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Federal Court of Australia |
Last Updated: 3 April 2003
Microsoft Corporation v Ezy Loans Pty Ltd [2003] FCA 37
Trade Practices Act 1974 (Cth)
Copyright Act 1968 (Cth), s 115(2), (4), s 116
Trademarks Act 1995 (Cth)
Trade Practices Act 1974 (Cth)
Fair Trading Act 1989 (Qld)
Federal Court Rules O 46 r 6
Nilsen Industrial Electronics v National Semiconductor Corporation (1994) 48 FCR 337, considered
Complete Technology Pty Limited v Toshiba (Australia) Pty Limited (1994) 53 FCR 125, considered
ACCC v Telstra Corporation Ltd [2000] FCA 28; (2000) 96 FCR 317, considered
Dataquest (Australia) Pty Ltd v Dataquest Inc and Ors (unreported, 8 August 1996), cited
Ballina Shire Council v Ringland (1994) 33 NSWLR 680, cited
Commercial Bank of Australia v Preston [1981] 2 NSWLR 554, followed
MICROSOFT CORPORATION and ORS v EZY LOANS PTY LTD
(ACN 093 279 826) trading as HARMONY TELECOMMUNICATIONS AND BUSINESS EQUIPMENT and ANOR
No N 1129 of 2000
SPENDER J
BRISBANE
31 JANUARY 2003
IN THE FEDERAL COURT OF AUSTRALIA |
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QUEENSLAND DISTRICT REGISTRY |
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1. Leave be granted to the Applicants to file in court this notice of motion and supporting affidavits and that the notice of motion be returnable instanter.
2. The hearing of this notice of motion take place during the fixed vacation.
3. Up to and including 4 pm on 4 February 2003, the Respondents and each of them, whether by their servants, agents or otherwise, be restrained from publishing or communicating (whether orally or in writing, via email or otherwise):
(a) the material (other than the Court documents reproduced) on the website http://www.microsoftvsearl.com as set out in Exhibit MCG2 to the affidavit of Maurice Charles Gonsalves affirmed on 30 January 2003 (the "Website") or statements to the effect of that material;
(b) Court documents in these proceedings accompanied by the material referred to in paragraph (a) or statements to the effect of that material;
(c) the affidavit of Anna Tran-Ngyuen sworn on 4 October 2001 for so long as that affidavit has not been read in evidence; and
(d) any without prejudice correspondence from the Applicants' solicitors in these proceedings or the effect of those without prejudice communications concerning settlement.
4. Within 24 hours of service of this order, the Respondents will do all acts and things necessary to remove from the World Wide Web the content of the website.
5. Within 24 hours of service of this order, the Respondents do all acts and all things necessary to remove from all other World Wide Web sites the content of which is controlled by them, or either of them, including without limitation the website, any material of which the content is the same as, or substantially to the effect of the material restrained from publication by order 3.
6. Service of this order on Earl Davis by facsimile on (07) 3276 8844 will be deemed to be personal service on each of the Respondents in the first instance. In addition copies of Notice of Motion, supporting affidavits and the orders made today to be personally served on Mr Davis.
7. The time of service of the notice of motion and supporting affidavits be abridged.
8. The Applicants' application for interlocutory relief be listed for hearing at the Federal Court of Australia, Queensland District Registry at not before 11.00 am on 4 February 2003.
9. Entry of these Orders be expedited.
10. Each party to have liberty to apply to discharge or vary these Orders on 24 hours' notice.
11. Costs reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
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QUEENSLAND DISTRICT REGISTRY |
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BETWEEN: |
MICROSOFT CORPORATION FIRST APPLICANT MICROSOFT PTY LTD (ACN 002 589 460) MICROSOFT LICENSING INC THIRD APPLICANT |
AND: |
EZY LOANS PTY LTD (ACN 093 279 826) trading as HARMONY TELECOMMUNICATIONS AND BUSINESS EQUIPMENT EARL SEYMOUR DAVIS SECOND RESPONDENT |
JUDGE: |
SPENDER J |
DATE: |
31 JANUARY 2003 |
PLACE: |
BRISBANE |
1 This is a notice of motion by the three applicants in proceedings N 1129 of 2000 (collectively "Microsoft"). The respondents in that application are Ezy Loans Pty Ltd trading as Harmony Telecommunications and Business Equipment and Earl Seymour Davis.
2 Microsoft in the notice of motion seeks orders on an interim and ex parte basis as follows:
1. Leave be granted to the Applicants to file in court this notice of motion and supporting affidavits and that the notice of motion be returnable instanter.2. The hearing of this notice of motion to take place during the fixed vacation.
3. Up to and including ___ February 2003, the Respondents and each of them, whether by their servants, agents or otherwise, be restrained from representing that the Applicants, or any of them, have engaged in, threatened to engage in, or authorised:
(i) a contravention of the Trade Practices Act 1974 (Cth);
(ii) any act of extortion; or
(iii) an entrapment.
4. Up to and including ___ February 2003, the Respondents and each of them, whether by their servants, agents or otherwise, be restrained from publishing, distributing, transmitting, displaying, broadcasting or disclosing to any person other than any solicitor or counsel representing the Respondents in Federal Court Proceedings No 1129 of 2001 (the "Proceeding"):
(a) any pleadings, affidavits or any other documents filed on the Applicants' behalf in the Proceeding or served on the Respondents, or either of them, by the Applicants' solicitors in connection with the Proceeding;
(b) any correspondence between the Applicants' solicitors and the Respondents, or either of them, in connection with the Proceeding;
(c) the content or substance of any communication between the Applicants' solicitors and the Respondents, or either of them, in connection with the Proceeding; and
(d) any material containing or conveying the representations referred to in paragraph 2 of these Orders;
(e) any material the content of which is the same as, or substantially similar to, the material set out in Exhibit MCG2 to the affidavit of Maurice Charles Gonsalves declared and affirmed on 30 January 2003 filed in these proceedings.
5. Up to and including ___ February 2003, the Respondents and each of them, whether by their servants, agents or otherwise, be restrained from publishing (whether orally, in writing, via website, via email or otherwise) any statement regarding the Applicants or the Proceeding.
6. Within 24 hours of service of this order, the Respondents do all acts and all things necessary to remove from the World Wide Web the content of the website located at the domain http://www.microsoftvsearl.com.
7. Within 24 hours of service of this order, the Respondents do all acts and all things necessary to remove from all other World Wide Web sites the content of which is controlled by them, or either of them, including without limitation the website located at the domain http://www.microsoftvsearl.com:
(a) any material the content of which is the same as, or substantially to the effect of, the material set out in Exhibit MCG2 to the affidavit of Maurice Charles Gonsalves declared and affirmed on 30 January 2003 filed in these proceedings;
(b) any material containing or conveying the representations referred to in paragraph 2 of these Orders.
8. Service of this order on Earl Davis by facsimile in (07) 3276 8844 will be deemed to be personal service on each of the Respondents.
9. The time of service of the notice of motion and supporting affidavits be abridged.
10. The Applicants' application for interlocutory relief be listed for hearing at the Federal Court of Australia, Queensland District Registry at ______ on ______ February 2003.
11. Entry of these Orders be expedited.
12. Each party to have liberty to apply to discharge or vary these Orders on 24 hours' notice.
13. Such further order or relief as the Court considers fit."
3 It is apparent that the relief sought in this motion is wider than might possibly be granted. Paragraph 3, for instance, seeks in terms to restrain the respondents from making any representation that Microsoft has engaged in any contravention of the Trade Practices Act 1974 (Cth). Similarly, par 5 in terms seeks to restrain the respondents from making any statement at all concerning Microsoft or the proceedings which Microsoft has brought against the respondents.
4 The gravamen of Microsoft's concern, however, is the threatened publication of the contents of a website. That material is exhibited to the affidavit of Maurice Charles Gonsalves. It would in a sense defeat the purpose of the notice of motion if I were to set out exactly what is contained in that exhibit. Suffice to say that, after referring to litigation in which the respondents and Microsoft have been engaged and the fact that the matter has been unsuccessfully the subject of mediation proceedings, the website gives details of the content of settlement negotiations and makes comments to the effect that the time has come for Microsoft to stop the extortion and entrapment by which they constantly manage to achieve out-of-court settlements.
5 The website exhibits documents which are in fact not the current versions of the statement of claim or the defence. More objectionably, it exhibits as a cross-claim a document of which leave to file was refused by Cooper J. The website misrepresents what in fact are the issues in the dispute. The material also refers to the terms of a "without prejudice and confidential communication" by the solicitors for Microsoft of the proposed terms of settlement, and exhibits an affidavit which has been filed by Microsoft in those proceedings, but which has not been read in those proceedings.
6 It also makes reference to a contract which, it asserts, provides a defence to the allegations of breach of copyright which Microsoft asserts. However, that agreement is dated 1 November 2002 and the particularised instances of breach of copyright in the amended statement of claim on which Microsoft relies occurred between April 2000 and June 2001. The material also seeks financial support from persons to whom the material is directed for defending Microsoft's claims.
7 It is necessary to say something of the broader history of the matter.
8 This is an allegation by Microsoft of breach of copyright. It was transferred to Queensland from New South Wales by order of Gyles J on 29 October 2001. The principal proceedings are on Cooper J's docket. Cooper J is presently overseas.
9 In the principal proceedings the applicant seeks orders permanently restraining the respondents from reproducing or authorising the reproduction or substantial reproduction of any Microsoft program without the licence of the first applicant, or importing, selling or otherwise supplying or distributing any infringing Microsoft program or procuring others to engage in the conduct sought to be restrained. They seek delivery up of all infringing programs and equipment used to make such infringing products. In addition, they seek damages or an account of profits pursuant to s 115(2) of the Copyright Act 1968 (Cth) ("the Act") and damages pursuant to s 115(4) and 116 of the Act. Orders are also sought concerning the infringement of the Microsoft trademark under the Trademarks Act 1995 (Cth), and orders in respect of the Trade Practices Act 1974 (Cth) claim and the Fair Trading Act 1989 (Qld) claim for, among other orders, correcting advertising.
10 On 20 September 2002 Cooper J ordered that the first and second respondents file any notice of motion, with supporting material, seeking to have the proceedings stayed or dismissed on the basis that the matter in issue in the proceedings has been compromised by agreement, as the respondents contended. On 4 October 2002, within the time ordered by His Honour, the first and second respondents filed a motion seeking that the proceedings be dismissed on the basis of an agreement between the parties. On 18 October 2002 Cooper J delivered judgment on the motion, dismissing the motion, ordering the respondents to pay the applicants' costs of and incidental to the motion, and referring the proceedings to Dowsett J for mediation with a view to settling the matters arising in the proceedings or identifying any issues which may be settled between the parties. That mediation conference was adjourned by Dowsett J to 18 November 2002 and was terminated when the parties could not reach agreement on any issue.
11 As to the confidentiality of Court documents, O 46 r 6 is of the Federal Court Rules relevant. In the absence of an order that a document be confidential, pleadings may be searched in the Registry by any person pursuant to O 46 r 6(2)(c). Rule 6 (3) provides that:
"Except with the leave of the Court or a Judge, a person who is not a party to a proceeding must not inspect any of the following documents in the proceeding:(a) an affidavit ...
...
(d) a list of documents given on discovery."
The essence of O 46 r 6 is that material which has not been read in open court is not available for publication.
12 There is a division of opinion as to when legal professional privilege in respect of witness statements is waived. In Nilsen Industrial Electronics v National Semiconductor Corporation (1994) 48 FCR 337, Olney J held that the statements of witnesses exchanged and filed in legal proceedings continued to attract legal and professional privilege unless and until they were put into evidence. Hill J, in Complete Technology Pty Limited v Toshiba (Australia) Pty Limited (1994) 53 FCR 125, rejected the view that material that had been put in a statement or affidavit which is then served on another party retains its character as the subject of legal professional privilege unless and until it is read in Court. He held that the privilege is waived by service on the other party and filing and this is so even though the service and filing are pursuant to orders of the Court.
13 Notwithstanding this, Hill J held that leave of the Court is necessary before witnesses' statements can be used in later proceedings because the implied undertaking not to use the information in discovered documents otherwise than for the purpose of the proceedings which a party giving discovery gives to the Court also extends to information in witness statements or affidavits filed and served in those other proceedings.
14 However, in ACCC v Telstra Corporation Ltd [2000] FCA 28; (2000) 96 FCR 317, Lindgren J effectively followed the view of Olney J and refused the respondents access to the applicant's documents for the purpose of using pleadings and witness statements in other related proceedings. His Honour held that the witness statements had not yet been read in open Court and remained subject to legal professional privilege.
15 It is clear in this particular case that the use of the unread affidavits, to which reference has been made, would be enjoined by not only Olney J and Lindgren J but also by Hill J, as the purpose of the publication of that affidavit is not for the purpose of the proceedings.
16 It is necessary next to refer to the evidence concerning the intended purpose of the proposed publication.
17 Mr Gonsalves deposes to a conversation with Mr Davis where Mr Davis said:
"Look, I am calling a press conference. I have done an internet site and I intend to go to the press and to other groups who are going to support the case, both in the USA and locally. My only defence is to take the matter public. Lauren Fabrick did send me that document."
This is a reference to what is said to be the contract by which Mr Davis says he had licence to act as he did.
18 Later, Mr Davis said:
"Microsoft would not want this in the marketplace. There will be negativity,"
to which Mr Gonsalves replied:
"Microsoft is used to negativity. Microsoft does not tolerate untruths or misleading statements. You are not at liberty to publish documents filed in court or without prejudice correspondence."
Mr Davis responded:
"Well, to make a good site you have to use as much truth as possible. It is of a public interest, it should not be hidden. I know that you could walk into a number of companies that are not compliant. I want to make companies aware of the problem. Microsoft can take the necessary action to have the documents removed. I will use all the documents, it is up to Microsoft to have it removed."
19 In a conversation deposed to by Gemma Dalgleish, Mr Davis said to her:
"I have done my research. There are other litigants with a similar interest. Within the next 24 to 48 hours Microsoft should seriously consider putting this matter to rest. It is not my intention to harm Microsoft, it is a matter of survival..."
to which Ms Dalgleish said:
"... our clients demand that you immediately remove the website and we intend to write to you tomorrow morning repeating that request. If you do not remove the website our clients will file contempt proceedings in the Federal Court and will be seeking injunctions to have the website removed."
Mr Davis responded:
"If you do that I will file a press release within the next 24 to 48 hours. By the time you get your court ruling the website will be broadcast around the world. Once it is broadcast you will never be able to remove it. It will be spammed across the world through search engines. Until I get some understanding as to what you are going to do, you know what you are in for. This has gone on too long. You guys know what you have to do."
20 With regard to the principles to be applied on an application such as this, I refer first to the judgment of Tamberlin J in Dataquest (Australia) Pty Ltd v Dataquest Inc and Ors, an unreported judgment of 8 August 1996.
21 Tamberlin J was there concerned with an application seeking to restrain a proposed media release. That proposed media release stated that a statement of claim and application had been filed in the Federal Court by Dataquest Australia Pty Ltd, claiming it was established to conduct market research in Australia and New Zealand. Four specific allegations were then set out in the media release, which concluded with the claim that Dataquest Australia alleged that the actions occurred in the context of the termination of a business agreement.
22 His Honour noted:
"In all, the language [of the media release] is fair and temperate. It is made clear that the specific matters referred to are in the nature of `allegations' and it has not been demonstrated to represent a false summary of the court process.In the normal course, documents initiating court process are open to members of the public to peruse. Normally it will be in the public interest that such information is made publicly available provided it is not substantially inaccurate, immoderate or without any foundation. The public interest is to be found in both the protection of the open administration of justice and in the proper and reasonable discussion of the way in which that process is carried out." (Emphasis added)
23 Mahoney JA noted in Ballina Shire Council v Ringland (1994) 33 NSWLR 680 at 719:
"The freedom to speak freely is a great public good. It stands high in the scale of values in our society and the law recognises it as such. In my opinion, no qualification of that freedom can be justified except by the need to protect equally important values."
In Dataquest, Tamberlin J stated:
"There are well-established limitations to absolute freedom of speech or expression. These include, amongst others, the law of defamation and the law relating to contempt of court and abuse of process. See Civil Aviation Authority v Australian Broadcasting Commission (unreported, New South Wales Court of Appeal 29 June 1995).What is not permitted, under the banner of free speech, is the use of legal proceedings in a way calculated or intended to influence a party or to frustrate the impartial consideration by the court of issues. Further, it is not permissible to expose a party to public abuse or obloquy nor to risk the prejudgment of the issues on the merits which will be canvassed in proceedings that are pending or which have been instituted: Attorney General v Times Newspapers (1974) AC 273 (the Thalidomide case)."
24 Tamberlin J in that case concluded that the summary of the process in the proposed press release was not in substance an unfair or inaccurate outline of the allegations and that it had not been shown that there was a likelihood that the respondents would be impeded or constrained in the preparation or prosecution of a full and complete defence. His Honour declined to make the order sought.
25 The factual situation in that case is to be contrasted with the situation considered by Hunt J in Commercial Bank of Australia v Preston [1981] 2 NSWLR 554. There an interlocutory injunction was sought and granted by Hunt J ex parte to restrain the distribution and publication by the defendants of a document. The basis of the injunction was that the publication and distribution of it and the threat to continue to do so amounted to contempt of Court. The pamphlet the subject of that judgment was in the following terms:
"C.B.A. BANK, YOU CAN'T BE PROUD ...THIS IS YOUR DISGRACEFUL RECORD."
The pamphlet detailed the plaintiff's appointment of receivers to the Preston Group of Companies. It described those appointments as invalid. It said that they were made without warning while the companies were in the process of changing banks and accused the branch manager, Mr Alcorn, of certain improprieties. The pamphlet continues in these terms:
"The C.B.A. BANK manager, Mr John Alcorn, lied in court and swore the affidavit, known to him and the C.B.A. BANK to be false.
The C.B.A. BANK and their solicitors, SLY & RUSSELL, used the evidence and the affidavit, which they knew to be false, to mislead the court for the C.B.A. BANK's gain and to discredit me.
The C.B.A. BANK lost the court case and it's (sic) evidence was rejected with all costs against them."
The pamphlet then turned its attention to the receivers, whom it alleged were negligent and incompetent. Of the plaintiff it said:
"The C.B.A. BANK thinks it is above the law and can mislead the court ..."
The pamphlet continued:
"The C.B.A. BANK (the secured creditor) after 17 months have not been paid a cent and the C.B.A. BANK is paying out thousands of dollars to take me to court and to intimidate me and my family."
The pamphlet concluded:
"To summarise ... The C.B.A. BANK destroyed 10 years of hard work, $550,000 of the companies' assets, goodwill of profitable companies, sacked 95 employees, attempted to mislead the court and still haven't received a cent as a secured creditor.
How many more times will big business get away with this kind of behaviour, especially what we mistakenly think is our trustworthy bank?"
26 Hunt J concluded, so far as is relevant for the present case, that it is a contempt of court to make a public statement which is calculated (as opposed to intended) by abuse or otherwise to influence a party to pending civil proceedings in the conduct of those proceedings, but only if that public statement misstates the facts and/or consists of intemperate opinion or discussion.
27 It is apparent from a consideration of the terms of the threatened publication of the material on the website that that material is not merely an accurate recitation of the litigation. It is replete with material which, on the evidence presently before me (recognising that this is an ex parte interim hearing and therefore any findings are not final) constitute contempts of Court. This includes, in particular, the breach of confidence by the publication of the contents of "without prejudice" settlement negotiations and the inaccurate and misleading representation as to the process in these proceedings. The pleadings in that material are not current, and the material refers to a cross-claim, in respect of which leave to file was refused by the judge in the principal proceedings.
28 There could not be any valid objection to the publishing of an accurate account of the pleadings or the issues in the proceedings as reflected in those pleadings, nor of the fact that settlement negotiations had been prosecuted but had failed.
29 However, looking at the material as a whole, the material is neither accurate nor temperate. It contains matters the publication of which clearly would constitute contempt of Court. Having regard in particular to the purpose of the threatened publication, as can be inferred from the correspondence and the conversations earlier set out, it is plain that, on the usual undertaking as to damages, I should make orders preventing that publication until I have had the opportunity of hearing from Mr Davis.
30 In those circumstances I propose to make the following orders. These orders will be in the terms of the short minutes of order which have been handed up by counsel for Microsoft, as amended by me.
31 On the usual undertaking by the applicants as to damages, the Court makes the following orders:
1. Leave be granted to the Applicants to file in court this notice of motion and supporting affidavits and that the notice of motion be returnable instanter.
2. The hearing of this notice of motion take place during the fixed vacation.
3. Up to and including 4 pm on 4 February 2003, the Respondents and each of them, whether by their servants, agents or otherwise, be restrained from publishing or communicating (whether orally or in writing, via email or otherwise):
(a) the material (other than the Court documents reproduced) on the website http://www.microsoftvsearl.com as set out in Exhibit MCG2 to the affidavit of Maurice Charles Gonsalves affirmed on 30 January 2003 (the "Website") or statements to the effect of that material;
(b) Court documents in these proceedings accompanied by the material referred to in paragraph (a) or statements to the effect of that material;
(c) the affidavit of Anna Tran-Ngyuen sworn on 4 October 2001 for so long as that affidavit has not been read in evidence; and
(d) any without prejudice correspondence from the Applicants' solicitors in these proceedings or the effect of those without prejudice communications concerning settlement.
4. Within 24 hours of service of this order, the Respondents will do all acts and things necessary to remove from the World Wide Web the content of the website.
5. Within 24 hours of service of this order, the Respondents do all acts and all things necessary to remove from all other World Wide website the content of which is controlled by them, or either of them, including without limitation the website, any material of which the content is the same as, or substantially to the effect of the material restrained from publication by order 3.
6. Service of this order on Earl Davis by facsimile on (07) 3276 8844 will be deemed to be personal service on each of the Respondents in the first instance. In addition copies of Notice of Motion, supporting affidavits and the orders made today to be personally served on Mr Davis.
7. The time of service of the notice of motion and supporting affidavits be abridged.
8. The Applicants' application for interlocutory relief be listed for hearing at the Federal Court of Australia, Queensland District Registry at not before 11.00 am on 4 February 2003.
9. Entry of these Orders be expedited.
10. Each party to have liberty to apply to discharge or vary these Orders on 24 hours' notice.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender . |
Associate:
Dated: 31 January 2003
Counsel for the Applicant: |
Mr Richard Cobden |
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Solicitor for the Applicant: |
Mallesons Stephen Jaques |
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There was no appearance for the Respondent | |
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Date of Hearing: |
31 January 2003 |
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Date of Judgment: |
31 January 2003 |
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