A company director recently told us of his surprise and confusion when a competitor's solicitor arrived on his doorstep, a court order in hand and another solicitor and accountant in tow. The solicitor told the company director that he had the right to search the premises, and to remove certain documents and merchandise.
The director did not know how he should react in these circumstances. Could the group start taking photos and opening boxes before the director had obtained legal advice? Should he freely hand over all the company's documents, or did he have a right to protect material he thought was confidential? Could the solicitor take any merchandise that was in the building? Could he take material that belonged to another associated company?
The director had found himself on the receiving end of what is commonly known as an "Anton Piller" order. This is a court order requiring one party (the defendant) to allow the other party (the plaintiff) to enter the defendant's premises to inspect, remove or make copies of documents or other items which might form evidence in an action or proposed action against the defendant.
If you are unfortunate enough to be served with one, you must be careful not to take any action which is in contempt of court, while at the same time protecting your rights as much as possible. This article gives a basic overview of what an Anton Piller order is, how it is obtained, and importantly, what you should do if you are served with one.
What is an Anton Piller order?
Anton Piller orders take their name from an English court case. They are primarily made in intellectual property related cases, for example, in cases where it is alleged that the defendant has been selling goods that infringe the plaintiff's intellectual property rights. The first Anton Piller order was granted in Australia in 1976, and their use has developed as trade in pirate and counterfeit goods has grown.
The primary purpose of an Anton Piller order is to prevent a defendant from interfering with discovery and frustrating a trial by destroying documents or evidence. The order also assists a plaintiff to quickly discover infringing items. In order to ensure that a defendant does not destroy evidence, applications to a Court for Anton Piller orders are made ex parte (that is, only the plaintiff is in court).
An Anton Piller order is said to be different to a search warrant because the plaintiff can only enter the defendant's premises with the permission of the defendant. However, in reality, this ability to refuse entry makes little difference to the defendant: a defendant who refuses to comply with an order, or obstructs its due execution, is guilty of a contempt of court. This can result in fines or imprisonment.
How is an Anton Piller order obtained?
In order to obtain an Anton Piller order, the plaintiff must meet three tests. These are:
1 there must be an extremely strong prima facie case against the defendant
2 the potential or actual damage to the plaintiff resulting from the defendant's alleged wrongdoing must be very serious, and
3 there must be clear evidence that the defendants have incriminating documents or things in their possession, and there is a real possibility that they may destroy such material if they were to become aware of the plaintiff's application.
Because the defendant is not in court to argue against the granting of the order, the plaintiff has a duty to make full and frank disclosure of all facts that could be taken into account by the judge in deciding the matter. This includes identifying any likely defences. They must disclose all known material facts or facts that would have been discovered by proper enquiries.
If the order is granted, the plaintiff will undertake to serve the papers that were relied upon in court on the defendant so that they will know the case against them. They must also undertake to compensate the defendant and third parties for any loss that they might suffer by reason of the order having been made, if the court later decides that this should occur.
What should you do if you are served with an Anton Piller order?
If someone arrives at your premises with an Anton Piller order, the first thing you should do is call your solicitor. Often the terms of the court order will expressly allow the defendant the opportunity to seek legal advice before complying with the order - this advice ought to be sought urgently so that the execution of the order can continue.
From time to time, we see court orders that make no express reference to the defendant having the chance to seek legal advice. Each such instance will depend on the overall terms and proper construction of the court order. However, there is legal authority suggesting that an Anton Piller order that orders the defendant to "forthwith" permit entry and search, does not mean at once or immediately, but only after there has been a reasonable period of time to obtain legal advice. However, the defendant is under an obligation to set about obtaining legal advice as soon as they are served with the order.
Most Anton Piller orders must be served during business hours to allow the defendant to obtain this advice. It is vitally important not to remove, destroy or hide any evidence or documents that might be the subject of the order while waiting for your lawyer to give advice (or, of course, afterwards!).
Your solicitor should explain that there are two options open to you:
1 you can allow the search, or
2 at the peril of being found in contempt of court, you can decline to permit the search and instead make an immediate application to the court to set aside or vary the order, undertaking not to remove or destroy any matters covered by the order in the meantime.
Making an application to discharge or vary the order is a risky course of action. If the action fails, your failing to comply with the order can amount to a serious contempt of court. If the order is set aside, there can still be a technical contempt by the failure to obey the order while it was on foot, and some penalty, at least in costs, can be imposed. The result is that most defendants consent and obey the court's order without first challenging it (and, accordingly, suffer the damage and distress of a search and seizure).
If you allow the search, you should be vigilant and ensure that the order is properly executed. Just like the defendant, if the plaintiff fails to follow the terms of the order, they can be found to be in contempt of court. Some points to consider are set out below.
- The order will usually require the presence of an independent solicitor at the execution of the order. This solicitor should serve the order and supporting documents, and explain the effect of the order. Has this occurred?
- If the premises are a private home and if it is likely that a woman will be alone, the order may specify that the solicitor serving the order is to be a woman, or accompanied by a woman.
- The order will usually limit the number of people who can take part in the search. Has this been complied with?
- Are the plaintiff's representatives on the right premises? Check the address contained in the order - the group is not permitted to search anywhere else.
- Make sure the plaintiff's representatives only inspect or remove items that are actually covered by the order. Read the order carefully and work out what material it refers to.
- If it is required by the order, have the plaintiff's representatives prepared a detailed list of the items being removed from the premises? Have you been given an opportunity to check the list?
- The order will usually require the independent solicitor to prepare a report about the search, which will be filed in court and served on the defendant. Check when this needs to be done.
Of course, remember that you cannot decide that you do not want to hand some things over because you believe that they are sensitive or irrelevant. If they are covered by the terms of the order, you must allow inspection and/or removal. Your solicitor should be able to advise you.
An Anton Piller order can be discharged even after it has been executed if, for example:
- the plaintiff failed to give full and frank disclosure of material facts at the ex parte hearing;
- insufficient evidence was presented to the court to allow the grant of the order, or;
- the plaintiff has not complied with the terms of the order.
Hopefully, you will never find yourself in the position of receiving a knock on the door from the bearer of an Anton Piller order. If you do, we can help you.
But also bear in mind the Anton Piller order for your own purposes. If someone may be infringing your intellectual property rights, this type of order should be considered.
This newsletter provides a summary only of the subject matter covered, without the assumption of a duty of care by Freehills. The summary is not intended to be nor should it be relied upon as a substitute for legal or other professional advice.