Crimson SRL and Anor v Claudia Shoes Pty Ltd and Ors (No.2)
[2007] FMCA 1024
•4 July 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CRIMSON SRL & ANOR v CLAUDIA SHOES PTY LTD & ORS (No.2) | [2007] FMCA 1024 |
| TRADE PRACTICES – Passing off – summary disposal – receipt of additional evidence after hearing concluded. |
| Business Names Act 2002 (NSW), s.4(1) Federal Magistrates Court Rules 2001, rr.13.07, 13.10 |
| Aikman v Brown (1973) 1 ACTR 121 NJ Williams QC, Civil Procedure, Victoria (LexisNexis, looseleaf) |
| First Applicant: | CRIMSON SRL |
| Second Applicant: | LYNCH FASHION MARKETING PTY LTD (ACN 010 466 485) |
| First Respondent: | CLAUDIA SHOES PTY LTD (ACN 050 235 491) |
| Second Respondent: | CLAUDIA ASSERAF |
| Third Respondent: | SALAMAN ASSERAF |
| Fourth Respondent: | YL IMAGE HOUSE PTY LTD (ACN 113 824 230) |
| Fifth Respondent: | XIAO LIN DONG |
| Sixth Respondent: | YI LI QIAN |
| File number: | MLG1432 of 2006 |
| Judgment of: | Riley FM |
| Hearing dates: | 30 May 2007 and 13 June 2007 |
| Date of last submission: | 29 June 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 4 July 2007 |
REPRESENTATION
| Counsel for the Applicants: | Michael Wise on 30 May 2007 Ms Egan on 13 June 2007 |
| Solicitors for the Applicants: | Middletons |
| Counsel for the First, Second & Third Respondents: | No appearance |
| Solicitors for the First, Second & Third Respondents: | MW Law |
| Counsel for the Fourth, Fifth & Sixth Respondents: | Mr Wodak on 30 May 2007 Michael GR Gronow on 13 June 2007 |
| Solicitors for the Fourth, Fifth & Sixth Respondents: | Dixon Holmes du Pont Lawyers |
ORDERS
In so far as it is claimed that the fourth respondent manufactured or ordered the manufacture of counterfeit garments, the proceeding is dismissed.
Otherwise, the fourth respondent’s application filed 4 May 2007 for summary dismissal is dismissed.
The application by the fourth respondent filed on 4 May 2007 for the whole or part of the amended statement of claim to be struck out as against it is dismissed.
The application by the fifth and sixth respondents filed on 4 May 2007 for summary dismissal is dismissed.
The application by the fifth and sixth respondents filed on 4 May 2007 for the whole or part of the amended statement of claim to be struck out as against them is dismissed.
The application by the first and second applicants filed on 24 May 2007 for summary judgment is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1432 of 2006
| CRIMSON SRL |
First Applicant
| LYNCH FASHION MARKETING PTY LTD (ACN 010 466 485) |
Second Applicant
| CLAUDIA SHOES PTY LTD (ACN 050 235 491) |
First Respondent
And
| CLAUDIA ASSERAF |
Second Respondent
| SALAMAN ASSERAF |
Third Respondent
| YL IMAGE HOUSE PTY LTD (ACN 113 824 230) |
Fourth Respondent
| XIAO LIN DONG |
Fifth Respondent
| YI LI QIAN |
Sixth Respondent
REASONS FOR JUDGMENT
Background
In this proceeding, the applicants allege breaches of copyright, misleading and deceptive conduct within the meaning of ss.52 and 53 of the Trade Practices Act 1974 and passing off.
The first applicant is said to be a company incorporated pursuant to the laws of Italy and is said to be the designer and supplier of an exclusive range of high-end women's clothing and fashion accessories under the label PianuraStudio. The second applicant is a company incorporated in Australia and is the exclusive distributor in Australia of PianuraStudio products.
The applicants say that the fourth respondent operates two boutiques in Sydney under the name Yili’s Boutique, one in Centrepoint and the other in St Ives. The fifth and sixth respondents are the directors of the fourth respondent. The fifth respondent holds 30% of the shares in the fourth respondent and the sixth respondent holds the remaining 70% of the shares. The fifth respondent is the secretary of the fourth respondent. The applicants also say that Yili’s Boutique has offered for sale, and in fact sold, in and around August 2006 counterfeit PianuraStudio garments. The fourth, fifth and sixth respondents do not dispute that Yili’s Boutique has sold counterfeit garments. However, they claim that they no longer operate Yili’s Boutique.
The applications that are presently before the court are competing applications for summary determination of part or all of the proceedings made by the applicants on one hand and the fourth, fifth and sixth respondents on the other hand. Alternatively, the fourth, fifth and sixth respondents ask that the amended statement of claim be struck out in whole or in part in relation to them.
Summary judgment was given against the first, second and third respondents on 20 June 2007. The first, second and third respondents sold counterfeit PianuraStudio garments in Melbourne but otherwise appear to have no connection with the fourth, fifth and sixth respondents.
History of the applications
The applications in this matter have followed a very unusual course. The fourth, fifth and sixth respondents filed their application on 4 May 2007. It was supported only by an affidavit sworn by their solicitor on 3 May 2007. The application was listed for hearing on 18 May 2007. On 16 and 17 May 2007, the applicants served notices to produce on the fourth, fifth and sixth respondents which were returnable on
18 May 2007.
An affidavit sworn by the solicitor for the fourth, fifth and sixth respondents on 17 May 2007 stated that the fifth and sixth respondents now reside in China. This was surprising given that in an earlier change of venue application, the fifth and sixth respondents were said to be residents of Sydney.
The fourth, fifth and sixth respondents did not produce any documents in response to the notices to produce on 18 May 2007. The matter was adjourned until 30 May 2007 to enable the fourth, fifth and sixth respondents to file and serve their affidavits of documents, which were then overdue, and to give inspection of discovered documents.
On 24 May 2007, the applicants filed a notice of motion seeking summary judgment against the fourth, fifth and sixth respondents. That application was supported by numerous affidavits.
The fifth defendant swore affidavits of documents on her own behalf and on behalf of the fourth respondent on 28 May 2007. Strangely, those affidavits did not disclose the fifth respondent’s address and did not state in the jurats where the affidavits were sworn. The fourth, fifth and sixth respondents did not at that stage file any other affidavits either in support of their applications or in opposition to the applicants’ application.
During the hearing of the applicants’ summary judgment application on 30 May 2007, the fourth, fifth and sixth respondents were given a further opportunity to seek an adjournment for the purposes of filing affidavit material. Counsel for the fourth, fifth and sixth respondents stated that he was instructed not to seek any further adjournment. At this stage, there was no affidavit material before the court sworn by either the fifth or the sixth respondent to the effect that neither they nor the fourth respondent operated the business of Yili's Boutique.
The fourth, fifth and sixth respondents argued on 30 May 2007 that there were certain gaps in the case presented by the applicants. Among other things, the fourth, fifth and sixth respondents noted that the first applicant’s incorporation had not been admitted in the pleadings and argued that the applicants had failed to prove the first applicant's incorporation.
Counsel for the applicants relied on a statement in an affidavit sworn by Anthony Brooke Watson on 18 December 2006 to the effect that the first applicant was an Italian company incorporated in Italy. The court asked whether that was sufficient to establish incorporation. Counsel for the applicants said it was not but said that summary judgment could nevertheless be given in favour of the second applicant alone.
After the hearing, on 31 May 2007, the applicants’ solicitors telephoned my associate and asked whether authority could be provided regarding proof of the first applicant's incorporation. I understand that my associate told the applicants’ solicitors that they could provide to the court and to the fourth, fifth and sixth respondents a letter giving the citations of any relevant authority.
The applicants provided to the court a letter which referred to certain authorities and made submissions about their significance. The applicants also referred to s.190 of the Evidence Act 1995 and made submissions about its significance. On 5 June 2007, my associate sent a letter by facsimile to the solicitors for the fourth, fifth and sixth respondents asking them to advise the court by 4pm on 6 June 2007 if they wished to respond to the applicants’ submission and to provide any such response by 4pm on 8 June 2007.
By midday on 12 June 2007, no response had been received in my Chambers from the fourth, fifth and sixth respondents. My associate telephoned the parties at about 3 p.m. on 12 June 2007 to advise that judgment would be delivered at 9.30 the following morning. At about the same time, a letter dated 8 June 2007 was received by my associate from the solicitors for the fourth, fifth and sixth respondents. It enclosed an affidavit sworn by the solicitor for the fourth, fifth and sixth respondents. The affidavit exhibited what purported to be an uncertified translation of an agreement dated 7 April 2005 whereby a person by the name of Jia Jin Liang was to operate the two Yili's Boutiques in exchange for the greater of $20,000 per year or 10% of the annual profit of Yili’s Boutiques.
This material, of course, had no connection with the question of the first applicant’s incorporation. It was only in connection with that issue that the fourth, fifth and sixth respondents had been asked whether they wished to make any response to the applicants’ submission.
When the matter came on for judgment on 13 June 2007, I advised the parties of what had occurred. I said that I did not regard the uncertified translation as acceptable evidence that the fourth, fifth and sixth respondents had in fact ceased to operate the Yili's Boutiques in April 2005 but said that it suggested that such evidence might be available.
I asked counsel for the fourth, fifth and sixth respondents if his clients wanted time to put in affidavits sworn by the fifth and sixth respondents themselves about who operated the business. Counsel obtained instructions and said that his clients did want that opportunity. They were given a week to file any additional affidavits.
Ms Egan, who appeared for the applicants on that occasion, sought and was granted an opportunity to file any further answering material and make submissions at a later date about whether the material of the fourth, fifth and sixth respondents should be admitted into evidence.
On 20 July 2007, the fourth, fifth and sixth respondents filed an affidavit by a translator which stated that she was a translator accredited by NAATI to the professional level in Chinese/English translation. She exhibited her translation of the agreement which coincided with the translation previously provided to the court.
On 21 June 2007, an affidavit sworn by the sixth respondent was filed. It said among other things that she had managed the two Yili's Boutiques from 2001 until about April 2005 when she began to spend more time in China looking after a real estate investment business that she had commenced there in late 2003. She said that she entered into an agreement with Jin Liang Jia in April 2005 whereby she took over the management of the Yili's Boutiques in exchange for the greater of $20,000 per annum or 10% of the annual profits.
The sixth respondent said further that from 14 April 2005, she had had no involvement in the management or operation of the two Yili's Boutiques. She said that she lives in Shanghai but has a residence in Sydney. She said that her former company, Yi Li’s Fashion Pty Ltd, was deregistered on about 14 March 2004 for failing to file annual returns and that the fourth respondent was incorporated on about
14 April 2005.
The sixth respondent said further that she knows nothing about the first, second and third respondents and has had no dealings with them. She said that she has not imported or manufactured any of the garments that the applicants referred to in these proceedings or had any dealings with any such garments.
Also on 21 June 2007, an affidavit sworn by the fifth respondent was filed. She said that in early April 2005, the sixth respondent had explained to her that she could not cope with travelling between Australia and China to operate her two businesses. The fifth respondent said that the sixth respondent asked her to set up a new company and be a co-director of it and to check the monthly net profit figures of Yili's Boutiques.
The fifth respondent said that she proceeded to cause the fourth respondent to be incorporated with the fifth and sixth respondents as its directors and caused the credit card merchant facility for the old company to be changed to the new company. Since 14 April 2005, the fifth respondent said that she has attended the two Yili's Boutiques once or twice a month to check the profit figures. She says she knows nothing of the first, second and third respondents and says that she has not imported or manufactured or had any dealings with the garments the applicants refer to in these proceedings.
The applicants did not file any additional affidavit material.
Whether the late affidavits should be received
The applicants argued that the late filed affidavits should not be received in evidence. The applicants referred to the need for finality in litigation. That is of course a very important principle. In this case, however, it was the applicants who were the first to seek to add to the matters that had been dealt with in oral submissions on 30 May 2007. Additionally, the principle of finality in litigation in some circumstances must give way to the overall justice of the case. In the present matter, judgment had not yet been delivered and the material sought to be filed late could provide a complete answer to the claim. In these circumstances, it seems to me that the principle of finality in litigation is not a sufficient basis for excluding the late material.
The applicants then say that the High Court in Smith v New South Wales Bar Association (1992) 176 CLR 256 said at 266-7 that an application to reopen a case will be denied where there was a deliberate decision not to call that evidence in the original hearing. However, that is not exactly what Brennan, Dawson, Toohey and Gaudron JJ said. In fact, their Honours said:
If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. (Emphasis added)
In this case, there apparently was a deliberate decision not to produce evidence of the sort filed on 20 and 21 June 2007 for the purposes of the hearing on 30 May 2007. I accept that ordinarily it would not be appropriate for the court to allow additional evidence after a hearing had concluded where there was a deliberate decision not to produce such evidence.
However, I consider that this case is out of the ordinary for two reasons. Firstly, the evidence that is now sought to be adduced would, if accepted, provide a complete answer to the claim. This is unusual because often additional evidence would merely help to tip the balance a little more one way than the other. Secondly, this is a summary judgment application. Litigants are ordinarily entitled to have their matters determined after a full hearing. It would, in my view, be a travesty of justice to give judgment without a full hearing where there is evidence which, if it survives the rigorous testing that would no doubt occur at trial, would be a complete answer to the claim.
The applicants also say that the fourth, fifth and sixth respondents had ample opportunity to produce the material now sought to be relied upon and did not do so at the appropriate time. The applicants say that the relevant material was obviously known to the fifth and sixth respondents from the commencement of the proceedings and could have been filed much earlier. Additionally, the applicants say that they are prejudiced by the late filing of the material and they have incurred significant costs in relation to the strikeout application and the summary judgment application which could have been avoided if the fourth, fifth and sixth respondents had put in their defences the detail that they now allege and had filed the affidavits earlier.
This is all true. I accept that the less than frank and forthright behaviour of the fourth, fifth and sixth respondents has led the applicants to deal with this proceeding in a particular way and has thereby prejudiced them. However, that prejudice is not comparable to the prejudice that the fourth, fifth and sixth respondents might suffer if the additional evidence were not admitted. In any event, the prejudice suffered by the applicants is a matter that goes to costs.
The applicants then argue that they are entitled to rely upon the public record consisting of the Australian Business Names Register and the ASIC Register as proof of the fact that the fourth respondent operates the Yili’s Boutiques and the fact that the fifth and sixth respondents, as directors and shareholders of the fourth respondent, are involved in the operation of the Yili’s Boutiques and the purchase of garments for sale in those stores.
The applicants say that in Trade Practices Commission v TNT Management (Rulings) (1984) 56 ALR 647 at 668, the Federal Court held that a public document is admissible as prima facie proof of the truth of its contents. That is so. However, it is not unusual for the obligation to keep public records up to date to be breached. Additionally, prima facie evidence can be rebutted. In the context of a summary judgment application, it does not appear to me to be appropriate to not allow evidence to be admitted for the reason that it is inconsistent with the contents of a public record.
The applicants’ next argument is that the fourth, fifth and sixth respondents are estopped from relying on the affidavits filed on 20 and 21 June 2007 because they represented in the business name records that they operated the Yili's Boutiques. It is not expressly stated but presumably the applicants also wish to argue that they relied upon the representation in bringing and continuing the present proceedings.
The applicants rely on the decision of Gibbs J in the Federal Court of Bankruptcy in Re Johnson and Mann; Ex parte Greendale Engineering and Cables Pty Ltd (1967) 11 FLR 335 and a decision of Fox J in the Supreme Court of the ACT in Aikman v Brown (1973) 1 ACTR 121. In Aikman, a travel agency conducted by a company was registered in the name of one of its employees. The company went into liquidation and the plaintiff sued the employee for monies paid to the company. Fox J noted that the Business Names Ordinance 1963 (ACT) did not provide that the person in whose name a business is registered is deemed to carry on that business. It was held that the employee was not liable to the plaintiff by reason of estoppel or otherwise.
It appears that the presently relevant Act, being the Business Names Act 2002 (NSW), is similar to the ACT Ordinance. Section 4(1) of that Act prohibits a person from carrying on business under any business name unless the business name is registered in the name of each person who carries on the business. The Act does not provide that anyone in whose name a business is registered is deemed to carry on that business. Accordingly, the mere fact of a business being registered under a particular person's name does not contain a representation that the person is carrying on that business.
Greendale Engineering concerned the Business Names Act 1962 (NSW). That Act contained a similar provision to s.4(1) of the current New South Wales Act. Gibbs J considered that the section might mean that a registration of the business name gives rise to a representation of the kind alleged in the present case. However, his Honour went on to conclude that the Act did not provide that any such representation was conclusively true and held that there was no estoppel. Gibbs J held that there was no estoppel in that case partly because the plaintiff had not been aware of the business name registration and so had not relied upon it in providing any goods or services to the defendant.
Given that Greendale Engineering was decided on the alternative basis that there was no reliance, and given that Gibbs J appears to have accepted only for the purposes of argument that the registration of a business name might give rise to a representation of the sort alleged in this case, I consider that it is more appropriate to apply the analysis set out in paragraph 38 above. Accordingly, I am not persuaded that an estoppel arises in the circumstances of this case.
Moreover, even if the fourth, fifth and sixth respondents were estopped from denying that they carried on the business, questions would remain about whether the fourth, fifth and sixth respondents had any direct or indirect involvement in the conduct that is alleged against them and have any liability for the actions of Jin Liang Jia, if, for example, she were found to have engaged in the impugned conduct without authority.
The applicants also argue that the evidence now sought to be relied upon is unsubstantiated and should not be accepted. The applicants submit that the failure to produce the purported agreement earlier suggests that it is not genuine. The applicants contend that the purported agreement does not look like a bona fide commercial document and there was, for example, no transfer of the lease. Additionally, the applicants argue that other documents that ought to be in existence and that would tend to verify the claims of the fourth, fifth and sixth respondents have not been produced. Those documents are said to include bank statements, tax records, invoices from suppliers and wage records.
I do not find the evidence that is now sought to be relied upon so inherently implausible that it should be dismissed out of hand. However, the fact that this material was not produced at an earlier time does raise doubts about its credibility, as does the fact that the purported agreement for the operation of the business is not in a more usual form. The failure of the fourth, fifth and sixth respondents to produce any third party documents such as bank and tax records also leads to some scepticism about the authenticity of the claims that are now made. However, in my view, these matters do not justify the material being rejected as totally implausible. The existing evidence may of course be supplemented at trial.
In all circumstances, and notwithstanding that it has inconvenienced both the applicants and the court, I am prepared to admit into evidence the affidavits sworn on 20 and 21 June 2007.
The fourth respondent's applications
In the application filed on 4 May 2007, the fourth respondent sought orders that:
a)the proceeding be dismissed pursuant to Rule 13.10 of the Federal Magistrates Court Rules 2001 as against the fourth respondent in relation to the claims set out in paragraphs 32 and 44J to 44M of the amended statement of claim; and, alternatively,
b)those paragraphs be struck out as against the fourth respondent pursuant to Order 11 Rule 16 of the Federal Court Rules 1979.
The identified paragraphs alleged that the fourth, fifth and sixth respondents sold or offered for sale, imported and manufactured counterfeit PianuraStudio products. However, when the matter came on for hearing, the fourth respondent only sought relief in respect of the claims relating to the fourth respondent’s alleged importation and manufacture of counterfeit PianuraStudio products.
The fourth respondent argued that the applicants had been given a considerable opportunity to plead their case properly but had not done so. The fourth respondent noted that the applicants had filed an amended statement of claim on 23 February 2007 and had filed two sets of further and better particulars but had not provided any particulars of the alleged importation or manufacture by the fourth respondent. The fourth respondent argued that there was no proper basis for the allegations that the fourth respondent, or indeed, the fifth and sixth respondents, were involved in the importation or manufacture of counterfeit garments. The fourth respondent referred to a letter from the applicants’ solicitor dated 12 April 2007 in which he said, "At this stage our clients are unaware of how the garments were manufactured or by whom”.
The fourth respondent argued that the applicants had not gone into evidence to state any basis on which the allegation of importation or manufacture was made. The fourth respondent argued that the court should not draw an inference of importation or manufacture from the fact, if it were found to be so, that the fourth respondent sold the counterfeit PianuraStudio garments. The fourth respondent argued that there must be a proper basis for all allegations made in the statement of claim and that the applicants should not make wildly speculative allegations.
At the hearing on 30 May 2007, the applicants noted that the fourth, fifth and sixth respondents had not at that stage gone into evidence at all and, more particularly, had not said on oath that the fourth respondent did not sell counterfeit PianuraStudio garments and did not operate the business of Yili’s Boutique. The applicants said that the fourth respondent's application had been adjourned to allow discovery to take place in the expectation that discovery would shed some light on the respondents’ defences. However, the respondents’ discovery did not include any documents substantiating the claim that the respondents had disposed of the business of Yili’s Boutique. (This argument has now been overtaken by events. There is now some evidence before the court that the fifth and sixth respondents had nothing to do with the garments in question.)
The applicants argued that as a matter of pleading there was no inadequacy with the amended statement of claim, especially given that the fourth respondent had conceded that it was acceptable to make an allegation in a pleading and give particulars at a later date.
In relation to the summary dismissal claim, the applicants argued at the hearing on 30 May 2007 that there was ample evidence that the fourth, fifth and sixth respondents were operating the business of Yili’s Boutique. That evidence consisted of the following:
a)the business name of Yili’s Boutique was registered to the fourth respondent;
b)pursuant to the provisions of the Business Names Act 2002 (NSW), business operators are required to notify the Director-General within a month of ceasing to carry on business and there was no record of any such notification being given by the fourth respondent;
c)there were in evidence receipts for purchases from both the Centrepoint and St Ives stores issued in the name of Yili’s Boutique;
d)the registered office of the fourth respondent is G32 Gallery Level Centrepoint - 100 Market Street Sydney; the principal place of business of the fourth respondent is disclosed in a company search as being the Centrepoint address; a receipt for a purchase from Yili’s Boutique at Centrepoint shows the shop address as “G32 C’Point”;
e)the application for the registration of the business name Yili’s Boutique was lodged on 15 July 2005 on behalf of the fourth respondent by Eileen Dong who also is identified in the application as Xiao Lin Dong, the fifth respondent;
f)the applicants’ solicitor sent a letter of demand to the fourth respondent at the Centrepoint address on 18 September 2006 and on 20 September 2006 received a call from a representative of the fourth respondent who identified herself as Eileen;
g)a representative of the second respondent attended the Centrepoint store on 10 January 2007 and spoke to the store manager who identified herself as Elaine; (in the applicants’ submission, Elaine should be understood to be the same person as Eileen);
h)the concession by the fourth respondent's solicitor in an affidavit sworn on 15 January 2007 that the fourth respondent operates two retail stores in Sydney;
i)the failure of the fourth respondent to produce any documentary evidence to substantiate the assertion that its only involvement in Yili’s Boutique was that it allowed the new owners to continue using the credit card facility that had been provided by the Commonwealth Bank to the fourth respondent;
j)the evidence on information and belief that the Commonwealth Bank does not permit a credit card facility to be transferred from one person to another;
k)the failure of anyone on behalf of the fourth respondent to swear an affidavit to the effect that the fourth respondent no longer carries on the business of Yili’s Boutique in circumstances where the fifth respondent was able to swear an affidavit of documents on behalf of the fourth respondent on 28 May 2007;
l)the fact that the affidavits of documents sworn by the fifth respondent on her own behalf and on behalf of the fourth respondent did not disclose the address of the fifth respondent or the place of swearing the affidavits in circumstances where the fifth and sixth respondents now claim to live in China but at the time of an application for change of venue maintained that they lived in Sydney;
m)the fact that the fourth, fifth and sixth respondents had discovered a document in Chinese dated 7 April 2005 but had not offered a translation of it and the fact that all of the documents relied upon by the applicants to establish that the fourth, fifth and sixth respondents operated the business of Yili’s Boutique post dated that document.
At the hearing on 30 May 2007, the applicants argued that the evidence that the respondents operated the business of Yili’s Boutique was all one way. They argued further that the counterfeit PianuraStudio garments bear a tag saying that the garments were made in Italy. If that were true, the applicants argued that the garments must have been imported by someone. The applicants submitted that the garments might have been imported by the fourth respondent or they might have been made overseas to order in which case the fourth respondent would have caused the garments to be both manufactured overseas and imported. The applicants argued that the failure of the fourth respondent to produce documents relating to its source of supply leads to an inference that the fourth respondent had documents that were damaging to it and that would demonstrate that the fourth respondent had imported the garments into Australia.
The applicants referred to evidence given by Ms Blomquist who is an agent for a number of fashion houses and wholesale distributors of fashion garments including the garments of the second applicant. Ms Blomquist said that the labels on the counterfeit PianuraStudio garments sold through Yili’s Boutique had the same typographical error as those sold by the first, second and third respondents. In her opinion, this indicated that there was a high likelihood that the source of both sets of counterfeit garments was the same.
The applicants submitted that it was now known from discovery that the first, second and third respondents obtained their garments from a person in Hong Kong and that was sufficient to establish that there was some prospect that the counterfeit garments were imported or manufactured by the fourth respondent. This evidence was given from the bar table without objection. Additionally, there was evidence in an affidavit sworn by a solicitor, Anthony Brooke Watson, on 25 May 2007 to the effect that the third respondent admitted that he had purchased the garments from overseas. None of this evidence was disputed.
In reply, the fourth respondent argued that there was no evidence that Elaine was the same person as Eileen and no evidence that Elaine or Eileen was the store manager. It was said that the conclusion that Elaine or Eileen was the store manager was speculative. The fourth respondent also argued that the tag on the garments did not establish that they were in fact made in Italy or that they were in fact imported by anyone.
The fourth respondent argued that all the evidence appeared to be one way in relation to the fourth, fifth and sixth respondents carrying on the business of Yili’s Boutique only because the respondents had not yet gone on oath. The fourth respondent noted that the orders of the court did not require the respondents to file affidavits until 29 June 2007. That, of course, was an order for the filing of pre-trial affidavits, and did not limit the ability of the fourth respondent to file an affidavit in support of its summary dismissal claim.
The fourth respondent argued that the solicitor’s certificate on the defences of the fourth, fifth and sixth respondents to the effect that there was “factual and legal material available … [that] at present provides a proper basis for” each of the allegations, denials and non- admissions in the pleadings constituted evidence in support of the allegation in the defences that the fourth respondent did not carry on the business of Yili’s Boutique.
The test for summary dismissal
The application for summary dismissal is brought under rule 13.10 of the Federal Magistrates Court Rules 2001. That rule provides as follows:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b)the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of the process of the Court.
Note For additional powers of the Court in relation to family law proceedings that are frivolous or vexatious, see section 118 of the Family Law Act.
There is also power under s.17A of the Federal Magistrates Act 1999 to summarily dispose of a proceeding. Section 17A provides as follows:
(1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is defending the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4)This section does not limit any powers that the Court has apart from this section.
Section 17A of the Federal Magistrates Act 1999 is in the same terms as s.31A of the Federal Court of Australia Act 1976. In Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146, Rares J considered the effect of s.31A and said the following at [42] to [47]:
[42] I am of opinion that properly construed, s 31A(2)(b) requires a person moving a motion for summary disposal (‘the moving party’) to satisfy the Court that there is no reasonable prospect of the party claiming relief (‘the plaintiff’) successfully prosecuting the proceeding or the part of the proceeding in question. Experience shows that there are cases which appear to be almost bound to fail yet they succeed. As Dixon CJ once said (Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20):
‘Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told…’
[43] Brennan CJ and McHugh applied that observation in Jackamarra v Krakouer (1998) 195 CLR 516 at 522 [9] to a situation which an appellate court was exercising a discretion to permit a further step to be taken in an appeal that had already been instituted. Obviously, where there is a contested application under s 31A, both parties will be present to explain their case, but not in the context of a trial. The procedure envisaged by s 31A is summary. The concept of a party having ‘no reasonable prospect of successfully prosecuting a proceeding’ has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. That test was authoritatively stated by the Judicial Committee in Hocking v Bell (1947) 75 CLR 125 at 130-131, approving the following statement from the dissenting judgment of Latham CJ (Hocking v Bell (1945) 71 CLR 430 at 441-442):
‘If there is evidence upon which a jury could reasonably find for the plaintiff, unless that evidence is so negligible in character as to amount only to a scintilla, the judge should not direct the jury to find a verdict for the defendant, nor should the Full Court direct the entry of such a verdict. The principle upon which the section is based is that it is for the jury to decide all questions of fact, and therefore to determine which witnesses should be believed in case of a conflict of testimony. But there must be a real issue of fact to be decided, and if the evidence is all one way, so that only one conclusion can be said to be reasonable, there is no function left for the jury to perform, so that the court may properly take the matter into its own hands as being a matter of law, and direct a verdict to be entered in accordance with the only evidence which is really presented in the case.’ (emphasis added) (see also Swain v Waverley Municipal Council (2005) 220 CLR 517 at 522 [9] per Gleeson CJ, 561-562 [128]-[131] per Gummow J and 580 [203], 582-583 [208]-[209] per Kirby J; see also at 531-532 [33]-[34] per McHugh J)
[44] In a case to which s 31A applies, where there is a real issue of fact to be decided in the sense identified in the above principle, and, possibly, where there is a real issue of law of a similar kind, it is obviously appropriate that the matter goes to trial. And, one must be mindful that in Hocking v Bell (1945) 71 CLR at 487, Dixon J said that in effect, every judge who had heard the matter (through four trials, two Full Court appeals and, to that point, the appeal to the High Court) would have formed the view that the plaintiff should have failed had they been able to decide the facts, yet the Privy Council restored the second jury verdict in her favour and so concluded the litigation. This raises a very real question, as to what reasonable prospects are for present purposes.
[45] I am of opinion that in assessing what reasonable prospects of success are for the purposes of s 31A, the Court must be very cautious not to do a party an injustice by summarily dismissing the proceedings where, in accordance with the principles in Hocking v Bell (1947) 75 CLR 125, contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorize a summary termination of the proceedings which s 31A envisages. In moving the second reading of the bill introducing s 31A (the Migration Litigation Reform Bill 2005) the Attorney-General said that it strengthened ‘… the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases’.
[46] In Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154-155, Dawson, Gaudron and McHugh JJ said that a party should not be shut out from litigating an issue which was fairly arguable and that the power to grant leave to amend should be exercised with that in mind. They observed (189 CLR at 154) that ‘...the ultimate aim of a court is the attainment of justice’. Obviously, s 31A regulates the attainment of justice by creating an entitlement in a party to be protected from claims or defences which fail to meet the threshold prescribed in the section. In granting leave to appeal on a decision involving the application of s 31A, Wilcox J observed in Vans, Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 at [12] that it was arguable that the effect of s 31A was that there could be summary judgment for an applicant ‘... notwithstanding the possibility that the applicant’s case will break down at trial; in other words, it is now not enough for a party resisting a summary judgment application to seek merely to put the other side to proof’ (his Honour’s emphasis).
[47] GE Capital also argued that s 31A required the Court to dismiss a claim or defence based on a predictive assessment of its prospects, even though it may be possible that had the matter gone to trial it would have succeeded. I am of opinion that this is not how the section operates. It is engaged only to determine summarily a claim or defence which has no reasonable prospect of success. The purpose of the enactment is to enable the Court to deal with matters which should not be litigated because there is no reasonable prospect of any outcome but one. If there is a reasonable danger that a claim or defence could be dismissed under s 31A, which could succeed at a trial, the provision would create miscarriages of justice. It is a key feature of the judicial power under Ch III of the Constitution that the Court be in a position to, and in fact does, quell a controversy. The exercise of the judicial power to prevent the substantive agitation of a controversy in which each side has a reasonable prospect of success would defeat, not advance, the ends of justice.
In Commonwealth Bank of Australia (ACN 123 123 124) v ACN 000 247 601 Pty Limited (in liq) (Formerly Stanley Thompson Valuers Pty Limited) [2006] FCA 1416 at [30] Jacobson J summarised the conclusions of Rares J in BostonCommercial as follows:
· In assessing whether there are reasonable prospects of success, the Court must be cautious not to do an injustice by summary dismissal.
· There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment is sought to succeed at the final hearing.
· Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects.
· Unless only one conclusion can be said to be reasonable, the discretion under s 31A cannot be enlivened.
I accept that these cases set out the relevant test for the summary dismissal of a claim in the Federal Magistrates Court. The test has been somewhat modified by the introduction of s.17A of the Federal Magistrates Act 1999 and is no longer that the opposing case is utterly hopeless. Rather, the test now is that there is no reasonable prospect of any outcome but one: Boston Commercial at [47].
Consideration of the fourth respondent's summary dismissal application
In relation to the summary dismissal point, it is necessary to consider the evidence to ascertain whether it discloses a reasonable prospect of any outcome but one. I do not consider that the evidence consisting of the certificate given by the fourth respondent’s solicitor to the effect that he has material to support the statements in the defence is evidence for present purposes.
Notwithstanding the as yet untested evidence given in the affidavits filed on 20 and 21 June 2007, the evidence that is otherwise before the court and set out at paragraph 50 above indicates that there is a reasonable prospect that the applicants may be able to make out their claim that the fourth, fifth and sixth respondents continued to operate the business of Yili’s Boutique and sold and offered for sale counterfeit PianuraStudio garments. I acknowledge that the evidence relied on by the applicants is largely circumstantial and is contrary to the evidence filed on 20 and 21 June 2007. However, there are a number of reasons to doubt the authenticity of the claims made in those affidavits. One way or another, it cannot be said that there is a reasonable prospect of only one outcome, being an outcome that is favourable to the fourth, fifth and sixth respondents.
If the court were to find that the fourth respondent operated the business of Yili’s Boutiques, I also consider that there is a reasonable prospect based on the evidence of Ms Blomquist that the court at trial would find that the counterfeit PianuraStudio garments sold at Yili’s Boutique come from the same source as the counterfeit PianuraStudio garments allegedly sold by the first, second and third respondents (“the Claudia garments”). Additionally, there is, for present purposes, unchallenged evidence from the bar table, which is said to be substantiated with discovered documents, that the Claudia garments were obtained from a person in Hong Kong. There is also unchallenged evidence that the third respondent has admitted obtaining the Claudia garments from overseas. That evidence permits, for present purposes, an inference that the Claudia garments were imported by the first, second and third respondents. There are reasonable prospects, in my view, that an inference could be drawn at trial that the counterfeit garments sold at Yili’s Boutique were obtained from the person in Hong Kong or elsewhere overseas who supplied the Claudia garments that were subsequently imported.
I do not consider that the words on the label “Made in Italy” can be taken at face value. The labels appear on garments that the parties presently before the court apparently accept are counterfeit. There is no reason at this stage to suppose that any aspect of the garments or their labelling is genuine. If the garments were in fact sourced in Hong Kong, it seems much more likely that they were made in China than in Italy.
In any event, the question remains whether there is a reasonable prospect of the applicants making out the claim that the fourth respondent imported the counterfeit garments sold by Yili’s Boutique. I consider that there is such a prospect in the present case. As the applicants now have some evidence in the form of invoices to the effect that the suppliers of the Claudia garments are based in Hong Kong, it is not farfetched or fanciful that the applicants will be able to make out their claim that the fourth respondent obtained garments from the same source and in the same manner as the Claudia garments, that is, by importing them.
However, there seems to me to be no evidence suggesting or from which it could even remotely be inferred that the fourth respondent manufactured, or ordered the manufacture of, the garments. If the garments were in fact sourced from the Hong Kong supplier, it is a rational possibility that he manufactured the garments in the expectation of being able to find buyers for them. There is nothing before the court that excludes that possibility, or even tends to suggest that it is unlikely. For example, there was no evidence that suppliers of counterfeit garments generally manufacture to order, and no evidence that the fourth respondent was in the habit of manufacturing or ordering the manufacture of garments, or has ever done so. In these circumstances, the claim that the fourth respondent manufactured or ordered the manufacture of the garments in question appears to me to be entirely speculative. There does not appear to me to be a scintilla of evidence to support it. Accordingly, there is not a reasonable prospect that the applicants will be able to make out their claim that the fourth respondent manufactured the garments.
Accordingly, there will be orders dismissing the proceeding in so far as it alleges the fourth respondent manufactured the counterfeit garments sold at Yili’s Boutique and orders dismissing the fourth respondent’s application for the dismissal of the proceeding in relation to the importation.
The fourth respondent’s pleading summons
The fourth respondent's second point was that as a matter of pleading, the amended statement of claim was inadequate in relation to the claim that the fourth respondent imported or manufactured the counterfeit PianuraStudio garments. Only the importation point remains relevant.
Order 11 rule 16 of the Federal Court Rules 1979 provides as follows:
Where a pleading:
(a)discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
(b)has a tendency to cause prejudice, embarrassment or delay in the proceeding; or
(c)is otherwise an abuse of the process of the Court;
the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out.
As far as the pleading point is concerned, the question is whether the claim as pleaded discloses a cause of action. In my view, there can be no doubt that it does. On a pleading summons, there is no obligation on a party to put forward the evidence that substantiates the claim or defence. The court assumes that the party will be able to make out the allegations. If the allegations made in the amended statement of claim were made out at trial the applicants would succeed.
The fourth respondent acknowledged that a party is able to provide particulars of an allegation at a later stage, including after discovery and interrogatories. As the matter stands, in my view, the pleadings as pleadings are adequate. The fourth respondent’s application insofar as it seeks the striking out of the pleadings in relation to importation will be dismissed.
The fifth and sixth respondents’ application
The fifth and sixth respondents sought orders that as against them:
a)the proceedings be dismissed under rule 13.10 of the Federal Magistrates Court Rules 2001,
b)the amended statement of claim be struck out under Order 11 rule 16 of the Federal Court Rules 1979,
c)paragraphs 32, 39 to 44, 44N and 47 of the amended statement of claim be dismissed under rule 13.10 of the Federal Magistrates Court Rules2001; and
d)alternatively, that those paragraphs be struck out under Order 11 Rule 16 of the Federal Court Rules 1979.
Paragraphs 32, 39 to 44, 44N and 47 of the amended statement of claim allege that the fifth and sixth respondents:
a)without the permission of the applicants sold and offered for sale counterfeit PianuraStudio garments and imported them into Australia;
b)engaged in misleading and deceptive conduct;
c)aided, abetted, counselled or procured the fourth respondent's misleading and deceptive conduct; and
d)on behalf of the fourth respondent infringed the first applicant’s artistic and literary copyright by reproducing or substantially reproducing the copyright works and by manufacturing, importing, offering for sale and selling infringing copies.
The fifth and sixth respondents’ summary dismissal application
The fifth and sixth respondents did not argue that the impugned conduct did not occur or that it was not wrongful. They simply argued that it was necessary for the applicants to prove that the fifth and sixth respondents personally engaged in the impugned conduct. The fifth and sixth respondents submitted that for individuals to be involved in the alleged breaches it was not sufficient to merely establish that they were directors of the company that was said to have engaged in the wrongful conduct. The fifth and sixth respondents submitted that it is not necessarily the case that the directors of a company would be aware of all of the actions undertaken by staff on behalf of the company.
The applicants argued that the fourth respondent was a small company with two directors who held all of its shares. The applicants submitted that company directors have an obligation to be aware of the conduct of the company. In these circumstances, the applicants argued that it should be readily inferred that the directors of the fourth respondent were closely involved in and aware of the impugned conduct of the fourth respondent. Moreover, the applicants argued that the fifth respondent at least was the store manager of the Centrepoint store and as such must have been aware of the impugned conduct of the fourth respondent. The applicant's case is stronger in relation to the fifth respondent as there is some evidence tending to suggest that she is in fact the store manager of the Centrepoint store. If that is correct, it is to be expected that she would be well aware of the stock and purchases for the store, including the price and source of any garments purchased.
As noted above, in a summary dismissal application, the test is whether there is no reasonable prospect of any outcome but one. On the evidence that is presently available, as explained above, I consider that there is a reasonable prospect that the court at trial will find that the fourth respondent operated Yili's Boutique and engaged in the alleged conduct except in relation to manufacturing. I also consider that there is a reasonable prospect that the court at trial would infer that the fifth and sixth respondents were personally involved in and aware of the conduct engaged in by the fourth respondent. It is commonplace in companies with two directors who own all of the shares in the company for the directors to work in the company and otherwise be intimately involved in managing it.
The evidence filed on 20 and 21 June 2007, if ultimately accepted, would of course, make such inferences impossible. However, as the matter stands, there are unresolved questions of fact that constitute triable issues. It cannot be said at present that there is no reasonable prospect of any outcome but one, being an outcome favourable to the fifth and sixth respondents. There are too many unanswered questions in relation to the material filed on 20 and 21 June 2007 for there to be no reasonable prospect but one. For these reasons, I consider that the fifth and sixth respondents’ application for summary dismissal should be dismissed.
The fifth and sixth respondents’ pleading summons
In relation to the fifth and sixth respondents’ pleading summons, I consider that, if the allegations made in the amended statement of claim were made out at trial, the applicants would succeed. In other words, I consider that the amended statement of claim discloses a reasonable cause of action. The fifth and sixth respondents’ submission that the amended statement of claim is inadequately particularised, would not, if substantiated, require the amended statement of claim to be struck out. Rather, it would call for an application for further and better particulars. The fifth and sixth respondents did not point to any particular deficiency in the amended statement of claim that meant that it did not disclose a reasonable cause of action. The argument appeared to be that there was insufficient evidence to make out the allegations in the amended statement of claim. That is not the issue on a pleading summons. In any event, the fifth and sixth respondents conceded that in an appropriate case, particulars could be provided after discovery and interrogatories. For these reasons, the fifth and sixth respondents’ application to strike out the amended statement of claim in whole or in part will be dismissed.
The applicants’ summary judgment application
The applicants seek summary judgment against the fourth, fifth and sixth respondents in respect of the misleading and deceptive conduct and passing off claims but not in respect of the copyright claims. The judgment that is sought is in the form of declarations, injunctions and orders for delivery up. The applicants also seek consequential orders to facilitate the calculation of damages or an account of profits.
The application is brought under rule 13.07 of the Federal Magistrates Court Rules 2001 and under s.17A of the Federal Magistrates Act 1999. Sub-rules 13.07(1) and (2) of the Federal Magistrates Court Rules 2001 provide that:
(1)This rule applies if, in a proceeding:
(a)in relation to the whole or part of a party's claim there is evidence of the facts on which the claim or part is based; and
(b)either:
(i) there is evidence given by a party or by some responsible person that the opposing party has no answer to the claim or part; or
(ii) the Court is satisfied that the opposing party has no reasonable prospect of successfully defending the claim or part.
(2)The Court may give judgment on that claim or part and make any orders or directions that the Court considers appropriate.
In a summary judgment application, it is necessary for the applicant to make out his case. The fourth, fifth and sixth respondents submitted that the applicants had failed to do so in three respects. Firstly, it was said that the applicants had failed to show that the fourth respondent operated Yili's Boutique. Secondly, it was said that the applicants had not proved the incorporation of the first applicant and the second applicant could not succeed on its own. Thirdly, it was said that the applicants had not established that PianuraStudio garments had the necessary reputation.
As noted above, the fourth, fifth and sixth respondents did not file any affidavit evidence in answer to the claim for summary judgment in time for the hearing on 30 May 2007. This is a very unusual course. For example, LexisNexis’ Practice and Procedure: High Court and Federal Court of Australia says at [41,855.1], in relation to the Federal Court summary judgment procedure, that:
Once the applicant’s affidavit has been filed the onus shifts to the respondent to file affidavits showing facts disclosing a defence on the merits: Barton v Moseley [1964-65] NSWLR 1560; (1964) 81 WN (Pt 1) (NSW) 417; on appeal Barton v Moseley [1965] NSWLR 113; (1965) 65 SR (NSW) 412. The respondent must file an affidavit dealing specifically with the applicant’s claim and affidavit and state clearly and concisely what the defence is and what facts he or she relies on in support of that defence: Commonwealth Dairy Produce Equalisation Committee v Hansen [1944] St R Qd 95. A mere general denial is usually unacceptable: Wallingford v Directors of Mutual Society (1880) 5 App Cas 685 at 704.
In Williams’ Civil Procedure, Victoria, it says at [I 22.04.5], in relation to the procedure of the Supreme Court of Victoria, that:
Assuming the plaintiff’s application is properly made, the court will give the plaintiff judgment against the defendant unless the defendant shows cause against the application to the satisfaction of the court. Cause may be shown by affidavit or otherwise: para (1). The defendant must satisfy the court that in respect of the claim or the part of the claim to which the application for judgment relates a question ought to be tried or there ought for some other reason to be a trial of that claim or part:
r 22.06(1)(b). The court, if so satisfied, will give the defendant leave to defend and the proceeding will continue to trial in the ordinary way. Leave to defend may be given unconditionally or on terms: r 22.06(1)(c).
The court will normally require an affidavit by or on behalf of the defendant before it will be satisfied that the defendant is entitled to leave to defend.
Rule 22.06(1)(b) of the Supreme Court(General Civil Procedure) Rules 2005 (Vic) is as follows:
(1) On the hearing of the application the Court may-
…
(b)give such judgment for the plaintiff against the defendant on the claim or the part of the claim to which the application relates as is appropriate having regard to the nature of the relief or remedy claimed unless the defendant satisfies the Court that in respect of that claim or part a question ought to be tried or that there ought for some other reason be a trial of that claim or part;
Although unusual, it is certainly possible for a respondent to avoid summary judgment without filing an affidavit. This may be done, for example, by showing that the applicant has not established an essential element of the cause of action. The fourth, fifth and sixth respondents relied on the three matters mentioned above.
The fourth respondent's operation of the business
In view of the evidence filed on 20 and 21 June 2007, I am satisfied that there is a triable issue in relation to whether the fourth respondent operated the business of Yili's Boutiques. While that evidence leaves many unanswered questions, the applicants’ evidence is largely circumstantial. It is not possible to determine whether the fourth respondent at relevant times operated the business of Yili’s Boutiques without a full hearing. That is, it cannot be said that there is no reasonable prospect of any outcome but one.
The incorporation of the first applicant
The fourth, fifth and sixth respondents did not admit in their defences that the first applicant was incorporated in Italy. Accordingly, it was necessary for the applicants to establish by evidence the incorporation of the first applicant. The applicants relied upon a statement in the affidavit of Anthony Brooke Watson sworn on 18 December 2006 that, "the first applicant is an Italian company and owner of the brand of clothing sold under the "PianuraStudio” label around the world.”
The applicants’ counsel was asked at the hearing whether such a statement was sufficient to prove incorporation. He said that it might not be but that the claim by the second applicant alone was sufficient to obtain the relief sought. Subsequently, the applicants’ counsel provided to the court authority which he said showed that the statement from the affidavit of Mr Watson set out in the previous paragraph was sufficient to prove the first applicant's incorporation in Italy. That authority was Murine Eye Remedy Co v Eldred [1926] VLR 425, H v Schering Chemicals (1983) 1 WLR 143 and Pearce v Button (1986) 65 ALR 83.
Reference was also made to s.190(3) of the Evidence Act1995 which permits the court to waive certain rules of evidence in relation to proof of documents. More particularly, certain rules of evidence may be waived if the matter to which the evidence relates is not genuinely in dispute or the application of the relevant provisions would involve unnecessary expense or delay.
If this matter had not needed to go to final hearing by reason of the triable issue of whether the fourth respondent operated the business, I may have been inclined to waive the requirement for strict proof of the incorporation of the first applicant. However, as the matter is going to final hearing, I reserve my views on this question.
Reputation
The evidence relied upon by the applicants to show that the PianuraStudio brand had a reputation amongst a class of people identified as those who might buy high-end Italian fashion consisted of evidence given by Mr Watson on information and belief as follows:
5.I have been informed by Mr Geoff Lynch and do believe that:
(a)the first applicant is an Italian designer and supplier of an exclusive range of high end women’s clothing and fashion accessories under the fashion label PianuraStudio (the PianuraStudio Products);
(b)the first applicant has been designing and distributing garments under the PianuraStudio label around the world since 1999;
(c)the first applicant has exclusive distribution arrangements for the sale of PianuraStudio Products with over 20 fashion distributors around the world, including in Australia, China, France, Germany, Japan, Spain, the USA and the United Kingdom. Now produced and shown to me and marked ABW-16 is a list of Italian and international distributors of the PianuraStudio Products, all of which appear on the first applicant’s website;
(d)the second applicant became the exclusive distributor of the PianuraStudio Products in Australia in 2004;
(e)the second applicant supplies the PianuraStudio products for retail sale to 35 customers across Australia. These customers are based in Sydney, Melbourne, Adelaide, Perth, Brisbane, Townsville, Cairns, Noosa, Gold Coast, Byron Bay, Nelson Bay, Newcastle and Bowral;
(f)the second applicant employs a public relations company called “Sweaty Betty” to promote the PianuraStudio brand on its behalf. The second applicant has spent $13,000 over the last 6 months with Sweaty Betty in promoting the PianuraStudio brand;
(g)the PianuraStudio brand has been promoted in a number of publications in Australia, including the Brisbane News in June/July 2006; Famous in July and August 2006; Redzero in Spring 2006; Country Style in August 2006; Who in August 2006; TV Soap in September/October 2006, New Woman in October 2006 and Cosmopolitan in November 2006. Now produced and shown to me and marked ABW-17 are copies of the articles from each of the publications listed above in which the PianuraStudio has been promoted;
(h)the PianuraStudio brand has been promoted in a number of publications internationally, including Vogue, Elle, Marie Claire, Diva e Donna, BMM, D La Repubblica Delle Donne, Friendly, Woman, Clara, Gioia, Yo Dona, Donna Moderna, Amica Sportswear International, Camera Café and Oxigeno. Now produced and shown to me and marked ABW-18 are copies of the articles from each of the publications promoting the PianuraStudio brand; and
(i)the PianuraStudio brand was promoted on Today Tonight in a swim suit special which aired on the program on Wednesday 23 August 2006.
6.The first applicant operates a website promoting PianuraStudio Products at web address Now produced and shown to me and marked ABW-19 is a selection of web pages which appear on the first applicant’s website at Google search of the word “PIANURASTUDIO” returns 41,600 hits. Now produced and shown to me and marked ABW-20 is a print out of the first page of the Google search of the word “PIANURASTUDIO”.
8.A number of articles have been written about the PianuraStudio brand in Italy. Now produced and shown to me and marked ABW-21 are print outs of 4 online articles that have been written about the PianuraStudio brand.
9.I have been informed by Mr Geoff Lunch and do believe that the applicants have a valuable reputation in the words “PianuraStudio”, the PianuraStudio brand, and the PianuraStudio Products sold by the applicants in Australia.
At this stage, the applicants have elicited some evidence to establish the necessary reputation. That evidence may be tested and may be somewhat undermined at the final hearing. Whether the applicants have the necessary reputation is now a matter for the final hearing.
Conclusion
In all the circumstances, I am satisfied that there is a triable issue in relation to whether the fourth, fifth and sixth respondents operated Yili’s Boutiques and whether they had the involvement alleged in the impugned conduct. Accordingly, the applicants’ summary judgment application must be dismissed. I will hear the parties on the question of costs.
I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Melissa Gangemi
Date: 4 July 2007
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