FEDERAL COURT OF AUSTRALIA Sunbeam Corporation Ltd v Breville Pty Ltd [2007] FCA 496 SUNBEAM CORPORATION LTD v BREVILLE PTY LTD NSD 2444 OF 2006 GRAHAM J 28 MARCH 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2444 OF 2006 BETWEEN: SUNBEAM CORPORATION LTD Applicant AND: BREVILLE PTY LTD Respondent BREVILLE PTY LTD Cross-claimant SUNBEAM CORPORATION LTD Cross-respondent JUDGE: GRAHAM J DATE OF ORDER: 28 MARCH 2007 WHERE MADE: SYDNEY THE COURT: 1. Orders that the cross-claimant's Notice of Motion dated 21 March 2007 be dismissed. 2. Orders that the cross-claimant pay the cross-respondent's costs of the Motion. 3. Directs the respondent to immediately provide to the applicant access (in accordance with the agreed electronic document exchange protocol) to the documents identified in its list of documents served on the applicant on 23 March 2007. 4. Directs the respondent to file and serve its Verified List of Documents on or before 30 March 2007. 5. Directs the respondent to provide access to all documents contained in its Verified List of Documents by 5.00pm on 2 April 2007. 6. Directs the applicant/cross-respondent to file and serve any Affidavits in reply or in response to the Cross-claim on or before 13 April 2007. 7. Directs the respondent to file and serve any Affidavits in reply in respect of the Cross-claim on or before 18 April 2007. 8. Grants the parties liberty to apply on 2 days' notice. 9. Directs the applicant to provide a 'personalia' identifying relevant individuals and the positions which they have held by 26 April 2007. 10. Directs the applicant to provide a Judge's working bundle of all current pleadings and Affidavits (both of the applicant and the respondent) but excluding exhibits to those Affidavits, in chronological order by 23 April 2007. 11. Directs the respondent to identify documents for inclusion in a combined tender bundle of documents and notify the applicant accordingly by 20 April 2007. 12. Directs the applicant to provide a paginated tender bundle of documents in chronological order together with a Judge's working copy thereof by 26 April 2007. 13. Directs the applicant to provide a full set of products, promotional and other material referrable to: 13.1 the Breville Ikon 600 blender; 13.2 the Breville Ikon 550 blender; and 13.3 the Sunbeam MultiBlender Electronic PB7950 blender. 14. Directs each party to provide a concise statement of relevant legal principles in dot point form with a reference to the relevant authorities from which the principles have been extracted by 26 April 2007. 15. Directs that lists of objections to Affidavits be provided by all parties identifying the matter objected to and the ground of objection by 23 April 2007. 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 2444 OF 2006 BETWEEN: SUNBEAM CORPORATION LTD Applicant AND: BREVILLE PTY LTD Respondent BREVILLE PTY LTD Cross-claimant SUNBEAM CORPORATION LTD Cross-respondent JUDGE: GRAHAM J DATE: 28 MARCH 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 What is presently before the Court is a Notice of Motion dated 21 March 2007 filed by the cross-claimant, Breville Pty Ltd ('Breville'), seeking relief against the cross-respondent, Sunbeam Corporation Ltd ('Sunbeam'). The prayers for relief in the Notice of Motion are relevantly: '1. That the respondent/cross claimant have leave to file and serve a further amended cross claim in the form of exhibit ZM-1 to the affidavit of Zaven Mardirossian sworn 21 March 2007 in support of this notice of motion. 2. That the respondent/cross claimant file and serve the further amended cross claim by 30 March 2007. 3. That the applicant/cross respondent file and serve its defence to the further amended cross claim by 14 April 2007. 4. That the applicant pay the respondent's costs of and incidental to the motion.' 2 These proceedings were commenced by an Application filed by Sunbeam on 14 December 2006. The present pleadings consist of an Amended Statement of Claim filed 5 January 2007 to which there is a Defence filed 22 January 2007. The Defence was accompanied by a Cross-claim also filed 22 January 2007. That was superseded by an Amended Cross-claim filed 1 February 2007. A Defence to the Amended Cross-claim was filed on 12 February 2007. The cross-claimant now seeks leave to file a proposed Further Amended Cross-claim. 3 When this matter was before the Court constituted by Allsop J on 20 December 2006, his Honour made a direction as follows: '21. All issues relating to the quantum of any pecuniary relief be heard separately from and subsequently to the determination of all other issues in dispute in this proceeding (including any cross-claim).' A timetable was fixed to progress the matter for an early hearing. 4 On 29 January 2007 I made further orders and gave further directions with a view to facilitating an early hearing of the matter. On 29 January 2007 I ordered that the matter be fixed for hearing as a four day matter commencing on Monday 30 April 2007 but on the basis that the matter would proceed until concluded. 5 The applicant/cross-respondent and respondent/cross-claimant are competitors in business in the supply and marketing of a range of small electrical appliances. The proceedings were instituted by Sunbeam with a view to securing relief for contraventions of ss 52 and 53 of the Trade Practices Act 1974 (Cth) ('the Act') in respect of what was said to be misleading and deceptive conduct and false representations made concerning Breville's blender, described as an 'Ikon 600 and/or Ikon 550'. 6 The Amended Cross-claim seeks relief in respect of alleged misleading or deceptive conduct engaged in by the applicant in contravention of ss 52 and 53 of the Act in respect of its blender known as a 'MultiBlender Electronic PB7950 blender'. 7 It would appear that on 21 February 2007 the Partner in the firm of solicitors representing the respondent attended the Myer store in Bourke Street, Melbourne with a view to considering what may have constituted misleading and deceptive conduct in relation to the packaging of other Sunbeam products. He proceeded to purchase an 'Accura' iron. That iron was presented in packaging which asserted that technology used in it was patented. 8 The purpose of the present Motion is to enable the respondent to obtain relief in respect of misleading and deceptive claims said to have been made in respect of the iron in addition to the claims which the respondent seeks in its Amended Cross-claim at present, which relate to the applicant's blender. One of the issues which needs to be addressed in considering the present application is whether by allowing the amendment proposed it will simply signal an opening of the floodgates to allow claims to be made in respect of alleged misleading and deceptive conduct in respect of the packaging of other electrical appliances as well. 9 In this regard it is convenient to note that on 21 March 2007 the solicitors for the applicant wrote to the solicitors for the respondent (see Exhibit NM-1) contending that the respondent, Breville, was offering for sale 800 Class Professional Grills, identified as model number 800GR, with false claims on the packaging suggesting that the grill lock mechanism was patented. No application has been made at this stage to introduce claims of misleading and deceptive conduct referable to the packaging of Breville 800 Class Professional Grills but one can sense that such a claim may be just around the corner in the context of the letter of demand sent by the applicant's solicitors to the respondent's solicitors of 21 March 2007. 10 Section 22 of the Federal Court of Australia Act 1976 (Cth) provides: '22. The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.' 11 Order 5 rule 1(1) of the Federal Court Rules ('the Rules') provides for the making of Cross-claims against an applicant: '(1) A respondent may cross-claim against an applicant for any relief to which the respondent would be entitled against the applicant if the applicant were a respondent in a separate proceeding commenced in the Court by the respondent for that purpose.' 12 Order 5 rule 9 of the Rules limits the making of Cross-claims after directions hearings, hence the application for leave to file and serve the proposed Further Amended Cross-claim. 13 Order 5 rule 11(7) of the Rules contemplates that the trial or hearing and all other steps in a proceeding on a Cross-claim shall, as far as practicable, be carried on together with the trial or hearing and similar steps in the proceeding on the originating process in respect of which the Cross-claim is filed. 14 Order 13 rule 2 of the Rules provides for amendment and my attention has been drawn by the cross-claimant to Order 13 rule 2(1), (2) and (7) in particular. I have also been referred to the principle that all amendments necessary to bring the matter before the Court and allow justice to be done should be allowed. 15 Order 6 rule 6 of the Rules deals with inconvenient joinder. It relevantly provides: 'Where any joinder of ... causes of action may complicate or delay trial of the proceeding or is otherwise inconvenient, the Court may order separate trials or make such other order as the Court thinks fit.' 16 Order 29 of the Rules, under which Allsop J's order referred to earlier was made, empowers the Court, in rule 2, to make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings. 17 My first impression was that it would be inappropriate at this late stage to allow an amendment to permit a case to be brought in respect of irons as part of a case concerning competing claims about electrical appliances known as blenders. It was explained, however, on behalf of the cross-claimant, that the claim made in respect of the iron by the cross-claimant was, in effect, conceded by the cross-respondent. It related to a misleading or deceptive or false claim in respect of the patented status of the iron and as such was substantially similar to one of the claims made by the applicant in respect of the respondent's blender, where false claims in respect of patent rights or misleading or deceptive claims in respect of patent rights, were said to have been made. 18 In Mr Mardirossian's Affidavit, sworn 21 March 2007, he referred to a letter written by the solicitors for the applicant on 27 February 2007, which he summarised in these terms: 'On 27 February 2007, Freehills wrote to ABL [a reference to Arnold Bloch Leibler] advising that the patent in relation to the Accura Iron and the "Twin Element Technology" and "twin element assemblies" was still pending and admitting that the statement on the Accura Iron packaging was incorrect.' 19 Viewed in this context, one might well say that it is reasonable to allow the claim in respect of the applicants' packaging of its irons to be brought and heard at the same time as the question of liability and principal relief in respect of the blenders is considered. The critical question is, would the addition, at this stage of the proceedings, of the fresh claims limit the ability of the applicant and the cross-claimant to properly prepare their case in respect of the blenders, or cause the hearing time for the proceedings fixed for 30 April 2007 to be so extended as to render the time allocated and available for hearing of the matter inappropriate? 20 Ms Baird of counsel, who appears for the cross-claimant, indicated that if the amendment was allowed, she was not in a position to offer to submit to an order under Order 29 rule 2 of the Rules, that the separate questions raised on the amended pleading in respect of the iron be determined separately and after the trial in respect of the blender issues. She did, however, indicate that she would not wish to be heard to oppose an order for separate questions if the Court otherwise considered it to be appropriate. 21 The key to the proper consideration of the application, in my view, lies in a paragraph in a letter sent by the solicitors for the cross-claimant to the solicitors for the applicant on 16 March 2007. The gist of the relevant paragraph is that, if the amendment now sought is ordered, it will not significantly affect the preparation of the proceedings as presently constituted for trial. All that will be required is that the cross-respondent, that is to say, the applicant Sunbeam, will have to put on a Defence to the Further Amended Cross-claim, and, in relation to discovery it stated: 'the only additional documents our client seeks your client to discover as a result of the amendments are all documents relating to the sale of the Iron over the relevant period.' 22 Even though questions of quantum will not be considered at the hearing fixed for 30 April next, the additional requirement for discovery may well prove to be significant, it being suggested that any discovered documents may be material to the determination of the number of units sold and the appropriate form of relief. Ms Baird submits that the problems confronting the applicant with the provision of discovery could readily be overcome by the applicant making an admission as to the number of units which have been sold in what is said to be the offending packaging. 23 It does not seem to me appropriate that the cross-respondent should be put in the position where to achieve a hearing within a reasonable space of time, it is called upon to make admissions which otherwise it may not be minded to make. 24 It is also appropriate to have regard to the possibility of the floodgates being opened and other claims advanced between now and 30 April in respect of other competing electrical appliances. 25 There seems to me to be no utility in allowing the amendment if it is to be coupled with an order for the separate hearing of the additional questions raised by the amendment. Whilst there is some attraction in allowing the amendment to be brought, given that it raises similar issues concerning packaging to those which are raised in the blender claims, I do not consider that it would be appropriate to prejudice or risk prejudicing the proper disposition of the proceedings as presently constituted on the dates which have been allocated for their determination. 26 Mr Cobden of senior counsel for the applicant has pointed out that notwithstanding the admissions which his client has made, there may well still be the need for extra time to determine what, if any, appropriate relief should be granted in respect of the claims made by his client referrable to the irons. Having regard to the floodgates question, the separate questions possibilities, the need for further discovery the claim to which is not abandoned and the need for extra time to consider appropriate relief in respect of the irons, I do not think that the Court should at this stage grant an amendment to allow in effect a separate case to be tacked on to the current case concerning the blenders. 27 It is not suggested that the cost of the filing fee should influence the outcome of the present motion. It seems to me that if the cross-claimant wishes to secure relief otherwise than by consent from the applicant in relation to the applicant's irons then it should institute separate proceedings which can be prepared and dealt with in a timely basis on another occasion. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 4 April 2007 Counsel for the Applicant/Cross-respondent: Mr R Cobden SC Solicitor for the Applicant/Cross-respondent: Ms K Everett of Freehills Counsel for the Respondent/Cross-claimant: Ms J R Baird Solicitor for the Respondent/Cross-claimant: Arnold Bloch Leibler Date of Hearing: 28 March 2007 Date of Judgment: 28 March 2007