Korolak v Campbell (No 3)

Case [2024] FedCFamC2G 148

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Korolak v Campbell (No 3) [2024] FedCFamC2G 148

File number(s): MLG 1112 of 2021
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 23 February 2024
Catchwords: INTELLECTUAL PROPERTY – form of declaration to make to give effect to a finding of trade mark infringement – costs – whether indemnity costs should be ordered against the successful applicant after the dates by which offers to settle the proceeding were available to be accepted had passed – indemnity costs not ordered because the relief the applicant obtained was not less favourable than the terms of the offers and it was otherwise not unreasonable for the applicant to refuse to accept the offers – whether the respondents should be ordered to pay the applicant’s costs on an indemnity basis – respondents not to pay costs on an indemnity basis – whether lump sum costs order should be made – lump sum costs order made.
Legislation:

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 141(1), 214(2)

Federal Court of Australia Act 1976 (Cth) ss 21(1), 43

Trade Marks Act 1995 (Cth) ss 120, 126(2), 129

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.06(3), 22.02, 22.09, Sch 2

Federal Court Rules (Cth) O 23, rr 3, 11(5)

Federal Court Rules 2011 (Cth) rr 25.01, 25.06, 25.10, 25.12, 25.14(1), Pt 40

Cases cited:

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564

Alborn v Stephens [2010] QCA 58

Anchorage Capital Partners Pty Limited v ACPA Pty Ltd (No 2) [2018] FCAFC 112

Australian Competition & Consumer Commission v Renegade Gas Pty Ltd [2014] FCA 1135

Australian Competition and Consumer Commission v Woolworths Ltd (No 2) [2002] FCA 1046

Australian Competition Consumer Commission v Amcor Printing Papers Group Ltd [2000] FCA 163

GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Limited v Generic Partners Pty Limited (No 2) [2018] FCAFC 100

Hamod v State of New South Wales [2002] FCAFC 97

Hockey v Fairfax Media Publications Pty Limited (No 2) [2015] FCA 750

Key Logic Pty Ltd v Blue Groper Investments Pty Ltd [2019] FCA 275

Mead v Watson as Liquidator for Hypec Electronics [2005] NSWCA 133

Division: General
Number of paragraphs: 65
Date of hearing: 16 February 2024 
Counsel for the Applicant: Mr D Stamboulakis (direct access), by video
Counsel for the Respondents: Mr B McEniery, by video
Solicitor for the Respondents: McCarthy Durie Lawyers

ORDERS

MLG 1112 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

RHONDALYNN KOROLAK

Applicant
AND:

CANNA CAMPBELL

First Respondent

SASS FINANCIAL AUSTRALIA PTY LTD ATF CANNA CAMPBELL FAMILY TRUST

Second Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

23 FEBRUARY 2024

THE COURT DECLARES THAT:

1.From around 12 February 2020 to around 15 May 2021 the respondents infringed the applicant’s Australian registered trade mark no 1762611, being the words “Financial Foreplay”, by:

(a)posting the logo reproduced in the schedule to these orders (logo), or logos…

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AGLC
Korolak v Campbell (No 3) [2024] FedCFamC2G 148
Case
[2024] FedCFamC2G 148
Decision Date

CaseChat Overview and Summary

The case of Korolak v Campbell (No 3) involved the applicant, Ms Korolak, and the respondents, Campbell. The dispute centred around the respondents’ alleged infringement of Ms Korolak’s Australian registered trade mark for the words "Financial Foreplay". The High Court of Australia was tasked with deciding on the form of declaration to be made to give effect to the finding of trade mark infringement, and on the appropriate costs to be awarded.

The primary legal issue was whether the respondents should be ordered to pay the applicant's costs on an indemnity basis, as Ms Korolak requested, and whether a lump sum costs order should be made. Ms Korolak argued that the respondents' failure to cease their infringing activities, their "hopeless" defence, and their unreasonable conduct during the litigation warranted indemnity costs. The court considered these arguments but found that the conduct in relation to which indemnity costs may be ordered must be connected with the litigation itself, and that the respondents’ defences, although weak, were not groundless or made in bad faith. The court also noted that the respondents' conduct, even if unreasonable, did not warrant indemnity costs for the entire proceeding.

The court concluded that it was not unreasonable for Ms Korolak to refuse to accept the Calderbank offers, as the relief she obtained was not less favourable than the terms of the offers. The court further determined that the respondents should not be ordered to pay Ms Korolak’s costs on an indemnity basis, but that a lump sum costs order should be made. The court ordered that the respondents pay the applicant's costs, set in the amount of $113,791.50.

The court also declared that the respondents had infringed the applicant’s trade mark by using the logo and the words “Financial Foreplay” in various advertising and promotional activities for their podcast. The respondents were ordered to cease and desist from such activities.

Orders

Orders of the court

THE COURT DECLARES THAT:

1. From around 12 February 2020 to around 15 May 2021 the respondents infringed the applicant’s Australian registered trade mark no 1762611, being the words “Financial Foreplay”, by:

(a) posting the logo reproduced in the schedule to these orders (logo), or logos substantially similar to the logo (logos), on Instagram and Facebook to advertise a forthcoming podcast or podcasts the respondents were to publish, and which the respondents described as “SugarMamma’s Financial Foreplay” (FF Podcast) , or to request listeners to rate and review the FF Podcasts;

(b) using the logo or logos when describing FF Podcasts posted on podcast platforms;

(c) using the words “Financial Foreplay” to advertise or otherwise refer to the FF Podcasts; and

(d) stating the words “Financial Foreplay” in the FF Podcasts themselves.

THE COURT ORDERS THAT:

2. The respondents pay the applicant’s costs set in the amount of $113,791.50.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I am therefore also not satisfied that Ms Korolak’s not accepting the Calderbank offer is relevant to the exercise of my discretion as to costs.Conclusion on costs In these circumstances, I am satisfied that costs should follow the event. I therefore propose to order that the respondents pay Ms Korolak’s costs. The next question is whether I should accept Ms Korolak’s submissions that the respondents should be ordered to pay Ms Korolak’s costs on an indemnity basis.Ms Korolak’s claims for indemnity costs Ms Korolak relies on four grounds for claiming that the respondents should be ordered to pay Ms Korolak’s costs on an indemnity basis. Failure to cease infringing activity The first is the respondents’ failure to cease their infringing conduct from at least 17 November 2020 when they received the first letter of demand from Ms Korolak’s lawyer, and their having engaged in the conduct I identified in paragraphs 77-113 of the earlier reasons. These are matters that would have been relevant in determining whether an order for additional damages should be made under s 126(2) of the TM Act; they are not relevant, however, to determining whether the respondents should be ordered to pay Ms Korolak’s costs on an indemnity basis. As I have already noted, the conduct in relation to which indemnity costs may be ordered “must be connected with the litigation itself”.[21][21] Mead v Watson as Liquidator for Hypec Electronics [2005] NSWCA 133, at [9]“Hopeless” defence The second matter on which Ms Korolak relies is the submission that the respondents’ defence to Ms Korolak’s claims for trade mark infringement was “hopeless”. Having considered the evidence and prepared detailed reasons for judgment, it may be said that the respondents’ defences were weak. But that is not equivalent to finding that the contentions on which the respondents relied were groundless, or that the respondents advanced and maintained contentions it was not open to them to make. The earlier reasons show that the contentions the respondents raised and maintained merited detailed consideration. I therefore do not accept that the respondents conducted a case that was bound to fail, or that they relied on contentions it was not open to them to advance and maintain. Manner of conducting the case The third matter on which Ms Korolak relies is what she submits is the respondents’ unreasonable conduct of the proceeding. Ms Korolak refers to the respondents “repeatedly” failing to meet court deadlines which led to Ms Korolak applying for default judgment on two occasions, and to the respondents’ failures to provide financial disclosure in a timely manner. The difficulty with this part of Ms Korolak’s submissions is that, assuming the respondents acted in the manner Ms Korolak submits they did, that does not mean that the respondents had conducted the entire proceeding in a manner that would warrant my ordering the respondents pay all of Ms Korolak’s costs on an indemnity basis.

Ratio Decidendi

Legal Principle Established

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