FEDERAL COURT OF AUSTRALIA Fleming's Nurseries Pty Ltd v Hannaford [2009] FCA 884 FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) and HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA v TONY HANNAFORD, ROSELYNE NURSERIES PTY LTD (ACN 072 821 893) and GEOFFREY ROBERT BRITTON; TONY HANNAFORD; HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA) and FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) VID 1432 of 2005 KENNY J 14 AUGUST 2009 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1432 of 2005 general division BETWEEN: FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) First Applicant HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA Second Applicant TONY HANNAFORD Cross-Claimant AND: TONY HANNAFORD First Respondent ROSELYNE NURSERIES PTY LTD (ACN 072 821 893) Second Respondent GEOFFREY ROBERT BRITTON Third Respondent HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA) First Cross-Respondent FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) Second Cross-Respondent JUDGE: KENNY J DATE OF ORDER: 14 AUGUST 2009 WHERE MADE: MELBOURNE UPON THE RESPONDENT/CROSS CLAIMANT giving to the Court the Undertakings set out in paragraphs A, B and C below: A. The Respondent/Cross Claimant (Respondent), whether by himself, his servants, agents or howsoever otherwise, undertakes to permanently refrain from: (a) producing or reproducing; (b) conditioning for the purpose of propagation; (c) offering for sale; (d) selling; (e) importing; (f) exporting; (g) stocking for the purposes described in sub-paragraph (a), (b), (c), (d), (e) or (f) above; propagating material of: (i) the Sweetheart variety; (ii) the 'Black Star' cherry variety (Black Star variety); (iii) any variety of which the owner or exclusive licensee of the PBR (as defined in s 3 of the Plant Breeder's Rights Act 1994 (Cth)) in Australia is the First Applicant/Second Cross Respondent (FirstApplicant) and/or the Second Applicant/First Cross Respondent (SecondApplicant) and/or Graham's Factree Pty Ltd (the Fleming's varieties) (as defined in Schedule A to this Order); (iv) any variety of stone fruit of which the owner of the PBR in Australia is Zaiger, Inc., being a variety that is not included in the Zee Sweet program (the Zaiger varieties) (as defined in Schedule A to this Order); and (v) any stone fruit variety of which the owner or exclusive licensee of the PBR in Australia is Zee Sweet (the Zee Sweet varieties) (as defined in Schedule A to this Order). B. The Respondent, whether by himself, his servants, agents or howsoever otherwise, undertakes to permanently refrain from procuring, inducing and/or directing any other person to: (a) produce or reproduce; (b) condition for the purpose of propagation; (c) offer for sale; (d) sell; (e) import; (f) export; (g) stock for the purposes described in sub-paragraphs B(a), (b), (c), (d), (e) or (f) above; propagating material of: (i) the Sweetheart variety; (ii) the Black Star variety; (iii) the Fleming's varieties; (iv) the Zaiger varieties; (v) the Zee Sweet varieties; C. The Respondent, whether by himself, his servants, agents or howsoever otherwise, undertakes: (a) to remove and destroy all cultivars and propagating material being the total number of the Sweetheart variety and Black Star variety growing on his properties to the best of his reasonable knowledge within ninety (90) days from the date upon which the last of the parties to the Deed of Settlement has executed it. In the event however that subsequent to the removal and destruction of the cultivars referred to in this sub clause (a), it is ascertained that there are any more of the cultivars growing on his properties he undertakes to immediately notify the First Applicant in writing of this fact and remove and destroy those cultivars as well. The provisions of sub clauses (b) and (c) below will apply mutatis mutandis to those extra cultivars. For the purpose of this Clause the expression "remove and destroy" shall, with respect to stubs of trees only, mean "destroy in situ by poisoning until killed" (b) within seven (7) days after the date of complying with sub-paragraph C(a) above, permit, upon 48 hours notice to Griffith Hack Lawyers, an independent third party to be agreed by the parties and in default of agreement, Mr Paul James, to enter upon any land owned, leased or occupied by the Respondent upon which any cultivars of the Sweetheart variety or Black Star variety have been grown to determine whether sub-paragraph C(a) has been complied with; and (c) to make, file and serve upon the lawyers for the Applicants, within fourteen (14) days from the date of complying with sub-paragraph C(a), an affidavit confirming that the Respondent has fully complied with sub-paragraph C(a). THE COURT DECLARES BY CONSENT THAT: 1. In this Order, the term "propagating material" does not include the fruit of any of the varieties referred to in paragraph A above, to the intent that insofar as the Respondent has properly acquired any of the abovementioned varieties (and is not required to remove and destroy them by virtue of paragraph C of this Order) he is at liberty to sell the fruit thereof. 2. The Respondent has: (a) breached the terms of the valid and binding Non Propagation Agreement dated 14 June 2004 in relation to the Black Star variety in that he reproduced or procured, induced and/or directed another person to reproduce propagating material of the Black Star variety without the permission of the First Applicant; (b) contravened section 53(1)(a) of the Plant Breeder's Rights Act in that he reproduced or procured, induced and/or directed another person to reproduce propagating material of the Sweetheart variety without the permission of the Second Applicant / First Cross Respondent (SecondApplicant); and (c) procured, induced and/or directed the acts of others to illegally propagate cultivars of the Sweetheart variety and Black Star variety without the permission of the First Applicant, thereby infringing plant breeder's rights in the Sweetheart variety and breaching the terms and conditions of the Non Propagation Agreements referred to above in relation to the Black Star variety. AND THE COURT ORDERS THAT: 3. Within twenty eight (28) days from the date of the signing the Deed of Settlement, the Respondent provide to the lawyers for the Applicants a statutory declaration (StatutoryDeclaration) in which full and complete disclosure to the best of his reasonable knowledge is made to the reasonable satisfaction of the Applicants of the following information: (a) details of all cultivars of the Sweetheart variety, the Black Star variety, the Fleming's varieties, the Zaiger varieties and the Zee Sweet varieties, which have been purchased and/or acquired by the Respondent (whether in partnership with third parties or otherwise) and subsequently supplied to third parties, with such details to include the identity of the supplier of the cultivars, the identity of the recipient of the cultivars, the identity of the person responsible for propagation and the quantities and names of the varieties propagated (including the rootstock); (b) details of the propagation of all cultivars identified in paragraph 3(a) above including the identity of the person responsible for the propagation of these cultivars, the quantity of cultivars propagated and, if any such propagated cultivars were supplied to third parties, the identity of the third parties; (c) details of all cultivars presently growing on each and every property owned, leased, managed and/or operated or directly or indirectly controlled by the Respondent (whether in partnership with third parties or otherwise) including but not limited to the quantities and the names of the varieties (including the rootstock); (d) details of all cultivars of the Sweetheart variety, the Black Star variety, the Fleming's varieties, the Zaiger varieties and the Zee Sweet varieties propagated insitu on each and every property owned, leased, managed and/or operated or directly or indirectly controlled by the Respondent (whether in partnership with third parties or otherwise) including but not limited to the identity of the person responsible for the propagation of these cultivars, the source of the propagating material and the quantities and the names of the varieties (including the rootstock); (e) details of any growing contract (whether oral or written) the Respondent has or has had with any third party for the Sweetheart variety, the Black Star variety, the Fleming's varieties, the Zaiger varieties and the Zee Sweet varieties including, but not limited to, the identity of the person responsible for the propagation, the identity of the recipient of the cultivars, the consideration, the source of the propagating material and the quantities and the names of the varieties propagated (including the rootstock); and (f) details of any propagating material of the Sweetheart variety, the Black Star variety, the Fleming's varieties, the Zaiger varieties and the Zee Sweet varieties, which has been: (i) provided to and/or received from any third party for any purpose whatsoever; and (ii) received and/or taken from any third party, whether with or without that third party's knowledge; and (g) details of all cultivars of the Sweetheart variety, the Black Star variety, the Fleming's varieties, the Zaiger varieties and the Zee Sweet varieties that have been removed and/or re-budded or reworked in any way to an alternative variety from each and every property owned, leased, managed and/or operated directly or indirectly controlled by the Respondent (whether in partnership with third parties or otherwise) for the time period commencing from 1 January 2000 up to and including the date of the Statutory Declaration. 4. The proceeding (including the Cross Claim) be discontinued, with a right of reinstatement limited to a period of twenty four (24) months from the date upon which the last of the parties to the Deed of Settlement has executed it. 5. Schedule A to this Order be kept confidential to the parties to the proceeding and may not be inspected or otherwise be made available to any person other than a party to the proceeding or their legal representative. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1432 of 2005 general division BETWEEN: FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) First Applicant HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA Second Applicant TONY HANNAFORD Cross-Claimant AND: TONY HANNAFORD First Respondent ROSELYNE NURSERIES PTY LTD (ACN 072 821 893) Second Respondent GEOFFREY ROBERT BRITTON Third Respondent HER MAJESTY THE QUEEN IN RIGHT OF CANADA (AS REPRESENTED BY THE MINISTER OF AGRICULTURE & AGRI-FOOD CANADA) First Cross-Respondent FLEMING'S NURSERIES PTY LTD (ACN 006 532 556) Second Cross-Respondent JUDGE: KENNY J DATE: 14 AUGUST 2009 PLACE: MELBOURNE EX TEMPORE REASONS FOR JUDGMENT INTRODUCTION 1 Fleming's Nurseries Pty Ltd and Her Majesty the Queen in right of Canada apply to the Court for declarations and other orders. Tony Hannaford has proffered certain undertakings, and consents to the declarations and orders being made. 2 The Court has been given a minute of the proposed consent orders and a copy of a confidential report made by the Centre for Plant Conservation Genetics at the Southern Cross University. The parties made brief oral submissions today. THE CLAIMS AND CROSS-CLAIM 3 This matter has a long history in this Court, entering my docket only after the publication of a Notice to Practitioners dated 15 April 2008. 4 The action was commenced by the applicants on 9 November 2005. Pursuant to the orders of Justice Weinberg dated 10 March 2006, leave was granted to Mr Hannaford to file and serve a cross-claim dated 28 February 2006 against the respondents. Further, on 29 May 2007, Justice Marshall granted the applicants leave to join additional parties. The action has been resolved as against the additional parties, and, if the declarations and orders are made today, against Mr Hannaford. 5 I have previously discussed the parties' claims and responses in Fleming's Nurseries Pty Ltd v Tony Hannaford [2008] FCA 591 at [4]-[10]. It is unnecessary to repeat this discussion. Mr Hannaford filed a Further Amended Defence and Second Further Amended Cross-claim on 6 April 2009. My attention was drawn to the admission contained in paragraph [36.2]. DECLARATIONS AND ORDERS SOUGHT 6 The Court is not bound to make the declarations and orders on which the parties have agreed. The power of the Court to grant declaratory relief derives from s 21 of the Federal Court of Australia Act 1976 (Cth). This is a discretionary power. As Mason CJ, Dawson, Toohey and Gaudron JJ said in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, at 581: It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which "[i]t is neither possible nor desirable to fetter … by laying down rules as to the manner of its exercise". However, it is confined by the considerations which mark out the boundaries of judicial power. Hence declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties". (citations omitted) 7 Given the rights conferred by s 11 of the Plant Breeder's Rights Act 1994 (Cth), and the conduct of the parties in relation to the litigation, including the admissions made by the first respondent/cross-claimant, it would appear that the applicants have a real interest in securing the relief that is sought and that the declarations may well serve a public interest of the kind outlined by counsel for the applicants/cross-respondents this morning. 8 Whether or not there has been a breach of these rights might have involved a lengthy and contested hearing in proceedings that have already taken up significant time and, presumably, money. In this case, upon mature reflection and professional advice and after receiving the confidential report to which I have referred, Mr Hannaford has accepted that the declarations in question should be made. The confidential report has been provided to the Court, by consent, in order that it may inform itself as to whether or not the breaches referred to in the declarations have occurred. 9 Having reviewed the pleadings and other associated documents (including the legislation to which they refer), read and considered the confidential report of the Centre for Plant Conservation Genetics, and heard the parties today, I am satisfied that the declarations and orders are appropriate and should be made. Accordingly, I would make these declarations and orders upon the respondent/cross-claimant giving the undertakings as he has indicated. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 14 August 2009 Counsel for the Applicants: Mr A Maryniak Solicitor for the Applicants: Griffith Hack Counsel for the First Respondent: Mr F C Brohier Solicitor for the First Respondent: Kelly & Co Date of Hearing: 14 August 2009 Date of Judgment: 14 August 2009