Lamont v Malishus Limited (NZ) (No 4)
[2021] FCCA 157
•5 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Lamont v Malishus Limited (NZ) (No 4) [2021] FCCA 157
File number(s): SYG 787 of 2020 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 5 February 2021 Catchwords: PRACTICE AND PROCEDURE – Application by applicant for discovery before being required to respond to request for particulars of amended statement of claim – whether it is appropriate or necessary to order discovery before responding to request for particulars and filing of defence – application for discovery dismissed. Legislation: Federal Circuit Court of Australia Act 1999 (Cth), s 45
Federal Circuit Court Rules 2001 (Cth), r 14.02(2)
Cases cited: Australian Building & Construction Commissioner v CFMEU & Ors (No.5) [2018] FCCA 1100
Harwood v The Trustee of the Property of John Mervyn Harwood [2015] FCCA 1058
Lamont v Malishus Limited (NZ) & Ors (No 2) [2020] FCCA 1227
Lamont v Malishus Limited (NZ) & Ors (No.3) [2020] FCCA 1908
Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426
Number of paragraphs: 30 Date of hearing: 17 December 2020 Place: Sydney Counsel for the Applicant: Mr M Bersten, by video Counsel for the Respondents: Mr M Hall SC, by video ORDERS
SYG 787 of 2020 BETWEEN: DARREN LAMONT
Applicant
AND: MALISHUS LIMITED (NZ) NZCN: 4429858
First Respondent
ROBERT JURCIC
Second Respondent
CLINTON SELWYN (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
5 FEBRUARY 2021
THE COURT ORDERS THAT:
1.The applicant’s application in a case for discovery filed on 23 November 2020 is dismissed.
2.The costs of the application in a case are reserved.
REASONS FOR JUDGMENT
INTRODUCTION
The applicant, Mr Lamont, claims a declaration under s 45 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act) that it is appropriate, in the interests of the administration of justice, to allow discovery.
PROCEDURAL BACKGROUND
The application arises in the context of a proceeding Mr Lamont has brought against four respondents for infringement of his trade marks. I have already delivered three judgments in the matter, the last being on 14 July 2020.[1] The second and third judgments relate to a statement of claim Mr Lamont prepared when neither he nor the respondents were legally represented.
[1] Lamont v Malishus Limited (NZ) & Ors (No.3) [2020] FCCA 1908
After I delivered the third judgment the parties obtained pro bono legal assistance by counsel. That resulted in Mr Lamont applying for and being granted leave to file an amended application and an amended statement of claim. Mr Lamont filed an amended statement of claim on 3 November 2020 (ASC). At the directions hearing on 4 November 2020 counsel for Mr Lamont informed me Mr Lamont intended to file an application in a case for discovery. I made directions requiring Mr Lamont to file an application in a case and listed the application for hearing.
On 23 November 2020 Mr Lamont filed an application in a case for discovery and consequential orders, together with an affidavit in which he describes classes of documents the respondents should be ordered to discover. Mr Lamont submits that an order for discovery should be made, first, because the classes of documents for which he seeks an order for discovery are directly relevant to the allegations made in the ASC and, second, Mr Lamont “cannot make out his case without” an order for discovery. The respondents submit Mr Lamont is seeking discovery for the purpose of mounting a fishing expedition.
PRINCIPLES
The word “discovery”, although not defined in the FCC Act, is defined in the Dictionary to the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) as “an obligation to disclose”.[2] That definition is not self-explanatory; but its meaning, at least in general terms, may readily be inferred. When the FCC Act was enacted there existed, as there currently exist, rules, rules of practice and, in some cases, practice notes, of Federal, State, and Territory courts that required, or provided for the relevant court by order to require, a party to search for and disclose to another party documents in the power, possession or control of the party that relate to an issue or issues in a proceeding.[3] In the context of these rules and practice notes, “discovery” denoted, as it currently denotes, the obligation of a party to litigation to search for and disclose documents in the party’s power, possession, or control, and to make documents a party discloses available for inspection by other parties in the proceeding, either under the operation of the rules of the Court or practice notes, or as a result of an order made under such rules or practice notes. The word “discovery”, as it appears in s 45 of the FCC Act, may therefore be taken to denote an obligation by a party to litigation to search for and disclose documents and make them available for inspection (discovery obligation) in accordance with the rules of practice that have been commonly associated with the practice of discovery.
[2] In this and the following two paragraphs I in large part repeat what I said in Australian Building & Construction Commissioner v CFMEU & Ors (No.5) [2018] FCCA 1100, at [7]-[9]
[3] I briefly noted the diversity of procedures in Harwood v The Trustee of the Property of John Mervyn Harwood [2015] FCCA 1058, at [24]
The next word to consider is “allow” as it appears in s 45 of the FCC Act. That means no more than “permit”. To “allow discovery”, therefore, means to permit the Court to make an order, or to permit some rule to come into effect, that imposes a discovery obligation on a party. That presupposes the existence of a rule or set of rules that, once a declaration under s 45(1) of the FCC Act is made, either authorises the Court to make an order imposing a discovery obligation, or which operates by its terms to impose a discovery obligation on a party. That presupposition is realised in r 14.02(2) of the FCC Rules, which provides as follows:
If a declaration [under s 45 of the FCC Act] is made, the Court or a Registrar may make an order for disclosure:
(a) generally; or
(b) in relation to particular classes of documents; or
(c) in relation to particular issues; or
(d) by a specified date.
It will be seen that r 14.02(2) of the FCC Rules provides for the making of three types of disclosure orders: an order for disclosure “generally”; an order for disclosure “in relation to particular classes of documents”; and an order for disclosure “in relation to particular issues”. Thus, when read with r 14.02(2) of the FCC Rules, the expression “allow . . . discovery” in s 45(1) of the FCC Act means the making of one of the three orders for disclosure provided for by r 14.02(2) of the FCC Rules. Given that the three disclosure orders provided for by r 14.02(2) are alternatives to each other, an application for a declaration under s 45(1) of the FCC Act must be made by reference to one of the three types of disclosure orders identified in r 14.02(2) of the FCC Rules. That has the practical consequence that a party who applies for a declaration under s 45(1) of the FCC Act must identify which of the three types of disclosure orders provided for by r 14.02(2) of the FCC Rules the party will ask the Court to make if the Court were to make a declaration under s 45(1) of the FCC Act and, where disclosure is not sought “generally”, the classes of documents or the issues in relation to which the party would seek a disclosure order.
Under s 45 of the FCC Act the Court cannot make a declaration unless it is satisfied that allowing discovery would be “appropriate, in the interests of the administration of justice”. That expression is not defined. It may be accepted, however, that “appropriate” largely overlaps with “necessary” as that notion was described by Lindgren J in Trade Practices Commission v CC (NSW) Pty Ltd (No 4):[4].
In my opinion, O 15, r 15 requires that the Court be satisfied that an order of the kind referred to in that rule is, at the time when the order is made, necessary “in the interests of a fair trial”: Percy v General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 at 292E, F. Similarly, in the judgment of Cross J in Boyle v Downs [1979] 1 NSWLR 192, in which his Honour had to construe a similarly expressed constraint in Pt 24, r 5(2) of the Supreme Court Rules 1970 (NSW) relating to interrogatories, the following passage appears (at 205):
"Of course, in many cases the evidentiary difficulties of one party only, i.e. the moving party, may loom large as considerations; but the test is not solely a matter of how much more effectively the moving party can present his case but, I believe, whether, all in all, the order is reasonably necessary for the disposing fairly of the case; and where a plaintiff has evidentiary difficulties, considerations of those difficulties will probably be the most important, but not the only, considerations relevant to determining whether the order is so necessary. I feel that it is for the reason that the rule should take into account the interests of both parties that the rule in other places, eg England and South Australia, is framed to make the relevant test 'necessary for the disposing fairly of the cause or matter'. I am of the opinion that the word 'necessary' in r 5(2) should be interpreted in a somewhat similar manner, namely, ‘reasonably necessary for the disposing fairly of the cause or matter’. In considering the meaning of the word 'necessary' in Pt 23, r 14 -- a rule relating to discovery and inspection similar to r 5 in Pt 24 relating to interrogatories -- Rath J in Percy v General Motors-Holden's Pty Ltd [at 292] interpreted it as 'necessary in the interests of a fair trial’. This definition is similar to the one I have suggested; for in Griebart v Morris [[1920] 1 KB 659 at 666], Scrutton LJ interpreted ‘necessary for disposing fairly of the cause or matter' (under the English rules relating to interrogatories) as 'necessary for the fair trial of the action’.” (Emphasis supplied.)
The notion of the “interests of a fair trial” and of the “fair disposition of a case” encompasses, in my view, the opening up of a train of inquiry of the kind referred to above which is part of the proper function of discovery.
In a case such as this, where one party and not the other is likely to have documents relating to a matter in question, it seems to me to be prima facie “necessary” in the sense referred to that discovery be ordered. But this general position is subject to the well established exception that discovery should not be ordered to enable a mere “fishing expedition” . . . .
[4] Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, at pages 436-437
It has been the usual practice of courts not to allow discovery until after pleadings have closed. This practice is in aid of the principle that a respondent ought not to be troubled with having to defend a claim the applicant does not or cannot properly plead or particularise; and the corresponding principle that an applicant ought not to be troubled with having to answer an affirmative defence or cross-claim that also is not or cannot be properly pleaded or particularised. The link between these principles and the practice of the courts not to allow discovery before pleadings are closed is often stated in the language of “fishing”: discovery ought not be granted if it is sought for the purpose of carrying out a “fishing expedition”.[5] Lindgren J described the notion of a “fishing expedition” in Trade Practices Commission v CC (NSW) Pty Ltd (No 4):[6]
What does the reference to a “fishing expedition” mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware . . . . What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists.
[5] Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, at pages 437-438
[6] Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, at page 438
The practice of not ordering discovery until after pleadings have closed, however, was and is not invariable; courts have a discretion in an appropriate case to order discovery before the close of pleadings, and even before the party seeking discovery is required to provide particulars of a pleading. Whether a party should be ordered to give discovery before providing particulars was one of the questions before Lindgren J in CC (NSW) Pty Ltd (No 4). In that case the applicant applied for an order for discovery in relation to an allegation that the respondents had entered into a particular understanding. The respondents submitted the application for discovery was a fishing expedition because the applicant could not provide particulars the respondents had sought. Lindgren J held that in the circumstances of the case this did not indicate the application for discovery was an attempt to mount a fishing expedition. His Honour found that the statement of claim and some of the particulars the applicant had provided were “reasonably detailed”; and there was evidence “of the existence of a case of the kind pleaded”.[7] Lindgren J also rejected the respondent’s submission that the applicant should provide particulars before discovery by filing and serving its affidavit evidence. His Honour said:[8]
A well-accepted situation which the court often exercises its discretion by ordering discovery before particulars are supplied is that in which the party which seeks particulars and resists discovery is alone in possession of the relevant documents . . .
[7] Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, at page 439
[8] Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, at page 439
QUESTIONS ARISING
In light of these principles, up to two questions may arise: does the ASC sufficiently plead and particularise the causes of action on which Mr Lamont relies against the respondents, having regard to the documents it may reasonably be supposed are available to him and to the respondents? If so, is it appropriate, in the interests of the administration of justice, that I should allow Mr Lamont all or some of the discovery he seeks?
THE ASC
The ASC may be summarised as follows.
Mr Lamont
Mr Lamont is the owner of a number of Class 25 trade marks (Malishus Clothing Marks),[9] and one Class 35 trade mark (Malishus Retailing Mark).[10]
[9] ASC, [5]
[10] ASC, [6]
Malishus NZ
Since 14 November 2019 the first respondent (Malishus NZ) is and has been the owner of:
(a)the “Malishus Apparel Facebook” page which is directed to an Australian audience and market; displays “shop now”, “message”, and “like and follow” buttons; does not state words to the effect that “our Malishus apparel is not available in Australia”, and does not restrict persons in Australia from viewing the page;[11]
(b)the “Malishus Apparel online Instagram” page which has people following the page who live in Australia; is directed to people in Australia, and does not state the products offered on that page are not available in Australia;[12]
(c)the “online Instagram page” found at the specified address which has people following the page who live in Australia; is directed to people in Australia; and does not state the products offered on that page are not available in Australia;[13]
(d)the “online Instagram page” found at the specified address that displays apparel for sale bearing the Malishus brand, but does not state that the products offered on that page are not available in Australia;[14]
(e)the “Malishus Entertainment Facebook page” which displays “message” and “like and follow” buttons; posted a competition in which Malishus NZ was giving away as a prize a “pair of Malishus Thongs”; is liked and commented on by people from around Australia; and does not state the products offered on that page are not available in Australia; and[15]
(f)the “Malishus Apparel” website domain which posted a competition in which Malishus NZ was giving away as a prize a “pair of Malishus Thongs”; is liked and commented on by people from around Australia; and does not state the products offered on that page are not available in Australia.[16]
[11] ASC, [7(a)]
[12] ASC, [7(b)]
[13] ASC, [7(c)]
[14] ASC, [7(d)]
[15] ASC, [7(e)]
[16] ASC, [7(f)]
Because of the conduct alleged in paragraph 14 Malishus NZ sold products in Australia as advertised, “the extent to which will be identified following discovery and evidence”.[17]
[17] ASC, [7(g)]
The conduct referred to in paragraphs 14 and 15 constituted the use by Malishus NZ of “Malishus” as a trade mark, and in so doing Malishus NZ infringed the Malishus Clothing Marks and the Malishus Retailing Mark.[18]
[18] ASC, [8]
Mr Jurcic
Since 14 November 2019 the second respondent, Mr Jurcic:[19]
(a)maintained a personal Facebook profile under the name “Robbie Jay” which promotes “Malishus” branded apparel; and
(b)in his capacity as a shareholder of Malishus NZ has co-ordinated, procured, or assisted in the infringing conduct alleged against Malishus NZ, the third respondent, Mr Selwyn, and the fifth respondent, Mr Hau.
[19] ASC, [9]
The conduct referred to in paragraph 17 constituted the use by Mr Jurcic of “Malishus” as a trade mark, and in so using “Malishus” he infringed the Malishus Clothing Marks and the Malishus Retailing Mark.[20]
[20] ASC, [10]
Mr Selwyn
Since 14 November 2019 Mr Selwyn, as a director of Malishus NZ and, since January 2020 as its sole director, directed the infringing conduct of Malishus NZ referred to in paragraphs 14 and 15.[21]
[21] ASC, [11]
Mr Selwyn supplied a basketball team in Melbourne with apparel bearing the name “Malishus” which was worn by the team in a team competition.[22]
[22] ASC, [12]
The conduct referred to in paragraphs 19 and 20 constitutes the use by Mr Selwyn of “Malishus” as a trade mark, and in so using “Malishus” he infringed the Malishus Clothing Marks and the Malishus Retailing Mark.[23]
[23] ASC, [13]
Mr Hau
Since 14 November 2019 Mr Hau:[24]
(a)has been the owner of an Instagram page 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; and
(b)has co-ordinated, procured or assisted in the infringing conduct alleged to have been engaged in by Malishus NZ referred to in paragraphs 14 and 15.
[24] ASC, [14]
The conduct referred to in paragraph 22 constitutes the use by Mr Selwyn of “Malishus” as a trade mark, and in so using “Malishus” he infringed the Malishus Clothing Marks and the Malishus Retailing Mark.[25]
[25] ASC, [15]
Mr Lamont has suffered loss as a result of the respondents’ infringing conduct.
PARTIES’ SUBMISSIONS
After referring to the purposes of discovery, counsel for Mr Lamont devotes most of his submissions to cases that deal with when it is appropriate to order discovery before parties are required to file their evidence. Most of the cases to which counsel refers relate to applications for discovery under New South Wales Supreme Court Practice Note SC Eq 11 – Disclosure in the Equity Division. As I have already noted, counsel for Mr Lamont submits that Mr Lamont “cannot make out his case without” the documents he seeks be discovered.
Counsel for the respondents, on the other hand, submits the ASC provides no particulars of the infringing acts it alleges against each of the respondents; and Mr Lamont has not responded to a request that he particularise the alleged infringements. Counsel for the respondents submits that Mr Lamont’s application for discovery is a fishing expedition.
DETERMINATION
Although counsel for Mr Lamont submits Mr Lamont “cannot make out his case without” the documents he seeks being discovered, I do not take this to be a submission that Mr Lamont cannot provide any particulars of the allegations made in the ASC. If Mr Lamont intends to make such submission, however, I would not accept it.
In my reasons for judgment published on 20 May 2020 I set out in some detail the evidence on which Mr Lamont relied for alleging that Mr Jurcic and Mr Selwyn infringed his trade marks;[26] and I found Mr Lamont has a good arguable case that Mr Jurcic and Mr Selwyn infringed his trade marks.[27] In those circumstances I cannot be satisfied that Mr Lamont is not in a position to provide at least some substantial particulars of the allegations he makes in the ASC. That, in turn, means this is not a case in which I can be satisfied, at least at this stage, that “the party which seeks particulars [that is, each of the respondents] and resists discovery is alone in possession of the relevant documents”. [28]
[26] Lamont v Malishus Limited (NZ) & Ors (No 2) [2020] FCCA 1227
[27] Lamont v Malishus Limited (NZ) & Ors (No 2) [2020] FCCA 1227, at [45]
[28] Trade Practices Commission v CC (NSW) Pty Ltd (No 4) (1995) 58 FCR 426, at page 439
I am therefore not satisfied that it is appropriate or necessary that, at this stage of the proceeding, I should order that the respondents give discovery to Mr Lamont. That does not mean it will not be open to Mr Lamont to apply for discovery after he responds to the request for particulars of the ASC that has apparently been made, and after the respondents file their defences.
DISPOSITION
I propose to order that Mr Lamont’s application in a case filed on 23 November 2020 be dismissed. I will reserve the question of costs.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 5 February 2021
SCHEDULE OF PARTIES
SYG 787 of 2020 Respondents
Fifth Respondent:
CHRIS HAU
0
5
2