FEDERAL COURT OF AUSTRALIA Beadcrete Pty Ltd v Fei Yu trading as Jewels 4 Pools (No 2) [2012] FCA 1139 Citation: Beadcrete Pty Ltd v Fei Yu trading as Jewels 4 Pools (No 2) [2012] FCA 1139 Parties: BEADCRETE PTY LTD (ACN 071 743 961), DESIGNER CONCRETE COATINGS PTY LTD (ACN 102 760 234), BUYRITE STEEL SUPPLIES PTY LTD (ACN 053 173 041) and DESIGNERITE PTY LTD (ACN 146 670 706) v FEI YU TRADING AS JEWELS 4 POOLS, JEFFREY STUART MCALISTER, PEBBLE MASTERS PTY LTD (ACN 087 540 734), TWIN COAST POOLS PTY LTD (ACN 104 149 484), MELKEN DEVELOPMENTS PTY LTD TRADING AS BAYSIDE POOLS & PAVING (ACN 052 945 169) and GRIN DISTRIBUTIONS PTY LTD (ACN 133 541 563) File number: NSD 111 of 2011 Judge: JAGOT J Date of judgment: 3 October 2012 Legislation: Patents Act 1990 (Cth) Date of hearing: 3 October 2012 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 7 Counsel for the Applicants: Mr A J Bannon SC and Ms P Arcus Solicitor for the Applicants: Creagh & Creagh Counsel for the Respondents: Ms S J Goddard SC and Mr H P T Bevan Solicitor for the Respondents: Conditsis Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 111 of 2011 BETWEEN: BEADCRETE PTY LTD (ACN 071 743 961) First Applicant DESIGNER CONCRETE COATINGS PTY LTD (ACN 102 760 234) Second Applicant BUYRITE STEEL SUPPLIES PTY LTD (ACN 053 173 041) Third Applicant DESIGNERITE PTY LTD (ACN 146 670 706) Fourth Applicant AND: FEI YU TRADING AS JEWELS 4 POOLS First Respondent JEFFREY STUART MCALISTER Second Respondent PEBBLE MASTERS PTY LTD (ACN 087 540 734) Third Respondent TWIN COAST POOLS PTY LTD (ACN 104 149 484) Fourth Respondent MELKEN DEVELOPMENTS PTY LTD TRADING AS BAYSIDE POOLS & PAVING (ACN 052 945 169) Fifth Respondent GRIN DISTRIBUTIONS PTY LTD (ACN 133 541 563) Sixth Respondent JUDGE: JAGOT J DATE OF ORDER: 3 OCTOBER 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application for leave to amend the cross-claim filed on 25 September 2012 be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 111 of 2011 BETWEEN: BEADCRETE PTY LTD (ACN 071 743 961) First Applicant DESIGNER CONCRETE COATINGS PTY LTD (ACN 102 760 234) Second Applicant BUYRITE STEEL SUPPLIES PTY LTD (ACN 053 173 041) Third Applicant DESIGNERITE PTY LTD (ACN 146 670 706) Fourth Applicant AND: FEI YU TRADING AS JEWELS 4 POOLS First Respondent JEFFREY STUART MCALISTER Second Respondent PEBBLE MASTERS PTY LTD (ACN 087 540 734) Third Respondent TWIN COAST POOLS PTY LTD (ACN 104 149 484) Fourth Respondent MELKEN DEVELOPMENTS PTY LTD TRADING AS BAYSIDE POOLS & PAVING (ACN 052 945 169) Fifth Respondent GRIN DISTRIBUTIONS PTY LTD (ACN 133 541 563) Sixth Respondent JUDGE: JAGOT J DATE: 3 OCTOBER 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The respondents have made further submissions in relation to the application filed on 25 September 2012 seeking leave to amend the cross-claim in this proceeding. The respondents seek to add a claim for the making of unjustifiable threats and seek relief pursuant to s 128 of the Patents Act 1990 (Cth) (the Act), including as specified in s 128(1)(c), the recovery of any damages sustained by the respondents as a result of the threats. 2 I accept that in this case an order was made on 23 June 2011 for the separation of all issues of liability from the quantification of damages, but the fact is that at the time that order was made there was no claim by the respondents for damages for unjustifiable threats or for any relief relating to alleged unjustifiable threats. 3 I also accept that it may well have been desirable – even highly desirable – for the applicants to have responded in writing to the respondents' letter of about a month ago notifying the applicants of their intention to seek leave to amend the cross-claim. However, I am not persuaded that the applicants' failure to respond in writing to that correspondence has made, or could have made, any difference to the practical outcome of the application. In other words, it seems to me that even if the application had been made a month ago the result could not have been different from the result today. The reason for this is that it is not simply a matter of the respondents being required to give discovery of documents which would be relevant to the recovery of any damages they say they have sustained as a result of the acts. 4 It is true that the applicants themselves seek an order for additional damages having regard to the provisions of s 122(1A) of the Act, but there is a world of forensic difference between a party trying to prove its case and a party defending the case of another. The fact that the applicants did not seek discovery of documents from the respondents which would fall within s 122(1A)(c), that is relating to the conduct of the respondents after the act constituting the infringement occurred or after the respondents were informed that they had allegedly infringed the patent, was a forensic decision the applicants made having regard only to their own positive case that they should be entitled to an assessment of an additional amount of damages. It was not a forensic decision made, and nor could it have been, having regard to the case of unjustifiable threats that the respondents now seek to run in the cross-claim. 5 I accept the applicants' submission that the real difficulty here is that the respondents seek the recovery of damages said to be sustained by the respondents as a result of the alleged unjustifiable threats. In accordance with s 128(1)(c) this would mean that if the cross-claim is permitted then in the subsequent hearing which is contemplated in relation to damages the respondents would be able to argue that they have sustained damage by reason of unjustifiable threats of the applicants. In so doing, the respondents would necessarily adduce evidence about at least the question of any damage sustained or, even if not necessarily, the respondents would have the opportunity to adduce evidence on that question. 6 The forensic difficulty this creates is that in the current hearing on infringement the evidence would not include such potential evidence from the respondents but the respondents would later have the opportunity to rely on such evidence. The applicants would thereby be denied the opportunity to use such evidence as they saw fit in relation to their claim for infringement and, of course, I would be denied the opportunity to take into account that evidence as potentially relevant to infringement. That is the forensic disadvantage which has been created by the lateness of the respondents' application to include in the cross-claim the claim for unjustifiable threats and, in particular, the recovery of damages for unjustifiable threats. That is a real forensic disadvantage to the applicants, not an imagined or theoretical forensic disadvantage. It is true that the nature and extent of the forensic disadvantage cannot be known, but the problem is that the nature and extent of the forensic disadvantage is wholly in the hands of the respondents because it would depend upon the evidence that the respondents chose to call in order to make out their damages claim. 7 In circumstances where neither party, quite properly having regard to the nature of the case, wants to see the hearing adjourned, the only fair result is that the respondents should not be permitted at this late stage to expand their cross-claim in the way sought. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 18 October 2012