Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Tender Withdrawal) [2020] FCA 1469

Federal Court of Australia

Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Tender Withdrawal) [2020] FCA 1469 File number: NSD 1283 of 2017

Judgment of: PERRAM J

Date of judgment: 14 October 2020

Catchwords: EVIDENCE – where Applicant tendered portions of affidavit – where s 136 Evidence Act 1995 (Cth) direction made that paragraph only be used to qualify preceding paragraph – where Applicant claims Respondents now use qualifying paragraph to support freestanding submission – whether Applicant should be granted leave to withdraw tender – whether s 136 direction should be reversed or clarified

Legislation: Evidence Act 1995 (Cth) ss 59, 81(1), 135, 136

Cases cited: Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; 49 NSWLR 262

Division: General Division

Registry: New South Wales

National Practice Area: Intellectual Property

Sub-area: Patents and associated Statutes

Number of paragraphs: 16

Date of hearing: 7 October 2020

Counsel for the Applicant: Mr C A Moore SC with Mr A R Lang and Ms P Arcus

Solicitor for the Applicant: Herbert Smith Freehills

Counsel for the Respondents: Mr C Dimitriadis SC with Mr J Cooke and Mr C Burgess

Solicitor for the Respondents: Shelston IP Lawyers

REASONS FOR JUDGMENT NSD 1283 of 2017

BETWEEN: MOTOROLA SOLUTIONS, INC. Applicant

AND: HYTERA COMMUNICATIONS CORPORATION LTD First Respondent

HYTERA COMMUNICATIONS (AUSTRALIA) PTY LTD ACN 165 879 701 Second Respondent

order made by: PERRAM J DATE OF ORDER: 14 OCTOBER 2020

PERRAM J: 1 On day 14 of the second tranche of this trial, Motorola sought to tender various portions of an affidavit of Mr Chen dated 30 November 2019. Mr Chen is the President of Hytera. Although Hytera had indicated that it would call Mr Chen ultimately it did not do so. One of those portions of Mr Chen's affidavit which Motorola sought to tender was the second sentence of [12] which is as follows: We gave Mr Kok authority to manage the personnel of the DMR team, including organising the structure of the team and hiring additional people when required which is Hytera's normal practice with senior managers. 2 It is not in dispute that this constitutes an admission against Hytera and on that basis is admissible under s 81(1) of the Evidence Act 1995 (Cth) ('the Act'). However, Hytera submitted at that time (T818.23) that it would be unfair and prejudicial within the meaning of s 135 of the Act to receive that evidence without also receiving the evidence contained in [13] of Mr Chen's affidavit which is as follows: At around the time that Mr Kok joined Hytera, in early 2008, I recall saying to him words to the effect of "I expect you will adhere to your obligations to Motorola". I trusted that Mr Kok knew what he could and could not do within the limits of his continuing obligation. 3 Following the raising of this contention, further debate between counsel ensued. Various solutions to the problem were floated. Ultimately, an arrangement was proposed by Hytera whereby the second sentence of [12] and the entirety of [13] would be received but [13] would be subject to a direction under s 136 of the Act that its use would be limited to the purpose of qualifying the second sentence of [12]. At the same time, Hytera indicated that it would not make a 'freestanding submission based on paragraph 13' (T820.12). The upshot was that Motorola tendered both the second sentence of [12] and all of [13] and the parties agreed that a s 136 direction should be made that [13] could only be used to qualify the second sentence of [12]. The exchange was as follows (T820.10-T820.36): MR BURGESS: Yes. That's – one approach. I wonder, your Honour, whether an alternative limitation could be admitting 13, but limit it to qualifying paragraph 12? So in other words, we don't make a freestanding submission based on paragraph 13, but it's admitted only as a qualification to what is admitted in paragraph 12. And that might just avoid any later difficulty in relation to whether the submission we make does or does not cross the line on the hearsay issue. HIS HONOUR: And then – the question of whether 13 does actually quality 12? Just becomes a submission question. MR BURGESS: Yes, your Honour. HIS HONOUR: So – Mr Lang, how's that for a deal which too good to refuse? So – you get to tender paragraphs 12 and 13, Mr Burgess agrees to a 136 direction that 13 can only be used as evidence to qualify 12. And then the problem is solved. MR LANG: Yes. Yes. We're content with that, your Honour. I think that does the trick, with respect. And, for good measure, we think the authority your Honour might have had in mind was ACCC v Air New Zealand [2013] FCA 322 at 59 and 60 in relation to that - - - HIS HONOUR: Thank you. MR LANG: - - - question on 135. HIS HONOUR: Yes. That rings a bell. All right. Well, that can be documented in due course. 4 In Module III of its closing written submissions dated 21 August 2020 Hytera submitted that the knowledge of Mr GS Kok and the other ex-Motorolans could not be attributed to Hytera because Mr GS Kok and the ex-Motorolans had acted outside the scope of their authority. This was because, amongst other matters: Mr GS Kok's authority had been limited when he joined Hytera because Mr Chen had expressly told him that he would be expected to adhere to his obligations to Motorola ([27](b)); Mr GS Kok had acted outside the authority given to him by Mr Chen ([27](c)); and, The other ex-Motorolans were hired by Mr GS Kok and acted under his directions in misappropriating and using Motorola code and documents, and therefore, also acted outside the authority given to Mr GS Kok by Mr Chen on behalf of Hytera ([27](d)). 5 The evidentiary reference for [27](b) was given as Mr Chen's affidavit [12] and [13] and I take it that the same reference was intended for [27](c) and (d). 6 On the second last day of the trial, following the receipt of that submission, Motorola indicated that it wished to withdraw the tender of the second sentence of [12] and therefore [13]. The question of whether it could do so was then the subject of full debate on the last day of the trial, 7 October 2020. At that time, Motorola modified its application to seek three different outcomes: (1) A withdrawal of the tender; (2) The reversal of the Court's earlier consent determination to receive [13] but subject it to the direction under s 136 (it is possible this was withdrawn implicitly at the end of argument but I will deal with it nonetheless); and, (3) A clarification of the s 136 direction to prevent Hytera from making a freestanding submission based on [13]. 7 Making the assumption in Motorola's favour that the Court has the power to grant a party leave to withdraw the tender of a document, I would not be disposed to do so in this case. The position which was arrived at in relation to [13] was the result of a dispute between the parties in which all the present considerations were in the front of counsel's minds. That controversy was quelled by the agreement that it would be received subject to the s 136 direction. Accepting that Hytera's submissions about the limits on the authority of Mr GS Kok flowing from his discussion with Mr Chen is what has provoked Motorola into its current application, Motorola understood the issue to which [13] gave rise at the time of its tender and it contented itself with the s 136 direction. That Motorola is now concerned that Hytera may be backsliding from the arrangement underpinning the s 136 direction does not provide a good reason to revisit the issue. Indeed, the risk that Hytera's submissions might cross the line was expressly adverted to in Mr Burgess' submission above and his contention was that the direction would prevent that from occurring (T820.13-T820.15). The point of the direction was to address the very concern which has now arisen. 8 Decisions have to be made during the course of a trial and there must be a reasonable expectation that they will not be revisited. That is not to say that it can never happen only that the circumstances in which it will be appropriate are likely to be rare. 9 Nor do I think that I should now reject the tender of [13] altogether. No doubt [13] is hearsay and not admissible under s 59 of the Act but 'not admissible' in s 59 means 'not admissible over objection': Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; 49 NSWLR 262 at 287 [149]. It was Motorola who tendered [13]. Motorola did not object to its own tender on the basis that it was hearsay. Instead it sought to limit the hearsay uses to which it could be put only to those which qualified the second sentence of [12]. Again, this was a considered course and I do not think it would be good trial process to revisit it. 10 It is clear, however, that part of the agreement Hytera reached with Motorola was that [13] would not be used in 'a freestanding way'. The power in s 136 is a power to limit 'the use to be made of evidence'. In most cases, that will mean, for example, that evidence with one kind of quality will not be received as evidence with another. For example, evidence of an out of court statement by a non-witness that he had said 'the car went through the red light' might be admitted to prove that the statement was made but a direction might be made that the evidence not be used as evidence that the car did in fact go through the red light. 11 What Motorola seeks is slightly different. There is presently a direction that [13] only be used to qualify the second sentence of [12]. That is a limit on its use. What Motorola seeks now is a direction that Hytera not be permitted to make a particular submission. I do not think the power in s 136 extends so far. 12 The s 136 direction which has been made does, however, entitle Motorola to submit that there is no evidence to support the submission which is now made at Module III [27] of Hytera's closing submissions. In terms, the effect of the s 136 direction is that the only purpose for which [13] can be put is to qualify the second sentence of [12]. If either party seeks to use the second sentence of [12] then the scope of that evidence can be cut down by [13]. Absent, however, any reliance on the evidence in the second sentence of [12] by either party then [13] cannot be used. 13 The question which arises is therefore whether [27] of Module III involves Hytera in using [13] other than as a qualification to the second sentence of [12]. The Macquarie Dictionary defines 'qualify' (the verb used in the s 136 direction) to mean, amongst other things: 3. to modify in some way; limit; make less strong or positive: to qualify a statement. 14 This accords with my understanding of the word in the sense in which it is presently being used. Thus for [13] to be used there must be: An assertion by a party of the truth of the contents of the second sentence of [12]; and A contention that the impact of that sentence is modified, limited or made less strong by [13]. 15 I do not think that the form of the direction limits who must assert the truth of the contents of the second sentence of [12]. The most natural fit is, of course, Motorola but there is nothing in the direction which limits its use only to Motorola and once evidence is in either party may use it. Nevertheless, there must first be an assertion of the truth of the contents of the second sentence of [12] before [13] can be called up. What this means for Hytera's submission at Module III [27] remains to be seen and does not call for determination at this point. 16 I will dismiss Motorola's applications. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.