Capital Webworks Pty Ltd v Adultshop.com.limited [2006] HCATrans 584 (26 October 2006)

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Capital Webworks Pty Ltd v Adultshop.com.limited [2006] HCATrans 584 (26 October 2006)

Last Updated: 3 November 2006

[2006] HCATrans 584

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P60 of 2005

B e t w e e n -

CAPITAL WEBWORKS PTY LTD

Applicant

and

ADULTSHOP.COM.LIMITED

First Respondent

MALCOLM DAY

Second Respondent

Application for special leave to appeal

GLEESON CJ
HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 26 OCTOBER 2006, AT 10.13 AM

Copyright in the High Court of Australia

MS G.A. ARCHER: May it please the Court, I appear for the applicant. (instructed by Tottle Partners)

MR G.R. DONALDSON, SC: May it please your Honours, I appear for the respondents. (instructed by Salter Power)

GLEESON CJ: Yes, Ms Archer.

MS ARCHER: Your Honours, in my submission, there are several questions of public importance in this case. In my oral submissions I wish to deal with two of them. Firstly, what are the limits to the particular caution approach required of appellate courts in matters involving practice and procedure and, secondly, is it open to an appellate court judge to refuse an appeal on the basis that the proper time for appealing against an order is after it has not been complied with?

The background of this matter will be familiar to the Court. In essence, the primary judge found that there was insufficient evidence on Adultshop’s strike-out application on the basis of abuse and the critical part of his Honour’s reasonings are the last four lines of application book page 11. But instead of dismissing the application for strike out, his Honour directed the respondent to the strike-out application, Capital Webworks, to adduce evidence. The majority of the Full Court found that the particular caution that was required of them meant that the appeal should be dismissed. His Honour Justice Lee was in the dissent.

Before I turn to the reasons of each of the justices in the majority, can I simply mention that although Justice Moore noted that the appellant, Capital Webworks, had raised the question of an apprehension of bias in the course of its submission, none of the majority judges actually considered that factor. Justice Moore’s reasons begin at page 23 of the application book and the critical part of his Honour’s reasons is at page 32, line 40. His Honour appeared to conclude that there was no evidentiary basis to make the order, but his Honour said it was an order made by a docket judge and it was in relation to a matter involving practice and procedure. His Honour noted the particular caution required and then concluded the appeal should be dismissed. Nowhere in his Honour’s reasons is there an indication that his Honour considered the issue of prejudice.

So his Honour’s reasons suggest that it was the combination of two factors that led his Honour to conclude the appeal must be dismissed. Firstly, the fact that the primary judge was the docket judge and, secondly, the requirement of particular caution and that those two factors put together meant essentially that the decision was unreviewable.

HAYNE J: What is the injustice that is suffered by your client in consequence of having to comply with the order which ultimately is attacked?

MS ARCHER: Several, your Honour. Firstly, if the order is complied with, then Capital Webworks has been obliged to give material to the other side that it ought not to have; secondly, providing that material could give rise to a further round of applications. Your Honours will be familiar that in the Appeal Court decision reference was made to the fact that even the provision of this information would not seem to get to the point that the primary judge was seeking to get to. So inevitably you might infer further applications would be necessary, further information would need to be disclosed before his Honour could get anywhere close to the point that his Honour was seeking to reach. So there is that.

HAYNE J: But the landscape of maintenance and champerty has now changed.

MS ARCHER: That is certainly true, your Honour, although in Western - - -

HAYNE J: The bottom line is this, Ms Archer, why should this Court intervene in a matter of interlocutory orders if you cannot point to some injustice which your client will suffer if the order is allowed to stand?

MS ARCHER: May I say two things in response to that, your Honour. Firstly, that in Western Australia the torts have not been abolished and in the decision in Campbells v Fostif the Court was at pains to make clear that its decision was not considering the application of the principles relating to abuse of process and maintenance in a jurisdiction where the torts remain. That decision was handed down, I think, less than two months ago and in that time there have already been a number of articles in which commentators have written about that judgment.

Your Honours will be aware that in those articles the fact that the States in which the torts have been maintained was not part of the reasoning of the majority in Campbells’ Case means that the situation is still open in Western Australia and, in my submission, in light of the very careful way in which the majority chose to distinguish the position where those torts remain, that is certainly a conclusion that can be reached from a reading of the case.

HAYNE J: Let it be assumed – and I express no view – maintenance and champerty is alive and well and living in Western Australia. Let it be further assumed that this affidavit, if filed, would disclose maintenance and champerty. You say that is a large assumption. The consequence would be that that which is at least tortious, query illegal, is thus revealed. Where is the injustice in that? Do we not have to come to that sort of bottom line at some point?

MS ARCHER: Well, with respect, your Honour, that is one of the bottom lines that could be reached. There are a number of alternatives. One is, for instance, that further information would be disclosed which would lead his Honour, the primary judge, to dismiss the primary proceedings on the basis of an abuse of process. Then the matter might be appealed and that appeal may or may not be successful. If it was successful, there would be no overall prejudice other than the provision of material to Capital Webworks, but it would impose a burden upon the parties to be involved in a process they should not have to have been involved in.

There is also the issue that if the material did not disclose anything of the sort, that would not prevent further applications being made and further proceedings being necessitated. In the succinct yet powerful dissenting judgment of Justice Lee in this case, his Honour noted the imposition that would be caused to the parties should the process have to continue and an appeal be launched after the strike-out application had been granted.

GLEESON CJ: What was the date of the commencement of this action?

MS ARCHER: It was 2000, your Honour.

GLEESON CJ: Well, if we in the year 2006 granted special leave to appeal and then an appeal came on in the year 2007 and was decided and we decided in support of your argument that there was no need to file this affidavit, then in later 2007, or perhaps in 2008, the Federal Court would get back to the question of whether the proceedings that were instituted in 2000 should be struck out as an abuse of process. That does not sound as though we would have made a major contribution to the administration of justice.

MS ARCHER: I understand your Honour’s point and there is certainly no getting around the fact that the principal proceedings have not been prosecuted expeditiously. That cannot be denied. But the principles that are at stake in this application are quite separate to that issue and not only is there the issue of the limits of the particular caution restraint, but there is also the fact that the reason why one of the judges in the majority declined to uphold the appeal was because his Honour thought the appropriate time to appeal would be after there had been non-compliance and, as a result, the matter struck out.

GLEESON CJ: What are these proceedings all about? What is at stake?

MS ARCHER: What is at stake is a domain name “adultshop.com” that was previously registered by Capital Webworks. Then there is a dispute as to what occurred, but ultimately the respondent to this application became registered as the owner of that domain name. Capital Webworks has instituted proceedings in respect of the fact that they no longer own the domain name and that the first respondent does, the second respondent being associated with the first respondent, and the third respondent to the principal proceedings being the organisation that is responsible for registering domain names.

GLEESON CJ: Thank you.

MS ARCHER: The situation that faces Capital Webworks was it is responding to an adversarial application to strike out its principal proceedings including on the grounds of abuse of process related to unlawful maintenance. Now, there are other grounds for the strike out. They have been reserved and what occurs with them is something that will follow in due course.

But from Capital Webworks’ point of view, they go down to a court in order to defend an application to strike out, insufficient evidence is adduced and instead of dismissing that application they are ordered to provide information that they should not have been ordered to provide. An Appeal Court declines to interfere, firstly, because his Honour, the primary judge, was the docket judge in the case of Justice Moore and, secondly, because what they should have done, according to Justice Finn, was to not comply with the order and then, if their principal application was struck out and an integral reason for that strike out was the fact that no further information was forthcoming, that that was the time that they should appeal.

In my submission, that sequence of events gives rise to the very two important principles of general importance, as I said, the limits of the particular caution requirement and, secondly, whether it is open to an appellate court judge to dismiss an appeal on the basis that the proper time for appealing is after the order has not been complied with.

In relation to Justice Finn, if I can just deal very briefly with his Honour’s reasons. They appear at application book 34 and the critical part of his Honour’s reasons is at page 35 commencing at line 19. Now, his Honour found that the order should not have been made and involved an error of principle, but his Honour said “having regard to the particular procedural context”, and it is not clear from that expression whether his Honour simply meant an appeal relating to practice and procedure or whether his Honour was also referring to the factor that the primary judge had been a docket judge. That is not apparent. But his Honour did consider, unlike Justice Moore, the potential injustice and his Honour found that there was potential injustice.

His Honour said that there was a risk that the applicant might be exposed to a real injustice as a result of the possible consequence of non-compliance, namely, the strike out. Having made that finding, his Honour then went on to say that in light of the particular caution required and the circumstances that the proper time to challenge, if at all, was after the matter had been struck out.

GLEESON CJ: There is a reason for the particular caution.

MS ARCHER: Yes.

GLEESON CJ: And the reason is to prevent over-enthusiastic litigants turning cases into modern versions of Jarndyce v Jarndyce. That is why there is a limit to the extent to which litigants are permitted to agitate interlocutory rulings.

MS ARCHER: Yes, your Honour. My response to that, your Honour, would be that in analysing a particular case an appellate court needs to be alive to the rationale underlying the particular caution and if the circumstances of the case mean that those underlying rationales should have no weight or little weight, then the Court should not feel constrained.

GLEESON CJ: I am not sure whether this particular idea has occurred to you, but the distinguishing characteristic of an interlocutory ruling is that a judge who makes such a ruling can always change his or her mind about it. That is what makes it interlocutory. Has anyone said to Justice Nicholson that having regard to what was said by the majority in the Full Court of the Federal Court he ought to just change his mind about this ruling?

MS ARCHER: I am not aware of that being done, your Honour. Just continuing to develop the idea about the underlying rationale, this Court on occasion has looked at decisions that appear to be decisions based on practice and procedure and has said that when there is a matter of principle involved it may not be appropriate to apply that restraint. The most obvious example would be Australian Broadcasting Commission v O’Neill in which your Honour Justice Hayne and I think Justice Gummow referred to that proposition.

What the applicant here is saying is that the appellate court cannot just say docket judge plus matter of practice and procedure, therefore do not review, or interlocutory matter so you can appeal after you have not complied with the order. What the appellate court needs to do, with respect, is scrutinise the underlying rationale for the particular caution requirement,
analyse whether those rationales have application to a case of this type and then inform itself as to the appropriate decision. Here, where you have a primary judge who has arguably given rise to an apprehension of bias by descending into the adversarial arena, in my submission, in those circumstances an appellate court should not feel so constrained. Those are my submissions, thank you.

GLEESON CJ: Thank you, Ms Archer. We do not need to hear you, Mr Donaldson.

This application relates to a decision of the Federal Court in litigation that has been pending since the year 2000, and concerns an interlocutory ruling on a matter of practice and procedure. The case does not give rise to an issue suitable to a grant of special leave to appeal and we are not persuaded that the interests of justice require such a grant.

The application is dismissed with costs.

AT 10.29 AM THE MATTER WAS CONCLUDED