Conquip Holdings Pty Ltd v S and a Restaurant Group Corp

[1998] FCA 1635

FEDERAL COURT OF AUSTRALIA

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 602  of 1998

BETWEEN:	CONQUIP HOLDINGS PTY LTD (ACN 057 055 044) APPLICANT
AND:	S & A RESTAURANT CORP RESPONDENT
JUDGE:		HEEREY J
DATE OF ORDER:		2 DECEMBER 1998
WHERE MADE:		MELBOURNE

THE COURT ORDERS THAT:

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 602  of 1998

BETWEEN:	CONQUIP HOLDINGS PTY LTD (ACN 057 055 044) APPLICANT
AND:	S & A RESTAURANT CORP RESPONDENT

JUDGES:	HEEREY J
DATE:	2 DECEMBER 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

This is an application brought under O 58 r 4(3) of Federal Court Rules for leave to appeal out of time against a decision of a deputy registrar of trademarks.  The applicant of course has to show “special circumstances”.  The history of this matter is disclosed in the various affidavits that have been filed by the parties and I shall not repeat those matters.  The relevant factors to be considered are set out in the judgment of Branson J in Kabushiki Kaisha Universal v Aristocrat Leisure Industries Pty Ltd (unreported, 4 March 1998) at 5-6. 

Turning to the question of the delay itself, the period runs from the time that the period for lodging the appeal expired (15 September 1998) to the time on which the notice of motion was filed on 6 November 1998, that is to say a period of some seven weeks.  It was in substance not disputed before me that up until 9 October 1998 there was explanation for the delay in the form of the serious illness which Mr John McCormack, the applicant's patent attorney, was suffering.  This was an illness which interfered substantially with his ability to give proper attention to his clients’ matters. 

The applicant itself had become aware on 29 September that the application for removal had been unsuccessful but was not told at that time that the time for instituting an appeal had already expired on 15 September.  It is, I think, fair to infer from the applicant's material that the applicant itself was aware in general terms that there was a right of appeal against the decision, and that there would be some time limit in which the appeal notice had to be lodged.  However, it was not until 13 October that the applicant actually received the decision and was told by its solicitors that the time for filing a notice of appeal had already expired. 

The applicant took a week to arrange a meeting with its lawyers.  However, the following day it gave instructions to seek an extension of time.  It is, to say the least, unfortunate that it took from 21 October until 6 November for the applicant's solicitors to perform the relatively simple task of filing the notice of motion, or indeed until 27 October simply to write to the respondent's solicitors putting them on notice.  However, the period effectively when the matter was entirely in the applicant's hands was a little more than a week and I do not think in the overall scheme of things that is excessive.  I should say I do not accept the criticism of counsel for the respondent that the applicant has not been frank with the Court and given adequate explanation for such delay as it was responsible for. 

As to the question of the merits of the appeal, it is not surprising that the application was dismissed, having regard to the incomplete and inadequate evidence proffered.  However, the whole point of a rehearing appeal is that the unsuccessful party has the opportunity to mend its hand.  I think it is reasonable to assume that it will have much better evidence available at a rehearing.  More to the point, however, as counsel for the respondent frankly conceded, the respondent does not in fact conduct a restaurant in Australia under the name of the mark in suit.  Thus expensive proof of this fact should not be necessary.   

The real issue on non-use will be whether the respondent, in entering into negotiations in late 1992 and 1993 with some prospective Australian franchisees, did engage in that small amount of use of the mark which is, as the authorities indicate, sufficient.  The question will be whether what occurred there went beyond mere preliminary discussions and negotiations (see Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414 at 434).

Counsel for both parties discussed that case and other authorities, and in particular Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592, and Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402. I think it is sufficient to say for present purposes that this issue will involve a careful analysis of the evidence and the application of the principles I have mentioned. I am unable to say at this stage that the applicant has not got an arguable case on that issue.

As to the question of prejudice, it is accepted that the prejudice that is relevant must be  prejudice not from the appeal succeeding, but from such delay as has happened.  The respondent's submissions filed today did not seek to put up a case of prejudice in this sense but rather pointed out, correctly of course, that absence of prejudice is not of itself sufficient to justify an extension.  However, there was an affidavit filed today by the respondent and sworn by a Mr B. Joseph Schaeff of Dayton, Ohio, a lawyer of a firm in that city which acts for the respondent.  Mr Schaeff deposes:

“I have spoken with representatives of S&A and they have stated to me that if the Australian Trademark Registration No. 376352 is removed from the Trademark Register, S&A will suffer substantial prejudice.  Specifically, I have been told and verily believe that discussions and negotiations for future franchise arrangements for operating BENNIGAN’S restaurants in Australia will be severely impaired.” 

This assertion is quite unparticularised and in generalised and conclusionary form.  It does not indicate what prejudice is alleged to have been suffered from such delay as has happened, as distinct from an application for removal succeeding. 

Finally there is the question of possible alternative remedies.  The applicant has on foot a number of other applications against other marks involving the same or similar name in other classes.  However, these apply to different periods and their existence I think should not tell against giving the applicant the opportunity to have the present appeal heard on its merits. 

I was told that the present application was merely the tip of the iceberg and that the respondent will incur costs in defending it.  However, I think once it is accepted, as I do, that there is a reasonable explanation for the delay and that there was an arguable case, or likely to be an arguable case on the merits, the fact that there are other different, albeit related applications which the respondent will have to face, it is not a reason for refusing leave.  So I will grant leave in the terms sought.  I will give shortly some directions about the further progress of this matter and I will hear what the parties have to say about costs.

I order that pursuant to O 58 r 4(3) of the Federal Court Rules the applicant be granted an extension of time in which to file a notice of appeal from the decision of the registrar of trademarks by his delegate, Ms Helen Hardy, of 25 August 1998, dismissing an application by the applicant for the removal from the register of trademark number 376352, registered in the name of the respondent, on the ground of non-use pursuant to section 23(1)(b) of the Trademarks Act 1955 (Cth). I order that the applicant pay the respondent's costs of this application. I note that counsel for the applicant indicated that the costs would be paid by the applicant's solicitors and patent attorneys.

I order respondent to file affidavits by 28 February 1999.  Applicant to file affidavits by a month later, by 31 March 1999.  I will adjourn the directions hearing to 12 April 1999.

I certify that this and the preceding  three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

Associate:

Dated:             2 December 1998

Counsel for the Applicant:	Ms P Tate
Solicitor for the Applicant:	Griffith Hack
Counsel for the Respondent:	Mr B Caine
Solicitor for the Respondent:	Phillips Ormonde & Fitzpatrick
Date of Hearing:	2 December 1998
Date of Judgment:	2 December 1998