FEDERAL COURT OF AUSTRALIA Knight v Beyond Properties Pty Ltd (No 2) [2006] FCA 192 PRACTICE AND PROCEDURE – parties – application for leave to join additional respondents – substantive application seeking relief in respect of alleged contraventions of s 52 of Trade Practices Act 1974 (Cth) and for passing off – allegation by applicant of reputation in Australia in connection with common law mark 'mythbusters' – existing claim relating to production of 'mythbusters' television series – proposed new claim relating to publishing of two 'mythbusters' books – no connection between publishers of books sought to be added as respondents, and existing respondents – issue of applicant's reputation in Australia common to both television series claim and books claim – Federal Court Rules O 6 r 2 – whether rights to relief 'are in respect of or arise out of the same transaction or series of transactions'. Federal Court Rules O 6 r 2 Bishop v Bridgelands Securities Ltd (1990) ATPR–§41-060 cited Payne v Young (1980) 145 CLR 609 cited ANDREW KNIGHT v BEYOND PROPERTIES PTY LTD & ORS NSD 131 of 2005 LINDGREN J 10 MARCH 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 131 OF 2005 BETWEEN: ANDREW KNIGHT APPLICANT AND: BEYOND PROPERTIES PTY LTD (ACN 002 861 458) FIRST RESPONDENT BEYOND INTERNATIONAL LTD (ACN 003 174 409) SECOND RESPONDENT DISCOVERY COMMUNICATIONS INC THIRD RESPONDENT SPECIAL BROADCASTING SERVICE CORPORATION (SBS) (ABN 91 314 398 574) FOURTH RESPONDENT FOXTEL MANAGEMENT PTY LTD (ACN 068 671 938) FIFTH RESPONDENT BEYOND PROPERTIES PTY LTD (ACN 002 861 458) FIRST CROSS-CLAIMANT BEYOND INTERNATIONAL LTD (ACN 003 174 409) SECOND CROSS-CLAIMANT ANDREW KNIGHT CROSS RESPONDENT JUDGE: LINDGREN J DATE OF ORDER: 10 MARCH 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Beyond Productions Pty Ltd be joined as sixth respondent. 2. In so far as the motion brought by the applicant by notice of motion filed on 2 February 2006 seeks leave to join Simon & Schuster Inc t/as Simon Spotlight Entertainment as seventh respondent, and John Wiley & Sons Inc as eighth respondent, the motion be dismissed. 3. The applicant have leave to file and serve a second further amended application and a further amended statement of claim. 4. The applicant pay the respondents' costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 131 OF 2005 BETWEEN: ANDREW KNIGHT APPLICANT AND: BEYOND PROPERTIES PTY LTD (ACN 002 861 458) FIRST RESPONDENT BEYOND INTERNATIONAL LTD (ACN 003 174 409) SECOND RESPONDENT DISCOVERY COMMUNICATIONS INC THIRD RESPONDENT SPECIAL BROADCASTING SERVICE CORPORATION (SBS) (ABN 91 314 398 574) FOURTH RESPONDENT FOXTEL MANAGEMENT PTY LTD (ACN 068 671 938) FIFTH RESPONDENT BEYOND PROPERTIES PTY LTD (ACN 002 861 458) FIRST CROSS-CLAIMANT BEYOND INTERNATIONAL LTD (ACN 003 174 409) SECOND CROSS-CLAIMANT ANDREW KNIGHT CROSS RESPONDENT JUDGE: LINDGREN J DATE: 10 MARCH 2006 PLACE: SYDNEY REASONS FOR JUDGMENT (No 2) INTRODUCTION 1 By notice of motion filed on 2 February 2006, the applicant ('Mr Knight') seeks leave to join three additional respondents: Beyond Productions Pty Ltd as sixth respondent, Simon & Schuster Inc t/as Simon Spotlight Entertainment ('S & S') as seventh respondent, and John Wiley & Sons Inc ('Wiley') as eighth respondent. 2 Associated with the proposed joinder, he also moves for leave to file a second further amended application and a further amended statement of claim. 3 Beyond Productions Pty Ltd is associated with the first respondent, Beyond Properties Pty Ltd, and the second respondent, Beyond International Ltd, and there is no objection to its joinder as sixth respondent. There will be an order for its joinder accordingly. I will refer to the three Beyond companies collectively as 'Beyond'. 4 The existing five respondents, who are represented by the same firm of solicitors, Phillips Fox, oppose the joinder of S & S and Wiley. BACKGROUND 5 The following account is based on the proposed further amended statement of claim and does not represent any finding of fact by me. Mr Knight's allegations are as follows. 6 Mr Knight, also known as 'Bowvayne', is an internationally acclaimed writer who is, and at all material times has been, involved in the writing of novels and the development of television programs. 7 Beyond comprises three Australian companies that are involved in the production and distribution of television programs. 8 The third respondent, Discovery Communications Inc ('Discovery'), is a foreign corporation that carries on business as a distributor of television programs and pay television broadcaster, and operates the 'Discovery Channel' in Australia. 9 The fourth respondent, the Special Broadcasting Service Corporation ('SBS'), is a statutory corporation that carries on business as a national free-to-air television broadcaster. 10 The fifth respondent, Foxtel Management Pty Ltd ('Foxtel'), is an Australian company that carries on business as a pay television broadcaster. 11 Since 1988, Mr Knight has continuously carried on, in Australia and internationally, a business of, inter alia, writing novels and developing, writing, producing and selling television programs all concerning the investigation of myths, under or by reference to the name and (common law) mark 'mythbusters'. Mr Knight gives particulars of his reputation overseas and in Australia, and concludes that he has a valuable and substantial reputation in Australia and elsewhere in the name and mark 'mythbusters'. 12 Mr Knight promoted in Australia and elsewhere, including to Beyond, the concept of a series of half-hour television programs to be called 'mythbusters'. 13 Without Mr Knight's authority, Beyond has produced, promoted and distributed a television series concerning the investigation of myths entitled 'mythbusters'. In addition, Beyond has licensed, authorised or permitted Discovery, SBS and Foxtel to broadcast and promote, or to procure the broadcasting and promotion of, the series in Australia and elsewhere, and they have in fact done so. 14 Mr Knight asserts that the conduct described has given rise to various misrepresentations in contravention of s 52 of the Trade Practices Act 1974 (Cth) ('the TP Act') and to various forms of passing off, by Beyond, Discovery, SBS and Foxtel. 15 The motion to join S & S and Wiley arises from the alleged publication by them in Australia and elsewhere without his authority of two books which include the word 'mythbusters' in their titles: in S & S's case the book, Mythbusters: the Explosive Truth Behind 30 of the Most Perplexing Urban Legends of All Time ('the S & S book'), and in Wiley's case the book Mythbusters: Don't try this at home ('the Wiley book'). 16 Mr Knight claims that by doing so, S & S and Wiley have also made misrepresentations in contravention of s 52 of the TP Act and engaged in various forms of passing off. 17 Mr Knight became aware of the publication of the two books in about mid to late 2005. He says that, in August 2005, he first saw the S & S book on the Amazon.com Internet site which stated that it was due to be released on 25 October 2005. He says that, on 26 October 2005, he ordered the S & S book which was delivered to him in November 2005. There is also evidence that the S & S book is being sold in a Dymocks bookstore in George Street Sydney. 18 Mr Knight learned of the Wiley book on 28 January 2006 when a staff member of the Angus and Robertson bookstore in Adelaide told him that it was due to be released in bookstores within seven days from that date. On 30 January 2006, a staff member in the Dymocks bookstore in George Street Sydney told him that the Wiley book would be available within seven to ten days. THE COURT's rules 19 Order 6 r 2 of the Federal Court Rules provides: 'Two or more persons may be joined as applicants or respondents in any proceeding: (a) where: (i) if a separate proceeding were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and (ii) all rights to relief claimed in the proceeding (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or (b) where the Court gives leave so to do.' Order 6 r 8 of the Rules provides: '(1) Where a person who is not a party: (a) ought to have been joined as a party; or (b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon; the Court may order that the person be added as a party and make orders for the further conduct of the proceeding. (2) A person shall not be added as an applicant without the person's consent.' Rule 8 does not apply in the present circumstances. It cannot be said that Mr Knight 'ought to have' joined S & S and Wiley as respondents. The publishing of the two books by them represented causes of action quite separate from those alleged against Beyond, Discovery, SBS and Foxtel, which all related to the television series. Indeed, the two books were published after the proceeding was commenced (the post-commencement accrual of the causes of action against the publishers does not itself defeat Mr Knight's motion: see Federal Court Rules O 13 r 2 (7), (8), (9)). 20 I turn, then, to O 6 r 2. Paragraph (a) of r 2 is directed primarily to a person who is contemplating commencing a proceeding in the Court. It informs that person as to whom he or she may join as co-applicants or as respondents. 21 A person cannot be made an applicant without his or her consent: O 6 r 8(2). 22 If there is a dispute over whether a person who has been joined as an applicant or respondent falls within para (a), there may be a challenge of wrongful joinder. 23 Addition of parties requires leave of the court, at least because it requires amendment of the application, and, since an application is not a pleading (see the definition of 'pleading' in FCR O 1 r 4), amendment of it always requires leave under O 13 r 1 (contrast the limited right to amend a pleading without leave under O 13 r 3). 24 Accordingly, even where the criteria of para (a) of O 6 are satisfied, an applicant needs the Court's leave to add respondents (or applicants). 25 Rule 2 (b) does not in terms limit the circumstances in which the Court may grant leave. Even if para (b) were limited to para (a) cases, para (b) would still have work to do: the Court might refuse leave because of considerations arising from the applicant's failure to join the parties at the outset, any delay of the applicant in seeking leave, the state of progression of the proceeding, any disruption likely to arise from the addition of parties, and other discretionary factors. That is to say, the Court may be persuaded, in the exercise of its discretion, to leave the applicant to the necessity of commencing a fresh proceeding. 26 In fact, in Bishop v Bridgelands Securities Ltd (1990) ATPR–§41-060 Wilcox J held that para (b) was not limited by reference to para (a) of r 2. I respectfully agree. Nonetheless, the first inquiry will always be whether the terms of para (a) are satisfied. If so, the Court will proceed to consider discretionary factors of the kind mentioned above. If not, the Court may still be persuaded in the particular circumstances of the case to exercise the discretion by granting leave, as happened in Bishop v Bridgelands, above. consideration 27 Mr Knight could not have joined S & S and Wiley at the outset because the facts giving rise to his claims against them (the publishing of the two books) occurred subsequently. 28 If a separate proceeding were brought by Mr Knight against S & S and Wiley, it appears that some common questions of law and fact would arise in that proceeding and the present proceeding (see para (i) of r 2(a)), namely, questions relating to Mr Knight's reputation in Australia in connection with the name 'mythbusters'. Apparently this will be a strongly contested issue in this proceeding. It may be, however, that even in relation to this issue, there would be differences between the two proceedings, one proceeding relating to Mr Knight's reputation with television viewers and the other relating to his reputation with the buyers and readers of books. 29 The rights to relief claimed in the two proceedings would clearly not be 'in respect of or arise out of the same transaction or series of transactions': cf Payne v Young (1980) 145 CLR 609. The evidentiary fields which would be covered by Mr Knight's claim against Beyond, Discovery, SBS and Foxtel in connection with the television series, and that covered by his claim against S & S and Wiley in connection with publication of the two books, would, it seems, be quite different. 30 The inconvenience to the two groups of respondents of having to participate in a hearing in which a substantial number of the issues and a substantial part of the evidence would be no concern of theirs, must be weighed against the inconvenience to Mr Knight of having to prove his reputation (or reputations) in separate proceedings. 31 In my view, the weighing exercise favours the respondents. Mr Knight would not have been entitled under O 6 r 2 to join the publishers as respondents in this proceeding initially, and he should not be allowed to do so now. 32 The respondents also oppose the joinder of S & S and Wiley on the basis that they did not publish the books in Australia. It is put that, on the evidence, they published the books in the United States of America and the books must have been imported into Australia by and from entities not related to S & S or Wiley. The respondents rely on a 'Brand Licence Agreement' between S & S and Discovery Licensing Inc, by which Discovery Licensing Inc granted to S & S the right to use certain trade names, trade marks, logos and copyrighted material of the Discovery Channel program 'mythbusters' to develop, publish, sell and distribute a 'mythbusters' fan book in the United States, its territories and possessions and Canada. According to an affidavit sworn 24 February 2006 of Emily Remes, Vice President and Deputy General Counsel of S & S, S & S has not been licensed the right to sell or authorise the sale of the S & S book or of any other 'mythbusters' fan book in Australia and has not done so. 33 There is also in evidence a brand licence agreement between Wiley and Discovery Licensing Inc dated 23 March 2005 under which Discovery Licensing granted Wiley the right to use certain trade names, trade marks and logos of the Discovery Channel program 'mythbusters' to develop, publish, sell and distribute a 'mythbusters' book in the United States its territories and possessions and Canada. 34 Counsel for the respondents agreed that her objection to the joinder as outlined above was in substance a submission that joinder would be futile because no reasonable cause of action would be disclosed and the proceeding would be liable to be summarily dismissed as against S & S and Wiley under FCR O 20 r 2. 35 I do not accept the submission. The question of the liability of S & S and Wiley for the alleged TP Act contraventions and for passing off raises factual and legal issues which are appropriately left to a final hearing. As I understood her, counsel for the respondents does not submit that S & S and Wiley do not carry on business within the Commonwealth and can not be served here: see FCR O 8 r 1(e). Generally speaking, the source, higher up the distribution chain, of an 'instrument of deception' is liable for passing off: see C Wadlow, The Law of Passing Off, Sweet & Maxwell, London, 1995 at 4.44 – 4.52 and cases there cited. On the evidence before me on this motion, I am not in a position to know with sufficient confidence that S & S and Wiley are excepted from this general principle. CONCLUSION 36 In substance, the motion should be dismissed with costs. However, as noted earlier, Mr Knight will have leave by consent to add Beyond Productions Pty Ltd as sixth respondent. He will also have leave to file and serve a second further amended application and a further amended statement of claim. The permitted amendments will not include those proposed relating to claims against S & S and Wiley. If, contrary to present indications, it transpires that there will be sufficient evidentiary overlap between the two proceedings, it will be open to Mr Knight or any other party to move for an order that they be heard together. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 10 March 2006 Counsel for the Applicant: Mr D S Yates SC and Ms S T Chrysanthou Solicitor for the Applicant: Ms. E. Ciccocioppo Counsel for the Respondents: Ms S J Goddard Solicitors for the Respondents: Phillips Fox Date of Hearing: 3 March 2006 Date of Judgment: 10 March 2006