Lift Shop Pty Ltd v Next Level Elevators Pty Ltd
[2021] FedCFamC2G 286
•16 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Lift Shop Pty Ltd v Next Level Elevators Pty Ltd [2021] FedCFamC2G 286
File number(s): SYG 1318 of 2020 Judgment of: JUDGE CAMERON Date of judgment: 16 November 2021 Catchwords: PRACTICE AND PROCEDURE – Summary dismissal – relevant considerations.
PRACTICE AND PROCEDURE – Undertakings – whether a promise in an affidavit expressed to be an undertaking was an undertaking to the Court.
Legislation: Federal Court Rules2011 (Cth) r 39.21
Federal Circuit Court and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 1.06(3), 13.13, 17.06, 25.05
Cases cited: General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 Division: General Number of paragraphs: 18 Date of hearing: 16 November 2021 Place: Sydney Counsel for the Applicant: Mr J. Hennessy SC Solicitors for the Applicant: Gilbert + Tobin Counsel for the Respondents: Dr W. Rothnie Solicitors for the Respondents: Sinisgalli Foster ORDERS
SYG 1318 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: LIFT SHOP PTY LTD
Applicant
AND: NEXT LEVEL ELEVATORS PTY LTD
First Respondent
COMPACT LIFTS PTY LTD
Second Respondent
NEXT LEVEL COMPACT LIFTS PTY LTD (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE CAMERON
DATE OF ORDER:
16 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The application in a proceeding filed 13 August 2021 be dismissed.
2.The respondents pay the applicant’s costs of and incidental to the application in a proceeding filed 13 August 2021, those costs be payable at the conclusion of the proceeding.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors, or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
In this proceeding the applicant, Lift Shop Pty Ltd, alleges against some or all of the six respondents infringement of copyright, breach of confidence, misleading and deceptive conduct in contravention of the Australian Consumer Law and passing off.
On 13 August 2021, the respondents filed an application in a proceeding seeking the following:
1. ORDERS that, pending trial and determination of this proceeding, Leslie Saul Katz:
a. will not communicate with (except through use of a lawyer);
b. will not assault, threaten, stalk, harass or otherwise intimidate;
c. will not approach; or
d. will not attempt to communicate with or approach,
any of the Respondents or their employees or agents, and
2.ORDERS that, pending trial and determination of this proceeding, Leslie Saul Katz will not come within 50 meters [sic] of the Respondents’ offices, residences or any place where the Respondents (or any one of them) is installing a lift.
3. Costs are reserved.
4. Such other or further orders as this Honourable Court deems appropriate.
Mr Katz is CEO of the applicant.
This interlocutory application arises from events said to have taken place on 21 May 2021 at the Sydney Autumn Home Show held at the International Convention Centre in Darling Harbour (“Home Show”). The respondents allege that the conduct of Mr Katz at the Home Show on 21 May 2021 represented a breach of an undertaking which they say he made to the Court in his affidavit of 10 August 2020 filed in this proceeding.
The respondents rely on r.39.21 of the Federal Court Rules2011 (Cth), which by virtue r.1.06(3) of the Federal Circuit and Family Court of Australia(Division 2) (General Federal Law) Rules 2021 (Cth) (“FCFCOADiv2GFL Rules”) applies to this Court, that is to say, the Federal Circuit and Family Court of Australia (Division 2) formerly known as the Federal Circuit Court of Australia. Rule 39.21 provides as follows:
39.21 Orders dealing with failure to fulfil undertakings
(1)A party may apply to the Court for an order requiring a person to do, or refrain from doing, an act or thing, including payment of a sum of money, if:
(a)the person (whether a party or not) has given the Court an undertaking to do, or refrain from doing, the act or thing; and
(b) the person has failed to fulfil the undertaking.
(2)This rule does not affect the powers of the Court to punish a person for contempt for a breach of the undertaking.
During the course of the hearing today, the Court has heard from four witnesses on behalf of the respondents: Mr Mawson, the fourth respondent and a director of the corporate respondents, Mr Every, Mr Sainsbury, and the respondents’ solicitor, Mr Kiernan. Messrs Mawson, Sainsbury and Every have given evidence to the effect that Mr Katz and Mr Mawson came into verbal conflict at the Home Show on 21 May 2021. The picture painted by those men is that there was some verbal aggression and that Mr Katz’s conduct, as described by them, would have contravened the undertaking which it is contended he gave in his affidavit of 10 August 2020.
At the close of the respondents’ case, the applicant sought summary dismissal of the interlocutory application on the basis that there was no case to answer or, alternatively, under the rules of the Court. In that regard, r.13.13 of the FCFCOADiv2GFL Rules provides:
13.13 Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b)the proceeding or claim for relief is frivolous or vexatious; or
(c)the proceeding or claim for relief is an abuse of the process of the Court.
In keeping with modern practice, I think it would be appropriate to apply the rules of the Court in a circumstance such as this, and specifically r.13.13(a) which is concerned with whether a moving party has no reasonable prospects of success in the application they are making. Provisions such as r.13.13 were introduced into the rules of this Court and of the Federal Court of Australia in order to make dismissal of matters somewhat easier than had been the case up to that point. Until then it had been necessary to demonstrate the lack of an arguable case, relying on authorities such as General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125, which is largely the no case argument made today. I should also note that the applicant has submitted that the proceeding is frivolous or vexatious or an abuse of the process of the Court and, therefore, liable to be dismissed under r.13.13 on those bases as well. However, it is not necessary to consider those matters.
A matter will not be dismissed for want of reasonable prospects of success if there is a real question of law or a real question of fact to be decided. The present interlocutory proceeding turns in large part on the wording of r.39.21, and in particular, paragraphs (a) and (b) of sub rule (1). The first of those paragraphs is concerned with whether an undertaking has been given in the first place, and the second with whether the person who is purported to have given the undertaking has failed to fulfil it.
Dealing with the second of those paragraphs first, the state of the evidence is such that I think that there is a question of fact to be tried. The evidence of Messrs Mawson, Every and Sainsbury is all in one direction, as one would expect, and is relevantly to the effect that Mr Katz created a scene at the Home Show by acting aggressively towards Mr Mawson. Mr Mawson deposed that he worried for his safety.
On the other hand, I acknowledge the forcefulness of the arguments raised on behalf of the applicant in relation to the content of the police record (“COPS report”) of the 22 May 2021 report which Mr Mawson made to police regarding Mr Katz’s behaviour at the Home Show. I note in that connection that the COPS report states in two places that Mr Mawson did not fear for his own safety or for the reputation of his business.
The point was pressed hard on behalf of the applicant that Mr Mawson’s claims to fear harm at the hands of Mr Katz sat poorly with what was recorded in the COPS report. Nevertheless, that is only one matter to be weighed in the balance, and at the moment, as I say, I believe there is a factual dispute which remains to be decided based upon the evidence as it stands before the Court at present. For that reason, it would not be right to conclude that the respondents have no reasonable prospect of proving that the purported undertaking was breached.
But the real question, it seems to me, is whether there was an undertaking in the first place. The issue has its genesis, as I understand it, in mutually insulting Facebook messages that Messrs Mawson and Katz exchanged and which are annexed to Mr Katz’s affidavit affirmed 27 July 2020 and filed in this proceeding. That affidavit was read on 29 July 2021 and it appears that that exchange came to the attention of Judge Baird, to whom the matter is docketed. Commencing at page 11 of the transcript of the directions hearing on 29 July 2021, Judge Baird refers to the correspondence, which she cites as being between pages 107 and 116 of exhibit LSK1 of Mr Katz’s affidavit. Her Honour continued at page 13:
Both instructors should – should very strongly urge their clients – respective clients, not to engaged [sic] in such correspondence …
Following her Honour’s observations, Mr Katz affirmed his affidavit of 10 August 2020. In paragraph 3 of that affidavit he said:
3.I make this affidavit in response to the affidavit of Daniel Mawson dated 6 August 2020 …
He went on to say in paragraphs 91 and 92:
91.Since retaining lawyers I have not communicated with Respondents, except for the exchange that followed my post on the Facebook page which was disclosed in my First Affidavit. I have reflected on the comments made by Judge Baird at the last hearing about that exchange, accept her honour’s observations about how unedifying the conduct was and apologise for my part in the exchanges. I was under a great deal of strain. I recognise that I shouldn’t have sent those communications and accept that they were inappropriate, even if I felt I had been provoked. I have reflected on the content of the emails and text messages, and apologise for them.
92.All direct communications with the Respondents (including via their employees) have ceased and I undertake to refrain from communicating with any of the Respondents during this case, nor will I otherwise approach them Respondents or their employees.
The matter came back before Judge Baird on 13 August 2020 and Mr Katz’s 10 August 2020 affidavit was the subject of some discussion. Her Honour said:
I should also say, whilst there were concerns at least expressed in the evidence about the behaviour of the principals, I understand that that is – these are very stressful times and, no doubt, parties – persons behave in ways that express that anxiety. And, Mr Hennessy, I note that Mr Katz has certainly given assurances through his affidavit that – the stress he has been under and the behaviour he has exhibited, of which I made comment on the last occasion, is not going to be repeated.
The question which is posed by the application for summary dismissal is whether or not what Mr Katz said in paragraph 92 of his affidavit of 10 August 2020 amounted to an undertaking to the Court, the contravention of which might ground an action for contempt or, relevantly for today, an order under r.39.21.
An undertaking to the Court has the same force and effect as an order of the Court and a person who gives an undertaking to the Court must comply with that undertaking: rr.17.06 and 25.05(2) of the FCFCOADiv2GFL Rules. Because an undertaking can in certain circumstances support an action for contempt, it should be treated as a serious matter and one generally involving some formality. At the very least, the Court should acknowledge that an undertaking has been made to it but that was not the case here. At the most, Baird J, it seems to me, has acknowledged that Mr Katz regretted his behaviour and was not going to repeat it. Her Honour did not characterise what was expressed in his affidavit as an undertaking to be an undertaking to the Court and something which would attract the sanctions which breach of an undertaking of the sort referred to in the FCFCOADiv2GFL Rules would attract.
I appreciate the respondents’ argument that, in circumstances where the affidavit, it must be inferred, was largely responsive to the criticisms which her Honour made on 29 July 2020, the fact that the undertaking was expressed in an affidavit filed with the Court rather than simply in correspondence between the parties makes it appear as if it is an undertaking to the Court which would engage the rules and possibly ground an action for contempt for failure to comply or fulfil it. However, it was not so expressed formally or proffered to the Court as such in the affidavit, counsel did not offer it to the Court as such and the Court did not record it as such. In the circumstances, I do not think that there are reasonable prospects of the respondents demonstrating that the passage in paragraph 92 of Mr Katz’s affidavit amounted to an undertaking to the Court. Consequently, the Court would not make an order under r.39.21 based on it.
For that reason, I accede to the applicant’s application that the application in a proceeding be dismissed on the basis that it has no reasonable prospects of success.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 19 November 2021
SCHEDULE OF PARTIES
SYG 1318 of 2020 Respondents
Fourth Respondent:
DANIEL MAWSON
Fifth Respondent:
DAMIEN BOYLE
Sixth Respondent:
EDWARD HUME
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