FEDERAL COURT OF AUSTRALIA Schott Termofrost AB v Meliador Pte Ltd [2007] FCA 926 SCHOTT TERMOFROST AB v MELIADOR PTE LTD ARBN 112219486 NSD 301 OF 2007 GRAHAM J 7 JUNE 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 301 OF 2007 BETWEEN: SCHOTT TERMOFROST AB Applicant AND: MELIADOR PTE LTD ARBN 112219486 Respondent JUDGE: GRAHAM J DATE OF ORDER: 7 JUNE 2007 WHERE MADE: SYDNEY THE COURT: 1. Grants leave to the respondent to file in Court the original of the affidavit of Russell Park-Miller sworn 29 May 2007. 2. Grants leave to the applicant to amend the name of the respondent to read 'Meliador Pte Ltd ARBN 112219486'. 3. Grants leave to the applicant to discontinue the proceedings on the basis that the applicant pay the respondent's costs fixed in the amount of $6,500. 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 301 OF 2007 BETWEEN: SCHOTT TERMOFROST AB Applicant AND: MELIADOR PTE LTD ARBN 112219486 Respondent JUDGE: GRAHAM J DATE: 7 JUNE 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicant, Schott Termofrost AB, is a Swedish company which is involved in the manufacture and supply of refrigerated cabinet doors. It claims copyright in certain works comprising technical data and cartoon images which are made available to potential customers. 2 The respondent, Meliador Pte Limited, ARBN 112219486, is a supplier of doors for refrigerated cabinets. It is a party to a distributorship agreement with a company known as Schott Glaverbel Malaysia Sdn Bhd. As the name Schott Glaverbel Malaysia Sdn Bhd suggests, there is some connection between the other party to the distributorship agreement made 1 August 2004 and the applicant. In the present circumstances it is unnecessary to explore in detail the precise nature of that relationship. Suffice it to say that the respondent contends that its use of the applicant's copyright in technical data and cartoon images is authorised by the terms of the distributorship agreement. 3 Prior to the institution of the proceedings on 1 March 2007 a letter of demand was apparently sent by the applicant's solicitors to the respondent dated 21 February 2007. No response to the letter of demand was received by the applicant's solicitors prior to the institution of the proceedings on 1 March. However, it would appear that on 26 February 2007 a response was prepared which was posted to the applicant's solicitors on 27 February 2007. That response was apparently not received until 5 March 2007. 4 The Application as originally filed was accompanied by a Statement of Claim which did not include documents that were said to have been identified in a schedule to the Statement of Claim. When the Application was first before the Court for directions on 5 April 2007 the omission from the Statement of Claim of the documents identified as being in the schedule to the original Statement of Claim was noted and leave was granted to the applicant to file an Amended Statement of Claim which cured this omission. 5 An Amended Statement of Claim was filed on 10 May 2007 which annexed as annexure A the relevant works in relation to which copyright was claimed. The nature of the infringement relied upon by the applicant was said to be the use of the copyrighted material in material posted by the respondent on its website, www.thermodoor.com.au. A copy of the website material was included as annexure B to the Amended Statement of Claim. It is common ground that the respondent included copyrighted material in the material which was posted on the respondent's website. The respondent, however, says that it had the right to use the relevant material by virtue of the distributorship agreement of 1 August 2004. 6 The respondent has elected to remove the material in respect of which copyright is claimed from its website notwithstanding the rights that it contends it enjoys under the distributorship agreement. In the circumstances the applicant has indicated a desire to discontinue the proceedings rather than pursue such rights as it may have to the relief sought in the Application. 7 The applicant could discontinue the proceedings without leave under Order 22 rule 2(1)(b) of the Federal Court Rules. Were it to do so it would be liable under Order 22 rule 3(1) to pay the costs of the respondent. In the circumstances the applicant has applied for the leave of the Court to discontinue the proceedings under Order 22 rule 2(1)(d) and has sought an order that leave be granted on the basis that there be no order as to costs. 8 The respondent has filed and served an affidavit of Russell Park-Miller sworn 29 May 2007 to which a copy of the distributorship agreement of 1 August 2004 was exhibited. As I understand it the solicitor for the applicant received instructions by electronic means at about 1:30 am today from his client in Sweden indicating that the authority of the company Schott Glaverbel Malaysia Sdn Bhd to confer rights in respect of the copyright material on the respondent is disputed. At this stage no evidence has been put before the Court to found an argument to the effect indicated. 9 The applicant's solicitor is in the difficult position of addressing how to best serve his client's interests in the circumstances. Were he to have applied for an adjournment of the application for leave under Order 22 rule 2(1)(d) it would follow that his client would be ordered to pay the costs thrown away of today's hearing. 10 Given that there is no apparent likelihood that further breaches of copyright, if there have been any, may occur in the near future it is unlikely that further substantive relief will have to be sought by the applicant against the respondent. 11 The respondent does not submit to an order that leave be granted to discontinue the proceedings on the basis that there be no order as to costs. However, it has indicated that it would submit to an order granting leave to the applicant to discontinue the proceedings on the basis that the applicant pay the respondent's costs limited to an amount of $6,500. 12 The applicant's solicitor is without instructions to consent to an order such as that to which the respondent would submit but does not wish to be heard in opposition to such an order being made. If I may say so this is a sensible approach to adopt given the likely costs of obtaining evidence to allow the argument referred to earlier to be advanced and ventilated. 13 In the circumstances I consider that an order should be made granting leave to the applicant to discontinue the proceedings on the basis that the applicant pay the respondent's costs in an amount of $6,500. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 19 June 2007 Solicitor for the Applicant: A J McMinn of RBHM Commercial Lawyers Solicitor for the Respondent: A Swanwick of Norton White Lawyers & Notaries, Melbourne Date of Hearing: 7 June 2007 Date of Judgment: 7 June 2007