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Peterson v Lucas Mill Pty Ltd [2012] NZHC 2830 (26 October 2012)

Last Updated: 31 October 2012


IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-404-007762 [2012] NZHC 2830

UNDER the Copyright Act 1994

BETWEEN CARL JAMES PETERSON Plaintiff

AND LUCAS MILL PTY LTD First Defendant

AND REX CAMERON LUCAS Second Defendant

AND KATICA LUCAS Third Defendant

AND WARREN GEOFFREY LUCAS Fourth Defendant

AND JENNIFER MARGARET LUCAS (DISCONTINUED)

Fifth Defendant

AND GEOFFREY WILFRED LUCAS Sixth Defendant

AND DOLORES VIVIENNE LUCAS Seventh Defendant

Hearing: 25 October 2012

Appearances: Plaintiff appears in person

T J Walker and J C Dickson for the defendants

Judgment: 26 October 2012

JUDGMENT OF GILBERT J [on application for leave to appeal]

PETERSON V LUCAS HC AK CIV 2009-404-007762 [25 October 2012]

This judgment was delivered by me on 26 October 2012 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.


Registrar/Deputy Registrar

Date:

Counsel: T J Walker, Auckland: Tracey.walker@simpsongrierson.com

J C Dickson, Auckland: joanne.dickson@simpsongrierson.com

J K Gorman, Wellington: Jessica.gorman@crownlaw.govt.nz

Copy to: C J Peterson: cpetenow54@hotmail.co.nz

Introduction

[1] Mr Peterson applies for leave to appeal my judgment delivered on

17 September 2012[1] dismissing his application for review of a judgment of Bell AJ[2] in which he found that this proceeding was compromised by a binding settlement agreement. My judgment not only confirmed the Associate Judge’s decision, it also dealt with separate applications brought by the Lucas parties to strike out the patent proceeding[3] and the revocation of patent proceedings[4] on the basis of the same settlement agreement. I granted the Lucas parties’ applications and struck out all three proceedings.

[2] Mr Peterson has not appealed against my orders striking out the patent proceeding and the revocation of patent proceeding and he is now out of time to do so. If he wishes to appeal those decisions, he will need to seek leave from the Court of Appeal to appeal out of time. The sole issue before me is whether leave should be granted to Mr Peterson under s 26P(1AA) of the Judicature Act 1908 to appeal my decision declining his application for review in the copyright proceeding.

Background

[3] The parties have been in dispute over the intellectual property rights to various sawmills for over 13 years. In February 1999, Mr Lucas issued patent proceedings against Mr Peterson and his company alleging that Mr Peterson’s “Islander” branded sawmills infringed the patent for the “Lucas” sawmill. Mr Lucas succeeded in the High Court and in the Court of Appeal but the Supreme Court upheld Mr Peterson’s appeal and found that the patent claim lacked novelty and was invalid. The Lucas parties discontinued their remaining claims against Mr Peterson and his company in July 2009 by which time Mr Peterson’s company had been

struck off the Companies Register and Mr Peterson was impecunious.

[4] This did not end the disputes between the parties because Mr Peterson brought a counterclaim under s 74 of the Patents Act 1953 seeking damages for unjustified threats of infringement proceedings. This counterclaim was struck out by Priestley J on 2 December 2009. Mr Peterson has appealed against this decision.

[5] In late 2009, Mr Peterson commenced this copyright proceeding alleging that the Lucas sawmill infringes copyright in his portable sawmill. Little progress was made in this proceeding because Mr Peterson did not pay the security for costs ordered by Woodhouse J on 23 December 2010. Mr Peterson has also appealed this decision.

[6] The Lucas parties applied for an order that the copyright proceeding be struck out unless security for costs was paid. This application was listed for mention on

5 October 2011. This was the context in which the parties negotiated the settlement agreement which fully and finally settled all proceedings.

[7] Shortly after the settlement agreement was reached, Mr Peterson sought to withdraw from it. He initially took the position that he was not bound to it because he did not sign anything. He later accepted that a binding agreement was reached but he then claimed that he was entitled to cancel or avoid the agreement on the grounds of duress, undue influence and misrepresentation. In agreement with the Associate Judge, I dismissed these contentions as being unarguable on the evidence.

[8] The duress and undue influence claims were based on Mr Lucas’ threat to commence copyright infringement proceedings against a company owned by Mr Peterson’s son. Mr Lucas told Mr Peterson that Lucas interests had acquired the worldwide copyrights associated with the “Stubbe” sawmill which Mr Peterson acknowledges is, in some respects, similar to the “Turbosawmill” manufactured by his son’s company. Mr Peterson claims that he was coerced into settling because of the threat of this proceeding. The misrepresentation claim was based on the omission from the settlement agreement of the Lucas parties’ promise not to pursue any such proceeding. The Lucas parties have however acknowledged that they are bound by this promise and have offered to include it as a term of the settlement agreement.

[9] Mr Peterson raises numerous grounds in his application for leave to appeal but many of these are repetitive. In essence he submits that the following errors should be corrected by the Court of Appeal:

(a) The Associate Judge and I both failed to test the legitimacy of Mr Lucas’ threat to bring copyright infringement proceedings. Mr Peterson submits that this requires an examination of the merits of the threatened proceeding. (Grounds 1 to 4, 7 and 11);

(b) I relied on sworn statements made by Mr Peterson in his affidavit and disregarded his assertion at the hearing that his affidavit was incorrect and needed to be amended. (Grounds 5 and 6);

(c) In finding that Mr Peterson had reasonable options and was not coerced into settling, I was wrong to place any reliance on his statement in his affidavit that he is prepared to meet any copyright infringement proceedings and is confident that he can mitigate any harm that this might cause to the business. (Ground 8);

(d) In finding that Mr Peterson was not coerced into the settlement, I was wrong to place reliance on the contemporaneous correspondence between the time the settlement was initially agreed on

4 October 2011 and the time Mr Peterson purported to withdraw from it on 12 October 2011. This correspondence included an email from Mr Peterson on 7 October 2011 advising:

Curiously, one of the motivating factors in making this offer to your clients suddenly disappeared shortly after my last conversation with Warren Lucas. That is, one of my family members was facing an urgent financial challenge requiring immediate assistance. That has now been rectified, and I do not hold the same urgency for settlement; particularly for such a small sum. Consequently, there is a very strong argument towards foregoing the agreement and demanding a larger sum. I have been hanging in the balance, and have received conflicting advice from my other family members. But having had a couple of days to mull this over, I have decided to proceed subject to the deposit your clients paid into the Court being released to me to cover my costs concerning the hearing before Justice Doogue. Should your clients agree to this, I will action the

necessary documents on Monday, and will at that time provide you with the bank account details necessary.

(Ground 9);

(e) I was wrong to overlook undue influence “via the reverse test”.

(Ground 10);

(f) The Associate Judge and I were “consumed” with “the almost irrelevant details of how Mr Peterson behaved under the stress of duress rather than how Mr Lucas behaved in creating it”. (Ground 12); and

(g) I misapprehended the timing sequence and significance of events. (Ground 13).

Legal principles

[10] The proper approach to be followed when considering an application such as this was set out by Blanchard J in Waller v Hider:[5]

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.

...

Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

Discussion

[11] The Associate Judge’s decision and my judgment upholding it both involve the application of settled legal principles to the facts of this case as disclosed in the affidavits. The proposed appeal does not raise any issue of law requiring

clarification. Nor does it raise any matter of public interest.

[12] The decision sought to be appealed is undoubtedly important for both parties because, unless it is overturned by the Court of Appeal, the copyright proceeding is at an end. However, the amount realistically at stake in any appeal is comparatively modest. The copyright proceeding has not advanced beyond a preliminary stage because Mr Peterson is not able to pay security for costs as ordered by Woodhouse J in December 2010. Although Mr Peterson has appealed this decision, his appeal has not progressed. The Lucas parties had applied to strike out the proceeding for failure to pay security for costs. The settlement agreement, which was negotiated in this context, involved the Lucas parties agreeing to pay a modest sum reflecting the considerable difficulties Mr Peterson faced in pursuing the proceeding.

[13] Mr Peterson’s wish to continue the litigation must be balanced by the interests of the Lucas parties in achieving an end to it. The Associate Judge and I have both ruled that they are entitled to the benefit of the settlement agreement which was to protect them from incurring further cost in this litigation. I must also have regard to the broader public interest in ensuring that the resources of the court are not wasted on appeals with no realistic prospect of appreciable benefit.

[14] Taking all these matters into account, I conclude that Mr Peterson’s application does not meet the criteria set out in Waller v Hider and does not justify consideration by the Court of Appeal of the same issues that have already been considered and ruled on twice.

Result

[15] Mr Peterson’s application for leave to appeal to the Court of Appeal is dismissed.


M A Gilbert J


[1] [2012] NZHC 2398.
[2] [2012] NZHC 1101.
[3] CIV 2001-404-003668.
[4] CIV 2011-404-007543.

[5] Waller v Hider [1998] 1 NZLR 412 (CA).


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