Karlsson v Griffith University

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FEDERAL COURT OF AUSTRALIA

Karlsson v Griffith University [2024] FCAFC 150

Appeal from: Karlsson v Griffith University, in the matter of Karlsson [2024] FCA 205
File number(s): NSD 366 of 2024
Judgment of: PERRY, BROMWICH AND RAPER JJ
Date of judgment: 22 November 2024
Catchwords: BANKRUPTCY AND INSOLVENCY – appeal from a decision of the primary judge refusing to set aside a bankruptcy notice upon review of a decision of the Registrar – where the appellant’s asserted counter-claim, set-off or cross demand under s 40(1)(g) of the Bankruptcy Act 1966 (Cth) was the very source of the judgments underlying the act of bankruptcy – appeal dismissed
Legislation:

Bankruptcy Act 1966 (Cth) ss 40(1)(g), 41(1)(a)(i), 41(1)(b)(i)

Federal Court of Australia Act 1976 (Cth) ss 51A(1)(a), 52
Cases cited:

Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58

Karlsson v Griffith University [2019] NSWSC 1335

Karlsson v Griffith University [2020] NSWSC 365

Karlsson v Griffith University [2022] FCA 997

Karlsson v Griffith University, in the matter of Karlsson [2024] FCA 205

Re Stockvis (1934) 7 ABC 53

Re Vicini; Ex parte EA Sealey & Co (1982) 64 FLR 323

Smith v Achieve Homes Pty Ltd [2024] FCA 327
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Number of paragraphs: 47
Date of hearing: 19 November 2024
Counsel for the Appellant: The appellant appeared in person
Counsel for the Respondent: Ms E Hall
Solicitor for the Respondent: Bartley Cohen

ORDERS

NSD 366 of 2024
BETWEEN:

ANNIKA KARLSSON

Appellant
AND:

GRIFFITH UNIVERSITY

Respondent

ORDER MADE BY:

PERRY, BROMWICH AND RAPER JJ

DATE OF ORDER:

22 NOVEMBER 2024

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondent’s costs of the appeal as agreed or assessed.

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


REASONS FOR JUDGMENT

THE COURT:

  1. Ms Karlsson owns a trade mark and brought proceedings against Griffith University in 2019 in the Supreme Court of New South Wales alleging, amongst other causes of action, infringement of her registered trade mark. Those proceedings were struck out and Ms Karlsson was ordered to pay costs. Ms Karlsson thereafter sought unsuccessfully to appeal that decision before the Court of Appeal and in the High Court. Undeterred, Ms Karlsson then brought unsuccessful proceedings in this Court. These unsuccessful actions led to various costs orders, which culminated in the issuing of a bankruptcy notice on 24 August 2023. The debt, including interest, comprises $122,910.04. Ms Karlsson then unsuccessfully applied for the bankruptcy notice to be set aside. On 7 November 2023, a Registrar of this Court dismissed the application and then on 29 November 2023, the Registrar also awarded costs against Ms Karlsson, assessed in the amount of $8,004.25. Thereafter, Ms Karlsson applied before the primary judge for a review of the decision of the Registrar.

  2. The primary judge dismissed, with costs, Ms Karlsson’s application for review of that decision of…

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Details
Case
[2024] FCAFC 150
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Ms. Karlsson appealed against a decision of the primary judge that refused to set aside a bankruptcy notice issued by Griffith University. The appeal centred around the validity of the bankruptcy notice, which was grounded in costs orders made against Ms. Karlsson in two previous proceedings in the Supreme Court of New South Wales, where she unsuccessfully sued Griffith University for trademark infringement. The legal issues before the court included whether the bankruptcy notice was correctly issued, and if the counter-claims or set-offs raised by Ms. Karlsson could affect the validity of the notice.

The court examined the procedural and substantive validity of the bankruptcy notice, considering the costs orders and the assessments made by the Local Court of New South Wales. It found that the bankruptcy notice was properly issued as the costs orders were final judgments against Ms. Karlsson. The court rejected Ms. Karlsson's arguments that the bankruptcy notice was flawed due to procedural errors or because it relied on orders that were not final judgments. Additionally, the court held that Ms. Karlsson's counter-claims or set-offs did not negate the legitimacy of the bankruptcy notice since they were the very source of the judgments upon which the notice was based.

Consequently, the appeal was dismissed. The court ordered that Ms. Karlsson pay Griffith University's costs of the appeal, as agreed or assessed. This ruling underscores the importance of correctly issued bankruptcy notices and the limited scope for counter-claims to affect their validity.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal as agreed or assessed.

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

Background

Background to the litigation

For the reasons which follow, the appeal must fail on its merits and there is no need to address the notice of objection to competency.The relevant background The debt claimed in the bankruptcy notice arises from costs orders made against Ms Karlsson in two proceedings instituted by her against the University in the Supreme Court of New South Wales, in which she alleged that the respondent was liable to pay damages for trade mark infringement: Karlsson v Griffith University [2019] NSWSC 1335 (Adamson J); Karlsson v Griffith University [2020] NSWSC 365 (Wright J). The history of the proceedings in the Supreme Court and in this Court are conveniently summarised in the University’s outline of submissions, as follows:(a)In the proceedings commenced by Ms Karlsson in the Supreme Court of NSW in 2019:(i) On 1 October 2019, Adamson J struck out Ms Karlsson’s statement of claim and ordered that she pay Griffith University’s costs of the application. (ii) On 7 April 2020, Wright J dismissed the proceeding and ordered that Ms Karlsson pay Griffith University’s costs of the proceeding. (iii) Ms Karlsson appealed the decision of Wright J to the NSW Court of Appeal. Payne and White JJA dismissed the appeal on 14 August 2020, and said that the NSW Court of Appeal did not have the power to hear and determine Ms Karlsson’s appeal (pursuant to s 7(5) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)) because the appeal should have been heard and determined only by the Full Court of the Federal Court. However the Court of Appeal determined that Adamson J and Wright J did have power to make the decisions they made in the proceedings below, prior to the appeal to the NSW Court of Appeal (pursuant to ss 125, 190 and 192 of the Trade Marks Act 1995 (Cth)). As to costs, although the Court of Appeal had power to make a costs order in that case, Griffith University did not request that Ms Karlsson pay their costs because the jurisdiction issue (specifically, the Court of Appeal’s lack of power) was raised by the court and not by the parties.(iv)Ms Karlsson’s application for special leave to appeal to the High Court was dismissed on 10 February 2021 with no order for costs.(b)On 28 March 2021, the costs orders made by Adamson J and Wright J in favour of Griffith University were assessed. On 21 April 2021, Griffith University obtained judgment in the Local Court for the amount of $63,552.80.(c) In the proceedings started by Ms Karlsson in the Federal Court in 2021:(i)On 24 May 2022, Katzmann J made summary judgment in favour of Griffith University and ordered Ms Karlsson to pay their costs.(ii)Ms Karlsson then applied for leave to appeal the decision of Katzmann J. Her application was dismissed on 15 August 2022 by Rares J, who ordered that she pay Griffith University’s costs.(d)On 2 May 2023, certificates of taxation were issued in relation to the costs that Ms Karlsson was required to pay Griffith University pursuant to the orders of Katzmann J and Rares J. Those costs were assessed as $31,207 and $16,101 respectively.(Citations omitted).The reasons of the primary judge

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Lastly, Ms Karlsson alleged error, at PJ[41], where the primary judge found that there was no basis for Ms Karlsson’s contention that the University had stolen her trade mark. Her submission at the appeal hearing was that the primary judge had erred by reference to the decision in Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58. Ms Karlsson failed to articulate the error in the primary judge’s reasons. The mere reference to a case where a party has succeeded in achieving comparable relief is not sufficient to prove the allegation has been made out. Conclusion For all of these reasons, the appeal must fail, and Ms Karlsson be ordered to pay the University’s costs.

Ratio Decidendi

Legal Principle Established

In addition, Ms Karlsson submits that the University failed to meet a requirement under ss 41(1)(a)(i), (b)(i) of the Bankruptcy Act, as the bankruptcy notice was served on the debtor “as following”:I. In the bankruptcy notice dated 16 April 2021 Judgment/order number 2021/00105741 principal amount on which interest is claimed $63,552.90 it is not a final judgment or final order of Supreme Court of New South Wales:Karlsson v Griffith University [2019] NSWSC 1335Karlsson v Griffith University [2020] NSWSC 365 Rely upon LORD & ANOR v RANKINE & ORS [2010] FMCA 668 at [8] The Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915 at [32] [34] [42]II.Identify Respondent failure filed to Local Courts of New South Wales. NOTICE OF ORDERS MADE dated 16 April 2021. Claim amount: $63,552.80 had add the costs assessor $3,229.05, incorrect of notice of order made Local Court of New South Wales. Costs assessor to be paid before release of the cost's assessment corticates, $3,229.05 had been paid to the assessor. Legal Profession Uniform Law Application Act 2014 s7 l (3)(a) this is document Local Courts of New South Wales notice of order made not seal or sign by the Court. Then bankruptcy notice BN261319 issued 24 August 2023 Judgment/order 2021/00105741 incorrect.Rely upon LORD & ANOR v RANKINE & ORS [2010] FMCA 668 at [10] In terms similar to above, Ms Karlsson also appears to submit that error lies in the primary judge’s reasons at PJ[34], [38], [40], [46], [47], [48], as the bankruptcy notice is “not a final judgment or final order of Supreme Court of New South Wales and bankruptcy notice incorrect Judgment/order 2021/00105741”. This claim must fail. The University, as creditor, had obtained final judgments and orders as against Ms Karlsson. Thirdly, Ms Karlsson contends error at PJ[44] of the primary judge’s reasons, where his Honour dismisses Ms Karlsson’s complaint concerning the University’s alleged failure to comply with a procedural order made on 11 February 2022 to file and serve submissions in reply by a particular date:Identify primary judge error of Reasons for Judgement at [44]incorrect of the bankruptcy notice Judgment/order number NSD1102/2021 principalamount $31,207.00. rely upon rule 40.07(2)(a)(v) federal court rules Liability of lawyer to their client for misconduct if, (a) a proceeding or an application is delayedadjourned or abandoned because of the lawyer's failure. (v) to comply with these rulesor an order of the Court. It appears by this submission that Ms Karlsson alleges that the University’s legal representatives have somehow engaged in misconduct by their delay. Regardless of the delay, as the primary judge reasoned correctly, even if this contention as to delay were accepted, it does not advance Ms Karlsson’s application to set aside the bankruptcy notice. Ms Karlsson then appears to repeat the same submission, in respect of PJ[45], asserting error in the “bankruptcy notice Judgment/order number NSD431/2022 principal amount $16,101.00. rely upon rule 40.07(2)(b)(ii) federal court rules Liability of lawyer to their client for misconduct if, (b) the lawyer (ii) incurs costs that are unnecessary or wasteful”. For the same reasons expressed immediately above, we reject this submission.