New South Wales Supreme Court CITATION : Guttershield Systems Australia Pty Limited v LBI Holdings Pty Limited [2008] NSWSC 747 HEARING DATE(S) : 5 September, 12, 13 and 14 November 2007, 6 and 12 February 2008 JUDGMENT DATE : 23 July 2008 JUDGMENT OF : McLaughlin AsJ 1. I determine the costs referred to in paragraph 2(a) of the short minutes of 17 December 2004 in the amount of $31,977.05. 2. I determine that the patents, registered designs or other items of intellectual property that are the subject of undertakings referred to in paragraphs 2(b), 2(c) and 2 (d) of the aforesaid short minutes are: Gutter grid logo Tubular mesh screen patent DECISION : Mesh screen patent Bushfile trademark Guttersock trademark Stopper assembly patent Drainsock trademark 3. I determine the costs incurred in relation to the development of the patents, registered designs or other items of intellectual property that are the subject of undertakings referred to in paragraphs 2 (b), 2(c) and if applicable 2(d) of the aforesaid short minutes in the amount of $7295.83 CATCHWORDS : Intellectual property - reference for determination - cost of development of patents - measures of cost - whether historic cost or arms-length cost - not appropriate to apply indexation by way of an interest component - travel expenses should be actual expenses incurred - possible unjust enrichmenst is not a relevant factor in calculating cost of development - not appropriate to caluculate what might have been the reasonable cost for developing the patents. LEGISLATION CITED : Patents Act 1990 TEXTS CITED : Bannon C. J., Australian Patent Law (1984) Shorter Oxford Dictionary PARTIES : Guttershield Systems Australia Pty Limited and Guttershield Pty Limited (Plaintiffs) LBI Holdings Pty Limited and Leafbusters Pty Limited (Defendants) FILE NUMBER(S) : SC 5724 of 2002 COUNSEL : Mr G. Grinter (Plaintiffs) Mr S. Reuben (Defendants) SOLICITORS : Denes Ebner (Plaintiffs) Slater & Gordon (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION ASSOCIATE JUSTICE McLAUGHLIN Wednesday, 23 July 2008 5724 of 2002 GUTTERSHIELD SYSTEMS AUSTRALIA PTY LIMITED and ANOR –v- LBI HOLDINGS PTY LIMITED and ANOR JUDGMENT 1 HIS HONOUR: On 25 October 2004 Campbell J (as he then was), after a hearing occupying five days, published his reasons for judgment. The proceedings before His Honour confirmed the beneficial interest of the Plaintiffs in five Australian patents registered in the name of the First Defendant, LBI Holdings Pty Limited (which patents had been referred to variously as "the Five Patents" and "the patents in suit"). 2 On 17 December 2004 His Honour, to give effect to his reasons for judgment, made orders in accordance with short minutes of order. Those short minutes included, as order 3, That it be referred to the Master to determine: (i) the costs referred to in paragraph 2(a); (ii) what patents, registered designs or other items of intellectual property are the subject of undertakings referred to in paragraphs 2(b), 2 (c), and 2(d); (iii) the costs incurred in relation to the development of the patents, registered designs or other items of intellectual property that are the subject of undertakings referred to in paragraphs 2(b), 2 (c) and if applicable 2(d). 3 Paragraph 2 of the short minutes relates to a number of conditional undertakings of the Plaintiffs to the Court, including, (a) To pay to Leafbusters Pty Limited and Polymesh Australasia Group Pty Limited, one-third of the cost incurred by those companies in development of the Five Patents (as ascertained by inquiry before the Master, or as agreed between the plaintiffs and Leafbusters Pty Limited and Polymesh Australasia Group Pty Limited). 4 Subparagraphs (b), (c) and (d) of paragraph 2 of the short minutes provide a scheme by which, upon payment by certain of the Defendants or other entities of a proportion of the cost incurred by the Plaintiff or by the principal of the Plaintiff in development of certain items of intellectual property, then the Plaintiffs will cause to be registered the interest of those Defendants or other entities in those items of intellectual property in the same proportions as such payments. 5 Subparagraphs (b) and (d) relate to the period from 17 March 1999 to 4 December 2000, whilst subparagraph (c) relates to the period from 4 December 2000 to 7 July 2002 (but expressly excludes the period from 17 March 1999 to 4 December 2000). 6 By paragraphs 4, 6, 7 and 8 of the short minutes, provision is made for certain happenings consequent upon the determination of the Master referred to in paragraph 3. 7 The reference in paragraph 3 to the Master has, in consequence of the abolition of that office in June 2005, been treated as a reference to an Associate Judge. It is by virtue of that reference that the matter has come before me for determination. 8 The effect of the reference ordered by Campbell J is, first, that, pursuant to order 3(i), I determine the cost incurred by Leafbusters Pty Limited ("Leafbusters") and Polymesh Australasia Group Pty Limited ("Polymesh") in development of the five patents (being the costs referred to in order 2(a) of the short minutes). Then, that I determine the identity of the various items of intellectual property referred to in paragraph 2 (b), (c) and (d) of the short minutes. Finally, that I determine the costs incurred in relation to the development of the foregoing items of intellectual property referred to in paragraph 2(b), (c) and (d). 9 Subsequently the parties agreed upon the determination referred to in order 3 (iii). 10 The Defendants accept the costings in relation to the development of the patents, registered designs or other items of intellectual property put forward in the affidavit of Bruce Wickett sworn 18 July 2006 (in respect to the intellectual property developed by him during the period of the Alliance). By letter of 14 August 2007 (incorrectly dated 10 April 2007) the solicitor for the Defendants accepted those costs and gave an unconditional undertaking on behalf of the Defendants to pay the costs incurred by the Plaintiffs and/or Mr Wickett, provided for in orders 2(b) and 2 (c), as identified by Mr Wickett in his affidavit of 18 July 2006. Those items which are accepted by the Defendants have been summarised in a table set forth in paragraph 11 of the written submissions of Counsel for the Defendants dated 23 August 2007. The total amount thus acknowledged by the Defendants was $7,295.83. Accordingly, as I understand it, the parties are in agreement that the determination ordered by order 3 (iii) of the short minutes will be in that amount of $7,295.83. 11 Accordingly, in consequence of the reference ordered by Campbell J, it is necessary for me to determine only items (i) and (ii) in order 3. That is, that I determine the cost incurred by Leafbusters and Polymesh in development of the five patents; and that I determine the identity of the items of intellectual property referred to in paragraph 2(b), (c) and (d) of the short minutes. 12 In respect to the identity of the various items of intellectual property referred to in paragraph 2 (b), (c) and (d) in the short minutes, the Defendants assert that there were three items discovered by the Defendants but not disclosed by Mr Wickett as having been developed during the period of the Alliance (that is, between 17 March 1999 and 7 July 2002). That assertion was made notwithstanding that the lodgement date in respect to each of the three asserted items of intellectual property was after the period when, as determined by Campbell J, the Alliance had come to an end. In relation to each of those three asserted items (and, in particular, the two items in respect to what was referred to throughout the hearing as the 3G mesh), the basis upon which the Defendants lay claim to those items is that the creator's intellectual work was performed during the period of the Alliance. 13 The relevant facts and circumstances are set forth in the judgment of Campbell J of 24 October 2004. It is not necessary for me here to rehearse the totality of those factual matters. 14 I have had the benefit of receiving several written outlines of submissions from Counsel for the respective parties. Those documents will be retained in the Court file. 15 For present purposes the background to the reference to myself and to the decision of Campbell J can be summarised as follows. Guttershield Systems Australia Pty Limited and Guttershield Pty Limited (which companies were controlled by Mr Bruce Wickett, and may be referred to compendiously as the Wickett interests) were part of a commercial alliance having two other components. One of those other components consisted of Leafbusters Pty Limited (the Second Defendant) and Polymesh Australasia Pty Limited (which companies were controlled by Mr Paul Anthony Groom and Mrs Thea Groom (also referred to as Thea Tsioris), and may be referred to compendiously as the Groom interests). The third component consisted of other companies which were controlled by Mr Jeroen (known as Jerry) DeGraaf (and which may be referred to compendiously as the DeGraaf interests). Subsequently, Mr DeGraaf and his companies withdrew from the alliance and the present litigation has been conducted between the Wickett interests and the Groom interests. 16 That commercial alliance (referred to in the evidence and in the submissions as "the Alliance") existed from 17 March 1999 to 7 July 2002. After the withdrawal by the DeGraaf interests from the Alliance on that latter date the Wickett interests and the Groom interests continued to regard the relationship between those two components as being governed by the terms of the tripartite alliance which had previously existed between those two interests and the DeGraaf interests. 17 During the period of the Alliance the Groom interests registered various items of intellectual property, including five Australian patents (referred to in the proceedings as "the Five Patents" or "the patents in suit"). Each of those patents was registered in the name of LBI Holdings Pty Limited, the first Defendant, and in each patent Paul Anthony Groom was described as the inventor. 18 For the purpose of determining the cost incurred by Leafbusters and Polymesh in development of the five patents, the Groom interests prepared a schedule detailing: (a) some of the hours invested by Mr Paul Anthony Groom and Mrs Thea Groom in the development of the five patents; (b) the purported cost of the hours so invested; (c) the attendant travel costs. 19 The Wickett interests disputed the reasonableness of the hours said to have been so invested and the asserted cost of those hours to Leafbusters and Polymesh. 20 In support of those schedules evidence was given by Mr Groom and by Robert Smith, a forensic accountant. Both Mr Groom and Mr Smith were cross-examined. 21 The Defendants also relied upon affidavit evidence of Norman Bruce Morcom, a patent attorney, which I allowed to be read in the face of opposition by the Plaintiffs to that course. Mr Morcom was not cross-examined on behalf of the Plaintiffs. 22 Annexure A to Mr Morcom's affidavit of 11 October 2007, sets forth the expenses asserted to have been incurred by the Defendants in the development of the five patents. The detailed items of expenses in that annexure, in a total amount of $93,676.84, were prepared by Mr Groom, and were stated by him to be details of the work performed by himself and Mrs Groom in relation to the development of the five patents. 23 The evidence regarding the costs incurred by Leafbusters and Polymesh in the development of the patents is set forth in a number of affidavits sworn by Paul Groom and his wife Mrs Thea Groom. It will be necessary to consider the contents of each of those affidavits, and to distil therefrom details of the nature and amount of those costs. 24 Much of the evidence contained in those parts of the affidavit of Paul Anthony Groom sworn 13 October 2003 which were read at the hearing before me did not address this question of the costs incurred by the Defendants in the development of the five patents. Similarly, much of those parts of the affidavit of Thea Grooms sworn 3 October 2003 which were read did not deal with the costs of development of the five patents in the period of the Alliance (17 March 1999 to 7 July 2002). 25 The Defendants allege that the costs of developing the five patents in suit were those costs that are set forth in Annexure A to the affidavit of Paul Groom of 15 October 2006 (referred to in the written submissions of Counsel for the Defendants as Schedule A). 26 In this regard the Defendants rely upon the definition of patent given in C J Bannon, Australian Patent Law (1984), and the respective definitions of invention and patentable invention in section 18 of the Patents Act 1990. The Defendants also submit that the word "development" (appearing in various phrases in the orders of Campbell J (such as, "costs incurred in development of the Five Patents" (order 2 (a)); "costs incurred…in the development of the patents…" (order 2 (b)); "development work" (order 2(b)); "costs of development" (order 2(b)); "costs of development" (order 2(c)); "costs of development" (order 2(d))) has its ordinary meaning as defined in the Shorter Oxford Dictionary (as meaning 1) as "a gradual unfolding; a fully working out of the details of anything". 27 The details set forth in Schedule A were prepared by Mr Groom from records of the Defendant companies, the contents of the bill from Morcom Pernat, Patent Attorneys (of which firm Mr Norman Bruce Morcom was a principal), as well as material referred to in earlier affidavits filed in the proceedings before Campbell J. The original source material referred to in the compilation of Schedule A, relating to diary entries, file notes and other documents, was exhibited to Mr Groom's affidavit of 15 October 2006, as exhibit PG1. No objection was taken on the part of the Plaintiffs to the details set forth in Schedule A upon the basis that that document contained the summary of matters set forth in Exhibit PG1 and the other source material from which Schedule A was derived. Indeed, the Plaintiffs themselves annexed Schedule A to Mr Wickett's affidavit of 6 November 2006. It was not disputed by Mr Wickett that 265 hours and 15 minutes had been spent by the Defendants in developing the five patents in suit (see paragraphs 13 and 15 of the affidavit of Bruce Wickett sworn 6 November 2006). However, Mr Wickett in those same paragraphs in that affidavit disputed the further assertion of the Defendants that additional periods totalling 857 hours and 10 minutes had been spent in the development of the patents in suit. 28 As I understand the situation, it is not in issue that Mr and Mrs Groom devoted the additional periods, totalling in excess of 857 hours, to work for or on behalf of the Defendant companies. What is in issue is whether that work can properly be attributed to the development of the patents in suit. 29 I have already referred to the affidavit evidence of Norman Bruce Morcom, a patent attorney, which was presented on behalf of the Defendants. That evidence was presented not only as evidence of factual matters (on account of all the charges made by Mr Morcom in respect to the patents in suit, and the various applications which matured into the registration of those several patents) but also in the nature of expert evidence. 30 The Plaintiffs challenged the competence of Mr Morcom to give opinion evidence, in the nature of expert evidence. One of the grounds of that challenge was that, so it was submitted, Mr Morcom was subject to a conflict of interest, in that he had acted for the Alliance up to 2002 in respect to the various patents, and that thereafter he had continued, until the end of the Alliance, to act on behalf of the Defendants. In objecting to the competence of Mr Morcom to give evidence in the nature of expert evidence, the Plaintiffs likened the situation to that of a solicitor who had acted on behalf of two parties, while they were pursuing some form of joint venture or partnership, and then, after the dissolution of the relationship between those parties, continued to act for one of them. 31 The Defendants, on the other hand, submitted that Mr Morcom, on account of his previous direct and intimate involvement in the development and patenting of the patents in suit, was uniquely positioned to understand the concept of the time spent by the Defendants (for practical purposes, by Mr and Mrs Groom) in relation to the development costs of a patent in general terms, as well as having an intimate knowledge of the specific five patents in suit in the present proceedings. It was submitted on behalf of the Defendants that Mr Morcom's evidence was uniquely positioned to enable him to say whether the times claimed for development activity were, in fact, reasonable. 32 In regard to Mr Morcom's evidence, the Defendants pointed to the fact that when, on 5 September 2007, I granted to the Defendants leave to file and serve further evidence in the nature of expert evidence (Mr Morcom's affidavit of 11 October 2007 being filed and served pursuant to that leave), I also granted to the Plaintiffs leave to file and serve any evidence in response thereto. The Plaintiffs did not avail themselves of that leave, and offered no affidavit evidence in response to Mr Morcom's affidavit. Further, the Defendants pointed to the fact that the Plaintiffs did not seek to challenge or, indeed, to cross-examine Mr Morcom on his expert evidence. This was despite the fact that Mr Morcom was available for cross-examination, and, indeed, was present in Court on 13 November 2007, a fact which was brought to my attention on that date, when Plaintiffs' Counsel suggested that the Defendants might wish to have Mr Morcom leave the courtroom. 33 Although Mr Morcom was not cross-examined and although no evidence was offered by the Plaintiffs to contradict the evidence of Mr Morcom, that does not mean that the Court must unquestioningly and uncritically accept the entirety of Mr Morcom's evidence. For example, where Mr Morcom gave evidence in the nature of expert evidence, and offered an opinion as to what was reasonable, the Court is entitled to accept that opinion, but is not required, unquestioningly or uncritically, to do so. Nevertheless, I consider that the fact that Mr Morcom had previously acted for the Alliance and that thereafter he had continued to act on behalf of the Defendants does not entitle the Court to reject his evidence. Neither is he thereby precluded from holding himself out as an expert qualified to offer opinion evidence. The perceived conflict of interest upon which the Plaintiffs challenge the competence of Mr Morcom to give opinion evidence is relevant to the weight of and the reliance to be placed upon his evidence, but not to his competence to give that evidence (if otherwise he be qualified to give expert evidence, which I am satisfied he is). 34 The Defendants also relied upon expert evidence from Mr Robert Smith, a forensic accountant. Mr Smith's affidavit of 11 October 2007 was also filed pursuant to the foregoing leave granted by me on 5 September 2007 to the Defendants to file further expert evidence. 35 Mr Smith in his report (Exhibit 2) offered various bases of calculation for the hourly charge claimed by the Defendants. Mr Smith offered at least three measures of "cost" that may be relevant. These included (a) historic cost; (b) arms-length cost; (c) opportunity cost. 36 Again, the Plaintiffs, although granted leave to do so, did not offer any evidence in response to that of Mr Smith. However, Mr Smith was cross-examined upon his affidavit evidence. One particular matter which was the subject of that cross-examination was his preference for the "arms-length" cost basis over the "historic cost" basis for the hourly charge claimed by the Defendants. 37 In paragraph 119 of his report, Mr Smith stated that one reason for preferring the arms-length method of costs calculation was because the historic cost measurement was hampered by limited accounting data available from Mr and Mrs Groom (due to the effluxion of time) and that the relevant wage/salary transactions with Mr and Mrs Groom were not on an arms-length basis. 38 Mr Smith was also of the opinion that to proceed upon the historic cost basis would unjustly reward the Wickett interests if, for example, Mr Groom had paid himself an above-market salary (paragraph 122(b)). The methodology relied upon by Mr Smith (paragraphs 147 f of his report) was based upon what he considered to be an appropriate hourly rate of charge determined by classifying Mr and Mrs Groom's occupation into the relevant occupation classification within the Australian Standard Classification of Occupations, Second Edition (ASCO), and the Australian Bureau of Statistics biennial publication titled Employee Earnings and Hours. 39 I am not persuaded that the methodology adopted by Mr Smith, by which he expressed a preference for the arms-length basis over the historic cost basis, was a valid one. The task committed to me by order 3(i) is to establish the costs of the Defendants in developing the five patents in suit. It is not for me to calculate what might have been the reasonable costs for developing the patents, or to take into consideration such factors (if there be such a factor in the circumstances of the instant case) as some perceived unjust enrichment of the Plaintiffs to the detriment of the Defendants. The task committed to me by the foregoing order of Campbell J is confined to determining the costs actually incurred by Leafbusters and Polymesh, not the costs which should have been incurred by those companies, and not a factor in those costs which might, in the perception of someone (for example, Mr Smith), benefit unjustly the Plaintiffs over the Defendants. 40 Accordingly, I reject the arms-length basis for the calculation of those costs, and I shall proceed upon the historic cost basis set forth by Mr Smith in his report. 41 I should, for completeness, state that, even if (contrary to the conclusion which I have just expressed) I were to accept the arms-length basis for the costs of the Defendants, I do not consider that there is any valid basis for applying (as Mr Smith has done) some indexation to those costs, so that they can be restated at their current value (paragraphs 128–133 of Mr Smith's report). Mr Smith performed that indexation by applying an interest component. Even if the arms-length basis were correct, I would not be prepared to apply such an interest component. 42 To the extent that it not be possible to rely upon Mr Smith's report alone in order to calculate the costs upon that basis, then it will be necessary that I should also consider the factual matters presented in the evidence of Mr and Mrs Groom relating to those costs. 43 It seems to me to be of considerable relevance in this regard that for a significant period of the Alliance Mrs Groom was in receipt of no salary. Therefore, throughout that period I do not see how it is permissible to attribute to the activities of Mrs Groom some hourly rate in calculating the costs incurred by the Defendants in developing the patents. I shall, therefore, disregard the hours asserted to have been spent by her in such a development up to the time when, in the financial year 2002, she commenced to receive a salary for work which she performed for the Defendants. 44 I would also observe, in respect to travel expenses, that the actual expenses incurred should be brought into account, not some appropriate allowable amount per kilometre (Mr Smith suggested 70 cents a kilometre: paragraphs 173 –178). 45 The Defendants had prepared a summary of their costs on each of the arms-length basis and the historic cost basis. Further calculation was performed to include an interest component in each of the items upon each of those two bases. 46 As I have already observed, I am not disposed to accept the calculation upon the arms-length basis, and, accordingly, I propose to adopt the historic costs basis. I have already expressed my view that the Defendants are not entitled to include an interest component of the nature which Mr Smith adopted in his report. 47 Various of the development costs asserted to have been incurred by Mr Groom and Mrs Groom were accepted by the Plaintiffs, those costs being, respectively, $9,173.35 and $144.70. Other development costs asserted by Mr and Mrs Groom were not accepted by the Plaintiffs, those costs being respectively, $15,865.37 and $358.13. 48 Much of the asserted development costs of Mr Groom which were not accepted by the Plaintiff (in items totalling $15,865.37) referred to meetings with an entity referred to as Kinnears. It was quite apparent from the evidence given by Mr Groom under cross-examination that those meetings did not deal with the development of the patents in suit, but dealt, rather, with what might be compendiously described as the commercialisation and exploitation of the patents. I am not satisfied that the costs of those meetings with Kinnears (or, at least, the substantial part of those meetings) can properly be attributed to the development of the patents in suit. Thus I am not satisfied that those costs should be included in the costs referred to in order 3 (i) of the short minutes. 49 Mr Groom calculated the various times asserted in his schedule as being derived from bills, diary notes, memoranda regarding meetings. However, in addition, he asserted an independent memory of what took place at, for example, the meeting on 10 August 1998. Having observed Mr Groom's oral testimony under cross-examination, I am not satisfied that he did, in fact, have such an independent recollection of, for example, the meeting on 10 August 1998. 50 In regard to the various costs which are not accepted by the Plantiffs, I would also observe that many of the documents upon which Mr Groom relied in this regard were bills and invoices addressed, not to either Leafbusters or Polymesh, but to LBI Holdings Pty Limited (I refer to Mr Groom's cross-examination at T 43 f). Despite Mr Groom's proffered explanation that these matters were attended to by "the accountant", it is apparent that the costs incurred by LBI Holdings Pty Limited and relied upon in this regard by Mr Groom cannot properly be characterised as coming within the category of "the cost incurred by [Leafbusters Pty Limited and Polymesh Australasia Group Pty Limited] in development of the Five Patents". 51 It is not necessary for me to go through each and every one of the individual items which are not accepted by the Plaintiffs. Suffice it to say that I am not satisfied from the evidence of Mr and Mrs Groom and the various documents upon which they relied that the items, totalling $15,865.37 in the case of Mr Groom and totalling $358.13 in the case of Mrs Groom, which were not accepted by the Plaintiffs, were incurred by Mr and Mrs Groom in the development of the Five Patents. 52 In consequence, therefore, I am not persuaded that the items asserted by Mr Groom, but rejected by the Plaintiffs, in amounts totalling $15,865,37 should be accepted. Similarly, as I have already observed, the development costs asserted by the Defendants in respect to Mrs Thea Groom, in amounts totalling $358.13, but rejected by the Plaintiffs, should not be accepted. 53 I have already expressed my view that, in respect to travel expenses, the actual expenses incurred should be brought into account, and not some allowable amount per kilometre (for example, in the opinion of Mr Smith, an amount of 70 cents per kilometre was thought to be appropriate). The amount for such travelling at 70 kilometre per hour was claimed in the sum of $5,384.40. In the absence of any record disclosing travel expenses actually incurred, I am not prepared to accept that figure. 54 The final item of costs claimed on behalf the Defendants was in respect to what might be described as the professional costs of the patent attorney, in an amount of $24,554. However, it was ultimately conceded by Counsel for the Defendants that he could not maintain a claim for Mr Morcom's invoice of 23 November 1999, in an amount of $1895, for assignment of patents. That leaves a figure of $22,659 for the professional costs of the patent attorney. It seems to me that the Defendants are entitled to those professional costs in that amount of $22,659. 55 Accordingly, upon my calculations, the costs to which the Defendants are entitled can be summarised as follows, Development costs accepted by Plaintiffs - Paul Groom $9,173.35 Development costs accepted by Plaintiffs - Thea Groom $144.70 Patent attorney costs $22,659 Total $31,977.05 56 I will now proceed to a determination of the identity of the various items of intellectual property referred to in a paragraph 2(b), (c) and (d) of the short minutes. In practical terms this requires a consideration of the question of whether any additional intellectual property (beyond the five patents) was developed by Mr Wickett during the period of the Alliance, that is, between 17 March 1999 and 7 July 2002. 57 The Defendants have asserted that the 3G mesh was, for practical purposes, developed during that period, although it will be appreciated that that patent was not registered until after the termination of the Alliance. 58 It was the case for the Defendants that the 3G mesh was so closely connected to the created work in relation to the 2G mesh (one of the patents in suit), of which Mr Groom was the inventor and which was developed during the period of the Alliance, that it appears on a prima facie basis, at least, that the 3G mesh was developed on the back of the creative work done during the Alliance period in relation to the 2G mesh. 59 It was the submission of the Defendants that there was identicality between the 3G mesh and the 2G mesh, with the consequence that the development of the 3G mesh was effected during the course of the Alliance, and thus that the 3G mesh falls within the ambit of the reference contained in order 3 (ii) and that the costs incurred in relation to the development of the 3G mesh fall within the ambit of the reference contained in order 3 (iii). 60 The foregoing asserted identicality was denied by the Plaintiffs. In this regard the Plaintiffs relied upon various differences between the two meshes which differences were, in the main, conceded by Mr Groom himself. 61 Nevertheless, I am satisfied that the 3G mesh was substantially identical with the 2G mesh. 62 It will be appreciated, however, that the similarity of the 3G mesh to the 2G mesh is of no relevance to my present determination unless the Plaintiffs or Mr Wickett performed development work concerning the 3G mesh within either of the specified periods. 63 There is no evidence that the 3G mesh was developed by the Plaintiffs (or, for practical purposes, by Mr Wickett). Indeed, Mr Groom's evidence of the meetings at Thredbo over the weekend, 15-18 September 2000, and his handwritten note made during the course of those meetings suggest that it was Mr Groom, and not the Plaintiffs or Mr Wickett, who developed the 3G mesh. 64 Further, the Plaintiffs have put forward no evidence of the cost of development of the intellectual property in the 3G mesh. 65 I am not satisfied that the Plaintiffs or Mr Wickett performed any development work in respect to the intellectual property in the 3G Mesh, either during the period 17 March 1999 to 4 December 2000 or in the period 4 December 2000 to 7 July 2002. In any event, even if (contrary to the conclusion which I have just expressed) some development work had been performed by the Plaintiffs or Mr Wickett in respect to the 3G mesh, there is no evidence of any cost incurred therein by the Plaintiffs or Mr Wickett. 66 In the course of cross-examination (T35.1 –35.55), Mr Wickett conceded that intellectual property in the Drainsock trademark lodged by him on 15 July 2002 should have been accounted for by him as part of the intellectual property developed by the Wickett interests during the period of the Alliance (in addition to the six items the costs whereof in the total sum of $7,295.83 were conceded by the Defendants); and, further, that he made no claim for costs in respect of such development of the Drainsock trademark. 67 It follows therefore, that my determination in respect to order 3 (ii) will refer only to the Drainsock trademark (in respect of which no cost of development is claimed by the Plaintiffs or Mr Wickett). 68 Accordingly, subject to the correction of any errors in arithmetical calculations, I make the following determinations of the matters referred to me by order 3 of Campbell J as follows, 1. I determine the costs referred to in paragraph 2(a) of the short minutes of 17 December 2004 in the amount of $31,977.05. 2. I determine that the patents, registered designs or other items of intellectual property that are the subject of undertakings referred to in paragraphs 2(b), 2(c) and 2 (d) of the aforesaid short minutes are: Gutter grid logo Tubular mesh screen patent Mesh screen patent Bushfile trademark Guttersock trademark Stopper assembly patent Drainsock trademark 3. I determine the costs incurred in relation to the development of the patents, registered designs or other items of intellectual property that are the subject of undertakings referred to in paragraphs 2 (b), 2(c) and if applicable 2(d) of the aforesaid short minutes in the amount of $7295.83 ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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