' .. I Law Institute LIV ViCIDPia 4 70 Bourke Street, Melbourne Telephone: 9607 9387 Fax: 9607 9558 CONTINUING LEGAL EDUCATION Advanced Civil Litigation Update on Mareva Injunctions & Anton Piller Orders Monday 17 2002 June, Presenters: Kate McMillan, SC David Forbes Barrister at Law Chair: Ian Lulham Tolhurst Druce & Emmerson ' ANTON PILLER ORDERS By Kate McMillan, SC THE ORIGINS OF THE ANTON PILLER ORDER The term "Anton Piller order" is taken from the English Court of Appeal decision Anton Piller KG v Manufacturing Processes Ltd. 1 In that case, counsel for the plaintiff outlined the history of "permit" orders for inspection in the United Kingdom for the previous 18 months. Judges of the Chancery Division had been making orders that authorised the plaintiff and the plaintiff's solicitors to enter the defendant's premises to inspect papers provided the defendant gave permission but with the court ordering the defendant to give that permission. Counsel for the plaintiff said that so far as it was known there had been seven ex parte applications to the courts for such "permit" orders for inspection, five of which had been granted and only one of which had been reported: E.M.I. Ltd v Pandif. Counsel who appeared for the appellant in Anton Piller also appeared for the plaintiff in E.M.I. Ltd vPandit. In E.M.I. v Pandit Templeman J stated: "The order sought by the plaintiffs appears, to misuse a current popular phrase, to be Draconian ... I am prepared ... subject to suitable safeguards, to make an order on the defendant to allow the plaintiffs to enter on premises in which he is in occupation for the purposes specified by the plaintiffs. This order will not involve forcible entry but would make the defendant liable for contempt proceedings if he disobeyed the order ... In the normal course of events, a defendant will have notice of the relief which is sought against him in the exercise of the powers given by this rule and will be able to come along to the court and to give reasons why the order should not be made or why, if it is made, particular safeguards should be included. Nevertheless, in my judgment, if it appears that the object of the plaintiff's litigation will be unfairly and improperly 1 [1976] 1 Ch 55 2 [1975] 1 WLR 302 I 3 ensuring that justice can be done to the applicant. In Anton Piller, Lord Denning said: "It seems to me that such an order can be made by a judge ex parte but it should only be made where it is essential that the plaintiff should have inspection so that justice can be done between the parties: and when, if the defendant were forewarned, there is a grave danger that vital evidence will be destroyed ... and so the ends of justice be defeated: and when the inspection would do no real harm to the defendant or his case."5 In Bhimji v Chatwanl it was said that Anton Piller orders "stand ... at the extremity of the court's jurisdiction. Some may think that they go beyond it. They involve the court in the hypocrisy of pretending that the entry and search are carried on because the owners of the premises have consented to it. They impose on plaintiffs solicitors the almost impossible task of describing fairly to non-lawyers the true effect and nature of the orders. They present respondents with orders of great complexity and jurisprudential sophistication and give little time for decisions to be taken as to the response to be made to them. They vest the plaintiffs, one side in what is usually highly contentious litigation, with the trappings of apparent administrative authority to carry out the search. The usual presence of a policeman 7 adds to this illusion." THE PLAINTIFF'S CASE The essential elements which must be satisfied before an Anton Piller order would be made are set out in the judgment of Ormrod LJ in Anton Piller: "There are three essential pre-conditions for the making of such an order ... First, there must be a strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants may have in their possession incriminating documents or things, and that there is a 5 Anton Piller supra at p61 6 [1991]1 AllER 705 7 Ibid at 712 5 The Contents of the Affidavit in Support As a starting point, the contents of the affidavit in support of the application should satisfy the three essential pre-conditions outlined by Ormrod LJ ie. the material should set out the facts to support a strong prima facie case, set out the damage to the applicant and set out the clear evidence that the defendants have the incriminating documents or things in their possession and the grounds to establish that there is a real possibility that such material may be destroyed by the defendants if notice of the orders were given to the defendants. The affidavit of the applicant should include material facts to satisfy all of the items outlined in the Practice Notes and a full proposal by the applicant for the execution of the order. 12 In Brink's-Mat Ltd v Elcombe Ralph Gibson LJ dealt with the principles which determine whether there has been material non-disclosure in the context of a Mareva order and the consequences the court would attach to any failure to comply with the duty to make full and frank disclosure. It is the duty of the applicant to make disclosure of all material facts being those facts which were material for the judge to know in dealing with the application. The applicant must make proper inquiries before making the application and the duty of disclosure applied to material facts known to the applicant and to any additional facts which could have been ascertained if reasonable inquiries had been made. The materiality of a fact was to be decided by the court and not by the applicant or the applicant's legal advisers. In Milcap v Coranto13 Davies J dealt with an application to set aside an Anton Piller order on the ground of non-disclosure. He said: "When an ex parte order is sought, the person seeking the order must be frank and disclose to the court all the matters which, if put before the court, might have an effect upon the court's decision. The facts that should be disclosed go both to matters of liability and matters of discretion. If a fact is material in that it would be a matter to be taken into account 12 [1988] 3 AllER 188 13 (1995) 32 IPR 34 7 (b) The articles or documents obtained as a result of the order be retained by the applicant's solicitors in safe custody. (c) Not to use any documents or information obtained as a result of the execution of the order except for the purpose of civil proceedings in connection with the subject matter of the dispute without leave. (d) That the order will be served by a solicitor who is independent of the applicant and who will offer to the person served an explanation of the order in plain language. (e) That the person served will be given the opportunity to take his or her own legal advice. The order usually requires the defendant to permit a stated number of persons to enter specified premises in normal business hours to inspect relevant documents and things and remove them to the safe custody of the plaintiffs solicitor. An independent solicitor must also be present when the order is being executed. In Liberty Financial Pty Ltd v Scott 21Weinberg J made an Anton Piller order against the defendant and in addition to the normal safeguards contained in Anton Piller orders it provided for the attendance of two named independent solicitors at the time the order was executed. The role of the solicitors was to supervise the execution of the order and to prepare a written report to be filed with the court. The order also provided for the preparation by the applicant's solicitors of an inventory specifying and describing each item to be removed from the premises and it provided that any documents so removed be delivered into the custody of the supervising solicitors pending the further hearing of the application for interlocutory relief. The requirement that the defendant forthwith admit the plaintiffs solicitor to the defendant's premises does not if the defendant desires to obtain legal advice mean 21 [2002] FCA 345 9 APPLICATIONS TO SET ASIDE OR DISCHARGE ANTON PILLER ORDERS Defendants who have been served with an Anton Piller order may seek orders that the Anton Piller order be set aside and/or discharged and that all documents seized pursuant to the order be returned to the custody of the defendant or its solicitors. The basis of such an application is usually on the grounds of material non disclosure by the applicant when making the ex parte order. Material non disclosure is a matter of fact and depends on the circumstances of each case. 5 In Thennax Limited v Schott Industrial Glass Limitecf an application was made to set aside an Anton Piller order in circumstances where material facts known to the plaintiff had not been made known to the judge who granted the order. His Lordship Browne-Wilkinson J said: " ... As time goes on and the granting of Anton Piller orders becomes more and more frequent, there is a tendency to forget how serious an intervention they are in the privacy and rights of defendants ... In my judgment the rule of full disclosure to the court is almost more important in Anton 26 Piller cases than in other ex parte applications." In Dart Industries Inc v David Bryar 27 Goldberg J dealt with an application to discharge an Anton Piller order based upon alleged non-disclosure. His Honour agreed with the views of Ralph Gibson LJ in Brinks and also to the tentative view expressed by Browne-Wilkinson VC in Tate Access Floors Inc v Boswell 28 that investigations of the circumstances in which an ex parte Anton Piller order was granted should be restricted to the cases where there had been a serious failure to make a material disclosure. 25 [1981] FSR 289. 26 Ibid at p298 27 (1997) FCA 481 (10 April1997) 28 (1999] Ch 512 at 534 II Anton Piller order"32 but this appears to be restricted, save for one or two forms of rolling orders, to Canada. 33 In Fila Canada Inc v Doe Reed J described the order as follows: "The order, which is sought, is what is known as a "rolling" Anton Piller order. As is obvious from the style of cause, when these orders are obtained from the Court neither the identity or address of the persons against whom they will be executed are known. On some occasions one or two persons may be identified as named defendants but they will have no necessary connection to the Jane and John Does against whom the order will be executed. The known defendants are allegedly infringing intellectual property rights belonging to the plaintiff but in different places, at different times and in different circumstances. The "rolling" orders can be distinguished from defendant-specific Anton Piller orders. While defendant-specific Anton Piller orders may also include Jane and John Doe defendants, in general, the latter will be connected to named defendants, for example, by being an employee of the defendant or supplier of the alleged counterfeit goods of the defendant. The "rolling" orders are executed against street vendors and transient flea markets although they are framed in broad enough terms to encompass the search of retail premises, office premises, vehicles, warehouses, as well as residences. They are usually expressed to last a year subject to being renewed." The rolling Anton Piller order does not sit easily with the classic Ormrod LJ criteria for granting the order. The first pre-condition of demonstrating a strong prima facie case can be met by pointing to the existence of the applicant's registered copyright, trademark or patent and by setting out specific examples of infringement. The fact that specific examples do not specify a particular defendant has not been commented upon. The second pre-condition of proof of potential or actual damage being very serious for the applicant can be met by the fact that the continued presence of the infringing material in the market place will threaten the trade 32 For information regarding rolling Anton Piller orders I am indebted to J Berryman for his article "Recent Developments in Anton Piller Orders" supra 13 venues." The terms of the statement of claim do not appear. An injunction was granted restraining pending the determination of the action or further order "the second defendants" and "the third defendants" (in the plural) respectively from selling merchandise without the licence of Metallica or McCartney. Upon service on them of a copy of the order by the plaintiffs solicitor, those defendants were required to state their name and place of abode and deliver up the offending merchandise. The injunction identified those to whom it was directed by reference to their acts which infringed the plaintiffs rights, and it prohibited the performance of those acts. The Metallica order (as the judge making it thought it might come to be known) thus had the novel feature- which would have appealed to Lewis Carroll that it became binding upon a person only because that person was already in breach of it. The order of Anderson J. was, as we have said, directed to the world at large. The existing Jaw and procedure may be inadequate to deal with the reprehensible activities of these intellectual bootleggers, but, with respect, we cannot accept that an injunction can be granted against all the world ... At p188 of the judgment it is said that on 16 March 1993 the plaintiff had obtained an essentially similar order from the Federal Court of Australia. The unreported decision of the Federal Court mentioned by Anderson J is evidently that of Burchett J., given in fact on 26 March 1993 in Tony Blain Pty Ltd v Jamison ... The order there made was, first, a representative order that the defendant, one Jamison, represent a group of persons (how the group was defined by the order does not appear) and, secondly, an order for the delivery up of the infringing merchandise. There seem to have been defendants other than Jamison; their identity or description does not appear. It seems that no prohibitory injunction was granted."36 The reference by the Court of Appeal to Tony Blain Pty Ltd v Jamison 37 is a reference to a type of rolling order. The Federal Court case appears to have decided that the named defendants were representatives of the wider class. However, the plaintiff was allowed to seize the infringing merchandise and was 35 [1998) 4 VR 143 36 1bid at pp.160-1 15 CONCLUSION Bearing in mind the strong criticism by the Court of Appeal in Victoria in the Maritime Union case it seems reasonably safe to predict that the rolling Anton Piller orders that are a feature in Canada will not become a feature in Victoria. 1'1-JU~I-2002 11:57 FROI1 C 11CMILLAII TO 096079451 V 1 c_ iOQtA PRACllCE NOlES [12,680! If only one Master is available, that Master will also bear in Cou o 1 (subject to other business pending) applications of the type ideoti1ied the foUowing paragraphs of Part B of the principal Practice Note: (b) (if the neys held by the Senior Master are held under the Trustee Act· 1958 other th for a person under disability); (f) (as if "order" were substituted for "certificate ; (g); (h); (i); (j); (k); (m); and (o). If another Master is available, that Master will hear s applications in Court 7, Court 7A, or Court No 2, first floor, 471 Little Bourke eet, Melbourne. The place of hearing will be specified in the summons (if. an but, to allow for subsequent wt alterjltion due to inteJVeoiog circumstances, the w of the day fixed for the bearing should always be consulted. Henceforth, summonses with respect t applications referred to in the penultimate paragraph are to be filed with, 1f there is oo summons, a date for the hearing of such au application is to be ob 'ned from, tho second secretary to the Senior Master. Applications for approval of a comP, mise in relation to a claim by or on behalf of or against a person under disab' · will cooti!lue to be beard by a Master aod arrangements for the bearing of ch an application may be made through the se<:ood secretary to the Senior ter> Applications for the ap otmcot of a. provisional liquidator and other a applications to Master und the Corporations La\V (other than those referred to in paragraph (f) and (g) of B of the principal Practice Note) are to be made in the 7th Court on a edn""day, Thursday .. or . Friday. Unless extraordinary circumstances obtain, e summons with respect to any sucb application is to be referred in the first · stance to the. principal secretary to the Senior Master. Masters assisting e. aTIIJ/hLr Wbere with espect to an application under tbis Practice Note to be heard by Masters B , Gaffney and Kings,. either Master Evans or Master Wheeler is will accept a reference Crom any of the former witb·respect to such an applicat' which the latter cannot hear as conveniently. Similarly, when any of tbe former s available, he or she will accept references of applications from the Master sitti in the Masters' Practice Court. 25' August 1993 KJ Mahony . / Senior Master .----·· [12,680) Urgent ex parte applications Practice Note '[1994] 1 VR 86 The Chief Justice has approved the issue of the foUowing Practice Note: No 4 or 1993 "f- Urgent ex pane applications It is thought that it may be useful to publish for the information of the profession a Practice Note setting out some of tbe matters that may fail to be considered when an application is made ex parte Cor urgent interim relief. · 0 Butkrworths 25,155