ROYALE BIOTECH GROUP LTD v HI GLOBE INTERNATIONAL TRADING LTD [2021] NZHC 2176

ROYALE BIOTECH GROUP LTD v HI GLOBE INTERNATIONAL TRADING LTD [2021] NZHC 2176 [23August 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2020-404-1080[2021] NZHC 2176UNDER the Copyright Act 1994BETWEEN ROYALE BIOTECH GROUP LIMITEDPlaintiffAND HI GLOBE INTERNATIONAL TRADINGLIMITEDDefendantVirtual hearing: 20 August 2021Appearances: No appearance for the plaintiffJRE Wach for the defendantJudgment: 23 August 2021JUDGMENT OF JAGOSE JThis judgment was delivered by me on 23 August 2021 at 3.00pm.Pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:James & Wells Solicitors – Auckland BranchAJ Park Law Limited, Auckland Branch[1] By this proceeding, the plaintiff ("Royale Biotech") alleges the defendant("Hi Globe") infringed its copyright in the design of a plastic bottle by (a) authorisingthe manufacture of bottles contended to be substantial reproductions of that design,and (b) importing such bottles into New Zealand.1[2] Although it is not pleaded as such, it appears Royale Biotech notified theMinistry of Business, Innovation, and Employment's chief executive of its claim ofcopyright in the bottles' design, and requested the chief executive to detain any piratedcopies of the item or items, as the case may be, that are in, or at any time come into,the control of the Customs.2 The chief executive accepted the notice, with theconsequence it remains in force until either revoked by Royale Biotech or, inproceedings under s 141(1) of the Copyright Act 1994, this Court orders the notice bedischarged.3 As a consequence of the notice's acceptance, the chief executivedetermined the imported bottles appeared to be pirated copies to which the noticeapplied.4[3] Royale Biotech then commenced this proceeding under s 141(3) for a decisionon whether the imported bottles were pirated copies of its design. Hi Globecounterclaims under s 141(1) for an order the accepted notice be discharged, and unders 141(2) for an order the detained bottles be released.[4] On Royal Biotech's subsequent failure to progress its claim, Hi Globe nowseeks Royal Biotech's claim be struck out as an abuse of process and the goods bereleased as a consequence of that 'abandonment'; alternatively, 'unless' orders tocomparable ends.Applicable law[5] Rule 15.1 of the High Court Rules 2016 provides:15.1 Dismissing or staying all or part of proceeding(1) The court may strike out all or part of a pleading if it—1 Copyright Act 1994, pt 7.2 Section 136.3 Section 136D.4 See Burden v ESR Group (NZ) Ltd [2015] NZHC 1649 at [14].(a) discloses no reasonably arguable cause of action, defence, or caseappropriate to the nature of the pleading; or(b) is likely to cause prejudice or delay; or(c) is frivolous or vexatious; or(d) is otherwise an abuse of the process of the court.(2) If the court strikes out a statement of claim or a counterclaim undersubclause (1), it may by the same or a subsequent order dismiss theproceeding or the counterclaim.(3) Instead of striking out all or part of a pleading under subclause (1), thecourt may stay all or part of the proceeding on such conditions as areconsidered just.(4) This rule does not affect the court's inherent jurisdiction.The principles are well-understood: pleaded facts are presumed true; the targetpleading must have no prospect of success; and the jurisdiction is exercised only inclear cases.5 An 'abuse of the process of the court' is "improper use of [the court's]machinery";6 use of that process "for a purpose or in a way significantly different fromits ordinary and proper use".7[6] Section 140 of the Copyright Act provides:140 Detention of pirated copy(1) Where the chief executive has formed an opinion that an item that is inthe control of the Customs may be a pirated copy to which a noticeaccepted under section 136(3)(a) relates, that item shall be detained in thecustody of the chief executive or any Customs officer until—(a) the chief executive is served with an order made in proceedings undersection 141(1) that the notice be discharged; or(b) the chief executive is served with an order made in proceedings undersection 141(2) that the item be released; or(c) any proceedings under section 141(3) in respect of that item(including any appeal) are determined by a decision that the item isnot a specified item that is a pirated copy; or(d) any proceedings under section 141(3) in respect of that item, includingany appeal, are abandoned; or5 See Gartside v Sheffield, Young & Ellis [1983] NZLR 37 (CA) at 45; Attorney-General v Prince[1998] 1 NZLR 262 (CA) at 267; and North Shore City Council v Attorney-General [2012] NZSC49, [2012] 3 NZLR 341 at [146], all endorsed by the Supreme Court in Sandman v McKay [2019]NZSC 41, [2019] 1 NZLR 519 at [113].6 Simon Goulding, DB Casson and William Blake Odgers Odgers on Civil Court Actions (24th ed,Sweet & Maxwell, London 1996) at [10.15] as cited in Commissioner of Inland Revenue vChesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [87].7 Attorney-General v Barker [2000] 1 FLR 759 (QBD) at 764.(e) 10 working days have elapsed since notice was served under section139 and the chief executive has not been served with notice ofproceedings brought under section 141(3) by a person other than theimporter or exporter;—whereupon the item shall, subject to subsection (3), be released to theperson entitled to it.(2) The chief executive may in any particular case extend the period referredto in subsection (1)(e) to 20 working days if he or she considers itappropriate to do so in all the circumstances.(3) The chief executive or any Customs officer shall not release any itemunder subsection (1) unless—(a) any other legal requirements as to importation or exportation of theitem are satisfied; and(b) any requirements made pursuant to any regulations made under thisAct requiring the deposit of a security have been satisfied; and(c) the release of the item is not otherwise contrary to law.Discussion[7] After a promising start, Royale Biotech breached timetable directions leadingto trial for 22 November 2021. It has not opposed Hi Globe's counterclaim, or servedits briefs of evidence and nominations for the common bundle, when due. Its lastsubstantive step in the proceeding, of filing an amended statement of claim at someodds with its initial claim, was on 18 May 2021. Its solicitors then were given leave towithdraw from its representation.8 It appears to have exited (without changing) itsregistered address. I am satisfied from proof of service subsequent documents properlyhave been served on that address, as well as electronically communicated to RoyaleBiotech's email address.9 But there has been no response from it at all.[8] Given in particular the fundamental role Royale Biotech's issue andmaintenance of this proceeding has in preventing release of the bottles to Hi Globeunder s 140(1)(d) and (e), I conclude Royale Biotech's failure to maintain theproceeding's progress thus is abusive; use of the proceeding effectively to preventrelease of the bottles to Hi Globe, a purpose "significantly different from its ordinary8 Royale Biotech Group Ltd v Hi Globe International Trading Ltd HC Auckland CIV-2020-404-1059, 14 July 2021 (Minute of Fitzgerald J) at [3].9 To avoid doubt, being satisfied in terms of High Court Rules 2016, r 9.73(5)(a), and noting bothJason Wach's email memorandum of 20 August 2021 and the intended affidavit's ultimateparagraph, I direct the intended affidavit of Ranjini Vasanthan be accepted for filing, and read andused, in this proceeding.and proper use'. I therefore will strike out Royale Biotech's amended claim (and, toavoid doubt, its initial claim).[9] There is a question if by such strike out the proceeding is abandoned for thepurpose of s 140(1)(d). Despite, or perhaps because, procedural rules provide forexpress notice of abandonment,10 or proceedings being deemed abandoned,11 the word'abandoned' in this context has not been the subject of judicial scrutiny. The paragraphalso refers to "any proceedings", but 'any' may mean either 'each' or 'all'. Section 2expressly defines 'proceedings' as "includ[ing] a counterclaim".12[10] Although (or, again, perhaps because) 'abandonment' has a "highly artificialand technical" meaning in maritime law,13 New Zealand courts have preferred to adopta definition of "[t]he action or process of surrendering, forsaking, giving upcompletely or leaving something or someone unprotected".14 That definition arguablyanticipates some deliberate commission or omission on the part of the abandoner.[11] Other legal dictionaries confirm the affirmative nature of the word:15(1) The relinquishment of an interest or claim. Abandonment must be final andcomplete and requires intention (although it may be proved by reference to acourse of action that shows the gradual formation of an intention to abandon).(2) Abandonment is of particular significance in relation to legal proceedings.Rules of Court can make provision for the method by which an action may beabandoned .10 See, for example, High Court Rules 2016, r 15.19.11 See , for example, Court of Appeal (Civil) Rules 2005, r 43.12 But, at least for the purpose of strike out, High Court Rules' r 15.1(2) distinguishes 'proceeding'and 'counterclaim'.13 Rankin v Potter (1873) LR 6 HL 83 at 144. See also Court Line Ltd v R, The Lavington Court[1945] 2 All ER 357 (CA) at 362–363.14 Carter v Ports of Auckland Ltd CA122/04, 29 August 2005 at [16]–[18]; albeit in a maritimecontext, citing Butterworths New Zealand Law Dictionary (now Peter Spiller New Zealand LawDictionary (9th ed, LexisNexis, Wellington, 2019 at 1)). Ray Finkelstein and others AustralianLegal Dictionary (2nd ed, LexisNexis, Victoria, 2016) at 2 uses the same definition, adding"Complete relinquishment of property or a claim in law", exemplified in the context of "Courtsand judicial system[:] The relinquishment of an interest or claim. Abandonment of action occurswhen proceedings are ceased ". Spiller adds "Courts[:] The discontinuance of a claim. SeeMailley v Police [2011] 3 NZLR 223, 230", but there is nothing in that decision to such effect.15 Daniel Greenberg (ed) Jowitt's Dictionary of English Law (5th ed, Sweet & Maxwell, London,2019) vol 1 at 4. Similarly, 'abandonment' is defined as "[t]he relinquishing of a right or interestwith the intention of never reclaiming it": Bryan Garner (ed) Black's Law Dictionary (11th ed,Thomson Reuters, Minnesota, 2019) at 2.Similarly, the word "[s]ignifies 'leaving completely and finally; giving up all concernin'".16 It does not sit well with the position here, in which the amended claim only isto be struck out for the would-be abandoner's inaction. It is unclear if, given thecounterclaim, the proceeding then may be dismissed.17 Even so, such dismissal doesnot attribute to Royale Biotech the meaning the word's definitions carry. Althoughstrike out for abuse of process or consequent dismissal may in one sense be describedas relinquishment of Royale Biotech's claim, that consequence cannot be said itsintention.[12] The better view is Royale Biotech's noted failures to meet its timetableobligations — and to respond to Hi Globe's informal present application, particularlyin circumstances of the clear and signalled consequences ultimately sought byHi Globe — inferentially are its gradually-formed intentional omissions, culminatingin its 'final and complete' abandonment of the proceeding, as struck out. I thereforewill declare Royale Biotech's proceeding under s 141(3) in respect of the importedbottles is abandoned. If Hi Globe's counterclaim then was to be discontinued, I woulddismiss the proceeding in its entirety.Result[13] I:(a) strike out Royale Biotech's statement of claim dated 8 July 2020 andamended statement of claim dated 18 May 2021;(b) declare Royale Biotech's proceeding under s 141(3) in respect of theimported bottles is abandoned; and(c) on Hi Globe's filing and service of a notice of discontinuance, dismissthis proceeding in its entirety (save for the question of costs).16 Daniel Greenberg (ed) Stroud's Judicial Dictionary of Words and Phrases (10th ed, Sweet &Maxwell, London, 2020) vol 1 at 1, citing Kallooar v R [1964] 50 WWR 602.17 High Court Rules, r 15.1(2).Costs[14] As the successful party, Hi Globe is entitled to an award of costs. If that is tobe pursued, I reserve their quantum for determination on short memoranda of no morethan five pages — annexing a single-page table setting out any contended allowablesteps, time allocation, and daily recovery rate — to be filed and served by Hi Globewithin 10 working days of the date of this judgment, with any response or reply to befiled within five working day intervals after service.—Jagose J