Lumascape Lighting Industries Pty Ltd v Vertex Lighting Inc

[2006] QSC 270

SUPREME COURT OF QUEENSLAND

CITATION:

Lumascape Lighting Industries Pty Ltd v. Vertex Lighting Inc & Anor [2006] QSC 270

PARTIES:

LUMASCAPE LIGHTING INDUSTRIES PTY LTD ACN 010 572 773
(applicant)
v.
VERTEX LIGHTING INC
(first respondent)
and
FABRICE PELLEGRINO
(second respondent)

FILE NO:

BS 5799 of 2006

DIVISION:

Trial

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

21 September 2006

HEARING DATES:

31 August and 11 September 2006

JUDGE:

Helman J.

ORDER:

Application dismissed

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – JURISDICTION AND GENERALLY – GENERALLY – where applicant seeks, inter alia, a declaration that California is the most appropriate jurisdiction to determine a dispute – whether Queensland Supreme Court ought determine that question.

Voth v. Manildra Flour Mills Pty Ltd (1990) 171 C.L.R. 538 Bass v. Permanent Trustee Co Ltd (1999) 198 C.L.R. 334
Lestery Pty Ltd & Ors v. Quetel Pty Ltd [1993] QCA 439

COUNSEL:

Mr D.L.K. Atkinson for the applicant
The respondents did not appear at the hearing

SOLICITORS:

Home Wilkinson Lowry for the applicant

1. This is an originating application by Lumascape Lighting Industries Pty Ltd, a company incorporated in Australia and based in Queensland, in which these orders were sought:

1.That the requirements for personal service pursuant to Rule 105(1) of the Uniform Civil Procedure Rules 1999 (Qld) be dispensed with.

2.That in accordance with rule 116(1) of the Uniform Civil Procedure Rules 1999 (Qld), the service of this original application and supporting affidavits, upon the lawyers for the Respondents, Patterson Houen & Commins, Level 26, Northpoint, 100 Miller Street, North Sydney NSW 2059, be deemed good and sufficient service;

3.A declaration that the state of California in the United States of America is the most appropriate jurisdiction to determine the dispute as set out in Affidavit of Adrian Justin Keys;

4.That the Respondents pay the Applicants cost of and incidental to this application; and

5.Such further or other orders as the Court deems appropriate.

1. The first respondent is incorporated in Canada and the second respondent is a director of the first respondent.  The applicant is a manufacturer and exporter of lighting products based in Queensland, and the first respondent is a manufacturer distributor of lighting products.  The managing director of the applicant,

   
   

   Mr Michael Agustin, has registered the trademark ‘LUMASCAPE’ in Australia.  The applicant conducts business in the United States of America through a subsidiary, Lumascape USA Inc., incorporated in California.  In or about May 2000 the applicant and the first respondent entered into a contract under which the applicant manufactured and supplied, and the first respondent distributed, Lumascape lighting products throughout North America.  The contract expired on 31 December 2004 and has not been renewed.  The following clause appeared in the contract under the heading Legal Remedies:

1.This agreement is subject to the courts of Australia and actions bought by either party must be heard in Australian courts.

1. Since 31 December 2004 legal proceedings to which the applicant and the first respondent are parties have been begun in three places:  Queensland, California, and Indiana. 

1. On 25 February 2005 the applicant began proceeding no. BS1508 of 2005 in this court against both respondents. From both it claimed damages and/or compensation pursuant to s. 87 of the Trade Practices Act 1974 (Cth) in the sum of $US431,382.31 in respect of misleading and deceptive conduct in contravention of s. 52 of that Act, and alternatively, from the first respondent only, damages in the same sum for breach of contract, and, in the further alternative from the first respondent only, restitution in the same sum. Those claims arose out of events that allegedly took place during the currency of the contract.

1. On 23 November 2005 the applicant, Lumascape USA Inc., and Mr Agustin began proceedings by complaint in the United States District Court for the Northern District of California against the respondents and Messrs Daniel Mercille and Michael Sanscartier claiming damages and injunctive relief: case no.

   
   

   C 05-04809 WHA.  At the hearing of a motion on 23 March 2006 in the United States District Court, to which I shall refer further later, the plaintiffs withdrew their claims against the second respondent and Messrs Mercille and Sanscartier.  According to Mr Adrian Keys, solicitor of the firm of solicitors that represents the applicant, of the actions complained of by the applicant and the other plaintiffs in the proceedings in California : the majority occurred after 31 December 2004, all occurred in the United States, and none occurred in Australia or relate to Australian trade marks.  Ten claims of wrongdoing are made in the complaint:  violation of the Lanham Act by a trade mark violation (1), violations of the California Business and Professions Code by unfair competition and trade mark infringements (2) and (3), injury to the business reputation and/or dilution of distinctive quality of trade mark and name (4), infringement of trade mark to enhance the commercial value of the first respondent’s goods and services (5), intentional interference with economic relationships (6), trade libel (7), misappropriation of trade secrets entitling relief under the Civil Code and at common law (8) and (9), and unfair competition by misappropriation of trade secrets (10).  It is alleged that Mr Agustin, acting for and on behalf of the applicant, registered ‘LUMASCAPE’ as its trade mark in the United States Patent and Trademark Office on 14 February 1995 and that its registration has been subsequently renewed.  The first seven claims arise from a letter allegedly sent in February 2005 by the first respondent from its principal place of business in Laval, Quebec to a customer in Las Vegas called Graybar Electric, and of which the first respondent sent copies to its agent, and to a lighting designer, in Los Angeles.  Although the letter was sent after the contract between the applicant and the first respondent had expired, the letter concerned an order placed with the first respondent before the contract had expired, on 30 November 2004.  The remaining three claims arise from the first respondent’s allegedly counterfeiting the applicant’s products and sending them to Indiana.  The events that gave rise to the last three claims are the subject of proceedings in Indiana.

1. On 20 January 2006 a complaint was filed in the United States District Court for the Southern District of Indiana, Indianapolis Division, by Techlite Corp against the first respondent, the applicant, and Lumascape USA Inc. as co-defendants (cause no. 1:06-cv-0103-DFH-WTL) in respect of defective products purchased from the first respondent and supplied by Techlite to a customer in Texas.  Techlite alleges breach of contract, fraud, and breach of warranties.

1. On 23 March 2006 a motion by the first respondent to dismiss the proceedings in the United States District Court for the Northern District of California came before that court and was heard by United States District Judge William Alsup, who delivered his decision on 29 March 2006.  The application was based on the contention that the court lacked personal jurisdiction, and was an improper venue or alternatively forum non conveniens.  Judge Alsup held that personal jurisdiction over the first respondent had been sufficiently shown in respect of the first seven claims, and that although personal jurisdiction had not been established in respect of the remaining claims, if they were considered discretely from the other seven claims, there could be pendent personal jurisdiction in respect of those claims.  His Honour concluded, however, that the contract between the applicant and the first respondent seemed central to all ten claims.  It followed that the forum-selection clause to which I have referred would bind the parties.   His Honour accepted as correct a submission on behalf of the applicant and the other plaintiffs that a forum-selection clause is unenforceable if enforcement is unreasonable and unjust, or where litigation in the designated forum would be so gravely difficult that the party would be deprived of his day in court.  On the other hand, his Honour noted, the party challenging the forum-selection clause bears a heavy burden of establishing the existence of the exceptions to enforcement of such a clause.  His Honour observed that there was a potential unfairness in that if the plaintiffs pursued the claims in an Australian court that court might decline to adjudicate them. 

   
   

   His Honour further noted the first respondent had been ‘evasive’ as to whether it would defend on procedural grounds so as to deflect the claims on the merits if the claims were to proceed in Australia.  For the first respondent to succeed in the United States court on the forum non conveniens argument it would be required to prove that an alternative forum existed and that the balance of private and public interest factors strongly favours dismissal;  and it was then unclear whether Australia would provide an alternative forum as to any and all issues.  Accordingly his Honour stayed the proceedings in California and listed them for a

   
   

   case-management conference on 28 September 2006, observing that should the Australian courts fail to provide an adequate forum despite diligence by the plaintiffs then the United States court would consider whether to proceed with the claims.

1. This application was not filed in the Brisbane registry of this court until

   
   

   13 July 2006.  In it the respondents were notified that it would be heard by the court in Brisbane on 27 July 2006 at 10.00 a.m.  It came before Philippides J. on

   
   

   27 July 2006.  The respondents appeared before her Honour by Shand Taylor, solicitors of Brisbane, as agents for Patterson Houen & Commins, solicitors of Sydney.  Shand Taylor sought an adjournment of the hearing of the application, which her Honour granted with directions.  Her Honour’s orders were as follows:

1.The Respondents pay the Applicant’s costs of today’s appearance, otherwise costs are reserved.

2.The Application be adjourned for hearing on 31 August 2006.

3.The Respondents serve any affidavits upon which they intend to rely on or before 4 p.m. 14 August 2006.

4.The Applicant serve any affidavits in reply they intend to rely on or before 4 p.m. 17 August 2006.

5.Both parties exchange their respective outlines by 4 p.m. on 24 August 2006.

6.Both parties have liberty to apply on the giving of 2 days written notice to the other party.

1. The application first came before me on 31 August last when there was no appearance for the respondents.  They were called but did not appear.  On the afternoon of 30 August a telephone message from Patterson Houen & Commins had been received at the court secretariat concerning this application.  As it was relayed to me by e-mail from the secretary who received it, it read:

Re:  Vertex v Lumascape BS 5799/2006.  This is to advise they Patterson Houen Commins are the acting Solicitors for Vertex.  The have received no instruction from their client and the matter is to go before Justic Helman tomorrow morning.  This is to advise that they have put in an application to withdraw as solicitor of the client and as such, they will not be attending tomorrow morning.

I have made the e-mail exhibit 1 on the hearing of the application.  That communication is consistent with a letter dated 21 August 2006 from Patterson Houen & Commins to the solicitors for the applicant.  The letter, which is also before me, concerned proceeding no. BS1508 of 2005 and this proceeding.  Formal parts omitted, it was as follows:

In these matters we have been unable to obtain any instructions from our clients for some time and accordingly we have filed in the Registry an Application to Withdraw as Solicitor.

It follows from the above that we have no instructions to appear on the hearing in matter BS5799 of 2006 which we understand is listed for 31 August 2006.

1. The hearing of the application then proceeded with submissions made on behalf of the applicant by Mr Damien Atkinson of counsel on 31 August and 11 September.  Mr Atkinson contends, undoubtedly correctly in my view, that orders 1 and 2 of his client’s originating application are not required since the respondents appeared by solicitors on the return date shown in the originating application.  The remaining question concerning principal relief is then whether the applicant is entitled to the declaration sought. 

1. The first point that must be made is that the declaration sought raises an issue that cannot be resolved in this court.  Whether California is the appropriate state of the United States in which to pursue claims against a Canadian company for alleged wrongdoing in California, Nevada, and Indiana is not a question that should be asked of this court:  it must be decided by a court in California or elsewhere in the United States.

1. That conclusion is enough to decide the matter, but, since submissions have been made on behalf of the applicant to the effect that it seeks an answer to the question whether it can pursue the respondents in this jurisdiction, I propose addressing that matter.  There are substantial obstacles facing the applicant in posing that question.  There is at present no relevant claim by the applicant against the respondents in existence in this jurisdiction.  The court is then asked to deliberate upon a proceeding not in existence and not formulated in a claim filed in this jurisdiction.  But even if a claim were formulated, the court would then be required to assume - if the applicant, and not the respondents, is to have an answer to the question - that the respondents, after having been served with the originating process, would not challenge the jurisdiction of the court by seeking either an order that service of them be set aside or a determination that this court is a clearly inappropriate forum, upon the principles explained in Voth v. Manildra Flour Mills Pty Ltd (1990) 171 C.L.R. 538. (The law in Australia is that the clearly- inappropriate-forum test is the relevant one rather than the clearly-more-appropriate forum test (p. 559), and yet that is the test the applicant appears to seek to have applied in seeking order no. 3.) It can, I think, be seen from that analysis that in asking whether it can pursue the respondents in this jurisdiction the applicant seeks an answer to a hypothetical question and one that it is therefore not appropriate to answer: see

   
   Bass v. Permanent Trustee Co Ltd

   (1999) 198 C.L.R. 334 at pp. 355-357. What was contemplated by Judge Alsup - and, I respectfully think, rightly so - was the pursuit of relief in this jurisdiction, not an application for an advisory opinion. I should add that, Mr Atkinson referred to Lestery Pty Ltd & Ors v. Quetel Pty Ltd [1993] QCA 439 as authority for the proposition that where there is a ‘present dispute’ between parties declaratory relief may be granted. In this case however there is no relevant present dispute between the applicant and the respondents in this jurisdiction and there can not be such a dispute concerning a claim in this jurisdiction before such a proceeding is instituted.

1. It should also be noted that the parties to this application are not the same as those in the proceeding in California :  the applicant has two co-plaintiffs in California and the first respondent is the only defendant in California.  The lack of identity of parties adds to the difficulty in determining the forum issue, and is not overcome in my view by Mr Agustin’s authority to act for the applicant and Lumascape USA Inc.

1. For those reasons, and although one may sympathize with the applicant in relation to the position in which it finds itself, I conclude I should dismiss the application.