The plaintiff appropriately conceded that there is an overlap between Order 13(b) and 13(d) and that provided that Order 3(c) is not deleted, Order 13(b) is not necessary. This is because the drawings referred to in Order 3(c) include drawings of the pole types and accessories in the Product Manual and Specifications including drawings containing improvements and enhancements. The plaintiff therefore does not press Order 13(b) and it should be deleted. 34In relation to subparagraph (a), the defendants says that this paragraph is redundant because the Product Manual and Specifications are already captured by subparagraphs (c) and (d). Subparagraph (a) is not redundant. Subparagraphs (c) and (d) are limited to drawings and the Product Manual and Specifications referred to in subparagraph (a) are broader. Order 13 (a) should be made. 35The defendants also object to Order 13(e) on the basis that the delivery up of drawings held by suppliers to subcontractors of the first defendant does not reflect the judgment. This is not correct. At [528] I found: "Streetscape has also failed to deliver up drawings held by over 35 specialised sub-contractors of Streetscape who assisted in the manufacturing of components of the Smartpoles." 36At [530(6)] I also said: "... Hayman Industries Pty Ltd, a contractor of Streetscape Projects, has possession of numerous drawings of the "Smartpole" poles containing the City's intellectual property, including an updated version of the 6400 Issue C Drawings, which it produced under subpoena." 37Accordingly, Order 13(e) should be made. 38The defendants also seek to limit delivery up to documents to those in their "possession, power, custody or control". There is no justification for this restriction. It is not justified by the terms of the Licence Agreement, clause 15.4 requiring Streetscape Projects to: "Deliver to the Licensor all documents containing Intellectual Property, Product Manuals and the Specification whether or not provided by the Licensor together with all documents containing any Confidential Information." 39Further, it is not justified on the findings. The Court at [527] - [530] made various findings in relation to Streetscape Projects' non compliance with its obligations under clause 15.4 and found that the plaintiff had made good its claims to delivery up of documents and that Streetscape Projects is obliged to deliver up under the provisions of clause 15.4 and the Second Deed of Variation. There should be no limitation on the orders reflecting those findings concerning documents not within the defendants' "possession, power, custody or control". 40Further, the limitation is not justified on the pleadings. No limitation by reference to "possession, power, custody or control" was raised on the pleading. No evidence was led by the defendants relating to any issue of impossibility concerning delivery up of documents. There is no evidence to support the defendant's contention in the Short Minutes of Order Bundle that, if they fail to comply with this order, they will be in contempt. In the absence of any evidence demonstrating impossibility, the plaintiff is entitled to the relief sought. 41Finally, the defendants raised two objections to the form of the carve out provision in relation to the Adepole . The first was that the carve out should not be limited to drawings brought into existence before the Second Deed of Variation (19 October 2007). The plaintiff indicated that it does not press this wording and in absence of argument, I accept the wording "prior to 19 October 2007" should be deleted. 42The second objection was to the inclusion of the words "and which on their face are marked with the name Adepole." The plaintiff submitted that this wording reflects the intention of the judgment. This is incorrect. Adepole is properly and adequately defined in the Orders in a manner which reflects the wording of the judgment. There is no reason to import any further characteristics into the definition, particularly where there was no evidence that the City only intended to convey Adepoles which were marked Adepoles on their face. The words "and which on their face are marked with the name Adepole" should be deleted to accurately reflect the findings in the Main Proceedings. 43The plaintiff's proposed Order 13 should be made but the words "prior to 19 October 2007" and "and which on their face are marked with the name Adepole" should be deleted.

Incidental orders - Orders 12 and 14 - 16 44The defendants also object to the whole of Orders 12, 14 - 16. They do this on the basis that those orders are not pleaded, are inappropriate and excessive. I accept the plaintiff's submissions that the incidental orders are necessary to ensure the enforcement of the primary orders for delivery up. 45The incidental orders are not required to be claimed in the summons itself. They are incidental orders and a wide discretion in this respect is bestowed on the Court by s 90 of the Civil Procedure Act 2005 (NSW). In any event, they are contemplated by paragraph 26 of the summons which seeks "such further or other order as the Court considers fit ". 46Order 12 requires that, before delivery up, the defendants identify by affidavit the computer systems which contain and the third parties which possess the drawings which are the subject of the order for delivery up in Order 13. Such an order is reasonable and appropriate to ensure the proper identification of documents held in computer systems and to enable the plaintiff to know the whereabouts of documents. 47Order 14 is an order that that the defendants confirm, by affidavit, the delivery up of relevant drawings, including the deletion of computer records of those drawings, as well as identification of the drawings that have been retained in relation to the Adepole (catalogue number 41100) exemption. Such an order is reasonable and appropriate to ensure proper delivery up and removal of relevant computer records. It also brings some accountability in relation to that process. It is also reasonable and appropriate for the plaintiff to be aware of the drawings relating to the Adepole which are retained by the plaintiff pursuant to the exemption. 48Orders 15 and 16 provide a mechanism whereby the inspection of the defendants computer systems can occur to ensure compliance and further deletion of drawings should that be necessary. 49The incidental orders should be made to ensure the defendants' compliance with obligations under the Licence Agreement. In this respect Streetscape Projects claimed that they had complied with their obligations under the Licence Agreement. The Court has found that Streetscape Projects did not comply with those obligations and the incidental orders are necessary and appropriate to ensure that compliance. 50It is appropriate to make Orders 12, 14, 15 and 16.

Orders 17 and 18 51Order 18 is the primary order for the delivery up of the moulds. Order 17 is an incidental order to ensure compliance. 52The Court does not accept the defendants' objections to these orders. There is no imprecision or ambiguity in ordering the delivery up of moulds "based on or derived from" drawings. 53The defendants also seek to add the words "in its possession, power, custody or control" to Order 18 as to limit their delivery up obligations. In support of this application, the defendants rely on the affidavit of John McLeod sworn 11 December 2009. This affidavit was not tendered in evidence by the defendants. Only part of that affidavit was tendered by the plaintiff in Exhibit # P55. That evidence does not contain any reference to delivery up of the moulds. 54At paragraphs [540]-[541] of the reasons for judgment, the Court made findings concerning the non-delivery up of the moulds and, based on those facts and a proper construction of the Licence Agreement, found that the City was entitled to delivery up of the moulds. If the defendants proposed to raise a particular reason why delivery up should not be ordered because of impossibility, it was incumbent on it to introduce evidence to demonstrate the ground for its inability. In the absence of any evidence demonstrating any lack of ability to deliver up, the plaintiff is entitled to the relief sought without restriction.

Monetary Relief 55The plaintiff indicated in oral submissions that it will not elect for an account of profits and instead seeks equitable damages. There remains a dispute between parties as to the appropriate quantum of these damages. 56The defendants appear to proceed on the basis that because the reasons for judgment only contain findings that in total refer to $559,908.24, an Order should be for that amount. This approach ignores the fact that the Court purposely gave reasons for judgment on the issues in dispute and directed that the parties propose what they contend to be appropriate orders consequential on these findings. The defendants' submission that the Court is being asked to "re-write" parts of its judgment is incorrect. 57The plaintiff's calculation of the judgment amount is set out in the letter from Holding Redlich to Colin Biggers & Paisley of 7 November 2011. It is summarised in the table below: (a) UAE royalties As per paragraphs 47 to 52 of Tab 17 of MFI P Closing and paragraphs 1-11 of the Addendum thereto, calculated on method 2 (being the lower average price per pole x 10,000 x 10%) $8,479,250.00 (b) UAE licence fees As per paragraph 53 of the addendum to Tab 17 of MFI P Closing and paragraphs 12-13 of the Addendum thereto (being distributions over 5 years x $50,000) $250,000 (c) Singapore royalties As per findings at [428] - [429] of the Judgment and multiplying that sum by the 10% royalty in clause 15.5 $210,354.30 (d) Singapore licence fees As per [429] of the Judgment and paragraph 17 of the Addendum to Tab 17 of MFI P Closing (being distributions over 2 years x $50,000) $100,000.00 (e) Post Expiry Sales As per [509] of the Judgment $336,439.34 Total $9,376,043.64

58The substance of the defendants' objection is that the judgment in the Main Proceedings does not make explicit findings as to quantity of poles or amount of damages payable. The judgment made no such findings because the plaintiff's proposed figures were not placed into issue. The defendants' case in relation to damages is summarised at paragraphs 10 to 16 of MFI # D Closing. Their primary position was that clause 15.5 of the Licence Agreement was not valid because there was no loss suffered by the City and therefore the clause was penal. The Court rejected every submission on damages put forward by the defendants. The inevitable result of this is that the plaintiff's evidence as to damages is accepted. Following this it was incumbent on the parties to calculate the amount payable according to the formula under the Licence Agreement and the quantity of poles which were unchallenged.

UAE 59The Court made the following findings in relation to the contractual liability of Streetscape Projects in relation to sales in the UAE: (1)There were over 10,000 poles sold in the UAE during the Licence Agreement term ([371] of the reasons for judgment); (2)The Memorandum of Information prepared for Macquarie Bank contained a list of the projects in the Middle East and the Expression of Interest to PWD identified projects involving the installation of "Smartpole" poles in the UAE and listed several installations of "Smartpole" poles as Streetscape Projects installations ([364] and [366] of the reasons for judgment). (3)The Defendants' contention that the poles sold in the UAE were not "Smartpole" poles was rejected ([369] of the reasons for judgment). (4)The parties contractually agreed that the price of infringement of the City's intellectual property was to be calculated by reference to clause 15.5 of the Licence Agreement ([382] of the reasons for judgment). Clause 15.5 provided that the royalty rate applicable in relation to distributions in unauthorised territories was 10% and the annual licence fees for such distributions was $50,000 per annum. 60In relation to equitable compensation , the Court made the following findings at [507] of the reasons for judgment: (5)The equitable duties owed by Streetscape Projects and Moses Obeid to the City require that they obtain the authority of the City before using the property of the City to manufacture and sell Smartpole poles in the UAE or Singapore. The consent of the City would not have been forthcoming without an undertaking to pay royalties and licence fees. The Licence Agreement contemplates the measure of those royalties and fees in clause 15.5 which evidences the amounts which would be payable as the price for that consent. (6)This is in conformity of the particulars of the City's claim. 42A of the Commercial List Statement particularises the loss for breach of equitable duty (pleaded in paragraph 40 as "loss of opportunity to obtain royalties and other fees from Streetscape International in respect of the use of the Intellectual Property and the Confidential Information " (emphasis added). Paragraph 39 of the Commercial List Statement pleads that the business of Streetscape International was derived from Streetscape Projects and was carried on for and on behalf of Streetscape Projects. Accordingly, the loss is the loss of royalties and licence fees from Streetscape Projects itself.) 61In light of the above findings, the quantum of equitable compensation will be the same as the common law claim. 62The quantification of the royalty and annual licence fees under clause 15.5 was the subject of the plaintiff's closing submissions. The defendants did not challenge the plaintiff's quantification of the amount payable under clause 15.5, limiting their argument to a submission that the figures referred to in the quantification were not relevant to a loss of opportunity claim. That submission was rejected by the Court. The significance of the absence of any submissions challenging the plaintiff's quantification is highlighted by the defendants' submission that damages should be determined on the evidence before the Court and without any further hearing. 63In light of the Court's findings referred to above and in light of the defendant's failure to challenge the plaintiff's quantification, it is inherent in the reasons for judgment that, in order to quantify the royalties payable pursuant to clause 15.5, an average price per pole on the lower average of the two methods proposed must be adopted then multiplied by the number of poles sold (10,000) and a 10% royalty then applied. A calculation on this approach results in the figure identified, namely $8,479,250. 64In relation to licence fees, it is inherent in the reasons that, in order to quantify the licence fees payable, the number of years that the City's intellectual property was used in the UAE should be multiplied by the annual licence fee provided by clause 15.5 (ie $50,000). The Memorandum of Information and the Expression of Interest indicate sales of "Smartpole" poles in the UAE between 2003 and 2007 (a total of 5 years). Those sales and when those sales occurred are referred to in the Distribution Schedule (at MFI P Closing tab 15). Five years at an annual licence fee of $50,000 results in total licence fees of $250,000.

Singapore 65In relation to Singapore, the Court has made the following findings in relation to the contractual liability of Streetscape Projects: (1)that the amount received by Streetscape Projects in relation to the sale of "Smartpole" poles in Singapore was $1,734,689 and from the sale of "Smartpole" accessories in Singapore was $368,854 (see [428] of the reasons for judgment); and (2)is liable for payment of the royalties and licence fees at the rate specified in clause 15.5 (see [429] of the reasons for judgment). 66Applying the 10% royalty specified by clause 15.5 for poles sold in Singapore in accordance with the findings referred to above, a total royalty calculation of $210,354.30 is appropriate. 67In relation to annual licence fees the invoices date over 2 calendar years (2008 and 2009), representing licence fees of $100,000 pursuant to clause 15.5.

Post Expiry Sales 68Based on the letter of 9 December 2011 from Colin Biggers & Paisley, there appears to be no issue in relation to the quantum for post expiry sales of $336,439.34.

Interest 69The plaintiff provided a detailed schedule (MFI # 1) indicating the appropriate amount of interest in circumstances where judgment for the full was entered in their favour. The defendant indicated that if the plaintiff was wholly successful on quantum that was the appropriate amount. The plaintiff has been wholly successful on quantum and therefore the defendants are to pay the plaintiff interest in accordance with that schedule.

Miscellaneous matters in the first proceedings 70The plaintiff no longer opposes the defendants' amendments to the definitions of "Product Manual" and "Specifications" and therefore the defendants' definitions should be adopted. 71The parties agree on Schedule A, except as to the notes column. The plaintiff has submitted that determining which pole is an Adepole is a question of fact. I agree with this proposition, however the notes column provides greater clarity to the orders and removes the possibility of further confusion. For this reason, the notes column proposed by the defendants should be included to clearly delineate which poles listed in the schedule are exempt from the restraints. 72Schedule B is largely in agreement. The parties are only in disagreement regarding paragraph 8. The defendants submit that paragraph 8 in the table should not be included because Streetscape is not restrained from utilising these poles. However, the effect of this deletion would be that Streetscape Projects would be free to use those drawings without any restriction. This would be contrary to the s 87 order which the Court found should be made. Accordingly, those drawings should not be deleted from the Schedule and the scope of any exception to the orders should be expressed as a "carve out" order. This ensures the poles in paragraph 8 are used within the bounds of the Court's decision.

The second proceedings 73The parties agree on Orders 1-6 of the Short Minutes for the second proceeding. Those orders were agreed between the parties on 19 October 2011. Pursuant to those orders, the three defendants are permanently restrained from using the Plaintiff's trade marks (SMARTPOLE) (Order 1); using the word SmartMFP in the course of its business (or applying for its registration as a trade mark) (Orders 2 and 3); representing or passing themselves off as a manufacturer or seller of the "Smartpole" pole (Order 4) or having a present connection or affiliation with the City (order 5). The parties also agree that there should be an order dismissing the cross claim (Order 7). However, there is no agreement on costs. 74In oral argument, the parties indicated that all matters as to costs should be heard after the Court's decision on orders. Accordingly the Court reserves its decision on costs for both proceedings.

The defendants' proposed 16 September tender 75On 16 September 2011 the defendants proposed to read and tender two documents: (1)The affidavit of Jeffrey Collins affirmed 24 August 2011 (' Collins Affidavit' ); and (2)The judgment of Gyles J in Council of the City of Sydney v Goldspar Pty Ltd [2004] FCA 568 (' Gyles J Judgment' ). 76The plaintiff opposed these tenders. 77In the principal judgment I left this application open and indicated that a ruling would be given at a later date. I now proceed to do so.

The Collins Affidavit 78Senior Counsel for the defendants stated that the Collins Affidavit was being read to deal with allegations of inadequacy of discovery by the plaintiff. However, on the face of the Collins affidavit it is clear that the affidavit does not deal with the discovery issue raised by Ms Fernandez. Ms Fernandez's affidavits of 12 and 26 August (tendered as part of Exhibit P #16) were the affidavits relied upon by the plaintiff in support of its inadequacy of discovery allegations. The Collins affidavit does not address this material. 79Instead, the Collins Affidavit responds to an affidavit of Sylvia Fernandez sworn 3 August 2011. This affidavit was sworn in opposition to the defendants' application to amend its commercial list response, the subject of the Court's judgment on 4 August 2011, see: The City of Sydney v Streetscape Projects (Australia) Pty Ltd and Anor [ 2011] NSWSC 831. This affidavit was not relied on in the main proceedings. 80I accept the plaintiff's submission that the Collins Affidavit is an attempt to tender into evidence material which has already been ruled irrelevant to the defendants' pleaded case. This is because the exhibit to the Collins Affidavit consists of copies of the 5470 Drawings. 81In relation to the 5470 Drawings, the defendants sought to amend their commercial list response on around 3 August 2011 to include the following: (a)Particular (2A) and (2B) to paragraph 4(a) of their commercial list response: "(2A) In or about June 1998 Streetscape Projects engaged KWA to produce drawings numbered by KWA 5470 (wrongly identified on occasion as 5740 & 5730). Particulars Affidavit of Moses Obeid dated 27 July 2011 paragraphs 39-42, affidavit of John Angus McLeod dated 27 July 2011 paragraphs 3-7. (2B) Pursuant to the engagement KWA produced drawings including the drawings identified at attachment MEO-C to the affidavit of Moses Obeid and tab 3 to the affidavit of Mr McLeod, and assigned the copyright in those drawings to Streetscape Projects" (emphasis added); and (b)Paragraph 17(e)(xi) of their commercial list response: "The drawings and specifications in relation to "Smartpoles" were not confidential as they had been disclosed by the City to at least the RTA, Energy Australia, mobile cellular communications network providers and subcontractors of each of them and by reason of the matters pleaded in paragraph 4(a)(2A) and (2B) herein and because the information contained in the drawings and specifications was in all material respects the same information available to Goldspar in respect of drawings and specifications owned by it which it could do with as it saw fit at all material times. Particulars The information was contained in the Goldspar non-conforming tender drawings Issue A and in a drawing described as 215.0 Street pole extrusion dated 16 September 1997 and a drawing described as 4930/01 Issue A dated 22 September 1997." 82The defendants were refused leave to make these amendments on 4 August 2011. The relevant reasons are found under the headings "The 1998 copyright pleading" (paragraphs [30]-[36]) and "The loss of confidentiality and no confidentiality issue" (paragraphs [48]-[55]). 83The defendants also sought to read the following affidavits which are referred to in the proposed amended commercial list response: (1)Moses Obeid sworn 27 July 2011 at [39]-[42] and MEO-C; and (2)John McLeod sworn 27 July 2011 at [3]-[7] and Tab 3. 84The Court also rejected this material. 85The same documents as appear in MEO-C to Mr Obeid's affidavit sworn 27 July 2011 and Tab 3 to Mr McLeod sworn 27 July 2011 appear in the Collins Affidavit (JC-4). 86In the principal judgment, under the heading " A mainstay of the defendants' contentions " ([189]-[194]) I dealt with the reasons why the Court will not permit the defendants to rely on these drawings in circumstances where their relevance was not pleaded early in the proceedings. For the same reasons the Collins Affidavit is inadmissible.

'The Gyles J Judgment' 87The defendants also sought to tender the judgment of Gyles J in Council of the City of Sydney v Goldspar Pty Ltd [2004] FCA 568. Mr Couper submitted that the plaintiff has already tendered Gyles J's other judgments in that proceeding and that this judgment is necessary to complete the picture. 88The plaintiff opposed the tender arguing: (1)It appears that the defendants wish to utilise the Gyles J Judgment in these proceedings to advance the proposition that Goldspar are the owners of the copyright which subsists in the 4930 Issue A Drawings. At [136] of the Gyles J Judgment, his Honour said: "Goldspar has the copyright in the Issue A drawings and council has the copyright in Issue C drawings." (2)The defendants' attempt to rely on the 4930 Issue A drawings which I have earlier rejected in The City of Sydney v Streetscape Projects (Australia) Pty Ltd and Anor [ 2011] NSWSC 831 (4 August 2011) under the headings "The loss of confidentiality and no confidentiality issue" (paragraphs [51]-[55]) and The City of Sydney v Streetscape Projects (Australia) Pty Ltd and Anor [ 2011] NSWSC 942 at [32]-[37]. In this latter judgment, I said at [32]: "I accept that in relation to the copyright, it is not open to the defendants to rely on the 4930 Issue A Document as relevant to the question of whether the plaintiff is the owner of the Issue C Drawings or the Tender 9912 6400 Issue A Drawings. This is because reliance on the 4930 Issue A Document or drawings is not pleaded." (3)See also [8] of The City of Sydney v Streetscape Projects (Australia) Pty Ltd and Anor [ 2011] NSWSC 942 under the heading "The defendants' position" in which the defendants seek to rely on the Gyles J Judgment for the following proposition: "Gyles J held at para 136 that as between the City and Goldspar, Goldspar has the copyright in the 4930 Issue A Drawings and the City has the copyright in the 4930 Issue C Drawings. According to his Honour, "there would be significant similarities between a pole constructed in accordance with issue A drawings and a pole constructed in accordance with issue C drawings because one is developed from the other." 89In so far as the Gyles J Judgment is tendered for the purpose of providing the Court with the proper factual context, so that it can fully appreciate all three judgments of Gyles J, I accept the judgment is relevant and admissible. However, it is appropriate that the judgment be subject to a s 136 limiting order. It would be unfairly prejudicial to the City for the defendants to rely on the proposition that Goldspar are the owners of copyright in the Issue A Drawings, where the Court rejected such an approach in its 4 August 2011 judgment. 90The Gyles J judgment is admissible, but not for the purposes of asserting that Goldspar are the owners of the copyright in the Issue A Drawings. This would cause unfair prejudice to the City and would contradict the Court's findings in previous judgments. 91Furthermore, it has long been the common law that a Court may review its judgment at any time until its orders have been perfected: cf Autodesk Inc v Dyason [No.2] (1993) 176 CLR 300 at 302-3.

Orders 92The Court orders and directs that: Injunctions (1)Subject to order 9 below, the First Defendant by itself, its officers, agents and employees be restrained from manufacturing, distributing, offering for sale or selling: (a)the pole types and the accessories referred to in the Product Manual and the Specification including improvements, enhancements, modifications, adaptations or extensions of those pole types and accessories after the date of the Licence Agreement except insofar as improvements, enhancements, modifications, adaptations or extensions to the accessories which are attached to a pole other than for lighting, traffic signage, street signs or banner installations provided that that part which is used to attach such item to a pole shall not be included in the above exception ; (b)the poles and accessories referred to in Schedule A hereto; (c)poles which use or contain the S1, S2 or S3 extrusion. (2)Subject to order 9 below, the Second Defendant by himself, his agents or employees be restrained from causing or permitting the First Defendant to manufacture, distribute, offer for sale or sell any of the poles and accessories referred to in order 1 above. (3)Subject to order 9 below, the First Defendant by itself, its officers, agents and employees be restrained from disclosing or permitting the disclosure or using or permitting the use of any of the information in: (a)the Product Manual; (b)the Specification; (c)drawings of the pole types and accessories in the Product Manual and Specification including drawings containing improvements, enhancements, modifications, adaptations or extensions of those pole types and accessories after the date of the Licence Agreement except insofar as the drawings contain improvements, enhancements, modifications, adaptations or extensions to the accessories which are attached to a pole other than for lighting, traffic signage, street signs or banner installations provided that that part which is used to attach such item to a pole shall not be included in the above exception; (d)drawings referred to in Schedule B hereto; (e)drawings of the S1 extrusion; (f)drawings of the S2 extrusion; (g)drawings of the S3 extrusion; and (h)drawings of any of the poles and accessories referred to in order 1 above excepting, in relation to accessories, the types of accessories within the exception to order 1(a) above. (4)Subject to order 9 below, the Second Defendant by himself, his agents or employees be restrained from disclosing or using the information referred to in order 3 above or causing or permitting the First Defendant to disclose or permit the disclosure of or use or permit the use of any of the information referred to in order 3 above. (5)Subject to order 9 below, the First Defendant by itself, its officers, agents and employees be restrained from using or permitting the use of any moulds: (a)relating to or used in the manufacture of: (i)the S1 extrusion; (ii)the S2 extrusion; (iii)the S3 extrusion; (iv)any of the poles and accessories referred to in order 1; or (b)based on or derived from any of the information or drawings referred to in order 3 above. (6)Subject to order 9 below, the Second Defendant by himself, his agents or employees be restrained from using any of the moulds referred to in order 5 above or causing or permitting the First Defendant to use or permit the use of any of the moulds referred to in order 5 above. (7)Subject to order 9 below, the First Defendant by itself, its officers, agents and employees be restrained from using or permitting the use of the Registered Design or the use of any moulds created from or based on the Registered Design. (8)Subject to order 9 below, the Second Defendant by himself, his agents or employees be restrained from using or causing or permitting the First Defendant to use or permit the use of the Registered Design or causing or permitting the First Defendant to use or permit the use of the moulds referred to in order 5 above. (9)Orders 1 to 8 above will not be enforceable insofar as the First Defendant pursuant to clause 5(a) of the Second Deed of Variation (as varied by the order 19 below) manufactures and sells the Adepole (catalogue item 41100) to the Adelaide City Council for the use by the Adelaide City Council within the boundaries of the Adelaide City Council. Registered Design (10)A declaration that the First Defendant holds the Registered Design on trust for the Plaintiff. (11)Order that the First Defendant by itself, its officers, agents and employees within 14 days do all things necessary to transfer the legal title of the Registered Design to the Plaintiff. If the First Defendant fails to comply with this order, the Registrar is hereby appointed to sign all documents necessary or desirable to transfer the legal title of the Registered Design to the Plaintiff. Delivery up of documents (12)Within 7 days of the date of this order, the First Defendant is to file and serve an affidavit which: (a)identifies all computer or electronic hardware in its custody, possession or control (including in the possession of its employees, servants and agents) containing drawings of the poles and accessories referred to in order 1 above; and (b)identifies all third parties who are in the possession of drawings of the poles and accessories referred to in order 1 above and specifies their contact details. (13)Order that within 21 days the First Defendant by itself, its officers, agents and employees deliver up to the Plaintiff, through the Plaintiff's solicitors: (a)all documents (including in electronic format) containing the Product Manual and the Specification; (b)all drawings (including in electronic format) of the poles and accessories referred to in order 1 above excepting, in relation to accessories, the types of accessories within the exception to order 1(a) above; (c)all drawings (including in electronic format) referred to in order 3 above; (d)all drawings (including in electronic format) held by any suppliers to or subcontractors of the First Defendant who were involved in or assisted in manufacturing any of the poles or accessories referred to in order 1 above; PROVIDED THAT this order does not apply to drawings of the Adepole (catalogue item 41100) which contain designs that were to be specifically be used in the Adepole (catalogue 41100) (14)Within 21 days from the date of this order, the First and Second Defendants are to file and serve affidavits which: (a)confirm that all drawings of the poles and accessories referred to in paragraph 1 above and the drawings in order 3 (in hardcopy or electronic format) have been delivered up to the Plaintiff in accordance with order 13; (b)confirm that all drawings of the poles and accessories referred to in paragraph 1 above and the drawings in order 3 (in electronic format) have been permanently deleted from the First and Second Defendants' computer systems or any computer on which they are held in accordance with order 13; (c)identify which drawings have been retained in accordance with the proviso to order 13 identifying the drawings and the basis for retention of the same. (15)By 21 days from the service of the affidavits referred to in order 14 above, the First Defendant must allow an inspection by the Plaintiff's authorised representative of all computer systems in its possession, custody and control or any computer on which they are held to ensure compliance with the orders in orders 13 and 14 above. (16)Order that if, as a result of the inspection, it is found that the First and Second Defendants remain in the possession of any drawings referred to in order 13 which they are not authorised to retain, the Plaintiff by its authorised representative shall be permitted to copy and delete the material from the relevant computer. Delivery up of moulds (17)Within 7 days of the date of this order, the First Defendant is to file and serve an affidavit, which: (a)identifies each mould relating to or used in the manufacture of each pole and accessory referred to in order 5(a) above or based on or derived from the information referred to in order 5(b) above and the particular part of the pole or accessory which is manufactured by its use; (b)identifies each mould relating to or used in the manufacture of the Adepole (catalogue item 41100) referred to in clause 5(a) of the Second Deed of Variation (as varied by the order in order 19 below) and the particular part of the pole which is manufactured by its use; and (c)identifies the holder of each mould and provides contact details for each of the identified holders, including address of the location of the moulds, telephone number and email address. (18)Order that within 21 days the First Defendant by itself, its officers, agents and employees deliver up to the Plaintiff, at an address to be notified by the Plaintiff within 15 days, all moulds relating to or used in the manufacture of any of the poles and accessories referred to in order 1 above or based on or derived from any of the information or drawings referred to in order 3 above; PROVIDED THAT this order does not apply to moulds that have been specifically used by the First Defendant to manufacture and supply the Adepole (catalogue item 41100) to the Adelaide City Council and which contain designs that have been brought into existence to specifically be used in the Adepole (catalogue item 41100) for the purpose of manufacturing and selling the Adepole (catalogue item 41100) to the Adelaide City Council. Adepole (19)Order pursuant to s.87(2)(b) of the Trade Practices Act varying clause 5(a) of the Second Deed of Variation such that it has the effect from the date of entering in the Deed that the City vested intellectual property in the Adepole (catalogue item 41100) only to the extent that that pole is designed for the Adelaide City Council and is sold only to that Council by the addition of the following words in that clause after the words "vests in the Licensee": "only to the extent necessary to enable the Licensee to manufacture and supply the Adepole (catalogue item 41100) to the Adelaide City Council for use by the Adelaide City Council within its boundaries." Judgments and Costs (20)Judgment against the First Defendant in the amount of $9,376,043.64 together with interest pursuant to s.100 Civil Procedure Act 2005 in the sum of $2,747,426.45. (21)Judgment against the Second Defendant in the amount of $9,376,043.64 together with interest pursuant to s.100 Civil Procedure Act 2005 in the sum of $2,747,426.45. (22)The First Defendant's Cross-Claim be dismissed. (23)Reserve all questions of costs. Definitions In these orders, the following expressions have the following meanings: "Adelaide City Council" means The Corporation of the City of Adelaide ABN 20 903 762 572; "Adepole (catalogue item 41100)" means the pole designed for and sold to the Adelaide City Council by the First Defendant for use by the Adelaide City Council prior to the date of entering into the Second Deed of Variation and consisting of an extrusion and cladding but excluding accessories and including modifications or improvements made to that pole subsequent to the Second Deed of Variation. "Product Manual " means the manual for the assembly, configuration and installation of the Smartpole poles and their accessories referred to in the Licence Agreement between the Plaintiff and the First Defendant dated 26 August 2002 and which is Exhibit PX, Tender Bundle 8:122 in these proceedings (and being Exhibit RM-2 to the Affidavit of Robert Stephen Matchett sworn 19 May 2010), including any developments, refinements, or improvements of that manual made by the First Defendant between 26 August 2002 and 26 August 2009. "Registered Design" means the Design registered under the provisions of the Designs Act 2003 and being registration number AU 146087 S. "Specification" means the specification referred to in the Licence Agreement between the Plaintiff and the First Defendant dated 26 August 2002 and which is Exhibit PX, Tender Bundle 8:123 in these proceedings (and being Exhibit RM-3 to the Affidavit of Robert Stephen Matchett sworn 19 May 2010), including any developments, refinements, or improvements of that specification made by the First Defendant between 26 August 2002 and 26 August 2009. 16 September Tender (1)The affidavit of Jeffrey Collins affirmed 24 August 2011 is inadmissible; and (2)The Gyles J judgment is admissible, but it is not admissible for the purposes of asserting that Goldspar are the owners of the copyright in the Issue A Drawings

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 February 2012

Trade Practices Act 1974(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (23 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (5)

Cited By (3)