Bio-Cide International Inc v Bergstrom

[2001] FCA 658

FEDERAL COURT OF AUSTRALIA

Bio-Cide International Inc v Bergstrom [2001] FCA 658

BIO-CIDE INTERNATIONAL INC v RICHARD BERGSTROM & ANOR
N 905 of 2000

SACKVILLE J
SYDNEY
1 JUNE 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N905 OF 2001

BETWEEN:

BIO-CIDE INTERNATIONAL INCORPORATED
APPLICANT

AND:

RICHARD BERGSTROM
FIRST RESPONDENT

AUSTRALIA ASIA MARKETING PTY LIMITED
SECOND RESPONDENT

JUDGE:

SACKVILLE J

DATE OF ORDER:

1 JUNE 2001

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.   The application be dismissed.

2.   The respondents be granted leave to file a notice of discontinuance in respect of the cross-claim.

3.   The respondents file a notice of discontinuance by 4.00pm on 4 June 2001.

4.   The applicant pay the costs of the respondents of the application.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N905 OF 2001

BETWEEN:

BIO-CIDE INTERNATIONAL INC
APPLICANT

AND:

RICHARD BERGSTROM
FIRST RESPONDENT

AUSTRALIA ASIA MARKETING PTY LIMITED
SECOND RESPONDENT

JUDGE:	SACKVILLE J
DATE:	1 JUNE 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an application pursuant to Federal Court Rules, O 10, r 3(2).  That sub-rule provides that proceedings commenced in the Federal Court may be dismissed by reason of the non-appearance of the applicant at a directions hearing.

2. The background to the proceedings can be stated briefly.  The applicant, which is a corporation primarily conducting business in Okalahoma, manufactures chemical sanitation products.  These products have been distributed in the United States and in other countries, including Australia, under a number of trade marks since 1990. 

3. In the amended statement of claim filed on its behalf, the applicant alleges that the second respondent entered into a non-exclusive distributorship agreement with the applicant between June and November 1992, relating to its products.  The first respondent is a director of the second respondent. 

4. The pleadings allege that the first respondent registered the trade marks, which the applicant had previously used within Australia, in April, 1995. The applicant claims that this registration was obtained by fraud and that the use of the trademarks would be contrary to law and be likely to deceive or cause confusion.  There are also allegations relating to breach of fiduciary duty and a breach of a contractual duty of good faith. 

5. For some time in these proceedings the applicant was represented.  However, a notice of ceasing to act was filed by the applicant's former solicitors on 21 February 2001.  Since that time there have been four directions hearings at which the applicant has not appeared.  On each occasion the respondents have appeared through legal representatives. 

6. Evidence has been read on behalf of each of the respondents which indicates that the applicant was given notice by facsimile and by letter of the directions hearing being held today and of the motion upon which the respondents intend to rely.  The documentation was sent by mail to the applicant's address in Okalahoma, as recorded in the original application and on the applicant's internet site.  The material was also sent by facsimile to the number recorded on the applicant's internet site.

7. In the circumstances that I have outlined, taken with correspondence that appears in the affidavits read on behalf of the respondents, it seems clear that the applicant has taken no step to pursue its claim in these proceedings over a period of several months.  Despite being given notice of hearings in the matter it has chosen not to appear.  It is therefore appropriate, in my view, for the proceedings to be dismissed pursuant to the powers conferred by Federal Court Rules, O 10, r 3(2). 

8. Accordingly, I order that the proceedings be dismissed and that the applicant pay the costs of the respondents.

9. I will also give leave for the respondents to file a notice of discontinuance of their cross claim filed in the proceedings.  I direct that that notice of discontinuance be filed by 4.00pm on 4 June 2001.

10. Finally, the respondents have sought an order for indemnity costs.  In my view it is not appropriate to make such an order.  All that appears from the evidence before me is that, for unknown reasons, the applicant has chosen not to pursue its claim against the respondents.  Mr Schneider submitted that the respondents have been put to particular expense by reason of the need to deal with the allegations of fraud.  There is, however, no affidavit evidence to suggest that special difficulties were encountered by the respondents nor to substantiate the contention that they were put to particular expense.  In the absence of such evidence, I do not think that I can regard that contention as a basis for the award of indemnity costs.  In these circumstances, I think that justice will be served by the usual order as to costs.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.

Associate:

DATED:          3 JUNE 2001

No appearance for the Applicant.

Counsel for the Respondent:                Mr Schneider
Solicitor for the Respondent:                Michell Sillar
Date of Hearing:  1 June 2001
Date of Judgment:  1 June 2001