Chen v Diversipak Pty Ltd (in liq)

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FEDERAL COURT OF AUSTRALIA

Chen v Diversipak Pty Ltd (in liq) [2018] FCA 1314

File number: NSD 1387 of 2018
Judge: BROMWICH J
Date of judgment: 10 August 2018
Date of publication of reasons: 27 August 2018
Catchwords:

CORPORATIONS – application for leave under s 471B of the Corporations Act 2001 (Cth) to commence proceedings against company in liquidation

TRADE MARKS – application for an interim injunction preventing liquidator of company from selling company goods – where applicant claims that the goods infringe her registered trade mark

Legislation:

Corporations Act 2001 (Cth), ss 471B, 500(2)

Trade Marks Act 1995 (Cth), s 27(1)(b)

Cases cited:

Commissioner for Consumer Protection v Unleash Solar Pty Ltd (in liq) [2015] FCA 348

Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406; 122 IPR 232

Vagrand Pty Ltd(In Liq) v Fielding (1993) 41 FCR 550

Date of hearing: 10 August 2018
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Trade Marks
Category: Catchwords
Number of paragraphs: 25
Counsel for the Applicant: Mr A Kaylinger
Solicitor for the Applicant: Alder IP
Solicitor for the Respondent: Mr D Turner of Assured Legal Solutions

ORDERS

NSD 1387 of 2018
BETWEEN:

LAY SIENG CHEN

Applicant

AND:

DIVERSIPAK PTY LTD ACN 122 831 707 (IN LIQUIDATION)

Respondent

JUDGE:

BROMWICH J

DATE OF ORDER:

10 AUGUST 2018

THE COURT ORDERS THAT:

1.The applicant be refused leave under s 471B of the Corporations Act 2001 (Cth) to commence proceedings against the respondent in liquidation.

2.The originating application be dismissed.

3.The applicant pay the respondent’s costs of and incidental to the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT
Revised from transcript

BROMWICH J:

  1. These reasons concern the question of leave to commence proceedings against a company in liquidation and the question of interlocutory relief.

  2. By an originating application, the applicant, Ms Lay Sieng Chen, brings a proceeding against Diversipak Pty Ltd ACN 122 831 707 (in liquidation).  Ms Chen was a director of Diversipak until 25 May 2017, when she was terminated from that position by the provisional liquidator.  She was then an employee of the company in liquidation until she resigned on 29 June 2018.  Her letter of resignation purported to terminate a licence to use a trade mark registered in her name.  That trade mark was registered with a priority date of 31 July 2009.  It consists of the words “Diversipak Packaging Solutions”, with an image above it in a stylised form of two open boxes forming the letters “DP”.  Broadly speaking, Ms Chen is concerned that the liquidator of Diversipak has sold and will continue to sell stock bearing this trade mark in the winding up of the company.

  3. The relief Ms Chen seeks in the originating application is as follows (verbatim):

    1.Leave under section 500(2) of the Corporations Act 2001 (Cth) to commence proceedings against the Respondent.

    2.Orders in relation…

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Details
Case
[2018] FCA 1314
Decision Date

CaseChat Overview and Summary

Chen applied for leave to commence proceedings against Diversipak Pty Ltd, a company in liquidation, under section 471B of the Corporations Act 2001 (Cth). Chen claimed that the liquidator of Diversipak was selling goods that infringed her registered trade mark. The application was heard in the Federal Court of Australia. Chen sought an interim injunction to prevent the sale of the goods and argued that the liquidator should be restrained from disposing of the company’s assets in a way that would prejudice her trade mark rights.

The legal issues the court had to determine were whether Chen was entitled to leave to commence proceedings against Diversipak and whether an interim injunction should be granted to prevent the liquidator from selling the goods. The court had to consider the balance of convenience and whether Chen had a serious question to be tried.

The court found that Chen did not have a serious question to be tried as her claims were speculative and there was no evidence that the goods sold by the liquidator were infringing her trade mark. The court also found that the balance of convenience favoured the liquidator as the sale of the goods was necessary to pay the company’s creditors. The court held that Chen was not entitled to leave to commence proceedings against Diversipak and dismissed the originating application. The court ordered that Chen pay the liquidator’s costs of and incidental to the proceeding.

Orders

Orders of the court

1. The applicant be refused leave under s 471B of the Corporations Act 2001 (Cth) to commence proceedings against the respondent in liquidation.

2. The originating application be dismissed.

3. The applicant pay the respondent’s costs of and incidental to the proceeding.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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