Trying to Change Court Orders? Here are Some Factors to consider!

A recent case from the Federal Court of Australia looks at the circumstances in which a Court may (or may not) be persuaded to vary orders already made in a matter.

Background

In Mountain Trail Engineering Pty Ltd v Foster [2023] FCA 718, an interlocutory application was filed by the Respondents in the proceedings to vary an earlier order made by the Court.

The proceedings related to allegations by the Applicant that its former employee Mr Foster, and Mr Foster’s new employer (the Respondents), had misused the Applicant’s confidential information to design the “Seisia Caravan”.

During the proceedings, an order was made against the Respondents that:

“restrained [them] from, without the licence or authority of the Applicants manufacturing or continuing to manufacture, promoting, offering for sale or selling the Seisia Caravan.. promoted and sold to date and any other products developed (either entirely or in part) by using any of the MTRV documents (or any part of such documents) (to be referred to as Order 5).

Order 5 was made in circumstances where the affidavit evidence of the Respondents confirmed that Mr Foster had retained copies of the Applicant’s files after his employment with the Applicant had ended. He had also transferred this data to the Respondents’ computer and used that material to design the Seisia caravan.

Application to vary Orders

During the proceedings, and pending a final determination of the matter, the Respondents wanted to send their newly designed caravan on a promotional trek

On 23 June 2023, the Respondents filed an application to vary Order 5.

The Respondents sought to vary Order 5 to allow them to use a redesigned version of the caravan for a promotional trek.

The Respondents’ evidence in support of the application included:

• A copy of the contract for the promotional trek.
• A report from a mechanical engineer advising that, although the Seisia Caravan had similar design elements to those used by the Applicant, such similarities were inevitable for trailer function and compliance.

The Respondents’ application was heard by O’Callaghan J]. O’Callaghan relied on the following comments made by Young J in Paras v Public Service Body Head of the Department of Infrastructure (No 2) [2006] FCA 652 to summarise the principles that apply to the Court’s power to vary orders:

“…the power is discretionary, and the authorities in this Court indicate that it is ordinarily only exercised in exceptional circumstances … The authorities indicate that the kind of exceptional circumstances that might attract the power of discharge or variation include where an interlocutory order was obtained by fraud or non-disclosure of material facts, or through an accident or mistake that occurred without the fault of the parties … The court’s discretion to vary aside an order is to be exercised with great caution having regard to the importance of the public interest in the finality of litigation … In my opinion, these principles apply, a fortiori, where the party applying for discharge of an interlocutory order seeks to reargue the issues that have already been determined by reference to additional evidence that was available to it on the earlier occasion but which it chose not to advance[.]”

 

Ultimately, his Honour held that the Respondents did not make a good case to vary Order 5 on the basis that:

1. Tere was evidence that the Applicants’ designs were frequently accessed by the Respondents around the time the caravan was designed;
2. The Respondents caravan was designed in a short period while the Applicants’ caravan took eight years to develop;
3. No explanation was given as to why the mechanical engineering report was not provided when Order 5 was initially sought by the Applicants; and
4. The promotional trek was something that the Respondents were aware of since July 2022. Any inconvenience caused by not being able to send their caravan as part of the trek was an held to be “of their own making.” His Honour further assumed that the Respondents could comply with their contractual obligations by sending any of their other caravans.

 

Takeaways

This decision is a reminder of the limited circumstances that will be considered when the Court decides whether to exercise its discretion to vary previous orders.  Commercial inconvenience will not necessarily be persuasive. It may also be that new information presented to the Court in an effort to vary orders will be given little weight if that information should have been presented to the Court at an earlier stage in proceedings.