Breakout Barrier Release Systems Pty Ltd v Breakout Barrier Release Systems Australasia Pty Ltd [2013] NSWSC 1815

Supreme Court New South Wales

Medium Neutral Citation: Breakout Barrier Release Systems Pty Ltd v Breakout Barrier Release Systems Australasia Pty Ltd [2013] NSWSC 1815 Hearing dates: 1-4 July 2013 and 8-10 October 2013 Decision date: 03 December 2013 Jurisdiction: Equity Division Before: Rein J Decision: There is no condition precedent to the operation of the Patent Licensing Agreement "the PLA" and there was no suspension of obligations pending the grant of the Standard Patent. The Breakout Lock is a product that falls within the description of the product of the PLA. The Sanctum Lock is not, in any of embodiments, a licensee's improvement within the terms of the PLA. The Sanctum Lock is a competing good of the same description as the Barrier Release Lock. Mr Watmough has breached his fiduciary duties to the plaintiff by making the Sanctum Lock Application. Catchwords: CONTRACT - whether the Breakout Locks and the Sanctum Locks are products which fall within the products as defined in the Patent License Agreement ("PLA") or within the definition of licensee's improvements CONTRACT - whether the Breakout Locks and the Sanctum Locks are of the same description, perform the same function or are of a similar description to the Barrier Release Lock CONTRACT - whether the PLA was subject to a condition precedent, namely the grant of the Standard Patent, and whether any obligations imposed on the first defendant by the PLA were suspended pending the grant of the Standard Patent. EQUITY - whether Mr Watmough owed fiduciary duties to the plaintiff or whether any such duties were nullified or erased by the PLA and whether fiduciary duties were breached. Legislation Cited: Corporations Act 2001 (Cth) Patents Act 1990 (Cth) Cases Cited: Barescape Pty Ltd v Bacchus Holdings Pty Ltd as trustee for Bacchus Holdings Trust (No 9) [2012] NSWSC 984 Birtchnell v Equity Trustees, Executors & Agency Co Ltd (1929) 42 CLR 384 Breen v Williams (Medical Records Access case) [1996] HCA 57, Chan v Zacharia (1984) 154 CLR 178 Re City Equitable Fire Insurance Co [1925] Ch 407 Codelfa Constructions Pty Ltd v State Rail Authority (1982) 149 CLR 337 Coomber v Coomber [1911] 1 Ch 174 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 Dogrow Pty Ltd v Teakdale Pty Ltd [2013] NSWSC 726 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 Gibson v Tyree (1900) 20 NZLR 278 Glassington v Thwaites (1823) 1 Sim & St 124 Hospital Products v United States Surgical Corporation (1984) 156 CLR 41 Mills v Mills (1938) 60 CLR 150 Royal Brunei Airlines Sdn Bhd v Tan Kok Ming [1995] 2 AC 378 Schwartz v Hadid [2013] NSWCA 89 Streeter v Western Area Exploration Pty Ltd (No 2) (2011) 278 ALR 291 Sydney Attractions Group Pty Ltd v Frederick Schulman [2013] NSWSC 858 Western Export Services Inc and Others v Jireh International Pty Ltd [2011] HCA 45 Texts Cited: Austin, Ford & Ramsay, Company Directors: Principles of Law and Corporate Governance (2005), LexisNexis Butterworths Category: Principal judgment Parties: Breakout Barrier Release Systems Pty Ltd (plaintiff) Breakout Barrier Release Systems Australasia Pty Ltd (first defendant) Michael Watmough (second defendant) Representation: Counsel: Mr P.R. Clay and Mr M. Bennett (plaintiff) Mr G. McVay (defendants) Solicitors: Breene & Breene Solicitors (plaintiff) Logan Fox Lawyers (defendants) File Number(s): 2009/289527