Apple and Pear Australia Limited v Pink Lady America, LLC

[2015] HCATrans 349

[2015] HCATrans 349

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M250 of 2015

B e t w e e n -

APPLE AND PEAR AUSTRALIA LIMITED (ACN 101 551 348)

Applicant

and

PINK LADY AMERICA LLC

Respondent

Application for stay

NETTLE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON TUESDAY, 22 DECEMBER 2015, AT 9.29 AM

(Continued from 18/12/15)

Copyright in the High Court of Australia

HIS HONOUR:   Mr Garratt.

MR GARRATT:   Your Honour should have received in the meantime some further affidavits ‑ ‑ ‑

HIS HONOUR:   Yes, I have from both sides, thank you.

MR GARRATT:   ‑ ‑ ‑ and some written submissions.

HIS HONOUR:   Yes, from you.  Thank you.

MR WISE:   Your Honour we filed with the registry today an outline of submissions.  I do not know whether they have reached your Honour or not.

HIS HONOUR:   No, they were under instructions, no more after yesterday, Mr Wise.

MR WISE:   I see.  Does your Honour wish to receive them now or ‑ ‑ ‑

HIS HONOUR:   These are submissions?

MR WISE:   I am sorry?

HIS HONOUR:   These are submissions?

MR WISE:   Yes.

HIS HONOUR:   No.  I would like to hear from you, if I may.

MR WISE:   Yes, no problem, your Honour.

MR GARRATT:   Thank you, your Honour.  I know and your Honour will soon know, that the submissions which our learned friend would make go to the question of this Court determining in limine the special leave application against APAL.

HIS HONOUR:   It is a bit hard when there is one of me here.

MR GARRATT:   I pass on.  Your Honour will have seen from the material that these features pertain.  My learned friend raised in relation to the question of prejudice, two grounds of prejudice.  One was to the loss of royalties.  The material from our side and uncontradicted is that royalties will not flow before April or May.

HIS HONOUR:   Yes.

MR GARRATT:   So, there is no immediate loss of royalties.  The interim regime which we had proposed, in any event, would prevent any loss of royalty.  The other ground of want of prejudice put up is the desire to be able to get on from the middle of January with licensing exporters, the issue of export licences in Chile.

Your Honour, what we say about that is this.  Our learned friends put on material which says that after the cessation of the joint licensing regime in 2012, they have been issuing export licences.  They do not provide material about the extent of their business in Chile and the material we have put on indicates it must of a small order, because we have gone to the apple export figures to North America provided and obtainable in respect of Chilean exports and less than 10 per cent of the apples exported from Chile went to North America, and what we cannot know is whether they went to North America under PLA export licences.

So it is a maximum of about 3 million kilograms, but just how big that export trade is being left entirely unexplained but, in any event, their position is that they have been issuing export licences.  So, the point is, they do not need a transfer of these marks to do what they have been doing.  But the point becomes all the more complex when your Honour picks up the undertakings given to Justice Croft on 11 December.

HIS HONOUR:   Yes.

MR GARRATT:   Recited under “Other Matters” on the second page of the order is an undertaking given by counsel:

until hearing and determination of any application by APAL for leave to appeal and the determination of any such appeal, or further order, it will not on sell, transfer, licence or otherwise encumber the PINK LADY trademarks ‑

A side point at the moment, your Honour, the Pink Lady trademarks that could only be the subject of that undertaking at this point must be the ones which transfer the three Schedule 1 trademarks.  But, in any event, what the undertaking makes plain is there is a formal promise not to licence.  So we say this second ground of prejudice, namely we want the transfers so that we can get on with licensing, fails at two levels.  First, you have been licensing without these marks, and second, you have given an undertaking to the court that you will not licence.

So, your Honour, we say there is no prejudice.  There is no need for the transfers.  The other thing which comes out of the recent material, your Honour, is to complete the exercise from the time we hand over transfers to lodging the transfers in the Chilean Trademarks Office, with the minimum of diligence, should occupy no more than two or three weeks.

HIS HONOUR:   This is Mr Ortuzar most recent affidavit?

MR GARRATT:   Yes.

HIS HONOUR:   Yes.

MR GARRATT:   It is the only affidavit which puts a timeframe on these things.  The Appeal A has somewhat enjoyed the ambiguity of a position which is that it might take a long time and therefore this is urgent, we need it now, on the one hand, but then not put on material about how long this really practically can really take.

So there is no need to get these marks at this point.  They are not necessary for licensing but in the event, once the stay application is determined in the Court of Appeal, it would be a matter of a couple of weeks only to register the marks.  You do need to lodge the marks for registration - sorry, I put that poorly - to lodge the applications, the transfers, in the Chilean office.  It will only take a matter of a couple of weeks, but you do not need them to do what you are doing or want to do in Chile. 

Starkly, your Honour, the material contains nothing about the substance of PLA.  We know nothing about the extent of its business or what assets it has, if any.  So the Court of Appeal, and I say this Court, is being asked to rely upon an undertaking from a company that gives no evidence about the extent of its business or the extent of its assets, if any, that is offshore and has no presence in this country.

Your Honour is asked to accept that as a sufficient counterweight against the grant of a stay, preserving within the control of the Court, the fate of these trademarks and trademark applications.  In our submission, your Honour, there is simply no comparison between the maintenance of judicial control through a stay, on the one hand, and a promise from an offshore corporation of unknown substance and unknown business which contradicts its own material about its intentions about licensing.

When we come to APAL’s position then, looking at the irreparable harm, we say the harm is of about eight distinct kinds.  First, there is a risk associated with the recovery of the Schedule 1 marks and those are the matters canvassed in the material about the risk of PLA on selling, transferring, licensing or otherwise encumbering the marks or not complying with a court order.  It has nothing here that makes it particularly amenable to the court’s order.

HIS HONOUR:   You have got the benefit of the undertaking which prohibits them from in any way encumbering or disposing of the marks and there is also the offer in their affidavit that that should extend to any marks that might issue between now and the determination of the appeal by the Court of Appeal.

MR GARRATT:   Yes, and as to that, your Honour, we make the points made that a promise from an entity that is offshore is of not the same comfort or assurance as maintenance of judicial control.

HIS HONOUR:   All right, I follow your point about that.

MR GARRATT:   Your Honour, just before leaving that point, if it is breached, what is the remedy for us?  The remedy for us is to attempt to enforce against PLA a claim for performance and it must be problematic that that can be done.  Certainly, any damages obtained if that could be done would be no substitute for the loss of the property rights that have gone or been encumbered in the meantime.

So that is the first head of risk. The second concerns the trademark oppositions that we make in Chile to the five applications - I think in one place we say in our submissions six, but there are five – five applications in Part 4 of the amended annexure to the Statement of Claim.  Once withdrawn, those oppositions cannot be refiled.  That is not challenged, so that is permanent prejudice.

Trademarks may issue on those applications which should never issue.  No one is ever going to be in a position to assess that, certainly not this Court.  This Court, I am sorry, no Australian court is going to be in that position.  No Australian court is going to be in a position of putting us back in the position in which we would have been, so it is simply not restorable.

The next head of risk is in respect of our application for the refreshed mark which we transfer.  The Court, neither the Court nor us have any control over how PLA deals with that application.  It could even abandon it or it might not comply, quite innocently perhaps, with Trademark Office procedures which lead to the application of being lost.

HIS HONOUR:   Well, it says in this affidavit, and I must say with a degree of apparent ….. similitude that it has got every interest to prosecute the application for registration.

MR GARRATT:   Well, not so, your Honour, because one of its applications is for the mark, so why should it prosecute our title rather than pursue its own claim?  Why should it leave on the record a derivative title to the refreshed mark through APAL when that might just wither and its own application blossom?

HIS HONOUR:   All right.

MR GARRATT:   Again, we cannot be restored to the position we would have been in as applicant.  We then have, fourthly, a distinct set of risks concerning the Trade Mark Master Licence agreement between APAL and VR in Chile.  APAL has licensed to VR the use of all the Pink Lady marks in Chile for domestic use.

Those marks include the three Schedule 1 marks and the refreshed mark, the proposed refreshed mark.  The transfer of the three Schedule 1 marks and the relinquishment of right in respect of the refreshed mark mean that VR is exposed to a claim by PLA that those marks may not be used by VR and that means that we, that is APAL, is exposed to a claim that what has been promised by the TMMLA is something we can no longer provide – breach – and breach, your Honour, in respect of the refreshed mark in particular which is the mark being used in respect of the trade in apples at this present time and has been since 2009 or 10. 

So it would not be some trivial breach that one could characterise as a breach of warranty under Australian law.  It would be a substantial breach, the risk of which would be that it would go to the heart of your contract or be seen to.  In other words, the TMMLA might well be terminated under the threats from PLA, in other words to VR, that you cannot do this VR, what you are doing with those marks.

The TMMLA is a valuable agreement to us.  It runs for another 13 years until 2028 and then there are two options for a renewal for 10 years.  If it is terminated for our breach, the damages claim could be very, very large.  If it is terminated for breach, there is no way this Court, or any Australian court can put us back in the position in which we would have been under the TMMLA being on foot.

There is a further head of risk which is lots of goodwill around the Pink Lady marks arising from confusion and allegations of infringement made by PLA against those using the mark in Chile, either for domestic or for export purposes.  There is then the further consequent head of loss, or risk, that because of contradictions in claims between APAL and PLA, growers decide they will export apples unbranded.  They do not want to acquire a stock of PLA‑based packaging.  They have been sterilised in the use of their APAL‑based packaging and they simply do not want to put themselves in one or other position.

HIS HONOUR:   How do you put that, risk of damage to a third party to be taken into account or something going further to the loss of goodwill by ‑ ‑ ‑

MR GARRATT:   It goes to the loss of goodwill, your Honour.

HIS HONOUR:   Yes.

MR GARRATT:   But the Court sees there is also loss to the third party growers, potentially, or certainly.  Now, there is some dispute on the material that has been filed as to the extent to which the APAL name is used on the packaging.

HIS HONOUR:   Yes, I saw that.

MR GARRATT:   An affidavit has been put on.

HIS HONOUR:   I cannot resolve it, can I?  I mean, there are competing views.

MR GARRATT:   No, your Honour cannot resolve it.  Your Honour cannot resolve it, but it would be relevant in that context to know the extent of PLA’s business in Chile and its activity in Chile in order to gauge the reliability of that material.  Your Honour does not have that. 

The next category, put distinctly but I have already mentioned it, is the harm to the third parties, the exporters themselves, in terms of wasted packaging, time and money costs associated with these changes of trademark ownership they have to deal with and a potential loss of profits to them in consequence of not shipping Pink Lady branded apples under the current arrangements and I also, in respect of third parties, mentioned the harm to Viveros Requinoa itself of not being able to continue to use the marks including the refreshed mark.

So, your Honour, these aspects of harm are matters again which are irreparable.  No undertaking has been offered which could meet them.  There is no evidence of any substance to PLA to back an undertaking and that must be one of the most troubling features, your Honour.  Anyone giving an undertaking must be mindful of the importance of putting on some evidence about the substance behind the undertaking:  a promise without some evidence that you have money in the bank or some assets or substantial presence that means your ability in the future to give effect to the undertaking is fairly clear.  A promise offered in those circumstances is of little assurance.

HIS HONOUR:   I assume that APAL would be prepared to give the usual undertaking as to damages?

MR GARRATT:   Of course, yes, your Honour, and to keep accounts, as we have indicated.  Your Honour, I am conscious of the time, this morning.

HIS HONOUR:   Yes.  Well, I can assure you I have read the material.  It took a little time but I have.  I understand your submissions thus far.  They seem to cover pretty well the material that is in the affidavit.

MR GARRATT:   Yes, and we have provided the written submission to assist your Honour to that end.  I will give my learned friend the opportunity now to present his submissions.

HIS HONOUR:   Thank you.  Mr Wise.

MR WISE:   Your Honour, my learned friend has driven straight to the question of essentially balance of convenience.

HIS HONOUR:   Yes.

MR WISE:   He has overleapt the first of the matters that he has to make good on the basis of Jennings v Burgundy Royale which is that there are substantial prospects of success on the application for special leave to appeal.

HIS HONOUR:   Special leave to appeal, yes.

MR WISE:   Yes.  So I would like to just refer your Honour to the application for special leave first.  I am sorry, just before I do, so Jennings outlines four matters.

HIS HONOUR:   Yes, I am familiar with Jennings, Mr Wise.

MR WISE:   Sorry.

HIS HONOUR:   I am familiar with Jennings.

MR WISE:   Yes.  So the first matter is, do they enjoy substantial prospects of success and in Marsden v Australian Broadcasting Tribunal quoting her Honour Justice Gaudron in Elliott v Seymour. That is a threshold question.

HIS HONOUR:   Yes.

MR WISE:   So, if one goes to the application for special leave, one sees the two orders, what are have described as orders that they seek to appeal against.  The first one is the order of Justice Croft made on 11 December.  The second is the so‑called order of the Court of Appeal.

HIS HONOUR:   You need not trouble about the second of them.  Just concentrate on the first.

MR WISE:   No, not a problem.  Thank you, your Honour.  So the first point to note, your Honour, is that this Court’s jurisdiction to review or entertain an appeal is an appeal in the strict sense that is it is not a re‑hearing on fresh evidence.  This Court is confined to considering the evidence that was before Justice Croft in making his order and any other material that has been filed at best goes to balance of convenience but ought not, or it is inadmissible before your Honour on the question of the threshold question, of whether there is disclosed error in the decision of Justice Croft.

Now, our learned friends have, first of all, not put into evidence before your Honour the evidence that was before Justice Croft.  It is apparent from the transcript that there was an affidavit affirmed by Mr Ortuzar which raised four points.  That is apparent from the submissions that were filed.  His Honour dealt with those four points and in essence, his Honour said, what you have provided me with in respect of those four points are four theoretical risks ‑ ‑ ‑

HIS HONOUR:   I have read the transcript of that argument so I understand the points you make.

MR WISE:   Yes.

HIS HONOUR:   But the question is not so much whether Justice Croft was right or wrong in refusing to direct that the Prothonotary hold the instruments it transfer, pending the application for leave to appeal to the Court of Appeal but whether this Court should exercise its jurisdiction to preserve under the Court of Appeal jurisdiction to turn the application for stay pending appeal to that court.  That is the issue that you need to concentrate on.

MR WISE:   Well, indeed.  It is important though, your Honour, on the basis of Jennings that there are four considerations that go into determining that matter and the ‑ ‑ ‑

HIS HONOUR:   Well, Jennings is concerned with an application for special leave to appeal from a substantive determination.  We are concerned here with an application for special leave to appeal from Justice Croft’s refusal to grant a stay, pending application for stay to the Court of Appeal.

MR WISE:   Well, your Honour, we would say that nevertheless, it brings into play the self‑same consideration, that is, is there some substantial prospect ‑ ‑ ‑

HIS HONOUR:   Yes.

MR WISE:   ‑ ‑ ‑ that our learned friends can succeed on demonstrating that the decision that was made by Justice Croft was wrong.  Now, no doubt the issue is the one that your Honour has framed but in dealing with that point, this Court must form a view as to whether there is some substantial prospect of succeeding on that point.

HIS HONOUR:   But they have not yet made their application to the Court of Appeal for stay pending appeal to that court.

MR WISE: No, that is true but, in our respectful submission, what is disclosed in the application for special leave to appeal is that they seek leave to appeal from the order of Justice Croft made in paragraph 2.

HIS HONOUR:   Yes.

MR WISE:   That is ‑ ‑ ‑

HIS HONOUR:   ‑ ‑ ‑ to hand over immediately.

MR WISE:   Yes.  Now, that is what the special leave application is about.

HIS HONOUR:   Yes.

MR WISE:   If that is right, then they need as a matter going to your Honour’s discretion, they need to satisfy your Honour that there is some substantial prospect that they can succeed on that point.

HIS HONOUR:   Before the Court of Appeal.

MR WISE:   Well, no, we say it is before your Honour because that is the application for special leave that is made to this Court.

HIS HONOUR:   Yes, true.

MR WISE:   So we say that what they have studiously avoided doing is putting before your Honour the evidence that was before Justice Croft and ‑ ‑ ‑

HIS HONOUR:   But they have not.  They have given me the transcript.  It is all referred to in there, is it not?

MR WISE:   Well, if your Honour takes that view, strictly they have not put any ‑ ‑ ‑

HIS HONOUR:   That is not to shut you down.  If you say that there is evidence apart from what is in the transcript, then by all means put it up to me.

MR WISE:   No, the four principle points that are covered in the Ortuzar affidavit are dealt with in the submissions in substance, so I will not take that matter any further.  But what is apparent from our learned friends’ written submissions is that they, when dealing with the question of substantial prospect, they do not deal with the substantial prospect of succeeding on the special leave application. 

Rather, they point to the prospects of succeeding on the application for leave to appeal and ultimately the appeal before the Court of Appeal.  We say that is a misdirection of your Honour’s attention and the reason it is a misdirection is, in the same way that a summons for an interlocutory injunction before any court must hang off a cause of action that has prospects of success.  In this case, their summons seeking the relevant stay, must hang off a cause of action in this Court which is the special leave application.

HIS HONOUR:   Yes.

MR WISE:   So we say that otherwise the special leave application is really irrelevant.  It would be completely irrelevant because all they want to do is talk about the summons that they have.

HIS HONOUR:   As I see it at the moment, what they are seeking special leave to appeal from is Justice Croft’s determination, so to frame paragraph 1 of the order, that they are affectively deprived of the opportunity of obtaining a stay, pending appeal before that order, in substance, takes effect.

MR WISE:   Yes.  Well, there is no difficulty with that but in terms of this Court reviewing that decision of Justice Croft, that is their special leave application and they need to satisfy your Honour as to the first point, that that has prospects of success.

HIS HONOUR:   Well, let me expose to you my thinking at this stage, so that you can respond to it.  We have established last Friday that it is not disputed that there is a seriously arguable ground of appeal to take on the substantive issue.  We know because it is self‑evident that unless Justice Croft’s paragraph 1 of the order is stayed, APAL will have to hand over immediately the instruments of transfer and withdrawal of opposition.

We know that they could take effect with the substantive results that they contend for and which you dispute.  I cannot determine them because we have deponents all around the world and no one is here for cross‑examination.  The question is whether in those circumstances there is ground for special leave to appeal from Justice Croft’s determination to order that the transfers and withdrawals take effect immediately, non obstante that there was yet to be made the application for leave to appeal to the Court of Appeal and stay pending that application.  Was it really right to put beyond their grasp the possibility of preserving the status quo ante at least until they got to the Court of Appeal for application for a stay pending appeal.

MR WISE:   What your Honour says is right, and what we would say is, just as your Honour articulated that final comment – was Justice Croft right in making the order that he did which had the effect that they contend for but which we dispute – was he right?  That is what this Court is empowered to do.  It is not empowered to do anything else.

HIS HONOUR:   No.

MR WISE:   So that drives your Honour to the question of what is their prospect of succeeding on that point.  Was his Honour right?  We say that on the basis of the materials before his Honour, which are dealt with in the transcript, there was no evidence of the relevant risks coming to fruition.  His Honour characterised it as merely putting up a set of theoretical risks without evidence to make good that those risks might come to pass.

If that is right – and a couple of matters are significant as to this.  First, our learned friends do not address you on that point of whether his Honour was right or wrong.  When they deal with substantial prospect of leave being granted, they do not direct themselves to that point.  They direct themselves to a different point.  The reason for that is that the evidence before Justice Croft was simply insufficient to have moved Justice Croft to do anything else.  We say that the order of Justice Croft was interlocutory in nature ‑ ‑ ‑

HIS HONOUR:   Of course.

MR WISE:   As such, House v The King would apply, and therefore the hurdle for our learned friends to overcome there is to establish either specific error – they do not even go to that.  If one looks at their grounds of appeal in the special leave application, they do not touch on error at all.

HIS HONOUR:   Just bear with me.

MR WISE: Paragraph 2. It is all about prejudice. It does not go to the question of whether his Honour erred in a House v The King fashion.

HIS HONOUR:   Perhaps they might contend like implied terms that it is so obvious it is to go without saying.

MR WISE:   They might, but it is a very dangerous thing for an advocate to do.

HIS HONOUR:   ….. if I may respectfully say so.

MR WISE:   Your Honour, what we say is the submission is a simple submission.  They need to satisfy your Honour that his Honour Justice Croft erred, on the basis of the material that was before his Honour.  The matters were – slight is the wrong way to put it.  There was no evidence.  So the first point was – sorry, if your Honour would just bear with me for a moment; I would like to go to it.

HIS HONOUR:   Yes.  They had an Ortuzar affidavit before Justice Croft, did they not?

MR WISE:   Yes, there was.

HIS HONOUR:   That is the first affidavit, indeed, that I received, before he backed up with a second one.

MR WISE:   No, I do not believe the first one that you received was the first Ortuzar affidavit.  That was the second Ortuzar.

HIS HONOUR:   I see.

MR WISE:   Our learned friends have studiously avoided putting before your Honour the first Ortuzar affidavit.  We would say the reason they have done that is they want to avoid the obvious conclusion that his Honour Justice Croft reached, and that your Honour would reach.  I have got copies of that affidavit here and I am happy to hand them up to your Honour.

HIS HONOUR:   I do not think so, not at this stage.  You say it is light on and that what is apparent from the transcript reveals that Justice Croft was right to treat it as so.

MR WISE:   Yes, he did.

HIS HONOUR:   Do you want to take me to anything particular in the transcript?

MR WISE:   Yes, I do, your Honour.  Your Honour, the transcript commences at page 40 of the Batrouney affidavit.

HIS HONOUR:   I have got it, thank you.

MR WISE:   Commencing at page 43 of the exhibit, I addressed his Honour on each matter.  The first one was that PLA:

“Might on-sell transfer, licence or otherwise encumber” –

We said we would not do that, and I gave the instruction which was ultimately recorded.  Just before we pass on from that, my learned friend puts a construction on that undertaking that is plainly incorrect and plainly not how to read that undertaking.  That undertaking not to “licence” concerned licensing in the fashion of on selling or encumbering.  It was not intended and could not have been read as or understood or intended to prevent my client sublicensing exporters.  That is the whole purpose; that is what we were all on about, and everybody understood that.  The reading that he gives to that is an improper reading.

HIS HONOUR:   What sort of licence does the undertaking go to, then?

MR WISE:   It goes to the equivalent of an exclusive licence to another party that would lead to them controlling the use of that mark.

HIS HONOUR:   So it goes to exclusive licences, or an exclusive licence?

MR WISE:   An exclusive licence to another party that would, in effect ‑ ‑ ‑

HIS HONOUR:   But not to a non-exclusive licence?

MR WISE:   No, no.  It cannot be, because the purpose of the transfer was to permit – it was understood by everybody that we were wanting to license exporters to export.  That was plain.  If one looks at the undertaking in the context of the words that surround it – that is, “will not on sell transfer, licence or otherwise encumber”.  It is clear that what is intended is that we would not do something that would prevent a retransfer to APAL.

HIS HONOUR:   Well, if this matter goes any further, it might be a good idea to go back before Justice Croft and get that tidied up.

MR WISE:   I accept that, your Honour.  We would be happy to do that; perhaps just a carve-out, save for sublicensing exporters – something of that nature.  We say that that is clear from what occurred.  So, the first point – Mr Ortuzar put up a hypothetical proposition that we could encumber it.  We said we undertake not to do that.  Second:

“The risk that PLA would not comply with an Australian court order to reassign” –

We said at line 28 “there is no basis to suppose” that we would do that.  One does have to remember, your Honour, that the reason this is being litigated in Australia in a Victorian court is that the parties executed an option deed, knowing that my client was American, which provided that Australian law is the relevant law of the option deed, and that all matters would be litigated here.

My learned friend makes great play of the fact that we are an American entity and we are beyond control of the Court.  Well, it is really not a fair proposition to put when my client has been in business for a long time, it has engaged in the relevant trade, we are brought to this jurisdiction and here we are, we have spent plenty of money to litigate and we comply with orders of the court.  There is no reason to suppose that we would not do so, and we have given an undertaking that we would do so.

HIS HONOUR:   Yes.

MR WISE:   The third point was the risk of some insolvency event.  Now, before his Honour there was no material at all to make good any proposition that my client might suffer an “insolvency event”.  There was nothing.  So his Honour ultimately, you will see, discounts that.

HIS HONOUR:   Was there any evidence before Justice Croft as to the financial position of PLA?

MR WISE:   No.

HIS HONOUR:   That is to say, either way; either to allow him to conclude that it was likely that it was a corporation of substance against which execution could be levied if necessary, or otherwise?

MR WISE:   I think the best that can be put is the fact that it was clear to his Honour at trial and beyond that my client had been in this business for a long time, busy conducting its business, and that is it.  So there was probably no evidence either way, except the fact that my client was there, had been in business for a long time engaged in this activity, and there was no evidence to suggest that we might be subject to an insolvency event.

HIS HONOUR:   Yes.

MR WISE:   So, in the end, all that there was was this hypothetical proposition that you might be subject to an insolvency event, but no evidence of it.  The next item, D, was:

“Uncertainty in the marketplace in Chile and risk of loss of goodwill and reputation, which would be caused by an assignment –

Again, we say that we submitted before his Honour that that was theoretical only, without any proper basis –

HIS HONOUR:   It is a bit more than that, is it not?

MR WISE:   No, we say it is not, your Honour.

HIS HONOUR:   It is hardly theoretical to say that if a licensor loses the ability to license in the market in which it has operated for seven years, any damage to goodwill is theoretical.

MR WISE:   It depends what is meant by “goodwill”.  If it is goodwill attaching to the mark, we would say no ‑ ‑ ‑

HIS HONOUR:   No, it is goodwill attaching to APAL.

MR WISE:   To APAL?

HIS HONOUR:   Yes, as the exclusive licensor of the mark in the territory.

MR WISE:   The only relevance to that would be if they succeed on appeal.

HIS HONOUR:   Well, that is the point.  They say that they will.

MR WISE:   Well, if they do succeed on appeal, we would say having regard to the strength of this brand and the evidence that growers will achieve a higher price and that is why they are prepared to pay the royalty associated with the brand, that it would be made up instantaneously.  It attaches to the brand.  It does not attach to APAL.  We would say that whoever owns this brand has the goodwill.  We say that that is not a substantial point at all.  Then, finally:

“The risk that INAPI may not accede to any application to have the trademarks reassigned” –

His Honour ultimately deals with that and says – his Honour was aware that back in 2007, an assignment was made on one of the registered marks and pending applications for registration of other marks.  He was aware that that was done just by reason of a document signed by both parties and registered with INAPI.  Our learned friends had raised this issue with us.  They said INAPI might not register because – a reassignment if it is done soon after assignment.

So we modified the transfer document that we put up for execution to exhibit a copy of Justice Croft’s order, and to recite that the assignment was being made pursuant to that order.  The idea that a reassignment which exhibited the relevant order of the Court of Appeal, and stating that it was done pursuant to that higher court’s order, the idea that in a civil system of law which is quite sophisticated in its intellectual property regime would not register that reassignment, it really defies logic.  That was expanded on in paragraph 10 with effectively the same result.  His Honour deals with that point at line 12 on page 45.  His Honour says:

HIS HONOUR:   I suppose if there was a retransfer INAPI would be advised of the reasons, if it asked?

The submission was –

MR WISE:   And, Your Honour, the reason [for] the form of these documents –

is what I have just explained to your Honour.  His Honour then says at line 29, with the benefit of the experience of the trial having seen what INAPI did in the past, he said –

HIS HONOUR:   I mean Chile has a sophisticated legal system.  It’s hard to imagine that that’s not right.

That is, that they would reassign upon the basis of a judgment of the Court of Appeal.  I then drew his Honour’s attention to the fact that they were seeking an interim stay without applying for one, which your Honour would have seen.  Then, if we move on, we will get to how his Honour dealt with the issue.  He dealt with it pretty much in discussion with my learned friend Mr Garratt, who, at line 49 ‑ ‑ ‑

HIS HONOUR:   Which page?

MR WISE:   Sorry, page 49 ‑ ‑ ‑

HIS HONOUR:   Yes, I have got that; line 11.

MR WISE:    ‑ ‑ ‑ commencing at line 11.  He drew attention to the Ortuzar affidavit.  His Honour said:

HIS HONOUR:   Yes.  I’ve read that, yes.

MR GARRATT:   My learned friend says that is just supposition.  The fact is this is an attorney who practises in Chile who says for example in respect of the assignment ‑ ‑ ‑

HIS HONOUR:   Yes, but it seems to me the point’s validly made; the list of matters in 7A to E.  I mean I think we could all list from general knowledge of the sort of risks that might happen with these sort of pieces of property, but there is no evidence that PLA is likely to become insolvent.  There’s no evidence in relation to D.  That seems highly speculative to me, and E it seems to me is a ridiculous proposition to say that if the Chilean Trademarks Office didn’t have the position fully explained to it there’d be an issue in relation to retransfer.  Now, of course one might be wrong in that assessment but if one had some actual evidence, apart from a list of possible risks, I might be persuaded but I’m not.

MR GARRATT:   Your Honour, the evidence is as far as Mr Ortuzar is concerned in respect of the last of those matters, is what he sets out in his affidavit in paragraph 10.  “There’s a risk that INAPI will question a reassignment if it occurred shortly after . . . 

HIS HONOUR:   Yes, but the point’s been made that the transfer – that the trademark office would be advised of the reason for the transfer; have a copy of court orders.  If the Court of Appeal in the State of Australia then makes order to retransfer I mean it’s almost inconceivable that the Chilean Trademarks Office would say, “I’m sorry, this is too quick.  This isn’t going to – there’s not going to be a retransfer”.  But I mean as I said before the issues raised in seven and ten are – there’s no disrespect to the attorney making this affidavit.

I mean appreciate they’re probably issues that could be raised in general terms there might bring difficulties as a matter of general proposition.  He’s not addressing in ten or 7E for that matter a situation where transfers are being made and retransferred under court orders.  He doesn’t deal with that, so I’m not satisfied.  I mean it’s evidence but it’s only worth what it says and I’m not satisfied that it justifies the proposition you’re putting.

MR GARRATT:   I can’t take that matter any further.  The only other matter [is this] –

and he deals with the Court of Appeal transfer.  Mr Garratt then sought an undertaking from my client that we would hold the documents pending an application to the Court of Appeal.  His Honour says this at line 27 on page 51:

MR GARRATT:   So, Your Honour, we would seek therefore an undertaking from our learned friends that if we hand the documents over within seven days, that they won’t further deal with them before a date in February so that we can tell the Court of Appeal that that’s the timeframe within which this application needs to be heard otherwise, obviously, we’ll tell them otherwise.

His Honour then turned to me.  I said:

MR WISE:   We don’t give that undertaking.  That is a de facto stay without having to apply for one and based on the – well, with nothing more than really theoretical possibilities put up as to the risks the court shouldn’t be satisfied that there’s any risk.

HIS HONOUR:   For the reasons advanced by Mr Wise, and for the reasons I’ve indicated and discussed with counsel, I’ll make the orders sought by Mr Wise.  It’s on the basis of the two undertakings that Mr Wise has said he has instructions to give.  If I could have a copy of the orders in that form for authentication by 12 o’clock today that would be appreciated?

Our point is a simple point.  Our simple point is that when your Honour looks at that transcript, based on the evidence before his Honour Justice Croft, there is no error disclosed and no error is pointed to by our learned friends.  If that is right, then they do not get past first base in respect of their application for special leave to appeal, and if that is right, then as to the first of the four matters identified in Jennings, they cannot satisfy your Honour and have failed to satisfy your Honour that there is any substantial prospect that they will succeed on their application for leave to appeal.  The consequence of that would be that the summons that they seek in the stay should be dismissed, but the point I wanted to articulate was that Marsden and Elliott make good the proposition that that question is a threshold test, and you only get to balance of convenience if your Honour is satisfied as to that.

I would like to now turn – I will not entertain your Honour in relation to why the order of the Court of Appeal is not an order.  I would like to deal with the balance of convenience.  The first point is this, your Honour.  We have given undertakings, and those undertakings ought not be – our learned friends say, well, these people are out of the jurisdiction.  Yes, we are, but that is who they contracted with, and beyond that – and the fact that we are conducting our business both in the United States of America, where we own these marks, and in respect of authorising export from Chile to North America, the United States, Mexico, Canada – I am sorry, my learned friend is right.  My learned friend says, in fact, it is an associated entity of PLA called “Brandt’s Fruit Trees” that owns the marks in the United States; he is correct.  But nevertheless, PLA manages those marks on behalf of BFT.

So the fact that my client is from the United States is, frankly, neither here nor there.  That is who they contract with.  They have brought us here.  It would be inappropriate for them to say “you have no assets in this jurisdiction; therefore, you should satisfy the court that you have substance” without a scintilla of evidence from our learned friends, no credible evidence to establish that there is some concern about my client’s solvency or ability to comply with undertakings.

We have indicated that if there is any doubt on the question – I would just like to deal with this question; they are bound up together.  Mr Garratt refers to the fact that APAL is required to withdraw its opposition to my client’s application for registration of the refreshed trademark, and also to assign or transfer to my client their application for the refreshed trademark.  It is for the same trademark.  At the end of this process, one or other of us is going to be declared to be the owner of the Pink Lady marks, or entitled to that ownership.  Everything is going to go to one party, or the other.

The idea that my client might succeed in obtaining the refreshed mark itself, but our learned friends might obtain their own refreshed mark ultimately, it simply does not run.  The idea that the opposition to one and the prosecution of the other are not co‑extensive – it is not correct; it is the same mark.  What has been ordered by Justice Croft is that their application be transferred to us; we will prosecute that.  Our application they should withdraw their opposition; we have undertaken we will prosecute that as well.  One or other of those, or both, is going to come to fruition.

The undertaking that we have given, and we clarify further, is that – we say that the undertaking we gave in relation to reassigning the Pink Lady trademarks is broad enough to encompass any and all marks that my client is the registered proprietor of, or the pending applicant in respect of.  All of those are contemplated, and if further clarification is needed, I give it now.

Our learned friend made reference to two matters.  In respect of third party rights, my learned friend refers to the position of Viveros Requinoa, and also the exporters in respect of their packaging.  I will just deal with the packaging shortly, because it is a short point.  The state of the evidence at the moment is that there is evidence from APAL of what was supposed to have been done; that is, the packaging was supposed to have the words “Pink Lady is a trademark of APAL”.

The evidence that we have put up is that that is not what was done.  The evidence is that the photographs are from the 2013/2014 inspections, and the evidence of Mr Ballew from the exporter is that he has never been asked to put the words “APAL” on it.  He has not done so.  The packaging that he has ordered for the 2015 year – that is, this coming season – does not include it, and his personal knowledge of other exporters’ packaging is in the same position.

What we have is the state of the evidence is they say what is supposed to have been done.  The evidence appears to be that is not followed.  What our learned friends do not do, and one is surprised, is they do not produce photographs of the packaging insularly with the words that they say ought to be there.  The state of the evidence at the moment is that it is not done, and therefore, that prospect of the exporters having to pulp their packaging is not a real prospect.

The second point that they make reference to is Viveros Requinoa and, they say, the risk that they run that they will be exposed to a damages claim to Viveros Requinoa.  The first thing to note is that it is a very long trademark master licensing agreement.  It is on their evidence, and I have not checked – their evidence has got some 20‑odd years to run.  Again, it is a little bit the same.  They have not put on evidence of what has occurred as between them and Viveros Requinoa.  They have not put on evidence to say Viveros Requinoa has written to us saying you can no longer provide us with the mark, and you are in breach; we, therefore, want to terminate.

One would imagine that Viveros Requinoa might well sit back and say “I will wait to see what happens with this appeal”.  But the state of the evidence at the moment is not that they are exposed, or that they are being brought to account, so we say that is hypothetical too.  There is a further matter – can I take your Honour to the TMMLA for a moment.  It is at GTL‑1, Langford – I think it is the first Langford affidavit ‑ ‑ ‑

HIS HONOUR:   Yes, I have got that.

MR WISE:    ‑ ‑ ‑ at page 18.  The relevant trademarks that are provided are Chilean trademark – if your Honour looks at page 18 to the definition, “Chilean Trade Marks” means:

all trade marks that APAL owns, controls, licences or uses in Chile that are related to the PINK LADY brand and the FLAVOR ROSE brand including without limitation the trade marks set out in Schedule 1 –

On the basis of the current declarations made by Justice Croft, and on the basis of the orders that are extant that they appeal against, they do not own those marks any longer.  So it may well be that there is in fact no breach of this agreement.  It may well be that this agreement is frustrated, but whether that opens up a damages claim is an entirely different matter.

Our learned friends made reference to the confusion in the marketplace.  Your Honour, what they are talking about is confusion associated with a transfer followed by a retransfer.  We say there has been confusion since 2013.  Both of us – both parties are out there in the marketplace saying they are the only party entitled to issue export licences in respect of Chile, in respect of their own territories – confusion reigns.

To think that there is going to be added confusion of substance and moments that can translate into a general damages claim by way of loss of reputation, we say that is unlikely.  If the marks are consolidated in one ownership – that is being PLA – and then subsequently consolidated back into the ownership of APAL in the unlikely event that they succeed on their appeal, we do not think that that adds to confusion.  The confusion is present.

Probably the final point I want to make at this point is this, your Honour.  Ms Arslan deposes on information and belief from Mr Brandt that growers need to know by mid‑January, who do I get an export licence from; how much will I pay; what are the conditions?

We say that will be enhanced by the orders that Justice Croft has made.  If one party has them, the one party can say we are the party who will do it; we will do it.  Your Honour ought also not be diverted by big numbers of kilograms of apples exported – 100 million, one million – that does not really matter.  The reason that does not really matter is you have got a remarkably small number of exporters that cross over; 43 on one view, 43‑odd for APAL – that is who they deal with – about 14 we deal with, and they cross over.  Even if they were added together, it is 50‑something growers who need to be signed up.  That is no remarkable task.  We have GLA on the ground.  They are able to do it; they have been doing in the past, and they can do it.  So we would say that the orders in fact will enhance the proposition rather than otherwise.

Your Honour, I wanted to just draw your attention to section 21(1) of the Judiciary Act which, upon our reading of it, permits your Honour as a single Judge to determine the application for leave to appeal:

Applications for special leave to appeal to the High Court from a judgment of another court may be heard and determined by a single

Justice or by a Full Court and the Rules of Court may provide for enabling such applications to be dealt with, subject to conditions prescribed by the Rules, without an oral hearing.

We understand that it is possible for your Honour to deal with the matter yourself.  We just pick up, at page 20,101 of the commentary – I do not know whether your Honour has ‑ ‑ ‑

HIS HONOUR:   No, I have got the Act.

MR WISE:   Yes.  It is just commentary drawn from the service:

The current Rules permit the Court to dispose of an application by an unrepresented person without an oral hearing.  The Rules contemplate applications for special leave may be decided on the basis of written summaries without an oral hearing –

Sorry, your Honour, it does not bear out ….. the proposition. While my learned junior is doing that, I am just going to make a final pass over my notes and see if there is anything further I wish to – also, your Honour, we rely on section 21(1) which would appear to empower your Honour to deal with the application for leave to appeal. We would say that this would be an appropriate – if your Honour accepts the proposition that the application for special leave to appeal in respect of either of the two “orders” has no substantial prospect of success, then we would say it would be appropriate for your Honour to finally deal with the matter now, rather than make that finding in the context of the summons, or the application, leaving the special leave to be dealt with later. If your Honour is of that view, then you should probably dispose of the whole matter, because the whole matter concerns, really, that one order.

HIS HONOUR:   Very well.

MR WISE:   Your Honour, those are the submissions for PLA.

HIS HONOUR:   Thank you.  Do you wish to say anything in reply, Mr Garratt?

MR GARRATT:   Just some short points, your Honour.  We would obviously invite your Honour not to dispose of the application today, but to grant a stay – there is some leeway here – until the earlier of 28 February, further order, or the hearing and determination of the stay application in the Court of Appeal.  We ask that your Honour do that so that your Honour retains control, at least, if, for some uncertain reason, we cannot get on in time in the Court of Appeal, we can come back.  We do not apprehend that is likely, but we do not want to have to be in the position of having to bring a second application if that circumstance produces itself.

HIS HONOUR:   What is the first day of the new term, 1 February?

MR GARRATT:   It is, your Honour, yes.

HIS HONOUR:   Which is a Monday, I suppose.  I think it is.

MR GARRATT:   I think it is, your Honour, but it is being checked.  It is, your Honour.

HIS HONOUR:   It is inconceivable, is it not, that if it goes on, it would not be dealt with by the Court of Appeal within the first week or so.

MR GARRATT:   I do not want to appear disrespectful to your Honour, but to my mind, it was inconceivable it was not going to be dealt with before Christmas in the Court of Appeal.

HIS HONOUR:   Yes.

MR GARRATT:   Your Honour, my learned friend misses the point about the application for special leave.  We do in our submissions make plain that the ground of the special leave application – we set it out in paragraph 30 of our written submissions – is the denial of an effective opportunity to obtain a stay in the Court of Appeal.  That does not depend upon the evidence that was before Justice Croft.  It depends upon the fact that we told Justice Croft that is what we wanted to do, and what the authorities indicated was the appropriate course.

We did provide an Ortuzar affidavit to indicate that there was some substance to it, but we were not making a stay application to it.  My learned friend said it is a de facto stay, and his Honour treated it that way, but equally, refused the opportunity of us getting to the Court of Appeal.  That is the ground of attack.

Just some short points, your Honour.  My learned friend says that both parties, on the question of confusion, are in the marketplace claiming to be entitled to grant export licences.  Your Honour, there is simply no evidence from our learned friends about the extent of their activity in Chile at all.  Reference is made to 14 exporters, but there is none of that in the material.

It is said we should be putting on correspondence from TMMLA complaining about the absence of title any longer to be using these marks.  Your Honour, at the moment, that has not yet arisen.  When the transfer

happens, that will occur.  It is said the agreement might not be breached; it might only be frustrated.  That is still loss of a valuable agreement that cannot be restored.

My learned friend does not say it can be restored.  My learned friend says why have you not got photographs of packaging from Chile?  We got their affidavit, your Honour, at 12 o’clock on Monday, which was 10 pm in Chile.  In the four-hour window between 12 noon and 4 pm, it simply was not possible to get more evidence than we did.  My learned friends have given no undertaking, if it is relevant – we would say it is – to prosecute the application which APAL makes for the refreshed mark, if it is assigned to them.

Your Honour is asked to infer substance in PLA from the fact that it has been managing someone else’s trademarks for some years.  But, your Honour, that does not tell you anything about the substance.  It does not tell you about its rights to manage, how long they go on, what capital it has got, what retained earnings it has got, or the like.  On the starting point, your Honour, about when will this be heard in the Court of Appeal, the indication from the Registrar to which Mr Batrouney refers at page 80 of his affidavit in his Exhibit 10 is:

The leave application will be listed as early as possible in Term 1 –

HIS HONOUR:   Well, that is presumably the first applications day, which would be 5 February.

MR GARRATT:   We had previously been told by the Court of Appeal, your Honour, that that day was full.  We had thought it might be the 12th.  That was when we first approached the Court of Appeal, on 10 December.  What has happened since, we cannot know.  If the Court pleases.

HIS HONOUR:   Thank you.

MR WISE:   Your Honour, may I correct one matter my learned friend just put to your Honour?

HIS HONOUR:   Yes.

MR WISE:   He said there has been no indication or undertaking that we would progress applications.  Paragraph 9(b) of Ms Arslan’s affidavit of 21 December says:

If this is considered to be a real risk, I am instructed by Mr Brandt that he will undertake on behalf of PLA that PLA will:

. . . 

b.continue to progress any and all extant PINK LADY trade mark applications in Chile pending determination of APAL’s appeal.

HIS HONOUR:   This is an application for a stay of paragraph 2 of the orders of a judge of the Commercial Court of the Supreme Court of Victoria Croft J made on 11 December 2015, pending the hearing and a determination of the application by the applicant (“APAL”) for special leave to appeal against his Honour’s orders. In brief substance, the facts of the matter are that APAL is an Australian corporation and the registered proprietor of a number of “Pink Lady” trademark registrations and applications for registration in Chile in relation to certain varieties of fresh fruit (“the subject marks”). The respondent (“PLA”) is incorporated in Washington in the United States of America and is not registered as a foreign corporation in Australia. The extent of its presence in Chile, at least until relatively recently, is substantially disputed and there is no evidence as to its financial position.

Following a trial in the Commercial Court in August and September 2015, on 10 November 2015, Croft J held that upon the proper construction of an option deed made 12 June 2007 between APAL and PLA (“the Deed”) and in the events which his Honour found to have occurred, APAL had repudiated the Deed and perforce of what his Honour found to be an implied term of the Deed, that APAL was obliged therefore to reassign the subject marks to PLA and to withdraw its opposition to the trademark applications of PLA listed in Part 4 of the amended annexure to APAL’s amended statement of claim dated 30 April 2014 (“PLA’s existing applications”).  His Honour then adjourned the matter until 11 December 2015 for the making of further directions and orders. 

It is not now disputed that APAL has a seriously arguable ground of appeal, albeit of course that PLA maintains that Croft J’s judgment was correct. 

At the hearing on 11 December 2015, Croft J rejected an application by APAL that his Honour direct that the instruments of transfer required to give effect to the retransfer of the subject marks to PLA and the instruments of withdrawal required to give effect to the withdrawal of APAL’s opposition to PLA’s existing applications be held by the Prothonotary until the hearing and determination by the Court of Appeal of the Supreme Court of Victoria of an application by APAL for stay pending appeal.

In very brief ex tempore reasons, his Honour stated that he was not satisfied that such difficulties as might attend the transfer of the subject marks back to APAL, in the event that APAL were successful in its appeal, warranted the measure suggested.  Presumably for the same reason, his Honour also declined to order that PLA not register the instruments of retransfer of the subject marks or the instruments of APAL’s opposition to PLA’s existing applications until the Court of Appeal had heard and determined APAL’s application for stay pending appeal.

During the following week, the solicitor for APAL made very strenuous efforts to have APAL’s application for stay pending appeal heard and determined by the Court of Appeal before Croft J’s orders for transfer and withdrawal took effect on 21 December 2015. Unfortunately, those efforts proved to be of no avail. Although an application for stay pending appeal may be determined pursuant to rule 64.15 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) by a single judge of appeal on the papers without oral argument, APAL’s solicitor was informed by officers of the Court of Appeal Registry that the Court of Appeal was unable to deal with the matter at all before the commencement of the first term on 1 February 2016.

One of the Registry officers suggested that, if the application could not wait until then, APAL should seek to bring it on before Croft J.  But when APAL’s solicitor contacted the Chambers staff of Croft J, in accordance with the Registry officer’s suggestion, he was informed that Croft J was of the opinion that the application which APAL had made on 11 December 2005 for a direction that the instruments of transfer and withdrawal be held by the Prothonotary pending the determination of APAL’s application to the Court of Appeal for stay pending appeal was itself an application for stay pending appeal and that his Honour was not prepared to entertain any further application for stay pending appeal, nor would he consider making any other orders or directions before 5 February 2016.

As was observed in Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd (1988) 165 CLR 452 at 457, in an ordinary case it would be most inappropriate for this Court to entertain an appeal from the refusal of interlocutory relief by a trial court. But at the same time, as was also stated in Paringa – ibid at 459‑460 – it is unsatisfactory to leave to a judge whose order is under review the exercise of appellate discretion of granting or withholding the kind of interlocutory relief which is required to maintain the status quo ante pending appeal, and especially so where the effect of declining to accord such relief is said practically to preclude the granting of the substantive relief claimed in the proceeding or, it might be added, where the effect of declining to grant such relief is or may be to render the appeal nugatory to a substantial extent.

APAL’s application for stay pending its application for special leave to appeal to this Court is supported by a number of affidavits, including an affidavit of Santiago Ortuzar, affirmed 16 December 2015 in Chile.  Mr Ortuzar is a Chilean intellectual property lawyer and a Chilean trademark attorney for APAL.  In that affidavit, Mr Ortuzar deposes that if APAL succeeds in its appeal there are likely to be very considerable difficulties in obtaining the re‑registration of APAL as the proprietor of the subject marks.  In his opinion, unless PLA were to co‑operate fully in the process, it would be necessary for APAL to take proceedings in Chile, likely to last in the order of four to five years, to obtain an order for registration and throughout that period PLA would enjoy untrammelled ownership and exploitation rights over the trademarks. 

Mr Ortuzar’s concerns about obtaining re‑registration of APAL as proprietor of the subject marks may be overstated.  As PLA points out, Croft J’s orders of 11 December 2015 were conditioned on a number of undertakings, including an undertaking by PLA that until the hearing and determination of any application by APAL for leave to appeal and the determination of any such appeal or further order, PLA “will not on sell, transfer, licence or otherwise encumber the PINK LADY trademarks in Chile, including by having the trademarks become the subject to any existing securities which are held over the assets of PLA”, and in the event of a successful appeal “it will comply with any order to reassign the PINK LADY marks to APAL”.

Be that as it may, however, Mr Ortuzar also deposes that once APAL’s opposition to PLA’s existing applications has been withdrawn it cannot be revived.  The only way of challenging the impugned registrations in those circumstances would be for APAL to take further proceedings in Chile, again lasting up to four to five years, during which time PLA would have unlimited ownership and exploitation rights in the impugned registrations.  Significantly, that evidence is not disputed.

In an attempt to overcome the difficulty thus created, PLA has offered to vary the existing undertakings so that the undertakings given by PLA to reassign any Pink Lady marks in the event of a successful appeal will encompass any registrations that issue to PLA in the meantime.  But among other shortcomings, one significant difficulty with that offer is that it does not extend to any registrations which do not issue until after the hearing and determination of the appeal or to marks in respect of which PLA may be enabled to lodge further applications by reason of the reassignment to PLA of the subject marks and the withdrawal of APAL’s opposition to PLA’s existing applications.  And in that connection, it is appropriate to observe that there are a number of indications in the facts recorded in Croft J’s reasons for judgment which suggest that PLA might well be disposed to make such further applications.

Conscious perhaps of those limitations, counsel for PLA observed in the course of submissions that if it were necessary to do so, undertakings could be sought in respect of any Pink Lady marks which in one way or another might be thought to fall within the compass of this proceeding.  But, as matters stand, such an undertaking has yet to be defined. 

Additionally on the material before me, there is a dispute which, in the absence of cross‑examination of the deponents, I am unable to determine as to whether the immediate retransfer to PLA of the subject marks would result in the need for any of APAL’s third party Chilean growers to alter their packaging and as to what would be involved in any such exercise.

There is a further dispute, which I am equally unable to resolve, as to whether the immediate retransfer to PLA of the subject marks and the immediate withdrawal of APAL’s opposition to PLA’s existing applications would result in PLA’s contracted third party Chilean growers being compelled to ship apples for the 2016 season without the benefit of the Pink Lady brand. 

There is too a further dispute and very considerable uncertainty as to the commercial and financial effects on APAL’s third party growers being denied the right to use the subject marks under the arrangements currently in place between APAL and its growers and between APAL and its exclusive licensee in Chile, and more generally and no doubt more concerning for APAL as to the effects of the retransfer to PLA of the subject marks and the withdrawal of APAL’s opposition to PLA’s existing applications upon the goodwill which APAL has built up as the exclusive proprietor of the Pink Lady brand in Chile since 2008.

Consequently, depending on which view of the facts is correct, or at least more accurate, there is a real risk that if the retransfer to PLA of the subject marks and the withdrawal of APAL’s opposition to PLA’s existing applications goes ahead, before APAL’s appeal to the Court of Appeal is heard and determined, and APAL succeeds in the appeal, it will be impossible to put APAL back in the position in which it had been if it had not been compelled to retransfer the subject marks and withdraw its opposition to PLA’s existing applications in accordance with Croft J’s orders.

By contrast, as counsel for PLA frankly and fairly conceded in the course of argument during the first day of this hearing, PLA is unable to point to any irremediable prejudice which it might suffer if the retransfer to PLA of the subject marks and the withdrawal of APAL’s opposition to PLA’s existing applications is delayed until the Court of Appeal is able to hear and determine APAL’s application for stay pending appeal.

Ordinarily, it is to be expected that the Court of Appeal will deal with an application for stay pending appeal in sufficient time to ensure that, where it is warranted, the subject matter of the appeal is preserved pending appeal. Regrettably, it has not done so in this case. Unless paragraph 2 of Croft J’s orders of 11 December 2015 is stayed pro tem, APAL will be required forthwith to hand over the instruments of retransfer and withdrawal, with the consequent risk to APAL to which I have referred, and yet the Court of Appeal has stated through its Registry officers that it is unable to deal with the application for stay until February 2016.

At this late stage of the year, it is not practicable to convene a court of at least two judges to consider APAL’s application for special leave to appeal and, in any event, the application is not yet in a form appropriate to be dealt with. Understandably, there has not yet been time for either side to prepare their outlines of argument and other documents for the hearing of the application. Counsel for PLA observed correctly in the course of argument that the question of whether there is a substantial prospect of APAL succeeding in its application for special leave to appeal is a threshold question, and he submitted that, if I were of the view that there was not a substantial prospect of APAL succeeding in its application for special leave, I should peremptorily dismiss the application for special leave pursuant to section 21(1) of the Judiciary Act 1903 (Cth).

I am not disposed to adopt that course.  Doing the best I can on the material before me, I consider that in all the circumstances to which I have referred, some of which admittedly were not made as plain to Croft J as they have been by reason of the evidence placed before me, there is at least a real possibility that this Court would be persuaded, upon consideration of APAL’s application for special leave to appeal, that it is necessary for this Court to make an order which will preserve to the Court of Appeal an effective jurisdiction to determine whether a stay pending appeal to the Court of Appeal should be granted.

Accordingly, in order to preserve an effective jurisdiction to this Court to determine the application for special leave to appeal, I propose to order pursuant to rule 8.07.2 of the High Court Rules 2004 (Cth) that paragraph 2 of the orders of Croft J of 11 December 2015 be stayed until 19 February 2016 or further order, or if it be sooner, until the Court of Appeal determines APAL’s application for stay pending appeal to the Court of Appeal. I also propose to adjourn the further hearing of APAL’s summons dated 18 December 2015 until 9.30 am on Friday, 19 February 2016. If, as may be hoped, the Court of Appeal determines APAL’s application for stay, pending appeal before 19 February 2016, APAL might wish to give consideration to whether it is appropriate then to discontinue the application for special leave to appeal to this Court.

But if the Court of Appeal has still not dealt with the application for stay pending appeal by 19 February 2016, I shall then consider what directions should be made for the further conduct of the application for special leave to appeal and stay of Croft J’s orders pending the application for special leave to appeal.  In the meantime, I shall reserve the costs of today.

The orders of the Court are as follows:

1.Pursuant to rule 8.07.2 of the High Court Rules 2004 (Cth), paragraph 2 of the orders of Croft J of 11 December 2015 are stayed until 19 February 2016 or further order, or if it be sooner, until the Court of Appeal determines APAL’s application for stay pending appeal to the Court of Appeal;

2.Adjourn the further hearing of APAL’s summons dated 18 December 2015 until 9.30 am on Friday, 19 February 2016;

3.Reserve the costs of each party of today.

Is there anything further, gentlemen?

MR WISE:   No, your Honour.

MR GARRATT:   We are indebted to your Honour for hearing the matter as your Honour has.

HIS HONOUR:   I am grateful to counsel for their assistance.  Thank you.  Adjourn this matter please until Friday, 19 February 2016 at 9.30 am.

AT 11.06 AM THE MATTER WAS ADJOURNED
UNTIL FRIDAY, 19 FEBRUARY 2016