FEDERAL COURT OF AUSTRALIA Fieldturf Inc v Balsam Pacific Pty Ltd [2003] FCA 809 PRACTICE AND PROCEDURE – pleadings – patent infringement action – "do not admit" plea – respondents required to state what aspects of the applicant's claim are admitted Civil Procedure Rules 1998 (UK) r 16.5 Federal Court Rules O 10 r 1A, O 12 r 5(1)(b) Federal Rules of Civil Procedure 1937 (US) r 16 Bain v Whitehaven & Furness Railway Co (1850) 10 ER 1 cited Western Australian Capital Investment Co v Federal Commissioner of Taxation (1988) 89 ATC 4001 discussed Australian Law Reform Commission, Review of the Adversarial System of Litigation, Issues Paper 20, 1997, para 7.9 "Developments in the Law – Discovery" (1961) 74 Harvard LR 940 F G Brennan QC, "Written Pleadings" (1975) 12 UWAL Rev 33 Odgers on Civil Court Actions, 24th ed, 1996, 146 Stephen on Pleadings, 6th ed, 1860, 23-26 FIELDTURF INC v BALSAM PACIFIC PTY LTD and DARREN JAMES GIRARD V 905 of 2002 FINKELSTEIN J 1 AUGUST 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 905 of 2002 BETWEEN: FIELDTURF INC Applicant AND: BALSAM PACIFIC PTY LIMITED and DARREN JAMES GIRARD Respondents JUDGE: FINKELSTEIN J DATE OF ORDER: 23 JULY 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The respondents identify precisely which of the integers of claims 1, 2, 3, 4, 5, 6, 7, 15 and 18 of the applicant's patent 730904 (which integers are identified in the applicant's letter to the respondents' solicitors dated 12 June 2003) the respondents allege are not present in the synthetic grass surface that they admit offering to sell and supply and selling and supplying at paragraph 2 of their defence dated 8 April 2003. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 905 of 2002 BETWEEN: FIELDTURF INC Applicant AND: BALSAM PACIFIC PTY LIMITED and DARREN JAMES GIRARD Respondents JUDGE: FINKELSTEIN J DATE OF ORDER: 1 AUGUST 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The respondents pay the applicant's taxed costs of the motion dated 17 July 2003. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 905 of 2002 BETWEEN: FIELDTURF INC Applicant AND: BALSAM PACIFIC PTY LIMITED and DARREN JAMES GIRARD Respondents JUDGE: FINKELSTEIN J DATE: 1 AUGUST 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 According to Lord Woolf the overriding objective of civil procedure is to enable the court to deal with cases justly. This means the court must, so far as is practical, attempt to place the parties on an equal footing; save expense; deal with the case in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of the parties; ensure that the case is dealt with expeditiously and fairly; and allot to the case an appropriate share of the court's resources while keeping in mind the necessity of allotting other resources to other cases. 2 If an action is to be conducted with a minimum degree of fairness, and a modicum of efficiency, the parties must be allowed to go into court with some identification of the subject matter of their dispute. There should be some process by which the subject matter is specified and the range of evidence at trial is kept within the limits of relevance. Moreover, to ensure that the system operates fairly, each party must disclose the facts that are within his knowledge and on which the case of the other depends. In our system an attempt is made to satisfy the need for efficiency and fairness by pleadings and discovery. 3 More than 500 years ago, the medieval courts in England relied primarily on pleadings to formulate the issues and to give notice of the scope of the controversy. Pleadings were initially oral and delivered in the presence of the judge. They were transcribed on parchment by an officer of the court. This constituted the "Record": Odgers on Civil Court Actions, 24th ed, 1996, 146. Through a complex and lengthy exchange, the parties were required to narrow their dispute to a single issue – ad exitum – which would then be tried: see generally Stephen on Pleadings, 6th ed, 1860, 23-26. As the common law developed, pleadings became formalised and factual allegations were replaced by statements of conclusions of law and fact, with the consequence that they revealed very little about the controversy. In 1828, Lord Brougham said that the common law declaration conveyed "no precise knowledge of the plaintiff's demand or indeed of what the suit is about": Speeches of Lord Brougham (1841) vol 1, at 569, cited by F G Brennan QC (later Brennan CJ) in his article "Written Pleadings" (1975) 12 UWAL Rev 33. 4 During the 15th century, the Court of Chancery evolved a different procedure for the formulation of issues and the giving of notice of the relevant facts which it adopted from the ecclesiastical courts. The plaintiff commenced his suit by serving a bill which comprised a "stating" part, where general allegations of fact were made, and a "charging" part, which contained a detailed statement of the evidence on which the claim was based. The defendant answered by admitting, denying or explaining each and every allegation. By the 18th century, the defendant's answer was replaced by responses to written interrogatories. Discovery was available if the moving party could show that the presentation of his case would be difficult without it: see generally "Developments in the Law – Discovery" (1961) 74 Harvard LR 940. 5 The change from oral to written pleadings (which probably occurred in 1460) was not beneficial. It led to trial by ambush. This meant that often there would not really be a trial on the merits. Nevertheless, the practice was not always frowned upon. In Bain v Whitehaven & Furness Railway Co (1850) 10 ER 1, Lord Brougham said (at 7): "The ground was surprise only? The court thinking that surprise was not, in itself, a ground for rejecting the evidence, held the exception so stated to be insufficient. … I am therefore of opinion that the appellant is now shut out from his general objection to evidence itself, for the objection taken below was surprise, and surprise is no ground of objection." 6 Things have moved on since then. Under most modern rules of court, pleadings must contain a statement in summary form of the material facts on which the party relies, although not the evidence by which the facts are to be proved. Matters of law, legal conclusion or inference must not normally be pleaded. In the Federal Court parties may raise points of law in pleadings. Still, no one seriously suggests that the system of pleadings is adequate. In a recent discussion paper entitled "Review of the Adversarial System of Litigation" the Australian Law Reform Commission noted (at para 7.9) the following criticisms of the present system: "– The difficulty in adhering to the rule that fact and matters of law be pleaded. – The barrier that the system of pleadings and its complex rules present to the unrepresented litigant. – The failure of pleadings to narrow the issues between the parties. – The tendency of parties to make allegations which they do not believe to be true or which they cannot reasonably expect to be able to prove at trial, and to deny allegations which they know to be true or which reasonable enquiry would reveal to be true." 7 This case provides a good illustration of one of the problems. The applicant sues for the infringement of its patent. The patent is in respect of a synthetic grass surface for sports playing fields. According to the principal claim, the synthetic grass surface is made up of the following elements: " (i) a flexible backing member; (ii) parallel rows of synthetic ribbons, representing blades of grass, projecting upwardly from the backing member; (iii) the rows of ribbons spaced apart from each other; (iv) the surface including a relatively thick layer of particulate material on the backing member supporting the ribbons in a relatively upright position relative to the backing member; (v) the relationship of the length of the ribbons and the spacing between the rows is 2A<L such that the length of the ribbons is at least twice the spacing; and (vi) the particulate material has a thickness, T, which is substantially equal to 2/3 the length, L, of the ribbons, where A is the spacing between the rows, L is the length of the ribbon measured from the flexible backing and T is the thickness of the layer of particulate material." There are a number of dependent claims. The applicant contends that the first respondent has infringed its patent by the sale of its own synthetic playing surface. The first respondent admits that it supplies a synthetic grass surface. It does not deny the allegation that its product infringes the applicant's patent. It merely "does not admit" that allegation. Such a plea is still permissible in the Federal Court, although I see that it has been abolished in England by the new Civil Procedure Rules 1998: see Rule 16.5. 8 The applicant asks for particulars of the "do not admit" plea for the purpose of determining in what respect (if at all) it will be conceded that the first respondent's synthetic grass surface uses elements of the patented invention. Specifically, it wants the respondents to identify with particularity which of the elements of the applicant's claims are not present in the first respondent's product. On a strict view of the rules these particulars need not be provided. In Western Australian Capital Investment Co v Federal Commissioner of Taxation (1988) 89 ATC 4001, 4005 French J explained that: "[w]here a plea in defence amounts to no more than a challenge to the plaintiff to prove its case, there is no affirmative statement and particulars of the defence have no function. And that is the effect of a general traverse in a defence which, save for matters expressly admitted, denies or does not admit the allegations in the statement of claim." 9 This is an unsatisfactory situation. The proper conduct of litigation will substantially be assisted if parties are compelled to identify what are the issues in dispute. The litigation process will also be assisted if parties are required to specify which facts alleged against them are conceded so as to avoid unnecessary proof. If the court can compel the admission of facts which are not in dispute, this will reduce significantly the scope of discovery and, equally importantly, it will limit the evidence at trial. This will save the litigants time and money. In complex litigation the savings in time and expense may be quite significant. 10 In the United States, Rule 16 of the Federal Rules of Civil Procedure, which was introduced in 1937, permits a judge to make orders of the kind sought here. Under Rule 16, a judge has power to require the parties to attend for a conference or conferences before trial for the purpose of, among others, expediting the disposition of an action. The court may make orders with respect to: "(1) the formulation or simplification of the issues, including the elimination of frivolous claims or defences; … (4) the avoidance of unnecessary proof; … and (16) such other matters as may facilitate the just, speedy and inexpensive disposition of the action." With the introduction of Rule 16, federal judges moved away from an essentially passive role in litigation. The Rule reflects the view that judges cannot leave all of the responsibility for the timing and conduct of litigation to lawyers and litigants. Instead, it is accepted that the judge must serve as the critical source of discipline in the system. 11 We do not have a rule similar to Rule 16. But our problems are just the same. Notwithstanding the absence of a specific rule, we can make many of the orders which Rule 16 contemplates, based on the court's inherent power to control its own proceedings. If a specific head of power is required it may be found in O 10 r 1A (where the judge may give "such directions as is thought proper with respect to the conduct of the proceeding") and O 12 r 5(1)(b) (the Court may order a party to file "a statement of the nature of the case on which he relies"). The power should not be exercised sparingly. To the contrary, if the parties do not identify precisely just what is and what is not in dispute, the court should intervene. The earlier the court acts, the better it will be for the parties. 12 Accordingly, the applicant is entitled to the order it seeks. If the applicant had asked, I would also have required the respondents to explain why they might assert that elements of the applicant's claim are not present in the first respondent's product. The applicant will have the costs of this application. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 1 August 2003 Counsel for the Applicant: B Caine SC Dr L Duncan Solicitor for the Applicant: Griffith Hack Counsel for the Respondents: J V Nicholas SC Solicitor for the Respondents: Phillips Fox Date of Hearing: 17 July 2003 Date of Judgment: 1 August 2003