GMCA Pty Ltd v Black & Decker Inc & Anor [2007] HCATrans 662 (14 November 2007)

Last Updated: 15 November 2007

[2007] HCATrans 662

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M129 of 2007

B e t w e e n -

GMCA PTY LTD

Plaintiff

and

BLACK & DECKER INC

First Defendant

BLACK & DECKER (AUSTRALIA) PTY LTD

Second Defendant

Office of the Registry
Melbourne No M130 of 2007

B e t w e e n -

GMCA PTY LTD

Applicant

and

BLACK & DECKER INC

First Respondent

BLACK & DECKER (AUSTRALIA) PTY LTD

Second Respondent

Summons for stay

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 14 NOVEMBER 2007, AT 9.12 AM

Copyright in the High Court of Australia

__________________

MR R.M. GARRATT, QC: If the Court please, I appear for the applicant in each matter. (instructed by Kahns)

MR W.T. HOUGHTON, QC: If the Court pleases, I appear with my learned friend, MS H.M.J. ROFE, for the respondent in both matters. (instructed by Davies Collison Cave)

HIS HONOUR: In matter No M129 of 2007, which is the action in this Court and what I might call a constitutional case, there is a summons filed on 9 November which seeks an order staying the hearing determination in the Federal Court of proceeding 1262 of 2005 pending the hearing and determination of the action in this Court and of the special leave application. The special leave application is matter No M130 of 2007 and in that matter there is also a summons filed on 9 November which in substance seeks relief of the same nature of that in the other summons. That is right, gentlemen, is it not?

MR GARRATT: That is so, your Honour.

HIS HONOUR: In support of each summons I have got summaries of argument and then there is an affidavit of Mr Di Giantomasso sworn on 5 November on behalf of your client, do you want to call GMCA, it might be easier.

MR GARRATT: Yes.

HIS HONOUR: Then there is an affidavit on the other side of Mr Jordan sworn on 13 November.

MR HOUGHTON: That is so, your Honour.

HIS HONOUR: Is that right?

MR HOUGHTON: Yes.

HIS HONOUR: I should proceed without objection on those two affidavits, I would think.

MR HOUGHTON: Yes, your Honour.

HIS HONOUR: And the summonses should be heard together, I would think.

MR HOUGHTON: Yes.

HIS HONOUR: Yes, Mr Garratt.

MR GARRATT: Your Honour, I propose developing the application for a stay under four topics. I do not propose distinguishing between the two summonses unless it appears appropriate to do so. The four topics are as follows. First, the jurisdiction of the High Court to entertain an appeal in the face of the first sentence of section 33(2) of the Federal Court of Australia Act.

HIS HONOUR: Yes.

MR GARRATT: GMCA challenges the constitutionality of the first sentence, if it is indeed is a bar, and GMCA contends that it is an argument of question which should be addressed to the Full Court. I should say, I see your Honour has just pulled out the section - - -

HIS HONOUR: You will both bear in mind that I am sitting in the Full Court at 10.15 am.

MR GARRATT: I am conscious of that, your Honour.

HIS HONOUR: Yes. Number two?

MR GARRATT: Number two, if the first sentence of section 33(2) cannot constitutionally have literal effect, can it be read down? I will mention that but I will not develop it greatly. It really hangs on a dictum of Sir Garfield Barwick. Three, is a stay necessary? Four, what are the prospects of success of an appeal and of obtaining special leave if necessary? The last point, if necessary, your Honour, depends upon this constitutional issue. If the first sentence falls away and cannot be read down, then there is a question, does an appeal lay of right - - -

HIS HONOUR: What was point number four again? Prospects of success on - - -

MR GARRATT: Success of an appeal and of obtaining special leave if necessary.

HIS HONOUR: Is it not really prospects of obtaining special leave?

MR GARRATT: On a special leave application typically one does ask - - -

HIS HONOUR: This morning I mean.

MR GARRATT: Yes, but there is this aspect to it, your Honour. It may be because of the constitutional point that special leave is not necessary. The reason being, your Honour, that if the first sentence is not constitutionally valid, there is no overt provision of the Federal Court of Australia Act or the Judiciary Act requiring a grant of special leave first to be had and obtained.

HIS HONOUR: Yes.

MR GARRATT: If I can go straight to the first question, your Honour, the jurisdiction of the High Court and go then immediately to Cockle’s Case. Cockle’s Case, it is submitted, is the relevant central authority and it repays close understanding. Cockle’s Case concerned an appeal to the High Court in respect of the dismissal of four informations before a Court of Petty Sessions at Sydney. The informations had been laid - - -

HIS HONOUR: What is the citation of Cockle v Isaksen?

MR GARRATT: It is [1957] HCA 85; (1957) 99 CLR 155. I was proceeding on the basis your Honour would have a copy of that.

HIS HONOUR: Yes, I have read it more than once.

MR GARRATT: As your Honour will then appreciate, the question related to the validity of section 113(3) of the Conciliation and Arbitration Act 1904. Section 113(1) conferred jurisdiction on the Conciliation and Arbitration Court in respect of certain matters and subsection (3) deprived, if the section was valid, the High Court of any appeal in respect of that subject matter. In their joint judgment the Chief Justice Sir Owen Dixon, Justices McTiernan and Kitto addressed whether section 113(1) was validly enacted and upheld it and after that they then proceeded to the second question which is the validity of subsection (3).

What they said and did was this. It is a very concise, as one might expect, series of propositions made out, the consequence of which is this, and I will take your Honour through the passage shortly, but an exception within the meaning of section 73 of the Constitution is a particular case or description of case which would otherwise be within the grant of appellate power. What their Honours did in the reasoning can be seen at page 165 of the report where they expressed their conclusion that section 113(1) is valid and then continued:

If an appeal is of the class properly falling within sub-s. (1) then according to sub-s. (3) it is not an appeal that lies to this Court. The provision must rest for its validity upon the words in s. 73 of the Constitution which authorise exceptions.

By authorising exceptions the federal Parliament is granted power. Section 73 is set out. Then they continue:

It is upon the legislative power to prescribe exceptions that sub-s. (3) rests. An exception assumes a general rule or proposition and specifies a particular case or description of case which would be subsumed under the rule or proposition but which, because it possesses special features or characteristics, is to be excluded from the application of the rule or proposition.

HIS HONOUR: This is written by Mr Justice Kitto, I think.

MR GARRATT: Your Honour has knowledge which I do not have.

HIS HONOUR: No, it is the prose style. They then continue:

It is not a conception that can be defined in the abstract with exactness or applied with precision; it must depend very much upon context.

as we will come to see –

Section 73 defines the appellate jurisdiction of this Court by reference to the judgments decree orders and sentences from which there are to be appeals. In every case the judgment decree orders and sentences are defined by reference to the courts or tribunals by which they are given made or pronounced. In the case of each description of court or tribunal the intention of s. 73 doubtless is that the general rule shall be that the High Court has jurisdiction to hear and determine appeals from its judgments decrees orders or sentences. From that general rule the legislation is empowered to prescribe exceptions.

HIS HONOUR: Yes, I understand all that. What do you get out of this? Where are we going?

MR GARRATT: We are getting this, your Honour, that one needs to know what an exception is. It is defined as “a particular case or description of case”. One sees that in the middle of that page. They then go on to show how they approach the matter in that case. Going over the page, after having referred to 113(3), in about line 8 or 9, they say:

Does that amount to prescribing an exception or exceptions under s. 73? It will be noted that the judgments etc. to be excepted are described not by reference to the courts giving them save that ex hypothesi they must be State courts exercising federal jurisdiction and must not be Supreme Courts. From what has been said about sub-s. (1) of s. 113 it will be seen that upon analysis the judgments etc. are really defined by reference to the matter involved in the appeal, that is to say by reference to the fact that a matter arising under the Conciliation and Arbitration Act is involved in the appeal from the judgment etc. It is difficult to see why that should be an inadmissible ground of exception.

Then one sees these words:

The ground relates directly to the judgment etc. as something either actually inherent in it or alleged by the appellant to be inherent in it. It is true that it relates rather to its legal basis than its operative effect as between the parties, its pecuniary significance, its finality or its interlocutory character. But familiar as these are as grounds for restricting or regulating appeals from judgments orders etc. they are not exhaustive. It is not desirable to go beyond the precise ground of exception which s. 113(3) appears to take. It is enough to say that is fixes upon a description of judgment decree . . . it does not eat up or destroy the general rule –

Justices Williams and Webb did not really add to that analysis. Justice Taylor was to the same effect at page 175 where, in contrasting this provision against an earlier one, said at the bottom of the page:

The latter section does not range over such a wide and indeterminate field; so far as is material to the present case it is, in terms, restricted to appeals - - -

HIS HONOUR: I understand all that, Mr Garratt, but how do you apply that to the present case in your favour?

MR GARRATT: This way, your Honour.

HIS HONOUR: Bearing in mind that section 33 was obviously enacted, I would think, in 1976, you say misplaced, but on the faith of cases like Cockle and there is the further consideration adverted to by Sir Anthony Mason in Castlemaine Tooheys [1986] HCA 58; 161 CLR 148 at 155 to 156. As his Honour said “In the absence of compelling grounds, it is the duty of the” judicial branch “to defer to, the enactment” as valid until it is “adjudged ultra vires” when entertaining some interlocutory application. In other words, it is extremely difficult to get interlocutory relief on the footing that a statute is invalid.

MR GARRATT: That is so, your Honour. What we have just seen, your Honour, is that the Justices define the class which is the exception by reference to the statute within which it appears. They all say, because one can give it a fairly precise operation with respect to appeals involving that subject matter - - -

HIS HONOUR: Why can you not give this a precise operation?

MR GARRATT: Section 33, your Honour, appears obviously in the Federal Court of Australia Act. It does not refer to a subject matter; indeed, it refers to a court. The very thing which Sir Owen Dixon and the other Justices were at pains to say they could distinguish - - -

HIS HONOUR: A judgment of a court constituted by a single judge.

MR GARRATT: Yes. In other words, they take as the subject matter the judgment of a court constituted by a single judge, not the subject matter or any other matter. When one asks them, what judgments of the courts are we talking about - - -

HIS HONOUR: Why is not the judgment of a court constituted by a single judge a subject matter?

MR GARRATT: It is not in the words “a particular case or description of case”. One sees the whole reasoning in Cockle is to struggle to define the exception. This is not a particular case. That is borne out by the conferral of jurisdiction on the Federal Court, which one sees in section 19, which is the other provision which needs to be read together with this:

The Court has such original jurisdiction as is vested in it by laws made by the Parliament.

In other words, this exclusion does not operate with respect to a particular class of subject matter at all. It operates with respect to anything the court has been vested with and, as we know, that in effect means virtually every heading of power by which the Federal Parliament has made laws. One only has to open up the Federal Court Reports to see the breadth, the huge breadth - - -

HIS HONOUR: They are just laws under section 76(ii) of the Constitution and to some extent under 75 as well.

MR GARRATT: Yes. So, your Honour, the antithesis, frankly, we would submit, of the position in Cockle v Isaksen where the reasoning was able to be that the subject matter is described not by reference to the court, said the majority justices, and we can see by analysis that it is really defined by the reference to the matter involved in the appeal in the particular Act, Conciliation Arbitration Act and you cannot use either of those techniques here with respect to section 33 to read it down in the way that the judges did in Cockle in order to - - -

HIS HONOUR: They said “it was sufficient to say”. They did not say, “or otherwise it would be invalid”. They were very careful.

MR GARRATT: They were very careful, and they were very careful because - - -

HIS HONOUR: In the last paragraph there of the joint judgment.

MR GARRATT: They are very careful. They say it must be very much be governed by context and say the question then becomes whether that category eats up the general rule laid down. That category certainly eats up - - -

HIS HONOUR: Does it in this case, you see? Because, assume you are correct about this and assume Justice Finkelstein should have adjourned to allow this evidence to go on and formulated yet another timetable, assuming he was wrong about that, that decision will be caught up in the decision at trial, will it not?

MR GARRATT: No, it will not.

HIS HONOUR: Why not?

MR GARRATT: Because the trial, your Honour, will proceed on a basis which excludes that material.

HIS HONOUR: I know, but a ground of appeal would be that his Honour simply erred in not letting in the evidence and that then gets caught up in the appellate structure and could get here. That has been so, if I may say to you, Mr Garratt, for a long while. An early example is Baume v The Commonwealth [1906] HCA 92; 4 CLR 97 in the judgment of Sir Samuel Griffith where there was a debate in that case at one stage, I think, over some particulars. Whether that was rightly or wrongly, that is at page 114, and decided it was caught up in the eventual appeal. The Cadbury Case is a recent example too, is it not?

MR GARRATT: The Cadbury Case is illustrative, your Honour, in this. The Cadbury Case concerned the exclusion of relevant material in the course of the trial - - -

HIS HONOUR: Does not matter.

MR GARRATT: - - - and the result was, your Honour - - -

HIS HONOUR: This notion of in the course or not in the course of the trial does not matter. The question is what is the record on which the case was determined? That is the question. The record, you will say, is incompletely constituted because you were shut out from putting material in you should have been allowed to put in.

MR GARRATT: And the result, your Honour, was - - -

HIS HONOUR: And the appeal is from the record.

MR GARRATT: Yes, but the result, your Honour, was a complete retrial.

HIS HONOUR: That is right.

MR GARRATT: And necessarily so - - -

HIS HONOUR: You are looking at the Constitution and the question is, is this Court shut out by what you would say is device to use section 73 in this way, is the Court shut out from ultimate appellate control? The answer, it seems to me, is no.

MR GARRATT: Your Honour, subject to this - - -

HIS HONOUR: So you cannot say when they use that metaphor “eat up” that is the sort of thing they had in mind.

MR GARRATT: Any what, sorry, your Honour?

HIS HONOUR: They used that metaphor “eat up” in Cockle v Isaksen.

MR GARRATT: Yes, eat up the jurisdiction. Your Honour, if I may say, is running two matters together. The first is the constitutional point, which are the construction - - -

HIS HONOUR: That is why I am here.

MR GARRATT: Yes, of course. The construction of the sentence, and that is to be resolved by reference not really to the circumstances of this case, in a sense. It is a question of, can the Federal Parliament do that? Is that prescribing a permissible class of exception?

HIS HONOUR: I mentioned it because you are going to come to reading down and, if you are right, that would be one way to read down.

MR GARRATT: I am not following your Honour’s reasoning there, but I will come to it. Your Honour, the other point is that here, is that this has been excluded before the trial begins by an interlocutory order. Your Honour, if we do not protest, if we do not appeal and allow the trial to proceed, we will be treated as having waived our right to object to - - -

HIS HONOUR: I do not think so.

MR GARRATT: To the trial proceeding on that basis, your Honour, and that is why we have to protest - - -

HIS HONOUR: You will be on your feet at the trial preserving this point for any appeal, I am sure. You make get a chilly response, you will not be treated as having waived.

MR GARRATT: It is not enough to stand on one’s feet. One has to take steps to appeal.

HIS HONOUR: You have taken steps and you have come to the ultimate Court in the country.

MR GARRATT: Yes, your Honour. So the first point we make, your Honour, is that a basis is shown that what is done by the first sentence of section 33(2) is too broad to found a class of exception permissible under the Constitution. The next point is can that be read down, that sentence? The only dictum we are aware of is the dictum of Sir Garfield Barwick in R v Judges of the Federal Court where in passing he observed that the sentence might be construed to mean appeals as of right do not lie and that a grant of special leave is still necessary. Your Honour, in our submission, it is not possible to put that construction lightly on the sentence. The sentence says, no appeal shall be brought and it does not say, but you may appeal if special leave is granted.

HIS HONOUR: No, but a possible reading down would fix upon the nature of a judgment constituted by a single judge. If it was interlocutory in nature that might be one way to read it down, because if it is interlocutory in nature and there is a trial, these questions flow, but I think we are using our time unwisely.

MR GARRATT: Yes. Is a stay necessary? In our submission, it is, your Honour, because our rights in respect of these two patents - - -

HIS HONOUR: Yes, I was going to ask you about that. There are two Black & Decker patents and one registered design, is that right?

MR GARRATT: Yes.

HIS HONOUR: What is the expiry date, do you know, of the patents? Have they got long to run? This action has been on foot for two years, has it not?

MR GARRATT: It has, your Honour.

HIS HONOUR: I think your solicitor has some instructions.

MR GARRATT: The standard patent will run to 2020. The innovation patent will run to 2010.

HIS HONOUR: One is an innovation patent, is it?

MR GARRATT: Yes, it is, your Honour.

HIS HONOUR: The action has infringement, which I guess is denied?

MR GARRATT: Yes.

HIS HONOUR: There is a cross-claim denying validity?

MR GARRATT: Yes.

HIS HONOUR: This fresh material goes to novelty, does it?

MR GARRATT: And obviousness.

HIS HONOUR: Novelty and obviousness. And are there any other grounds of objection to the validity claim?

MR GARRATT: Yes, there are, your Honour.

HIS HONOUR: What is their nature, do you know?

MR GARRATT: Insufficiency.

HIS HONOUR: Construction arguments?

MR GARRATT: Yes, construction arguments and in utility.

HIS HONOUR: And in utility?

MR GARRATT: Yes, your Honour. The section 40 grounds, your Honour, and I am intending to - - -

HIS HONOUR: Yes, I understand. What is the estimated time for the trial at the moment? Six days, I saw something.

MR GARRATT: Seven to ten.

HIS HONOUR: Yes, thank you. I should ask, is there a challenge to validity of the design?

MR GARRATT: Yes, your Honour, there is.

HIS HONOUR: That seems to be the lesser of the - - -

MR GARRATT: It is not involved in this aspect, your Honour. Is a stay necessary, your Honour? In our submission, it is, because our rights are about to be determined and therefore to merge into a judgment and be lost forever in that sense. Your Honour has observed or pushed the position that, may I say, that we might be able to appeal and succeed in the appeal and then have a retrial.

HIS HONOUR: You say you should not be put to that complex series of steps?

MR GARRATT: Your Honour, the expense and inconvenience upon which our learned friends rely - - -

HIS HONOUR: You both complain about expenses.

MR GARRATT: It is utterly duplicated at that point, not to mention the stress put to one witness of the patentee who has a medical condition, but he would need to go through the whole thing again.

Your Honour, it is an important question, the JL Holdings question, in our submission. What has happened below is by, in effect, an Act of judicial legislation, the standing of JL Holdings in relation to cases under case management has been sidestepped.

HIS HONOUR: I am not sure that if you got here and JL Holdings was looked at again that it might not undergo some reinterpretation. I am not sure the reinterpretation would help you, in this sense, and I only put this tentatively. One of the things not discussed in any detail in JL at any rate is the importance of parties observing directions in complicated cases, patent cases in particular I say from personal experience, and directions are orders of the Court.

MR GARRATT: Yes.

HIS HONOUR: Orders – they are not advisories. They are orders and if there appears to a judge to be – I am not saying it is right or wrong in this case – failure to comply with orders of a sustained nature that is a significant matter to go in the scales.

MR GARRATT: Yes, we would not dispute that, your Honour. Here, though, the evidence in question came to light only after the order. It was immediately put into affidavit form in final form, given to the other side and could have been accommodated within the trial. It was not disputed.

HIS HONOUR: No, but the other question about JL is, in any event, JL may have been read as attempting to put a straitjacket on trial judges and you cannot satisfactorily do that in my experience because circumstances of trial preparation are so infinitely various.

MR GARRATT: That would be so, your Honour, but it is not, if I may say, for a single justice of the Federal Court of Australia to set JL Holdings effectively aside on the grounds that it only applies where a costs order provides full compensation, which manifestly was not the case in JL Holdings and is not the case, as the High Court recognised in Cachia v Hanes in any piece of litigation. So effectively, what has happened is JL Holdings has been set aside completely in respect of any case under case management in this country which happens to be virtually all civil litigation in District or County Court level and higher.

HIS HONOUR: Yes, well, that is another matter, of course, but the notion of case management is, in my view, something of an overstatement where – we were case managing cases in the Federal Court, I think, from 1977 from the start. We did not call it case management. We called it getting on with it.

MR GARRATT: Yes.

HIS HONOUR: You did not get PhDs in the subject either.

MR GARRATT: No. Your Honour, lastly in respect of what Justice Finkelstein and Justice Heerey have done is that they have equated intellectual property litigation with ordinary commercial litigation and it is a false equation, in our submission. In ordinary commercial litigation, the evidence and the witnesses are essentially under the control of the parties and if they are not under the control they are known to the parties. The production of material is amenable to subpoena or compulsory process. In intellectual property litigation, if you are challenging a registered design or patent, that is not the case usually. You have to find the material - - -

HIS HONOUR: Yes, I understand that.

MR GARRATT: People who are giving you that assistance are not under your control, you have to locate them and you have to work with them. So the notion of rigid adherence to timetables and cutting people out from adducing relevant evidence is to be seen in that context. What has effectively happened here, your Honour, if this Court does not intervene, is that it is countenancing a trial proceeding on a fictitious footing, namely, validity of patents which affects not just us but other people being tested and determined by reference to less than what is known to be the relevant material.

We are told, “You can fix it up later, you can go through the whole appellate process and have another retrial of all of these issues and hope that all the witnesses are then available” and so on, your Honour. That is not a course, in our submission, which this Court ought countenance. What has happened is the guiding determination for proper management of these steps has been set at nought and it has exposed us to this situation. It should be remedied now. It needs to be remedied promptly. If the Court pleases.

HIS HONOUR: Yes, Mr Houghton.

MR HOUGHTON: Your Honour, I do not want to embark upon any extensive or, indeed, any analysis of the constitutional point, but with great respect to our learned friend’s argument, we would simply submit that it is not a strong case. On the more pressing point of whether a stay ought be ordered or not we would make these points. First, the applicant’s rights are not about to be destroyed or lost forever. If the trial proceeds, there are two possibilities. My client might win or our learned friend’s client might win. The new material is there to supplement - - -

HIS HONOUR: What is sought to be brought before this Court is not the decision of Justice Finkelstein. It is the refusal of leave by Justice Heerey.

MR HOUGHTON: Yes.

HIS HONOUR: Is that right?

MR HOUGHTON: That is so.

HIS HONOUR: It has been looked at twice.

MR HOUGHTON: Yes. But on this question of stay we say that the position of the applicant, being the respondent in the proceeding below, is very similar to the position that adverted in Cadbury Schweppes v Darrell Lea earlier this year in the Full Court. That was a case where the learned trial judge excluded further evidence on various grounds and it took place in an interlocutory hearing prior to trial. The trial proceeded - - -

HIS HONOUR: Citation of Cadbury Schweppes is – it is reported actually, I think[2007] FCAFC 70; , 159 FCR 397.

MR HOUGHTON: I am grateful to your Honour.

HIS HONOUR: I think there was an application in this Court that the Chief Justice heard in that litigation.

MR HOUGHTON: Yes, there was a special leave application which did not proceed but the case essentially was that the additional evidence sought to be relied upon, and it was expert evidence, by the applicant, Cadbury Schweppes, was ruled out by the learned trial judge in an interlocutory hearing prior to trial. The trial proceeded, the applicant lost, the applicant went to the Full Court of the Federal Court and succeeded in its contention that the learned trial judge had erred in excluding the additional expert evidence. So, clearly, first of all, there is an appeal right, an appeal as of right, in the event that our learned friend’s client loses at trial, so they do not lose any appeal rights even though the decision to exclude the evidence was taken prior to the trial commencing - - -

HIS HONOUR: I should have asked Mr Garratt this. Is this further evidence to be the only evidence on novelty and obviousness?

MR GARRATT: Yes, your Honour, the only additional evidence.

MR HOUGHTON: The only additional evidence – there is already evidence there - - -

HIS HONOUR: But is there evidence already on on novelty and obviousness?

MR HOUGHTON: Yes.

HIS HONOUR: There is?

MR GARRATT: Yes, your Honour.

HIS HONOUR: Is that purely documentary or is there trade evidence?

MR GARRATT: There is some trade evidence, your Honour, and what the additional evidence is is from one of those witnesses is that I found the very tool which did the things which they said were not known.

HIS HONOUR: Yes, I saw that.

MR HOUGHTON: But there is already existing evidence put in by our learned friend’s client on those points and they wish to supplement that by the evidence that has been rejected. But in Darrell Lea, for instance, on appeal, the first point is there is an appeal as of right against the ruling of the learned trial judge to exclude the evidence. The second point is, let us assume that the learned trial judge was wrong, let us assume that the Full Court agree and uphold the appeal, it is not necessary for there to be a retrial because, for instance, in the Cadbury Schweppes Case what the Full Court there said, it said, “Well, there is an argument that the additional evidence would not have made any difference but we cannot determine that. What we are going to do is to send the matter back to the learned trial judge”, not order a retrial, but order that the judge now receive the evidence, rule upon objections, and then hear the case further. So there was no retrial in Cadbury Schweppes, it was simply sent back to the trial judge to now receive the disputed evidence.

HIS HONOUR: Has that happened?

MR HOUGHTON: No, not yet, but it is about to.

HIS HONOUR: I see.

MR HOUGHTON: So we say that the rights that the applicant have are not going to be lost by reason of the trial proceeding, so we say the prejudice really is all our way and in our material we put forward some compelling reasons as to why the trial should proceed next week, but the most compelling reason is probably that one of our experts is suffering from some considerable ill health. He is available if the trial proceeds next week, as it presently will, but there is some doubt on medical evidence that he would be available at some future time.

There are other reasons as well. Our other expert occupies the position of dean at one of our universities in Melbourne and he has put aside some time for the trial but he is very pressed for time and we do not know whether he can make his time available for some future date. Then, of course, there is the usual factors about availability and non-availability of counsel that we do not press as being a compelling ground but taken in combination, particularly in light of the fact that we have already lost a trial date at the beginning of the year in April, we say - - -

HIS HONOUR: What do you say about JL Holdings?

MR HOUGHTON: We say it does not impose some straightjacket upon learned trial judges. It sets out various factors that a learned trial judge
should take into account when considering an application, for instance, to amend pleadings or receive new evidence but it does not provide some formula whereby if you can say that our case will be prejudiced unless the judge accedes to the application, then the judge must accede to the application. It is always a question of discretion and the High Court in JL Holdings simply said the ratio we would submit of JL Holdings is that the particular discretion reposed in the learned trial judge in that case miscarried because the learned trial judge paid too much primacy, if you like, to case management rather than the justice of the case.

We would simply say that is not the situation in our case. Although his Honour the learned trial judge was clearly annoyed with the rather repeated contraventions of the orders that our learned friend’s client had been guilty of for the very many months prior, he also took into account the overall justice of the situation and balanced – we would say he engaged in a balancing process – who would suffer the more prejudice, my client or our learned friend’s client, if the new evidence went in which had - - -

HIS HONOUR: All right. Look, it is 10 to 10, Mr Houghton.

MR HOUGHTON: Yes. Your Honour, I think they are the points we wanted to make on the stay application. It ought to be dismissed.

HIS HONOUR: Very well. Yes, Mr Garratt.

MR GARRATT: Your Honour, in Cadbury Schweppes, I have not had a chance to fully read it, but I did note in the chance I had last night on the computer that in paragraph 3 it said the application was made in the course of the trial. My learned friend says that is not right. He has a greater familiarity with it. I cannot say anything about that. As I say, your Honour is countenancing this. We have been penalised in respect of evidence which came to light, which is after the date in question, which is highly relevant to the issues of novelty and obviousness in the case. It could have been accommodated within this trial without vacating the trial date. It was not submitted against the application that that was so. Your Honour, therefore the trial would proceed on a fictitious footing in that highly relevant evidence is not going to be considered. It will not be put to the experts. The tool will not be considered by them.

The Full Court, if we get that far would then not be able to adjust the rights. In the meantime our rights in respect of the patent would have merged in a judgment and so would the interests of everyone else in the country in relation to these patents be determined or affected by it because the validity of the patents may well have been upheld. It is no answer, in our submission, to say, well, at some future date thereafter you may have a right of appeal that could see all this undone and perhaps a retrial or perhaps
just a further trial before the judge in relation to this material. The Court ought not countenance that and ought, given the serious challenge which has been made to JL Holdings, grant leave, given that the constitutional issue is a live one, so that these issues may be looked at at an early opportunity.

HIS HONOUR: Thank you.

Before the Court this morning there are two summonses which seek relief to the same effect. I shall call the applicant in each matter GMCA and the respondents Black & Decker.

On 2 November 2007 Justice Heerey sitting in the Federal Court in Melbourne refused leave to appeal from an interlocutory judgment of Justice Finkelstein. Justice Finkelstein gave his judgment on 23 October. The electronic citation is [2007] FCA 1623. His Honour refused to GMCA leave to rely at trial on certain affidavit evidence which had been filed out of time.

The affidavit evidence would go to matters of novelty and obviousness which are urged in support of a cross-claim asserting the invalidity of two patents in suit in the action in the Federal Court. One patent is a standard patent which is for a term to expire in 2020 and the other for an innovation patent for a term to expire in 2010. There is also in suit a registered design, allegedly infringed, but that is not at the forefront of the dispute before me today.

If the relief sought in the summonses in this Court were to be granted, the effect would be to bring to a stop the processes presently in train for the commencement of the trial of the action next week. The estimated time for the trial is some seven to 10 days.

In refusing the application for leave Justice Heerey first remarked that is was clear from the decision of this Court in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 that great restraint should be exercised in allowing leave to appeal in matters of practice and procedure. His Honour continued:

I do not see any arguable case that his Honour’s discretion miscarried. In particular, it was not necessary for him to make express reference to what was obviously common ground, namely that the evidence in question was relevant. Nor was it necessary for him to restate the trite fact that there is a public interest in invalid patents not remaining on the register.

The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 is not authority for the proposition that amendments, adjournments and other procedural indulgences must always be granted and that the balm of costs will always be sufficient. In this case his Honour made findings of fact as to the prejudice that would be suffered by Black & Decker if this evidence was admitted. Those findings were open to him. His Honour was entitled to place considerable weight on the procedural record of GMCA. Whether or not criticism can be launched in this regard at Black & Decker, the fact remains that time and again GMCA have sought to enlarge the case and produce further evidence without regard to the firm directions given by the Court.

This case is not concerned with particularly arcane technology, for expert evidence concerning which the parties might have to search throughout the world. It was incumbent on the parties to get their case in order long before now. The integrity of the court process is an important issue on which his Honour was entitled to place great weight.

Justice Heerey was exercising jurisdiction as a single judge of the Federal Court. Section 24(1A) of the Federal Court of Australia Act 1976 (Cth) provides that an appeal shall not be brought from an interlocutory judgment of the Court constituted by a single judge, which is the case here, unless the Federal Court or a Judge first gives leave to appeal. That, as I have indicated, was refused by Heerey J.

The first sentence of 33(2) of the Federal Court of Australia Act is addressed to the position of this Court and says:

Except as otherwise provided by another Act, an appeal shall not be brought to the High Court from a judgment of the [Federal] Court constituted by a single Judge.

There is a qualification to s 33(2) which is not presently relevant. It follows that if section 33(2) has effect according to its terms, this Court would lack jurisdiction to entertain an appeal from the decision of Justice Heerey. Special leave to appeal nevertheless has been sought in matter No M130 of 2007.

To the obstacle apparently placed in the path of that endeavour by section 33(2) an action has been commenced in the original jurisdiction of this Court, matter No M129 of 2007, where relief is sought to the effect that section 33(2) is not a valid law to the extent that it would prevent a party in the position of GMCA from seeking special leave to appeal in this case.

The first question is the significance this morning of the alleged invalidity of section 33(2). The provision was apparently enacted on reliance upon the treatment of section 73 of the Constitution by this Court in Cockle v Isaksen [1957] HCA 85; (1957) 99 CLR 155.

There is, however, a threshold consideration and that was indicated by Acting Chief Justice Mason in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 156. That passage was recently approved in the Full Court of this Court in Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 at 82 [66]. The substance of the point is that when interlocutory relief is sought on the ground of alleged invalidity of a law, then in the absence of compelling grounds, this Court should proceed on the footing that the legislation is valid.

Counsel for GMCA said all that could be said on the point and indicated what he said were grounds for distinguishing the treatment in Cockle v Isaksen of the particular legislation under consideration there from section 33(2) of the Federal Court of Australia Act. However, I am not satisfied that those arguments are sufficiently compelling to warrant any decision now on the footing that there are real prospects of success in demonstrating invalidity of the provision. That, of course, would render the special leave application incompetent because an appeal would not lie even if special leave were granted.

As to the prospects of success independently of the constitutional position of the special leave application, the point should be made, in addition to what was said by Justice Heerey, with which I agree, that the ruling by Justice Finkelstein is not necessarily immune from further appellate consideration, including in due course appellate consideration by this Court. That is because, as indicated by such cases as Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70; (2007) 159 FCR 397, were GMCA to be unsuccessful at trial it would, as part of any appeal, have available to it a complaint that the record at trial was insufficiently constituted by reason of the rejection of the material which it sought to lead albeit out of time and in non-compliance with the orders made by the Court for the preparation of the case.

Also, I am not satisfied at the level at which the issue is presented this morning that there are sufficient prospects of success on a special leave application demonstrating some insufficient appreciation or application in the Federal Court of what may follow as a matter of general principle from the decision of this Court in State of Queensland v JL Holdings Pty Ltd.

In paragraph 2 of each summons an order is sought abridging time between service and return of the summons. That order should be made. But order 1 which seeks the principal relief which I have described, should not be made, and the summonses otherwise should be dismissed with costs.

I will now adjourn.

AT 10.05 AM THE MATTER WAS CONCLUDED