FEDERAL COURT OF AUSTRALIA
Krishnan v Estee Lauder Pty Ltd [2022] FCA 273
ORDERS
WAD 156 of 2021 BETWEEN: MEENAKSHI KRISHNAN
Applicant
AND: ESTEE LAUDER PTY LTD (ACN 008 444 719)
Respondent
ORDER MADE BY:
BANKS-SMITH J
DATE OF ORDER:
24 MARCH 2022
ON THE UNDERTAKING OF THE RESPONDENT made to the Court to…
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- AGLC
- Krishnan v Estee Lauder Pty Ltd [2022] FCA 273
- Case
- [2022] FCA 273
- Decision Date
CaseChat Overview and Summary
The case of Krishnan v Estee Lauder Pty Ltd involves a dispute between the applicant, Ms Krishnan, and the respondent, Estee Lauder Pty Ltd, over allegations related to the advertising of certain skincare products. Ms Krishnan brought an action in the Federal Court seeking damages for what she claims to be misleading representations made by Estee Lauder Pty Ltd regarding the ingredients and benefits of its Clinique brand skincare products. The court was tasked with deciding whether the applicant had any reasonable prospect of successfully prosecuting her claims against the respondent, whether the proceeding was frivolous or vexatious, and whether the alternative pleadings should be struck out.
The court examined the evidence provided by both parties and considered whether Ms Krishnan's claims had any reasonable prospect of success. The respondent submitted that the claims were based on hyperbole and were therefore flawed. The court found that Ms Krishnan's claims were exaggerated and lacked substance, which obscured the actual claims she was making. The court further noted that the respondent had admitted to an inadvertent error in the advertising of the product on its website, which it had promptly rectified. Based on these findings, the court concluded that Ms Krishnan's claims had no reasonable prospect of success and that the proceeding was frivolous.
Following the analysis, the Federal Court entered judgment in favour of Estee Lauder Pty Ltd pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth). The court ordered that Ms Krishnan pay the respondent's costs of and incidental to the interlocutory application dated 3 December 2021, with the costs to be assessed by a registrar of the Court on a lump sum basis if not agreed. The court also granted liberty to apply with respect to any issue that arises relating to the manner of payment of the sum referred to in the undertaking.
The court examined the evidence provided by both parties and considered whether Ms Krishnan's claims had any reasonable prospect of success. The respondent submitted that the claims were based on hyperbole and were therefore flawed. The court found that Ms Krishnan's claims were exaggerated and lacked substance, which obscured the actual claims she was making. The court further noted that the respondent had admitted to an inadvertent error in the advertising of the product on its website, which it had promptly rectified. Based on these findings, the court concluded that Ms Krishnan's claims had no reasonable prospect of success and that the proceeding was frivolous.
Following the analysis, the Federal Court entered judgment in favour of Estee Lauder Pty Ltd pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth). The court ordered that Ms Krishnan pay the respondent's costs of and incidental to the interlocutory application dated 3 December 2021, with the costs to be assessed by a registrar of the Court on a lump sum basis if not agreed. The court also granted liberty to apply with respect to any issue that arises relating to the manner of payment of the sum referred to in the undertaking.
Orders
Orders of the court
1. Judgment is entered in favour of the respondent against the applicant pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth).
2. The applicant pay the respondent's costs of and incidental to the interlocutory application dated 3 December 2021, such costs to be assessed by a registrar of this Court on a lump sum basis if not agreed.
3. If the parties seek any other costs order with respect to the proceedings, a minute of any proposed orders should be provided to chambers within 14 days.
4. There be liberty to apply with respect to any issue that arises relating to the manner of payment of the sum referred to in the above undertaking.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
As noted, the respondent has applied for summary judgment, or, in the alternative that the amended statement of claim be struck out. If the application succeeds only in part and Ms Krishnan is permitted to continue with any part of the claim, the respondent seeks security for costs in the sum of $50,000. The respondent has not as yet pleaded its defence to the amended statement of claim. The application has been brought shortly after the provision of the amended statement of claim and no issue of delay on the part of the respondent arises.The evidence The respondent relies on three affidavits in support of its application. Two of the affidavits were sworn by Ms Corrine Duffy. Since 1 July 2021 Ms Duffy has been the Brand General Manager for Clinique, Aveda and Lab Series, Australia and New Zealand, for ELC. Prior to this, from April 2009 to October 2013, she held the role of Product Manager, Treatment & Makeup, Clinique. From October 2013 to November 2018, Ms Duffy was a National Marketing Manager, Clinique. From November 2018 to June 2021 Ms Duffy was the National Marketing and Communications Manager, Clinique. At all relevant times Ms Duffy was employed by the respondent. Her roles have related to the marketing and promotion of Clinique products including the CABS products. In her current role, Ms Duffy is responsible for the Clinique brand and marketing in Australia and New Zealand, including advertising and marketing of the CABS products. This description of Ms Duffy's roles is important, as it indicates that she is well placed to provide reliable evidence as to the concerns raised by Ms Krishnan. Her evidence is addressed in detail below. The third affidavit was sworn by Ms Elisabeth White, a partner of the firm Baker McKenzie, which represents the respondent in these proceedings. Ms White annexes various communications with Ms Krishnan, records the procedural history and also addresses matters relevant to security for costs. Ms Krishnan relies on an affidavit sworn by her on 16 January 2022. The following matters are extracted from the evidence.Ms Krishnan writes to the respondent and institutes proceedings On 5 February 2021 Ms Krishnan wrote a letter of complaint to the respondent with respect to the CABS products. The letter was apparently marked 'without prejudice' and is not in evidence. However, I infer that from at least that time, the respondent investigated the substance of the complaint made by Ms Krishnan as to the manner in which the CABS products were advertised and made available for sale, and in particular the descriptions of ingredients and references to salicylic acid and benzoyl peroxide. After communications between the parties, Ms Krishnan commenced these proceedings in June 2021, initially seeking damages in the sum of $6 billion for 'extensive mental harm, personal and professional damage'. After various case management hearings, the application and statement of claim were amended in October 2021. In that process Ms Krishnan corrected the identity of the respondent (following information provided by the respondent). She also removed and recast some of her claims. I will deal only with the claims that remain in her amended application and statement of claim.The different ingredients in US and Australian products
Decision
Reasons for decision
Section 31A of the Federal Court of Australia Act 1976 (Cth) includes the following:31A Summary judgment(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. It is s 31A(2), rather than s 31A(1), which is of present relevance. Rule 26.01 of the Federal Court Rules 2011 (Cth) also sets out circumstances in which a party may apply to the Court for an order for summary judgment:(1)A party may apply to the Court for an order that judgment be given against another party because:(a)the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or(b)the proceeding is frivolous or vexatious; or(c)no reasonable cause of action is disclosed; or(d)the proceeding is an abuse of the process of the Court; or(e)the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.…(4)If an order is made under subrule (1) dismissing part of the proceeding, the proceeding may be continued for that part of the proceeding not disposed of by the order. The principles relating to these powers are well settled. The principles are set out in cases such as Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118; Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955; Rana v Google Australia Pty Ltd [2013] FCA 60; and C v Commonwealth of Australia [2015] FCAFC 113; (2015) 234 FCR 81. The party seeking summary judgment bears the onus: Windsor v Sydney Medical Service Co‑operative Ltd (No 2) [2009] FCA 704 at [38] (Edmonds J). In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60; (2008) 167 FCR 372 at [124], Gordon J noted that s 31A was introduced in order to extend 'the power of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases' (citing the Minister's Second Reading Speech of the relevant bill). Even so, the power to give judgment for one party against another is not to be exercised lightly: Spencer at [24] (French CJ and Gummow J), [60] (Hayne, Crennan, Kiefel and Bell JJ); and Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Limited [2011] FCAFC 145 at [31] (Edmonds, Jessup and Robertson JJ).
Ratio Decidendi
Legal Principle Established
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