Optical 88 Ltd v Optical 88 Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Optical 88 Limited v Optical 88 Pty Limited [2010] FCA 310

Citation: Optical 88 Limited v Optical 88 Pty Limited [2010] FCA 310
Parties: OPTICAL 88 LIMITED v OPTICAL 88 PTY LIMITED (ACN 060 355 437), ANGUS HAU-SUM LAW and LESLEY LOK-YEE LAW; OPTICAL 88 PTY LIMITED and OPTICAL 88 LIMITED
File number: NSD 316 of 2008
Judge: YATES J
Date of judgment: 31 March 2010
Catchwords:

PRACTICE AND PROCEDURE – leave to amend pleadings – leave to withdraw admissions – application made in the course of the hearing for principal relief –  factors relevant to the exercise of discretion

HELD: Leave refused

Legislation: Federal Court of Australia Act 1976 (Cth), s 37M
Federal Court Rules, O 22 r 4
Cases cited: Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2007] FCA 1390
Celestino v Celestino (unreported, Spender, Miles and Von Doussa JJ, 16 August 1990)
Centrestate Exports Pty Ltd v Amarantos Shipping Co Ltd [2005] SASC 158
Drabsch v Switzerland General Insurance Co Ltd (unreported, Supreme Court of New South Wales, 16 October 1996)
H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694
Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327
Langdale v Danby (1982) 1 WLR 1123
Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
Date of hearing: 26 March 2010
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 45
Counsel for the Applicant: Mr D K Catterns QC with Mr M R Hall
Solicitor for the Applicant: Baker & McKenzie
Counsel for the Respondents: Mr J M Hennessy with Ms M R Cairns
Solicitor for the Respondents: Mok & Associates

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 316 of 2008
BETWEEN:

OPTICAL 88 LIMITED
Applicant / Cross Respondent
AND:

OPTICAL 88 PTY LIMITED (ACN 060 355 437)
First Respondent / Cross Claimant

ANGUS HAU-SUM LAW
Second Respondent

LESLEY LOK-YEE LAW
Third Respondent

JUDGE:

YATES J

DATE OF ORDER:

26 MARCH 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Paragraphs 3 and 4 of the notice of motion be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 316 of 2008
BETWEEN:

OPTICAL 88 LIMITED
Applicant / Cross Respondent
AND:

OPTICAL 88 PTY LIMITED (ACN 060 355 437)
First Respondent / Cross Claimant

ANGUS HAU-SUM LAW
Second Respondent

LESLEY LOK-YEE LAW
Third Respondent

JUDGE:

YATES J

DATE OF ORDER:

31 MARCH 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.        The costs of the motion be reserved. 

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

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Details
Case
[2010] FCA 310
Decision Date

CaseChat Overview and Summary

Optical 88 Ltd, an established business in Hong Kong and other countries, filed a claim against Optical 88 Pty Ltd, a business operating in Sydney, for trade mark infringement, passing-off, contravention of section 52 of the Trade Practices Act 1974 (Cth), and copyright infringement. The applicant claimed relief based on its proprietary rights in certain registered trade marks, a particular copyright work, and its reputation in Australia in the "Optical 88 Branding." The first respondent, carrying on business in Sydney, uses the "Optical 88" name and various trade indicia, including logos, in its optometry services and optical goods, which led to the applicant's claims. The second and third respondents, husband and wife, are the directors of the first respondent. The court had to decide on a motion filed by the applicant seeking leave to amend its pleadings to include a cause of action for relief based on the alleged misleading or deceptive conduct of the third respondent in contravention of section 52 of the Trade Practices Act.

The court examined the motion in light of the admissions made in the third respondent's defence and amended defence, which included advertising, marketing, and promoting services under or by reference to the Optical 88 Branding. The applicant argued that the admissions made by the third respondent were inconsistent with her understanding of her role in the operation of the first respondent, and thus sought to amend the pleadings to clarify her involvement. The court noted that while the admissions made by the second and third respondents were identical, this did not necessarily indicate an error, as both were directors of the first respondent. The court also considered the third respondent's solicitor's affidavit, in which he suggested that the admissions may have been an inadvertent error caused by replicating the second respondent's defence. However, the court found that there was no evidence to support this suggestion, and no explanation was provided for the alleged error.

After considering the evidence and submissions, the court decided not to grant the leave sought by the applicant to amend its pleadings. The court found that there was no clear basis for the alleged error in the third respondent's admissions, and that the applicant's proposed amendments did not provide a clear or coherent alternative to the existing pleadings. The court also noted that the proposed amendments would cause significant prejudice to the respondents, who had already prepared their case based on the existing pleadings. The court concluded that it was not appropriate to grant the leave sought by the applicant.

The court dismissed the motion and refused to grant the leave sought by the applicant to amend its pleadings. The court found that there was no clear basis for the alleged error in the third respondent's admissions, and that the proposed amendments did not provide a clear or coherent alternative to the existing pleadings. The court also noted that the proposed amendments would cause significant prejudice to the respondents, who had already prepared their case based on the existing pleadings. The court concluded that it was not appropriate to grant the leave sought by the applicant.

Orders

Orders of the court

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Background

Background to the litigation

After receiving evidence on the motion, and hearing the parties, I refused to grant the leave that was sought, and dismissed the motion to that extent. So as not to interrupt the conduct of the hearing, I said that I would provide reasons at a later date. These are my reasons.BACKGROUND The notice of motion was filed and argued on the fifth day of the hearing before me of the principal proceeding, immediately before the scheduled cross-examination of the personal respondents and another of the respondents’ witnesses. In the principal proceeding the applicant claims relief against the respondents based on causes of action for trade mark infringement, passing-off and contravention of s 52 of the Trade Practices Act 1974 (Cth), and copyright infringement. The applicant has an established business in Hong Kong and other countries as a retailer of a broad range of optical and eye care products including prescription lenses, contact lenses and solutions, frames for spectacles and sunglasses. It also provides a comprehensive range of optical services, including sight-testing, eye examinations, and after-sales servicing of spectacles. Its business is carried on from a number of stores which operate under the name “Optical 88” using various trade indicia, including logos and the name Optical 88 represented in various stylised forms. For convenience, the name “Optical 88” and the various trade indicia are referred to in the applicant’s pleadings as the “Optical 88 Branding”. In addition to the proprietary rights it claims in certain registered trade marks and a particular copyright work, the applicant claims a reputation in Australia in the Optical 88 Branding. The first respondent carries on business in Campsie, Chatswood and Eastwood (all suburbs of Sydney) as a supplier of optometry services and optical goods. The optometry services include eye-sight examination services. The optical goods include optical lenses, spectacle frames, sunglasses, clip-on sunglasses and accessories such as contact lens solutions, eye drops, spectacle cases and spectacle chains. The business is also carried on under the name “Optical 88” using various trade indicia, including logos and the name Optical 88 represented in a stylised form. It is these activities, carried on in this way, that give rise to the applicant’s claims of trade mark infringement, passing-off and contravention of s 52 of the Trade Practices Act, and copyright infringement. The second respondent and the third respondent are husband and wife, and are the directors of the first respondent. The third respondent is also the secretary of the first respondent. The second and third respondents have held these offices since at least the time that the first respondent, in 1993, took over the optometry practice previously carried on by the second respondent. The first respondent was apparently incorporated for this purpose. A statement of claim was filed on 7 March 2008. Paragraph 13 of the statement of claim pleaded as follows (omitting particulars): 13. Since approximately July 1993 each of the respondents has, or has jointly with one or more of the other respondents, done, or directed or procured the doing by another respondent of, one or more of the following:(a) advertised, marketed or promoted;(b) offered; and/or(c) providedthe Services in Australia, under or by reference to the Optical 88 Branding or marks or signs which are substantially identical or deceptively similar to elements of the Optical 88 Branding, including:(i) the name OPTICAL 88;(ii) the name OPTICAL 88 in Chinese, being the Chinese characters "an geng" followed by the number 88, depicted as : [characters] 88 (in formal characters) or [characters] 88 (in simplified characters);(iii) the OPL Logo; and/or(iv) the mark the subject of the Objectionable Trade Mark Application.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It is with these observations in mind that I considered the present application.CONSIDERATION In an affidavit sworn on 26 March 2010 the third respondent’s solicitor said that he reviewed the third respondent’s defence the previous evening and observed the admissions to which I have referred. He said that these admissions were inconsistent with his understanding of the third respondent’s position in the proceeding. He said that he had understood that part of the third respondent’s denial of liability was on the basis that she performed a limited role in the operation of the first respondent and had not been actively involved in the first respondent’s conduct the subject of the applicant’s complaints. He said that the third respondent’s defence and amended defence were prepared by the respondents’ former junior counsel. He said that he relied on the respondents’ former junior counsel to both prepare and settle the defence and amended defence. He proffered the suggestion that the making of the admissions appeared to be an inadvertent error brought about by replicating the second respondent’s defence, which made the same admissions. This is the extent of the explanation that has been given. In my view there is nothing, objectively speaking, that is odd or surprising about the fact that the same admissions are made by both the second respondent and the third respondent. They were and are, after all, the only two directors of a private company (the first respondent) that carried on the impugned activities. And even though the same admissions are made, the third respondent’s defence and amended defence have been specifically personalised to her situation. The defence and amended defence are not, on their face, slavish reproductions of the second respondent’s defence and amended defence. The fact that separate defences were prepared and filed for each of the personal respondents indicates that, at the time, there was a clear appreciation on the part of their advisers that each was seeking to plead specifically to the allegations made against him or her. Both the third respondent’s defence and amended defence bear an endorsement that the pleading was prepared by the third respondent’s solicitor and settled by counsel. This endorsement sits oddly with the statement now made in the third respondent’s solicitor’s affidavit that it was counsel who both “prepared and settled” the defence and amended defence. No explanation has been given for this inconsistency or, if the endorsement be erroneous, how it nevertheless came to be made and repeated. Moreover, in respect of the third respondent’s defence and amended defence, the third respondent’s solicitor certified on each pleading that the factual and legal material available to him at that time provided a proper basis for each allegation in the pleading. In the face of that certification, there is no evidence before me that reveals the precise circumstances in which the defence and amended defence came to be prepared, what instructions had been given for that purpose, when those instructions were given or how the pleadings came to be prepared in the form in which they were filed, apart from the speculation that the third respondent’s pleading was an inadvertent replication of the second respondent’s pleading.