Crocker v Toys ‘R' Us (Australia) Pty Ltd (No 3)
[2015] FCA 728
•30 July 2015
FEDERAL COURT OF AUSTRALIA
Crocker v Toys ‘R’ Us (Australia) Pty Ltd (No 3) [2015] FCA 728
Citation: Crocker v Toys ‘R’ Us (Australia) Pty Ltd (No 3) [2015] FCA 728 Parties: DEBRA ANN CROCKER v TOYS 'R' US (AUSTRALIA) PTY LTD, BABY ZONE (AUST) PTY LTD and THE BABY PROJECT LIMITED PARTNERSHIP LP File number: QUD 647 of 2014 Judge: REEVES J Date of judgment: 30 July 2015 Catchwords: PRACTICE AND PROCEDURE – application for summary judgment under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth) – application to strike out statement of claim under r 16.21 of the Federal Court Rules 2011 (Cth) – consideration of whether proceeding an abuse of process – consideration of whether no reasonable prospect of successfully prosecuting claims – where allegations against a party who was dismissed from the proceeding – where allegations are scandalous, frivolous and vexatious – where part of the proceeding is permitted to advance – consideration of whether to strike out statement of claim in whole or part Legislation: Federal Court of Australia Act 1976 (Cth)
Trade Marks Act 1995 (Cth)
Federal Court Rules 2011 (Cth)Cases cited: Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279
Bhagat v Global Custodians Ltd [2002] FCAFC 331
Caterpillar Inc v Sun Forward Pty Ltd (1996) 36 IPR 411
Chaffers v Goldsmid [1894] 1 QB 186
Crocker v Toys ‘R’ Us (Australia) Pty Ltd [2015] FCA 588
Dawkins v Prince Edward of Saxe Weimer (1876) 1 QBD 499
Geoffrey Inc v Luik (1997) 38 IPR 555
Hamilton v Oades (1989) 166 CLR 486
Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60
Kranjiw v Newman (No 2) [2015] FCA 673
Manolakis v Carter [2008] FCA 505
Packer v Meagher [1984] 3 NSWLR 486
Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225
Peter Kent Development Pty Ltd v ANZ Banking Group Ltd (unreported, Sup Ct, NSW, Hunt J, 6 May 1980)
Pickering v Centrelink [2008] FCA 561
Solomon v Psychologists Board of Western Australia [2000] WASCA 266
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275
Williams v Spautz (1992) 174 CLR 509
Young v Holloway [1895] P 87Date of hearing: 22 April 2015 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Counsel for the Applicant: Ms Crocker appeared in person Counsel for the Second, Third and Fourth Respondents: Mr Ferrett Solicitor for the Second, Third and Fourth Respondents: Chrysiliou Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 647 of 2014
BETWEEN: DEBRA ANN CROCKER
ApplicantAND: TOYS 'R' US (AUSTRALIA) PTY LTD
Second RespondentBABY ZONE (AUST) PTY LTD
Third RespondentTHE BABY PROJECT LIMITED PARTNERSHIP LP
Fourth Respondent
JUDGE:
REEVES J
DATE OF ORDER:
30 JULY 2015
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.Judgment be entered for the respondents against the applicant on all those parts of this proceeding comprising the claims made in paragraphs 1, 3, 6, 7, 8 (insofar as it relates to a registered trade mark) and 9 to 14 (inclusive) of the originating application filed 1 December 2014.
2.The applicant’s statement of claim filed 10 February 2015 be struck out and she have leave to file a new statement of claim to plead the claims described in paragraphs 2, 4, 5, 8 (insofar as it does not relate to a registered trade mark) and 15 of the originating application filed 1 December 2014.
3.The applicant pay the respondents’ costs of and incidental to those parts of the proceeding upon which summary judgment has been ordered and to this application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 647 of 2014
BETWEEN: DEBRA ANN CROCKER
ApplicantAND: TOYS 'R' US (AUSTRALIA) PTY LTD
Second RespondentBABY ZONE (AUST) PTY LTD
Third RespondentTHE BABY PROJECT LIMITED PARTNERSHIP LP
Fourth Respondent
JUDGE:
REEVES J
DATE:
30 JULY 2015
PLACE:
BRISBANE
REASONS FOR JUDGMENT
INTRODUCTION
In this application, Toys ‘R’ Us (Australia) Pty Limited, Baby Zone (Aust) Pty Limited and the Baby Project Limited Partnership LP (the respondents – who, for convenience, I will generally refer to as “Toys ‘R’ Us”) seek summary judgment against Ms Crocker, the applicant, under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) and r 26.01 of the Federal Court Rules 2011 (Cth) (the Rules). In the alternative, they seek to have various parts of Ms Crocker’s statement of claim struck out under r 16.21 of the Rules.
MS CROCKER’S CLAIMS IN THIS PROCEEDING
As Ms Crocker’s originating application is the subject of a suppression order, I will not set out her claims verbatim. For present purposes, it will suffice to record that all of them relate directly, or indirectly, to a trade mark called SECURAP that Ms Crocker applied to register in 2010. SECURAP is described in Ms Crocker’s statement of claim as a securing device using a five and three point harness system to secure children’s car seats, prams, high chairs, swings and strollers. In her statement of claim, Ms Crocker claims to have designed the SECURAP device and trade mark, and to hold copyright in relation to the instructions for its use and the marketing packaging in which the device was offered for sale.
As best can be ascertained from her originating application, Ms Crocker’s claims broadly fall into four categories:
(a)the infringement of the SECURAP registered trade mark;
(b)the infringement of the copyright in the user instructions and the marketing packaging for the SECURAP device;
(c)passing off, or misleading or deceptive conduct, in relation to the SECURAP mark; and
(d)a collection of sundry claims including fraud, plagiarism, misuse of a barcode, breach of contract, and counterfeiting.
The references to SECURAP as a registered trade mark requires some explanation at the outset of these reasons. In late 2010, Ms Crocker applied to register the SECURAP mark under the Trade Marks Act 1995 (Cth) (the Trade Marks Act). Shortly after she made that application, it was accepted for registration by the Registrar of Trademarks. However, on 21 June 2011, Mr Horsfall of Infa Secure Pty Ltd commenced opposition proceedings under Part V of the Trade Marks Act. Those opposition proceedings were successful in November 2012, when a Delegate of the Registrar decided that Ms Crocker’s application to register that trade mark should be refused. The details of those opposition proceedings and the salient parts of the Delegate’s decision are set out in my recent decision of Crocker v Toys ‘R’ Us (Australia) Pty Ltd [2015] FCA 588 at [15]–[22]. It follows that Ms Crocker does not hold a registered trade mark under the Trade Marks Act for the SECURAP mark.
THE ISSUES
In descending order of significance, Toys ‘R’ Us advanced the following grounds for summary judgment, or dismissal, of all or a part of this proceeding, or to strike out all or a part of Ms Crocker’s statement of claim:
(a)the whole proceeding because it is an abuse of process; or
(b)all claims in the proceeding, except Ms Crocker’s infringement of copyright claim, because she has no reasonable prospects of successfully prosecuting those claims; or
(c)all of the paragraphs of Ms Crocker’s statement of claim that plead allegations against Infa Secure Pty Ltd (Infa Secure) because they are an abuse of process and do not disclose a cause of action against any of the existing respondents; and/or
(d)all of the paragraphs of Ms Crocker’s statement of claim which contain scandalous, vexatious or frivolous material.
However, following Ms Crocker’s oral submissions on this application, Toys ‘R’ Us sought to add, as a primary ground to those stated in (c) and (d) above, that the most efficient course in all the circumstances was to strike out the whole of Ms Crocker’s statement of claim on the basis that she should be given leave to re-plead her infringement of copyright claims.
For the reasons that follow, I do not consider the whole of Ms Crocker’s proceeding should be the subject of a summary judgment, or dismissal, order. However, I do consider a number of discrete parts of the proceeding should be disposed of in that manner. I also agree with Toys ‘R’ Us that the most efficient course in all the circumstances is to strike out the whole of Ms Crocker’s statement of claim and to grant her leave to re-plead her remaining claims (identified below) afresh.
THE APPLICABLE PRINCIPLES
The principles applicable to the various kinds of application made by Toys ‘R’ Us have recently been outlined by me in Kranjiw v Newman (No 2) [2015] FCA 673 at [9]–[13]. I will apply those principles in this application but, in the interests of brevity, I will not reiterate them here. In addition to those principles, it is necessary to briefly outline some other principles that were not raised in that decision.
First, it is necessary to outline the principles relating to claims that are said to be scandalous, vexatious or frivolous. These expressions can be used either separately, or in conjunction, or interchangeably, with the expression “abuse of the process of the court”: see Young v Holloway [1895] P 87 at 90-91. A matter that is “frivolous” has been described as one that is “without substance or groundless or fanciful”: see Pickering v Centrelink [2008] FCA 561 at [27] per McKerracher J. It may also describe a situation where a party is trifling with the court or wasting the court’s time: see Chaffers v Goldsmid [1894] 1 QB 186; Dawkins v Prince Edward of Saxe Weimer (1876) 1 QBD 499 at 503 per Mellor J. A “vexatious” proceeding is one without foundation, which cannot succeed, or is brought for an ulterior and collateral purpose: see Peruvian Guano Company v Bockwoldt (1883) 23 Ch D 225 at 330; Packer v Meagher [1984] 3 NSWLR 486; Williams v Spautz (1992) 174 CLR 509. It might also describe proceedings that are “seriously and unfairly burdensome, prejudicial or damaging”: see Hamilton v Oades (1989) 166 CLR 486. In Solomon v Psychologists Board of Western Australia [2000] WASCA 266, Hasluck J observed (at [49]) that a matter can be regarded as “scandalous” where it contains “unnecessary allegations bearing upon the moral character of individuals or which exceed…necessity”. Scandalous claims also include those made with “no proper foundation”: see Manolakis v Carter [2008] FCA 505 at [12] per Mansfield J.
Secondly, Toys ‘R’ Us have acknowledged that there is a part of Ms Crocker’s proceeding which should proceed to trial, namely her infringement of copyright claims (see at [3(b)] above). In that event, it is apt to note that there is authority that an applicant for summary judgment on the remaining claims in a proceeding must show an exceedingly strong case as to why the whole matter should not proceed to trial: see Peter Kent Development Pty Ltd v ANZ Banking Group Ltd (unreported, Sup Ct, NSW, Hunt J, 6 May 1980). However, in Caterpillar Inc v Sun Forward Pty Ltd (1996) 36 IPR 411 (Caterpillar Inc), Drummond J also observed that this Court should not approach a claim for summary judgment on part of a proceeding with a predisposition not to grant it, save in exceptional circumstances. Rather, his Honour held (at 425) it is necessary to take account of all the relevant circumstances to determine whether it is appropriate to give summary judgment in respect of a particular part of a proceeding, when other parts can be, or are only suitable to be, resolved at a trial. This reasoning was followed by this Court in Geoffrey Inc v Luik (1997) 38 IPR 555.
Finally, it should be noted that a person bringing an application for summary judgment – in this case, Toys ‘R’ Us – bears the onus of persuading the Court of their entitlement to have the proceeding determined summarily: see Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60 at [127] per Gordon J.
TOYS ‘R’ US SEEK TO HAVE THE WHOLE PROCEEDING DISMISSED AS AN ABUSE OF PROCESS
As I have already recorded above, Toys ‘R’ Us seek to have this proceeding dismissed as an abuse of process. The gravamen of that application is their contention that Ms Crocker is using the existence of this litigation as a means to place pressure on Infa Secure to reach a compromise of her claims, rather than genuinely seeking to obtain relief against the respondents in this proceeding. They contend that the principal indicators of this abuse are:
(a)Ms Crocker’s decision to discontinue against Infa Secure as soon as it applied for injunctive relief in the proceeding to prevent her from making allegations to the customers of Infa Secure that it had engaged in, among other things, theft and fraud; and
(b)that a significant component of Ms Crocker’s statement of claim pleads grievances against Infa Secure, with few, if any, allegations pleaded against the current respondents to this proceeding.
THE DISCONTINUANCE AGAINST INFA SECURE
These contentions require an explanation of Infa Secure’s erstwhile role as a party in this proceeding. However, before setting out that explanation, it should be recalled that Infa Secure was the entity that successfully took opposition proceedings in relation to Ms Crocker’s application to register the SECURAP mark under the Trade Marks Act (see at [4] above).
Ms Crocker commenced this proceeding in early December 2014. Throughout the proceeding, she has represented herself. She does not have any legal training or experience. In her originating application, she named four respondents: Infa Secure, Toys R Us, Baby Zone and Baby Co. Having commenced the proceeding, Ms Crocker then sent a series of emails to various customers of Infa Secure, including Toys R Us, Baby Zone and Baby Co, which contained a number of serious allegations, including fraud, on the part of Infa Secure’s senior personnel. Infa Secure considered those emails were designed to damage Infa Secure’s standing within its customer base, with a view to pressuring it to address Ms Crocker’s claims against it in relation to the SECURAP device.
Accordingly, Infa Secure’s lawyers foreshadowed to Ms Crocker that it would file an application for an injunction to restrain her from continuing to send such communications to its customers. Infa Secure then proceeded to file that application, along with a number of supporting affidavits. Ms Crocker’s reaction to that development was to discontinue this proceeding as against Infa Secure. She frankly stated her reasons for doing so in Court on 22 April 2015 in the following terms:
I did dismiss Infa-Secure prior to even serving them because they made it very, very clear that they were going to attempt to obstruct me and I told them that if they did obstruct me – I put it in an email – that I would dismiss them. They refused service. I attempted service; they refused it. So I dismissed them from proceedings ...
Infa-Secure is the company that took the product. They shouldn’t have the product. They are the company that are on-selling it to retailers. I think I was just being bombarded with so many retailers contacting me and making me feel bad as a person and burdening me with a responsibility that I should be going after Infa-Secure and not them…
… but I just – because [Infa-Secure] declined service, they refused service, I thought it was just easier to dismiss them.
I interpolate that Ms Crocker’s assertion that Infa Secure was not served with the proceeding is not strictly correct. At the time she filed her notice of discontinuance on 30 December 2014, Infa Secure had already filed a notice of appointment of a lawyer. It did that on 19 December 2014 concurrently with the filing of the application and affidavits referred to above. Accordingly, under r 10.11 of the Rules, Ms Crocker’s originating application was deemed to have been served on Infa Secure as at that date.
Since late December 2014, the proceeding has continued against the current three respondents only. In this regard, it should be noted that in April 2015, the names of those respondents were amended to reflect their correct titles and status: Toys ‘R’ Us (Australia) Pty Ltd, Baby Zone (Aust) Pty Ltd and The Baby Project Limited Partnership LP.
THE DISPOSITION OF TOYS ‘R’ US’ ABUSE OF PROCESS CONTENTIONS
It is unnecessary for me to decide whether this proceeding is an abuse of process because there is a fundamental inconsistency in this aspect of the respondents’ contentions. That is, that they are seeking to have the whole proceeding dismissed as an abuse of process, while at the same time accepting that a part of the proceeding, namely the infringement of copyright claims (see at [3(b)] above), should be allowed to continue. If at least this head of claim in the proceeding is accepted not to amount to an abuse of process, I do not consider the whole proceeding should be dismissed on that ground.
In reaching this conclusion, I have taken into account the principle that to dismiss a proceeding as an abuse of process is an exceptional power which ought to be used sparingly: see Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 275-279. Nonetheless, I do not consider this conclusion forecloses on the question whether all, or some, of Ms Crocker’s remaining heads of claim in the proceeding should be dismissed. In other words, I consider I should adopt the approach outlined by Drummond J in Caterpillar Inc (see at [10] above). The answer to this question raises Toys ‘R’ Us’ second ground in this application (see at [5(b)] above) and requires a consideration of Ms Crocker’s other heads of claim listed in [3(a)], [3(c)] and [3(d)] above.
MS CROCKER HAS NO REASONABLE PROSPECT OF SUCCESSFULLY PROSECUTING SOME OF HER CLAIMS
As to the head of claim described in [3(a)] above, during oral submissions, Ms Crocker accepted the historical fact that she does not hold a registered trade mark for the SECURAP mark (see at [4] above). It necessarily follows that Ms Crocker has no reasonable prospect of successfully prosecuting her claim for the infringement of that mark as a registered trade mark.
As to the head of claim described in [3(c)] above, notwithstanding her failure to gain registration of the SECURAP mark, it may still be open to Ms Crocker to pursue a passing-off, or misleading or deceptive conduct claim, in relation to that mark as against some, or all, of the current three respondents. However, an examination of Ms Crocker’s statement of claim reveals a dearth of factual allegations necessary to support those kinds of claims. In almost every instance, their involvement is expressed as being secondary to the conduct of Infa Secure. Nonetheless, taking into account Ms Crocker’s lack of legal qualifications and experience, I am not willing to exercise my discretion to order summary judgment on this head of claim at this time. This conclusion does not mean that the justification for such an order may not exist at a later point in this proceeding. I therefore consider Ms Crocker should be given an opportunity to properly plead those claims and, if it then emerges that she is unable to plead the facts necessary to support them, the respondents will then be able to renew their application for summary judgment at a later time.
That leaves the collection of sundry claims described in [3(d)] above. Since Ms Crocker’s originating application is the subject of the suppression order, it is not appropriate to describe those claims in any detail. It will suffice to say that they essentially involve a series of unsupported and discursive allegations about theft, fraud, criminal conduct, plagiarism, and counterfeiting. Those allegations are primarily directed to Infa Secure, which is no longer a party to this proceeding. This is understandable given that Infa Secure was a party to this proceeding when that document was filed in December 2014. What is perplexing is that Infa Secure remains the central focus of the allegations in Ms Crocker’s statement of claim – approximately two thirds of the paragraphs in that document relate solely to Infa Secure – notwithstanding the fact it was filed on 10 February 2015, about six weeks after Infa Secure ceased to be a party. Furthermore, having examined the way in which those allegations are pleaded in Ms Crocker’s statement of claim, I agree with Toys ‘R’ Us that they are in part scandalous, in part frivolous and in part vexatious. They do not come close to meeting the strictures that apply to the pleading of fraud, or similar serious allegations of misconduct: see Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 285 per Mason CJ and Gaudron J. Instead, Ms Crocker has used the expression “fraud” and other similar serious allegations indiscriminately, without any apparent regard for the consequences of what she is conveying by the use of those words. This kind of approach was strongly condemned by the Full Court of this Court in Bhagat v Global Custodians Ltd [2002] FCAFC 331 at [13]. Finally, it should also be noted that Ms Crocker did not seek to maintain any of these claims in her oral submissions. Taking into account all these matters, I consider those claims should be dismissed on the ground Ms Crocker has no reasonable prospect of successfully prosecuting them and they constitute an abuse of process.
THE WHOLE OF MS CROCKER’S STATEMENT OF CLAIM SHOULD BE STRUCK OUT
The final question then is whether the whole of Ms Crocker’s statement of claim should be struck out, or only parts of it. I have already concluded above that Ms Crocker’s statement of claim does not presently plead the facts necessary to support her passing-off and misleading or deceptive conduct claims in relation to the SECURAP mark (see at [21] above). As to Ms Crocker’s infringement of copyright claims, an examination of her statement of claim reveals that it suffers from similar, albeit not as extensive, deficiencies to those just mentioned. As well as making additions to the existing document to address these deficiencies, it will also be necessary to remove from it any allegations that exclusively relate to the two heads of claim in relation to which I consider Toys ‘R’ Us are entitled to summary judgment: the infringement of a registered trade mark claim; and the collection of sundry claims which includes all the allegations against Infa Secure. Since all these additions to, and deletions from, the existing document are necessary, I consider the most efficient course is to strike-out the whole of Ms Crocker’s statement of claim and to give her leave to file a new document in which she properly pleads those heads of claim that remain open to her.
In summary, for the reasons outlined above, I therefore propose to order:
(a)summary judgment on Ms Crocker’s claim for infringement of a registered trade mark because Ms Crocker has no reasonable prospect of successfully prosecuting that claim against the respondents (see at [3(a)] and [20] above). While the discursive manner in which Ms Crocker claims in her originating application makes it difficult to be precise about this, I propose to confine this judgment to the claims described in paragraphs 1, 3, 6 and 8 (insofar as it refers to a registered trade mark) of Ms Crocker’s originating application;
(b)summary judgment on the collection of sundry claims pleaded in her statement of claim because Ms Crocker as no reasonable prospect of successfully prosecuting those claims against the respondents and they constitute an abuse of process (see at [3(d)] and [22] above). With the same reservation expressed above, this judgment will apply to the claims described in paragraphs 7 and 9 to 14 (inclusive) of Ms Crocker’s originating application;
(c)Ms Crocker’s statement of claim filed 10 February 2015 be struck out;
(d)Ms Crocker have leave to file a new statement of claim to plead her claims relating to: infringement of copyright in the user instructions and the marketing packaging for the SECURAP device (see at [3(b)] and [23] above); and passing off, or misleading or deceptive conduct, in relation to the SECURAP mark (see at [3(c)] and [23] above). Again, with the same reservations expressed above, I consider these are the claims described in paragraphs 2, 4, 5, 8 (insofar as it does not refer to a registered trade mark) and 15 of Ms Crocker’s originating application; and
(e)Ms Crocker pay the respondents’ costs of and incidental to those parts of the proceeding upon which summary judgment has been ordered and to this application.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. Associate:
Dated: 30 July 2015
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