Case: Allen Manufacturing Co Pty Ltd v McCallum &amp; Co Pty Ltd [2001] FCA 1838 , 53 IPR 400
Outcome: cited
however, there have emerged two lines of authority such that the path to be followed remains unclear. In Cooper v Universal Music Australia Pty Ltd [2006] FCAFC 187 , 156 FCR 380 , Kenny J expressed these two lines of authority as follows: [160] The law concerning the liability of directors and other officers for corporate wrongdoings is unclear: see Allen Manufacturing Company Pty Ltd v McCallum &amp; Company Pty Ltd (2001) 53 IPR 400 at 409 411 per Wilcox, French and Dowsett JJ (" Allen Manufacturing "). There are two relevant lines of authority, each supportive of a different test. As the Full Court said in Allen Manufacturing 53 IPR at 409: One line supported ... the " Performing Right Society test": whether the director had "directed or procured" the company's infringement. The other line supported "the Mentmore test": whether the director had engaged in "the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it". [161] No Full Court of this Court has settled which of these two tests is to be preferred: see Allen Manufacturing 53 IPR at 410 411 and Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 ; (2002) 55 IPR 354 at [160] [161] per Weinberg and Dowsett JJ (" Sydneywide "). In Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980 ; (2000) 177 ALR 231 (" Root Quality "), Finkelstein J discussed both tests and concluded at [46] that "[t]he director's conduct must be such that it can be said of him that he was so personally involved in the commission of the unlawful act that it is just that he should be rendered liable." I tend to agree with his Honour's approach: compare also Universal Music [2005] FCA 972 ; 150 FCR 1 at [134]. Branson J did not express a preference for either test and the remaining member of the Court, French J, simply agreed with the conclusion of Branson and Kenny JJ that the appeal should be dismissed. Notwithstanding the acknowledgment that there are these two distinct lines of authority, the Full Court has suggested that the differences may be more apparent than real. In Allen Manufacturing Co Pty Ltd v McCallum &amp; Co Pty Ltd [2001] FCA 1838 , 53 IPR 400 Wilcox, French and Dowsett JJ concluded: [43] The difference between the two tests may be more apparent than read [sic]. We are not aware of any case in which it has been held that a director or officer of a company directed or procured the company's infringing act, yet that person escaped liability because he or she did not deliberately, wilfully or knowingly pursue a course of conduct that was likely to constitute infringement or that reflected indifference to the risk of infringement. This may be because, in practice, an act of direction or procurement will generally meet the Mentmore test. It is notable that, in Mentmore itself, the Canadian Federal Court of Appeal declined (at 204) to "go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement". The court declined to do this because that "would be to impose a condition of liability that does not exist for patent infringement generally". The same conclusion was reached by Gordon J in LED Technologies Pty Ltd v Elecspess Pty Ltd [2008] FCA 1941 at [171] to [175] [2008] FCA 1941 ; , 80 IPR 85 at 128 to 129.