Lamont v Malishus Limited (NZ) and Ors (No.2)
[2020] FCCA 1227
•20 May 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LAMONT v MALISHUS LIMITED (NZ) & ORS (No.2) | [2020] FCCA 1227 |
| Catchwords: PRACTICE AND PROCEDURE – Application by second and third respondents to dismiss the proceeding as an abuse of process – whether applicant has good arguable case – application for dismissal of proceeding as an abuse of process is dismissed on terms that the applicant file an amended application and a statement of claim that removes the fourth respondent as a party. |
| Legislation: Competition and Consumer Act 2010 (Cth), sch.2, s.18 |
| Cases cited: Insolvency Guardian Melbourne Pty Ltd v Carlei [2016] FCA 72 Jackson v Sterling Industries Limited (1987) 162 CLR 612 |
| Applicant: | DARREN LAMONT |
| First Respondent: | MALISHUS LIMITED (NZ) NZCN: 4429858 |
| Second Respondent: | ROBERT JURCIC |
| Third Respondent: | CLINTON SELWYN |
| Fourth Respondent: | RIMA NICHOLAS |
| Fifth Respondent: | CHRIS HAU |
| File Number: | SYG 787 of 2020 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 8 and 29 April 2020 |
| Date of Last Submission: | 29 April 2020 |
| Delivered at: | Sydney |
| Delivered on: | 20 May 2020 |
REPRESENTATION
| Applicant in person, by telephone |
| Second and third respondents in person, by telephone |
| No appearance by, or on behalf of, the first, fourth, and fifth respondents |
ORDERS
The application in a case filed by the applicant on 30 March 2020 is dismissed.
The application made by the second and third respondents that the proceeding be dismissed as an abuse of process is dismissed.
By 3 June 2020 the applicant file and serve an amended application and a statement of claim that do not include the fourth respondent as a party.
The matter stand over for directions at 9.30 am on 22 July 2020.
The parties have liberty to apply on such notice as the circumstances warrant, including liberty reserved to the applicant to apply for an interlocutory injunction to restrain any one or more of the first, second, third, or fifth respondents from using the name “Malishus” in connection with the advertising or promotion of apparel if the applicant comes into possession of evidence that is reasonably capable of proving that any one or more of the first, second, third, or fifth respondents has or have used or proposes or propose to use in Australia the “Malishus” name in connection with apparel.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 787 of 2020
| DARREN LAMONT |
Applicant
And
| MALISHUS LIMITED (NZ) NZCN: 4429858 |
First Respondent
| ROBERT JURCIC |
Second Respondent
| CLINTON SELWYN |
Third Respondent
| RIMA NICHOLAS |
Fourth Respondent
| CHRIS HAU |
Fifth Respondent
REASONS FOR JUDGMENT
Introduction
In these reasons for judgment I consider an application by the applicant, Mr Lamont, for freezing orders against the second respondent, Mr Jurcic, and the third respondent, Mr Selwyn. I also consider an application Mr Jurcic and Mr Selwyn make that the proceeding be dismissed as an abuse of process.
I propose to proceed as follows.
a)I will first set out some procedural history.
b)Second, I will identify the principles that regulate the determination of applications for freezing orders.
c)Third, I will describe the causes of action on which Mr Lamont relies, these being set out in a draft statement of claim.
d)Fourth, I will set out in detail the evidence that is before me, most of which consists of screenshots of material posted on various social media sites.
e)I will then consider whether the requirements for the making of a freezing order are satisfied on the material before me. That depends on whether the evidence satisfies me Mr Lamont has a good arguable case for the relief he claims and, if so, whether there is a danger that Mr Jurcic or Mr Selwyn or both will deal with any of their assets with a view to frustrating Mr Lamont’s prospects of recovering the fruits of any judgment he might obtain in the proceeding.
My determination whether the requirements for the making of a freezing order are satisfied on the material before me is likely to be determinative of the application Mr Jurcic and Mr Selwyn make that the proceeding be dismissed as an abuse of process; if Mr Lamont has a good arguable case for the relief he seeks, it will be difficult to find the proceeding is an abuse of process.
Procedural background
The immediate background to this application is to be found in the reasons for judgment I delivered orally on 8 April 2020, and the orders I made on that day on the basis of those reasons. The reasons have been transcribed, and they will be published when I publish these reasons.
As contemplated by the orders I made on 8 April 2020, Mr Lamont served documents on Mr Jurcic and Mr Selwyn, and the matter came before me at 2.15 pm on 14 April 2020. On that day I ordered that Mr Lamont’s application for a freezing order be set down for hearing on 29 April 2020. I did so after Mr Jurcic and Mr Selwyn both undertook to the Court that “they will not enter into any contract to sell or otherwise deal with the Malishus trade marks of which they are the registered owners without first giving the applicant 7 days’ prior notice”.
On 29 April 2020 I heard Mr Lamont’s application for a freezing order, and the application made by Mr Jurcic and Mr Selwyn that I summarily dismiss the proceeding. Mr Lamont and each of Mr Jurcic and Mr Selwyn appeared by telephone.
Also relevant to these reasons are the orders I made on 14 November 2019 (Orders) in an earlier proceeding Mr Lamont had brought against a number of the respondents, including Mr Jurcic and Mr Selwyn (earlier proceeding); and the reasons for judgment on the basis of which I made the Orders (earlier reasons).[1] The Orders include declarations that Mr Jurcic and Mr Selwyn infringed the trade marks of Mr Lamont (Malishus Trade Marks), and an order restraining Mr Jurcic and Mr Selwyn from using in Australia as a trade mark any word in relation to clothing, footwear, or headgear that is substantially the same or deceptively similar to the word “Malishus”.
[1] Lamont v Malishus & Ors (No.4) [2019] FCCA 3206
These reasons assume familiarity with the earlier reasons, and the reasons for judgment I delivered orally on 8 April 2020. The earlier reasons are relevant not only for the background they provide. There are common elements in the causes of action on which Mr Lamont succeeded in the earlier proceeding and the causes of action on which Mr Lamont relies in this proceeding. To the extent the Orders are based on determinations of the elements that are present in both the earlier proceeding and in this proceeding, the determinations I made in the earlier proceeding are binding on Mr Lamont, Mr Jurcic, and Mr Selwyn in this proceeding.[2]
[2] I am here referring to the doctrine of issue estoppel which, in broad terms, provides that, in the circumstances in which the doctrine operates, an issue decided between the same parties in a previous preceding cannot be re-litigated by the parties in a later proceeding – see Kuligowski v Metrobus [2004] HCA 34, at [20]
Principles in relation to freezing orders
This is not the first time Mr Lamont has applied for a freezing order. He applied for such order in the earlier proceeding, but I dismissed his application.[3] It would be useful, however, if I repeat in these reasons the principles I discussed in my reasons for judgment for dismissing Mr Lamont’s earlier application for a freezing order.
[3] Lamont v Malishus & Ors (No.2) [2018] FCCA 895
The Federal Circuit Court of Australia does not have any specific rules or a practice note governing the granting of freezing orders. It may be that the rules in the Federal Court Rules2011 (Cth) (FC Rules) dealing with freezing orders apply because of r.1.05(2) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules). Whether or not that is so, this Court has jurisdiction under s.15 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act). That section provides:
The Federal Circuit Court of Australia has power, in relation to matters in which it has jurisdiction, to:
(a) make orders of such kinds, including interlocutory orders, as the Federal Circuit Court of Australia thinks appropriate; and
(b) issue, or direct the issue of, writs of such kinds as the Federal Circuit Court of Australia thinks appropriate.
Section 15 of the FCC Act is in similar terms as s.23 of the Federal Court of Australia Act 1976 (Cth) (FC Act) and in Jackson v Sterling Industries Limited[4] the High Court held that the power to grant a Mareva injunction (being the name by which freezing orders were previously known) is comprehended by s.23 of the FC Act in relation to a matter in which the Federal Court has jurisdiction.
[4] (1987) 162 CLR 612
It is therefore clear that under s.15 of the FCC Act this Court has jurisdiction to grant a freezing order, and in particular the orders that Mr Lamont seeks, provided, of course, the preconditions for the granting of those orders are met. In broad terms, and as held in Sterling in relation to s.23 of the FC Act, s.15 of the FCC Act confers jurisdiction on the Court to issue an order if there is a danger of a respondent absconding, or there is a danger of a respondent’s assets being removed out of the jurisdiction or disposed of in some other way within the jurisdiction, so that there is a danger that a successful plaintiff will not be able to have his or her judgment satisfied.
The preconditions for the granting of a freezing order, at least in the Federal Court, are set out in r.7.35 of the FC Rules, and these may be taken as constituting the preconditions that apply to the granting of freezing orders by this Court. A relevant summary of what those preconditions are is set out in the judgment of Edelman J in Insolvency Guardian Melbourne Pty Ltd v Carlei, where his Honour there said: [5]
[5] Insolvency Guardian Melbourne Pty Ltd v Carlei [2016] FCA 72, at [16]
The criteria that must be satisfied for the court to grant a freezing order are set out in r 7.35 of the Federal Court Rules 2011(Cth). In substance, the criteria relevant to this application are that:
(1)the applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the Federal Court of Australia;
(2)there is a sufficient prospect that the judgment will be registered in or enforced by the Federal Court of Australia; and
(3)the Court is satisfied, having regard to all the circumstances, that there is a danger that a prospective judgment will be wholly or partly unsatisfied because any of the following might occur:
(a) the judgment debtor, prospective judgment debtor or another person absconds; or
(b) the assets of the judgment debtor, prospective judgment debtor or another person are:
(i) removed from Australia or from a place inside or outside Australia; or
(ii) disposed of, dealt with or diminished in value.
Mr Lamont’s claims
Mr Lamont has articulated his claims in a draft statement of claim (DSOC) that is annexed to an affidavit Mr Lamont made on 23 April 2020. After setting out allegations relating to Mr Lamont’s use of the word “Malishus”, the DSOC makes allegations in relation to each of the five respondents. As to the first respondent (Malishus Limited), the DSOC alleges:
a)Malishus Limited is the owner of:
i)the “Malishus Apparel Facebook” page which is to be found at “ and “@malishusapparel” from 17 May 2013;[6]
[6] DSOC, [2(c)]
ii)the “Malishus Apparel online Instagram” page which is to be found at “ from 17 May 2013;[7] and
[7] DSOC, [2(d]
iii)the online Instagram page found at “ from 9 January 2020; [8]
[8] DSOC, [2(e)]
iv)the online Instagram page found at “ from November 2015;[9]
[9] DSOC, [2(f)]
v)the “Malishus Entertainment Facebook page” found at “ from 5 January 2020; and[10]
[10] DSOC, [2(g)]
vi)the “Malishus Apparel” website domain “ DSOC, [2(h)]
b)The page referred to in paragraph (a)(i):
i)is directed to an Australian audience and market;
ii)displays a “shop now” button, a “message button”, “like and follow buttons”, and the website domain name “
iii)does not state words to the effect of “our Malishus apparel is not available in Australia”; and
iv)does not restrict persons in Australia from viewing the page.[12]
[12] DSOC, [2(c)]
c)The page referred to in paragraph (a)(ii):
i)has people following the page who live in Australia;
ii)is directed at and towards the Australian market; and
iii)does not state words to the effect of “our Malishus apparel is not available in Australia.”[13]
[13] DSOC, [2(d)]
d)The page referred to in paragraph (a)(iii):
i)has people following the page who live in Australia;
ii)is directed at and towards the Australian market; and
iii)does not state words to the effect of “our Malishus apparel is not available in Australia.”[14]
[14] DSOC, [2(e)]
e)The page referred to in paragraph (a)(iv):
i)does not state words to the effect of “our Malishus apparel is not available in Australia”; and
ii)displays Malishus apparel for sale.[15]
[15] DSOC, [2(f)]
f)The page referred to in paragraph (a)(v):
i)displays a “message button”, and “like and follow buttons”;
ii)does not state words to the effect of “our Malishus apparel/footwear is not available in Australia”;
iii)posted a competition in which Malishus Limited was giving away as a prize a “pair of Malishus Thongs”; and
iv)the page is liked, followed and commented on by people from around Australia; the posts are directed at and towards the Australian market and an Australian audience.[16]
g)On 31 August 2019 Malishus Limited posted a promotional flyer on the “Melbourne Night Club “Q-Room”” Facebook page, with the promotional flyer depicting a person wearing, advertising, and promoting a Malishus t-shirt.[17]
h)There was posted on the Malishus Apparel Facebook page promotional material in relation to a fighter who lives in Melbourne, such postings having been made on 9 October 2017, 10 October 2017, 22 April 2018, and 9 October 2019.[18]
i)Because of the matters in paragraphs (a)-(h), Malishus Limited has infringed the Malishus Trade Marks within the meaning of s.120 of the Trade Marks Act 1995 (Cth) (TM Act) and contravened s.18 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL).[19]
[16] DSOC, [2(g)]
[17] DSOC, [2(i)]
[18] DSOC, [2(j)]
[19] DSOC, [3]-[13]
In relation to the second respondent, Mr Jurcic, the DSOC alleges as follows:
a)Mr Jurcic was the “CEO/Presenter, co-founder, co-director and part shareholder” of Malishus Limited from around 17 May 2013 to at least 20 January 2020, but still “has an association/connection” with Malishus Limited.[20]
b)Mr Jurcic is in a partnership with the third respondent, Mr Selwyn, and has so been since the middle of 2011.[21]
c)Mr Jurcic maintains a personal Facebook profile which Mr Lamont believes Mr Jurcic is using to promote Malishus branded apparel.[22]
d)Mr Jurcic is the registered owner of the domain name “ around December 2019 to around February 2020 Mr Jurcic advertised for sale Malishus Limited for $65,000 stating that “management will stay”.[24]
f)Because of the matters in paragraphs (a)-(e), Mr Jurcic has infringed the Malishus Trade Marks within the meaning of s.120 of the TM Act and contravened s.18 of the ACL.[25]
[20] DSOC, [16(a)]
[21] DSOC, [16(b)]
[22] DSOC, [16(c)]
[23] DSOC, [16(d)]
[24] DSOC, [16(o)]
[25] DSOC, [17]-[27]
In relation to the third respondent, Mr Selwyn, the DSOC alleges as follows:
a)Mr Selwyn was the “co-founder, co-director and part shareholder” of Malishus Limited from around 17 May 2013 to at least 20 January 2020.[26]
b)From 20 January 2020 Mr Selwyn is “on the records” as a director and a 100% shareholder of Malishus Limited, although Mr Jurcic, and the fifth respondent, Mr Hua are directors “off the records”.[27]
c)Mr Selwyn is in a partnership with Mr Jurcic, and has so been since the middle of 2011.[28]
d)Mr Selwyn “had a “Melbourne Basketball Team”” in a Melbourne basketball competition under the name of “Malishus”.[29]
e)Because of the matters in paragraphs (a)-(d), Mr Selwyn has infringed the Malishus Trade Marks within the meaning of s.120 of the TM Act and contravened s.18 of the ACL.[30]
[26] DSOC, [30(a)]
[27] DSOC, [30(b)]
[28] DSOC, [30(c)]
[29] DSOC, [30(j)]
[30] DSOC, [31]-[41]
In relation to the fourth respondent, Mr Nicholas, the DSOC alleges as follows:
a)Mr Nicholas was a co-director of Malishus Limited from 17 May 2013 to at least 10 February 2016,[31] and a shareholder from around 22 July 2013 to 22 April 2016.[32]
b)On 10 February 2016 Mr Nicholas commented on a “Malishus Apparel Facebook page” the fifth respondent, Mr Hau, shared on his personal Facebook profile in relation to Mr Hau’s directorship with Malishus Limited, in which he stated, among other things, that because of his experience with Malishus he travelled to Australia for the first time; and in so commenting Mr Nicholas tagged Mr Selwyn.[33]
c)Because of the matters in paragraphs (a) and (b), Mr Nicholas has infringed the Malishus Trade Marks within the meaning of s.120 of the TM Act and contravened s.18 of the ACL.[34]
[31] DSOC, [44(a)]
[32] DSOC, [44(b)]
[33] DSOC, [44(e)]
[34] DSOC, [44(f)]
As for Mr Hau, the fifth respondent, the DSOC alleges as follows:
a)Mr Hau became a director of Malishus Limited from at least around 10 February 2016.[35]
b)Mr Hau has been in partnership with Mr Jurcic and Mr Selwyn from at least 10 February 2016 to the present.[36]
c)Mr Hau is the owner of the Instagram page under the name “Xrisda1st” found at “ which displays the “Malishus TM Logo” and states “@Malishus_Clothing and @MalishusEnt”, and does not contain words to the effect that the Malishus apparel that is advertised on that page is not available in Australia.[37]
d)On 9 April 2016 Mr Hau appeared in a Malishus apparel video clip posted on the Malishus Apparel Facebook page and stated that he is the “director for Malishus” who handles “all the New Zealand . . . side of things”.[38]
e)On 28 December 2016 Mr Hau shared on his Facebook profile Mr Selwyn’s Facebook page being “Malishus x MCGKD StreetFighter Tournament” which displayed Mr Selwyn wearing and promoting a “Malishus” t-shirt in Melbourne, and the video clip was viewed 5,457 times.[39]
[35] DSOC, [45(b)]
[36] DSOC, [45(c)]
[37] DSOC, [45(e)(iii)]
[38] DSOC, [45(g)]
[39] DSOC, [45(h)]
The DSOC also alleges causes of action based on alleged contraventions of the Australian Consumer Law.
Evidence
The principal affidavit on which Mr Lamont relies is his affidavit made on 15 April 2020 and filed on 27 April 2020. The affidavit annexes screenshots of material posted on various social media sites. It would be useful if I refer to the material on which Mr Lamont relies by reference to the social media site on which the material was posted.
Malishus Apparel Facebook page
Mr Lamont refers to the following:
a)A private message sent on 2 March 2014 via Facebook to the “Malishus Apparel Facebook” page addressed to Mr Jurcic and Mr Selwyn requesting that they remove all “Malishus Clothing material” that had been uploaded to the Facebook page “in regards to Australia”, and a message sent by Mr Jurcic in response.[40]
b)A private message Mr Lamont sent on 12 October 2017 via Facebook to the Malishus Apparel Facebook page, addressed to Mr Jurcic and Mr Selwyn demanding that they remove from the Facebook page “all material . . . that states Australia [sic] or even has any connection to Australia”.[41]
[40] Affidavit of D Lamont 15.04.2020, [4(a)-(c)], annexure “CT2”
[41] Affidavit of D Lamont 15.04.2020, [4(d)], annexure CT2, page 26
Mr Jurcic’s Facebook page
Mr Lamont refers to Mr Jurcic’s personal Facebook page, and annexes three screenshots from that Facebook page.[42]
a)One is a screenshot taken on 10 April 2020. It contains a photograph (which appears next to other photographs) of three persons each wearing a Malishus t-shirt; the statement “To see what he shares with friends, send him a friend request”; and a statement that Mr Jurcic lives in Melbourne.[43]
b)A second screenshot was taken on 10 April 2020. It contains a larger version of the photograph referred to in (a). Mr Lamont says he “tendered it as evidence within [his] (ASOC)” filed in the earlier proceeding.[44] (The photograph appears after the words “. . . . updated his cover photo March 4, 2012”.)
c)A third screenshot was taken on 9 April 2020. It is said to be a “blown-up” copy of the photograph in (b).[45]
[42] Affidavit of D Lamont 15.04.2020, [5]; annexure “CT3”
[43] Affidavit of D Lamont 15.04.2020, [5(a)]; annexure CT3, page 28
[44] Affidavit of D Lamont 15.04.2020, [5(b)]; annexure CT3, page 29
[45] Affidavit of D Lamont 15.04.2020, [5(c)]; annexure CT3, page 30
Mr Selwyn’s Facebook page
Mr Lamont refers to screenshots of Facebook searches in relation to Mr Selwyn’s Facebook page.[46]
a)There are three screenshots of the results of those taken on 6 February 2020. Mr Lamont says he undertook two of these searches via his personal Facebook profile under the name “Lamont Malishus”. Mr Lamont says he could not find Mr Selwyn’s personal Facebook profile under the name “Clinton Selwyn” through his personal Facebook profile because Mr Selwyn has blocked him on Facebook so that he cannot view Mr Selwyn’s profile “or his continual infringing conduct”.[47] Mr Lamont says that the search was undertaken by one of his friends, and the results of that search displayed Mr Selwyn’s personal Facebook profile. Mr Lamont deposes that the screenshot of Mr Selwyn’s personal Facebook profile displays the Malishus logo, and Mr Selwyn describes himself as “Brand Manager at Malishus”.[48]
b)There is a screenshot taken on 9 April 2020 of a search Mr Lamont’s friend undertook on “Clinton Selwyn”. The screenshot contains the words “Brand Manager at Malishus”, and “Manages Malishus”.[49]
c)There is a screenshot taken on 9 April 2020 of a search Mr Lamont’s friend undertook on “Clinton Selwyn”. The screenshot contains the words “Brand Manager at Malishus”, and “Manages Malishus”.[50] Mr Lamont deposes that when his friend “hovered the “mouse arrow” over the Malishus link where it states “Brand Manager at Malishus” a (Pop-Up-Box) appeared which displays the web domain and it “displays the infringing Malishus TM Logo and states; @malishusapparel and “Clothing (Brand)””, as well as displaying “Shop Now”, “Like”, “Follow”, and “Message” buttons.[51]
d)This is a screenshot taken on 9 April 2020 of a search Mr Lamont’s friend undertook on “Clinton Selwyn”.[52] Mr Lamont deposes the screenshot displays many photo images of “Malishus Apparel” being worn. He also deposes that the screenshot shows Mr Selwyn has 1,210 Facebook friends. Mr Lamont says he will allege that “a lot of them would live in Australia”, and that Mr Selwyn’s friends could easily “Private Message” him for Malishus Apparel in Australia.[53]
[46] Affidavit of D Lamont 15.04.2020, [6(a)]; annexure “CT4”, pages 32-34
[47] Affidavit of D Lamont 15.04.2020, [6(a)]
[48] Affidavit of D Lamont 15.04.2020, [6(a)]; annexure CT4, page 34
[49] Affidavit of D Lamont 15.04.2020, [6(d)]; annexure CT4, page 35
[50] Affidavit of D Lamont 15.04.2020, [6(e)]; annexure CT4, page 36
[51] Affidavit of D Lamont 15.04.2020, [6(e)]; annexure CT4, page 36
[52] Affidavit of D Lamont 15.04.2020, [6(f)]; annexure CT4, page 37
[53] Affidavit of D Lamont 15.04.2020, [6(f)]
Malishus Clothing Instagram page
Mr Lamont refers to the following screenshots, most of which are of posts made to the “Malishus Clothing Instagram” page:
a)A screenshot taken on 29 March 2020 which shows there is a follower in Melbourne which, Mr Lamont asserts, is a Melbourne night club where Malishus apparel had previously been promoted. Mr Lamont asserts Mr Jurcic manages the “Malishus Clothing Instagram” page in Australia.[54]
[54] Affidavit of D Lamont 15.04.2020, [7(a)]; annexure CT5, page 40
b)A screenshot taken on 21 January 2020 which contains material posted on 27 November 2013. Mr Lamont states Mr Jurcic and Mr Selwyn have not removed the post.[55]
[55] Affidavit of D Lamont 15.04.2020, [7(b)]; annexure CT5, page 41
c)A screenshot from Mr Lamont’s Malishus Instagram page displaying the results of a search Mr Lamont undertook of the “Malishus Clothing Instagram” page. Mr Lamont states the respondents did not remove their page, but blocked Mr Lamont from accessing it. Mr Lamont asserts the respondents did this “so that the Applicant cannot see the “Respondents” continued infringing conduct in Australia”.[56]
[56] Affidavit of D Lamont 15.04.2020, [7(c)]; annexure CT5, page 42
d)A screenshot of the “Malishus Clothing Instagram” page taken on 9 April 2020 by a friend of Mr Lamont. It bears the word “malishus_clothing” and “Malishus Clothing & Apparel It records 835 followers. Mr Lamont asserts “this page is in fact directed at and in fact target [sic] Australian Audience and Market”.[57]
[57] Affidavit of D Lamont 15.04.2020, [7(d)]; annexure CT5, page 43
e)Two screenshots of the “Malishus Clothing Instagram” page taken by a friend of Mr Lamont on 9 April 2020. One of the screenshots records the following:[58]
malishus_clothing
Down but not out in Australia!
To all our loyal friends, family and supporters, you may be wondering why we have been so quiet over the last 6-12 months. Over the last few years Malishus has been involved in an ongoing law suit. We have been in court and even went to trial over accusations we have been selling Malishus apparel in Australia.
Although two of the owners are based in Australia our business has been operating and trading solely out of New Zealand through our Director/Owner there.
A few weeks ago the judge finally delivered his verdict and we have been . . . [text cut off in copy] . . . move forward. We do have a few things we are working on and we maybe [sic] moving into a new area within Australia in 2020. Apparel will start shortly from New Zealand once our court issues are cleared up. It’s been hard 12 months but we look forward to connecting with you all again if you’ll have us.
Malishus
f)Screenshots from the “Malishus Clothing Instagram” page displaying the name “malishus_clothing”.[59] Mr Lamont points to followers who are located in Australia.
[58] Affidavit of D Lamont 15.04.2020, [7(e)]; annexure CT5, pages 44-45
[59] Affidavit of D Lamont 15.04.2020, [7(e)]; annexure CT6
Malishusent Instagram page
Mr Lamont refers to the following screenshots from the “malishusent” Instagram page:
a)A screenshot taken on 21 January 2020 displaying footwear under words that include “Malishus Slides Giveaway!!”. [60] Mr Lamont points to the screenshot that recorded this was liked by 48 people.
b)Two screenshots taken on 21 January 2020 which shows that one of the persons who signified they liked the post depicted on the Instagram page is located in Australia.[61]
c)A screenshot taken on 30 January 2020 which shows that the following was posted on 23 January 2020:[62]
Congratulations to our winners! Thank you to all those who competed & welcome to our new followers! Keep an eye out for more @malishus_clothing giveaways but more importantly, share & stay tuned for our show announcements we have for you all this year…
d)A screenshot of the page referred to in (a) Mr Lamont took on 9 April 2020 containing the same post,[63] and a screenshot taken by a friend of Mr Lamont on 10 April 2020 of the same page except it contains a photograph of footwear.[64] Mr Lamont points to one of the followers living in Australia.
[60] Affidavit of D Lamont 15.04.2020, [8(a)]; annexure CT7, page 66
[61] Affidavit of D Lamont 15.04.2020, [8(b)]; annexure CT7, pages 67-68
[62] Affidavit of D Lamont 15.04.2020, [8(c)]; annexure CT7, page 69
[63] Affidavit of D Lamont 15.04.2020, [10(a)]; annexure CT9, page 80
[64] Affidavit of D Lamont 15.04.2020, [10(b)]; annexure CT9, pages 81-82
Malishus Apparel Facebook page
Mr Lamont refers to the following screenshots from the “Malishus Apparel” Facebook page:
a)A screenshot taken on 9 April 2020 which displays “ and contains the words “malishus apparel”, “Clothing (Brand) Apparel & Clothing”, and “Shop Now” and “Send Message” links.[65]
b)Two screenshots taken on 10 April 2020 which display a post being “liked” by persons who are in Australia.[66]
[65] Affidavit of D Lamont 15.04.2020, [9(a)]; annexure CT7, page 74
[66] Affidavit of D Lamont 15.04.2020, [9(b)]; annexure CT7, pages 75-76
Malishus Streetwear Instagram page
Mr Lamont refers to screenshots of the “malishus_streetwear” Instagram page taken on 19 April 2020 and 22 April 2020 which displays persons wearing “Malishus Apparel”.[67]
[67] Affidavit of D Lamont 15.04.2020, [12]; annexure CT11, pages 88-90
Other material
Mr Lamont refers to a message he sent to Malishus Limited in around October 2017 and another message Mr Lamont says he sent to Mr Jurcic and Mr Selwyn, which include the following:[68]
I strongly urge you to Cease & Desist in any further advertisement, use, promoting, sponsoring or even wearing of your MALISHUS clothing within Australia and remove all posts or media off-line that is advertising Australia or even has any connection with Australia for that matter…; and
I have continually warned you about these acts and therefore strongly advise that you go into your Facebook settings and block AUSTRALIA all together from your page so that there will be no future incidences within Australia… I take this matter very seriously and hope the court puts a stop to all this very soon and I will be bringing to his honors attention that you still continue to do the alleged acts even after being served with no care at all for the legal acts or the law…
[68] Affidavit of D Lamont 15.04.2020, [13]; annexure CT12, page 92
There are two further sets of materials on which Mr Lamont relies. The first are matters set out in his affidavit made 30 March 2020. Here Mr Lamont refers to Mr Selwyn organising or being part of a basketball team named “Malishus”, and that Mr Lamont observed that team playing basketball with all of its members wearing apparel that included the word “Malishus”.[69]
[69] Affidavit of D Lamont, 30.03.2020, [6]
The second set of materials on which Mr Lamont relies were not formally tendered into evidence at the hearing, but they were tendered at the ex parte hearing on 8 April 2020, and which I marked Exhibit “A”. I will refer to the material because Mr Selwyn responds to the material in his affidavit to which I refer later. The material includes a screenshot of what appears to be Mr Selwyn’s Facebook page. It includes the words “Malishus Entertainment” and under Mr Selwyn’s name the statements: “Making moves in the entertainment space. Australia and New Zealand. Stay live with us!” It also includes a photograph of two slides situated side by side with one slide bearing the letters “MALI” and the other the word “SHUS”.[70]
[70] Exhibit A, page 4
Evidence of intention of sale
In his affidavit of 30 March 2020 Mr Lamont annexes documents which he asserts show that “the first, second and third respondents were, trying to sell the First Respondent “Online” for ($65,000)”. Although this evidence is principally relevant to the question of whether there is a risk the respondents will dispose of their assets, it is potentially relevant to whether Mr Lamont has a good arguable case of trade mark infringement. The evidence on which Mr Lamont relies is screenshots of pages from a web site known as “DealStream”. The first is a screenshot of the results of a search for “Malishus” or a set of words that included “Malishus”. One of the results of the search is the following:[71]
[71] Affidavit of D Lamont, 30.03.2020, annexure NE-6, page 29
FOR SALE: HIGH CONCEPT APPAREL IP – Malishus Athletics
. . . .
Dec 2, 2019 – Seize the opportunity to acquire a high concept brand geared toward the growing impact sports and lifestyle apparel market. Background: Malishus (a phonetic play on Malicious) was conceived in 2010 as an ultra-aggressive streetwear brand taking influence from hip-hop, action sports and the streetwear scene.
Next, there are three screenshots of content contain in a section headed “High Concept Apparel IP – Malishus Athletics” immediately underneath of which appears the words “Business For Sale”, “United States”, “Clothing Wholesalers”, “$65,000”, and “New Listing”.[72] Underneath these words there is a photograph of a “Malishus” trademark in one of the screenshots, and in each of the other two a photograph of apparel bearing a “Malishus” trademark.
[72] Affidavit of D Lamont, 30.03.2020, annexure NE-6, pages 30-33
Finally, one of the screenshots records the following information:[73]
[73] Affidavit of D Lamont, 30.03.2020, annexure NE-6, pages 34-35
Background:
Malishus (a phonetic play on Malicious) was conceived in 2010 as an ultra-aggressive streetwear brand taking influence from the hip-hop, action sports and the streetwear scene. With registered trademarks in the USA, Canada and New Zealand, the brand was looking to evolve into a formidable player in the growing action sports market (specifically boxing and MMA). The founders initially laid commercial roots in New Zealand and built a brand with a strong and respected reputation which was recognized and supported by various high-profile athletes and training gyms across the country.
What’s prompting the sale:
Due to a change in circumstances, the founders have decided to cease operations and offer the brand as a trademark/domain package to a capable buyer who can further monetise the brand.
Buyer profile and opportunity:
This brand would suit an enterprising fighter, established hip-hop artist, a passionate newcomer or an existing apparel group that’s looking to add to their existing portfolio. With the right strategy, team and marketing push, the Malishus brand could achieve strong commercial traction in North America and various global markets.
High concept trademark names such as ‘Malishus’ are becoming extremely difficult to secure and it will continue to diminish as original and memorable generic names are all eventually registered. This is especially true for apparel trademarks.
What’s included:
Included in the sale are domestic and global trademarks in various classes (primarily apparel) and website domain specific to each trademarked country – A detailed IP portfolio can be provided on request.
Note: Established website is not available as it was in development when the founders ceased operating. Inventory and other assets were sold off as part of the wind-up. The IP will be rolled into an LLC holding company which will be transferred to the buyer.
Sale process:
Engagement will be made with serious buyers only. We require a $5’000 [sic] deposit held in escrow which will conclude the sale. Due diligence and transaction activities are the buyer’s responsibility, so we highly recommend the services of a trademark attorney. Accrued fees and legal costs will be borne by the buyer, not the seller.
Affidavits of Mr Jurcic and Mr Selwyn
Both Mr Jurcic and Mr Selwyn have each made an affidavit and have each also filed written submissions.
In his written submissions which he filed on 14 April 2020, Mr Jurcic sets out the steps he has taken to comply with the Orders. He says that he has “removed [himself] from any affiliation with Malishus and have not participated in any commercial activities related to the brand”. Mr Jurcic denies he and Mr Selwyn listed Malishus Limited for sale. He says that he and Mr Selwyn have listed for sale the trade marks he and Mr Selwyn own. Mr Jurcic says that he and Mr Selwyn decided to sell the trade marks to raise money to pay the money he and Mr Selwyn were ordered to pay Mr Lamont in the Orders.
In his affidavit made on 19 April 2020, Mr Jurcic deposes to substantially the same matters as those he states in his written submissions. Mr Jurcic deposes that he has “not engaged with the Malishus brand in any capacity on a commercial level apart from the proposed sale of the international Trademarks [sic] which was not subject to the Orders”, and that he has “ceased as a Director of Malishus NZ on the 14th November 2019”. Mr Jurcic attached a screenshot of an extract from what he describes as the “NZ company register”. The extract records Mr Jurcic’s name and other details under the heading “Former Directors”. Mr Jurcic also deposes that the $65,000 amount was not based on any professional valuation. He deposes that “the purpose of trying to sell the international trademarks was to raise money to pay Mr Lamont”. He further says that the listing was targeted for an American audience, but it attracted no responses from prospective buyers. The listing lapsed on 2 February 2020.
In his written submissions filed on 14 April 2020 Mr Selwyn provides details of the steps he has taken to comply with the Orders. He also responds to Mr Lamont’s affidavit of 30 March 2020 and Exhibit A. He accepts he has in his possession a basketball singlet for a basketball team named “Malishus”, and he says he understands he has made “a very bad error in judgement in keeping my personal basketball gear”, although he did not intend to breach the Orders. As for the materials in Exhibit A, Mr Selwyn states that Mr Lamont has highlighted images of Malishus apparel that “are randomly selected by Facebook to be highlighted”, noting that he has “hundreds of images” on his “personal Facebook profile”, and that he has “no control over what images Facebook choose to highlight”. He states he does not “own, manage or facilitate any of the Malishus Entertainment Social Media services on Facebook or Instagram”. Mr Selwyn also states that he does “not have any input in Mr Chris Hau’s business model or his business social media accounts as this relates to New Zealand”. In his affidavit made on 20 April 2020, Mr Selwyn deposes to substantially the same matters as those he states in his written submissions.
Mr Lamont’s affidavit in response
Mr Lamont filed an affidavit made on 27 April 2020 in which he responds to the affidavits of Mr Jurcic and Mr Selwyn. In that affidavit, Mr Lamont does a number of things. First, he notes that the screenshot from the “DealStream” webpage[74] records that the “IP will be rolled into an LLC holding company which will be transferred to the buyer”.[75] Second, Mr Lamont annexes a screen shot from the “DealStream” webpage taken on 7 January 2020 which contains the words “Management Will Stay”.[76]
[74] Affidavit of D Lamont, 30.03.2020, annexure NE-6, page 29
[75] Affidavit of D Lamont, 27.04.2020, [9(e)(iii)]
[76] Affidavit of D Lamont, 27.04.2020, [9(e)(iv)], annexure RR3, page 34
Third, Mr Lamont notes by reference to the email correspondence annexed to Mr Jurcic’s affidavit that Mr Jurcic did not mention to Mr Lamont that he and Mr Selwyn were seeking to sell their trade marks. Mr Lamont further refers to his offering in his email to Mr Jurcic to take an assignment of their trademarks in return for Mr Lamont reducing by $500 the amounts they each owe Mr Lamont under the orders I made on 14 November 2019.[77] Mr Lamont also sets out Mr Jurcic’s response in an email he sent to Mr Lamont on 23 December 2019:[78]
Hi Darren. Thanks for the email. I’m honestly unsure what we are doing in relation to our active trademarks. I’m no longer involved with Malishus and I’m looking to remove myself from the trademark registry. Clint advised me that he’s figuring out his situation but there needs to be more discussion about it come 2020. My main focus is to get the damages payment sorted which is looking likely in the second week of January. I’m working straight through Xmas and things will be hectic until the New Year. I also need to put together a settlement agreement so my payment removes me from and [sic] further obligations and I can finally move forward. I’ll have a firm payment date once my family gets back after Christmas. Clint is still working through his part but I’m yet to hear back. It’s a bad time with Christmas, so hopefully we can get things moving quicker come January.
[77] Affidavit of D Lamont, 27.04.2020, [9(j)(iv)]
[78] Affidavit of D Lamont, 27.04.2020, [9(j)(v)]. The quote is taken from the affidavit of R Jurcic, 19.04.2020, annexure “RJ5”
Fourth, Mr Lamont annexes documents which he submits show that Mr Jurcic remains a director of Malishus Limited. The documents are as follows:
a)A screenshot from what Mr Lamont describes as the “New Zealand Companies Office” which records the following:[79]
[79] Affidavit of D Lamont, 27.04.2020, [14(a)(iv)], annexure RR6, page 46
Particulars of Director
4429858 MALISHUS LIMITED
Registration Date and Time 20 January 2020 21:10:56
Document Type Particulars of Director
Presenter Robbie JURCIC
[Address in Auckland]
Ceased director
Robert JURCIC
[Address in Australia]
Date ceased 14/11/2019
b)A screenshot from the “New Zealand Companies office website” taken on 27 April 2020 which records a mobile number which is identical to the mobile number Mr Jurcic recorded at the front page of the affidavit he filed in this proceeding, and an email address “[email protected]”.[80]
[80] Affidavit of D Lamont, 27.04.2020, [21(a)(iv)], annexure RR17, page 75
Should a freezing order be granted?
The first question I must consider is whether Mr Lamont has a good arguable case for the relief he seeks in the proceeding.
Good arguable case?
Mr Lamont pleads a number of causes of action; but at this stage I need only consider his cause of actions based on alleged infringements of the Malishus Trade Marks. I have set out in my earlier reasons the elements of a cause of action for infringement of a trade mark under s.120 of the TM Act, these being: [81]
a)a person must use a “sign”;
b)the person must use the sign “as a trade mark”;
c)the person must use the sign as a trade mark “in relation” to goods or services;
d)the goods and services are goods and services “in respect of which” the registered trade mark is registered; and
e)the sign the person uses as a trade mark is “substantially identical with, or deceptively similar to” the registered trade mark.
[81] Lamont v Malishus & Ors (No.4) [2019] FCCA 3206, at [47]
I also considered in the earlier reasons some of the principles relating to those elements,[82] and it is not necessary to repeat here all of the principles I identified in the earlier reasons. It would be convenient, however, if I repeat the principle that using a sign in the course of trade does not require that there be an actual sale; that “in the course of trade” means “for the purposes of trade”, which, in turn, means that a sign may be used as a trade mark in the course of advertising; and that a mark will be held to have been used in the course of advertising if it would have appeared to the person observing the advertisement that the marks in question possessed “the character of devices, or brands, which” the alleged infringing party “was using or proposing to use in relation to” particular goods “for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the” goods in question and the alleged infringing party.[83]
[82] Lamont v Malishus & Ors (No.4) [2019] FCCA 3206, at [48]-[54]
[83] The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited [1963] HCA 66; (1963) 109 CLR 407, at page 425 (Kitto J)
The evidence before me is reasonably capable of supporting the following findings:
a)The first respondent, Malishus Limited, is conducting a business that includes the sale of apparel. The evidence that is reasonably capable of supporting such finding includes the Instagram post I have reproduced in paragraph 24(e) of these reasons (in particular the statement that “[a]lthough two of the owners are based in Australia our business has been operating and trading solely out of New Zealand through our Director/Owner there”); the screenshots reproduced in paragraphs 25(a), 25(c), and 27 of these reasons; the “background” information contained in the screenshot reproduced in paragraph 33 of these reasons (including the words the “founders initially laid commercial roots in New Zealand” and “the founders have decided to cease operations”); and the screenshot referred to in paragraph 38 (including the words “Management Will Stay”).
b)Mr Jurcic and Mr Selwyn are involved in the management of the business of Malishus Limited and that they have permitted Malishus Limited to use Malishus trade marks of which they are the registered owners (J & S Malishus Trade Marks). The evidence that is reasonably capable of supporting such finding includes the evidence referred to in (a), and the screenshots referred to in paragraphs 23(b), 23(c) and 40 of these reasons.
c)Malishus Limited has used the word “Malishus” in the course of advertising the clothing apparel. The evidence that is reasonably capable of supporting such finding includes the screenshots referred to in (a) and (b).
d)Malishus Limited has directed its advertising of apparel in connection with the use of the word “Malishus” to persons in Australia. The evidence that is reasonably capable of supporting such finding includes the screenshots referred to in (a) and (b); evidence recorded in the screenshots referred to in paragraphs 23(d), 24(a), 24(d), 25(b), 25(d), and 26(b) of these reasons which record followers at least some of which it may reasonably be inferred reside in Australia; and the absence of evidence that those managing Malishus Limited have taken steps to block access by residents in Australia to the social media pages Malishus Limited and Mr Selwyn have used to display “Malishus” in connection with apparel.
Given the evidence is reasonably capable of supporting these findings, Mr Lamont has a good arguable case that Mr Jurcic and Mr Selwyn have engaged in conduct that constitutes the infringement of the Malishus Trade Marks.
At the hearing before me Mr Jurcic and Mr Selwyn submitted that Mr Lamont has relied on posts made to their social media pages that are not current. Whether that is so, however, is not a matter that is to be determined on an application for a freezing order; it is to be determined at the final hearing to this proceeding, assuming Mr Lamont’s maintaining this proceeding is not an abuse of process.
Risk of dissipation of assets?
The evidence on which Mr Lamont relies for claiming there is a danger Mr Jurcic and Mr Selwyn intend to deal with their assets in a way that will frustrate Mr Lamont’s rights relates to matters that occurred before he commenced this proceeding. Those matters include Mr Jurcic not informing Mr Lamont that he and Mr Selwyn intended to sell their trade marks at the time Mr Jurcic and Mr Lamont were discussing the means by which Mr Jurcic and Mr Selwyn would pay the $32,686.75 that one of the Orders require Mr Jurcic and Mr Selwyn to pay Mr Lamont, and evidence which, unexplained, might suggest that Mr Jurcic removed himself as a director from Malishus Limited only to have himself reappointed as a director.
Considered on its own, this evidence could reasonably have supported a finding that there is a danger Mr Jurcic and Mr Selwyn intend to deal with their assets with a view to frustrating Mr Lamont’s rights to the fruits of one of the Orders that Mr Jurcic and Mr Selwyn pay Mr Lamont $32,686.75, or the fruits of a judgment Mr Lamont may obtain in this proceeding. As I have already noted, however, on 14 April 2020 Mr Jurcic and Mr Selwyn gave an undertaking to the Court that “they will not enter into any contract to sell or otherwise deal with the Malishus trade marks of which they are the registered owners without first giving the applicant 7 days’ prior notice”. An “undertaking to the court is given in lieu of an injunction and, if broken, is treated as the equivalent of an order for the purpose of enforcement; it may therefore be enforced in the same manner as an injunction”.[84] In those circumstances, it is unnecessary for me to order that Mr Jurcic and Mr Selwyn refrain from doing that which they have undertaken to the Court not to do.
[84] Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150, at page 164
Mr Lamont relies on evidence that Mr Jurcic and Mr Selwyn have assets.[85] There are a number of observations that may be made about that evidence. First, most of the evidence relates to or is based on the trade marks Mr Jurcic and Mr Selwyn hold. These, however, are subject to the undertaking they have given to the Court. Second, Mr Lamont refers to what he asserts is a vehicle Mr Jurcic owns. Whether that is so or not, there is nothing to suggest Mr Jurcic intends to deal with any vehicle to frustrate Mr Lamont’s rights in this proceeding. Third, Mr Lamont refers to assets Mr Jurcic’s fiancé might hold. There is nothing to suggest, however, that any assets Mr Jurcic’s fiancé holds is property that belongs, or which is subject to Mr Jurcic’s control.
[85] Affidavit of D Lamont, 27.04.2020
Finally, Mr Lamont seeks orders that Mr Jurcic and Mr Selwyn disclose their financial assets. Given I have concluded Mr Lamont is not entitled to a freezing order, there is no basis for me to make any ancillary orders compelling the disclosure of financial information.
Conclusion
Although I have found Mr Lamont has a good arguable case against Mr Jurcic and Mr Selwyn, he has not made out a case for the grant of a freezing order. The position might change if Mr Jurcic and Mr Selwyn give notice of their intention to sell or otherwise deal with their interest in the trade marks of which they are the registered owners. I propose, therefore, to dismiss Mr Lamont’s application for a freezing order.
Abuse of process?
Having found that Mr Lamont has a good arguable case against Mr Jurcic and Mr Selwyn for the infringement of the Malishus Trade Marks, I am not satisfied that the proceeding is an abuse of process to the extent Mr Lamont alleges Malishus Limited, Mr Jurcic, Mr Selwyn, and Mr Hau, have infringed in Australia the Malishus Trade Marks.
The claim against Mr Nicholas falls into a different category. I held in the previous proceeding that Mr Nicholas had not infringed any of the Malishus Trade Marks in Australia. The DSOC does not allege any acts by Mr Nicholas that could reasonably give rise to any infringement of the Malishus Trade Marks in Australia. Thus, the claim against Mr Nicholas cannot proceed.
Disposition
I will make an order that the application for freezing orders be dismissed, and that the application for dismissal of the proceeding for abuse of process also be dismissed on terms that within 14 days Mr Lamont file an amended application and a statement of claim which does not include Mr Nicholas as a respondent.
Mr Lamont has purported to serve the application and other documents on Malishus Limited and Mr Hau by email. That, however, is not the method for serving on a respondent an initiating document filed with this Court. An initiating document filed with this Court must be served in the manner specified by r.6.06 of the FCC Rules; and where the respondent is a resident of New Zealand, an initiating document must comply with the additional requirements specified by the Trans-Tasman Proceedings Act 2010 (Cth).[86] Under Form 1 in Schedule 1 to the Trans-Tasman Proceedings Regulation 2012 (Cth) a person in New Zealand who is served with an initiating document filed with an Australian court is allowed 30 working days to respond to the initiating document.
[86] Lamont v Malishus & Ors (No.3) [2018] FCCA 1294
I propose, therefore, to list the matter for further directions at a date that will allow Mr Lamont sufficient time to serve Malishus Limited and Mr Hau. I also propose to grant to the parties liberty to apply. That liberty will be available to Mr Lamont to apply for an interlocutory injunction to restrain any one or more of Malishus Limited, Mr Jurcic, Mr Selwyn, or Mr Hau from using the name “Malishus” in connection with the advertising or promotion of apparel if Mr Lamont comes into possession of evidence that is reasonably capable of proving that any one or more of these respondents has used or proposes to use in Australia the “Malishus” name in connection with apparel.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 20 May 2020
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