Milcap Publishing Group A.B. & Ors v Coranto Corporation Pty Ltd & Ors [1995] FCA 591

C A T C H W O R D S PRACTICE AND PROCEDURE - Anton Piller order - whether Anton Piller order ought to be set aside - whether full disclosure had been made - entitlement to set aside order arises ex debito justitiae when full disclosure has not been made. MILCAP PUBLISHING GROUP A.B. & ORS v CORANTO CORPORATION PTY LIMITED & ORS NG 377 of 1995 Davies J Sydney 17 July 1995

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NG 377 of 1995 ) GENERAL DIVISION ) BETWEEN: MILCAP PUBLISHING GROUP A. B. (A CORPORATION INCORPORATED UNDER THE LAWS OF SWEDEN) First Applicant JOHN LARK Second Applicant PETER COLLINS Third Applicant AND: CORANTO CORPORATION PTY LIMITED (ACN 008 645 458) First Respondent LOUIS ROKAS Second Respondent KOULA ROKAS Third Respondent Coram: Davies J. Date: 17 July 1995 Place: Sydney REASON FOR DECISION

This is an application by the respondent to set aside an Anton Piller (see Anton Piller KG v Manufacturing Processes Ltd [1976] 1 Ch.55) order which I granted on 30 May 1995. I think that the order that was made should be set aside for I am of the view that there was not full disclosure of all the facts that were material. When an ex-parte order is sought, the person seeking the order must be frank and disclose to the Court all the matters which, if put before the Court, might have an effect upon the Court's decision. The facts that should be disclosed go both to matters of liability and matters of discretion. If a fact is material in that it would be a matter to be taken into account by a Court in the making of the decision to grant an injunction or in the formulation of the order that is to be made, it is a matter that ought to be disclosed. There is a duty of frankness imposed upon applicants so that the Court is not misled in circumstances when the order is sought ex-parte, that is to say, without giving the other side an opportunity to be heard. If material facts are not disclosed, then the respondent is entitled to have the order set aside. It has been said that the entitlement arises ex debito justitiae in the sense that it arises as a remedy of right from the need to give justice. A person who seeks an ex-parte order, without giving notice, has a duty of full disclosure and if full disclosure is not made, a respondent is entitled to have the matter set aside and the procedure started again. In the present case, what was sought was an Anton Piller order with respect to what were alleged to be pirated video cassettes. Mr Lark and Mr Collins had been granted the exclusive right to sell in Australia the product of Milcap Publishing Group ("Milcap"), a Swedish corporation. The affidavit that was put in support of the application for the order was an affidavit of Mr Collins which described Milcap's product. The affidavit described a belief that the respondents' were retailing pirated copies of the cassettes and that the respondents were responsible for the illegal copying of the cassettes. The allegation of copying was expressed in the form of a belief rather than putting forward any direct evidence to that effect. In the affidavit, Mr Collins described the Milcap cassettes. It was said that they were sold at $59.95 or for a reduced price if two or three or more videos were purchased. Mr Collins went on to say that, because of the sale of copied videos at a cheaper price, Mr Lark and Mr Collins had lost a substantial amount of sales. Mr Collins referred to purchases that had been made from the premises of the respondents and he described the difference between the cassettes so purchased and the Milcap product. He described not only the fact that the cassettes were different, but that the quality of the respondents' product was poor, all of which gave rise to an inference that there had been a copying of Milcap's product and that it had been done without authority. The evidence now before the Court, however, is that trap purchases have been made from the premises conducted by Mr Lark and Mr Collins of the four cassettes which are presently before me. One is of a Milcap product and was purchased for full price without a discount. The other three are copies of what were alleged to be the pirated cassettes being sold by the respondents. The inference is that it has been a part of the regular practice of the business carried on by Mr Lark and Mr Collins to take trade-ins of video cassettes and in due course, to sell those trade-ins. Mr Lark and Mr Collins carry on business under the name of Mega Adult Video Exchange and so one may assume a person wishing to trade a video will bring in an exchange video and an exchange will take place. The evidence of one of the witnesses is that that happened. He took in two videos for exchange and acquired two other videos and the price at which the exchange took place was very much less than the full price of a new video. It seems to me that that was a material fact. In Mr Collins' affidavit in response he has not given any significant answer to the issues which arise from the respondents' evidence on these matters. In my opinion, it was a material matter for the applicants to disclose in the circumstances of an application ex-parte, that they, the applicants, were themselves taking in as an ordinary part of their business these pirated cassettes and were, themselves, retailing the pirated cassettes in the ordinary course of business. Whether, if that disclosure had been made, the Anton Piller order would not have been granted, is not something I can say. To be material, a fact does not have to be such as would have caused the application to be refused. I have myself sat on a Full Court which has set aside an ex-parte order because of a non-disclosure and the matter has then been remitted back to the trial judge or to a judge and the application for an injunction heard again.