Peter Vogel Instruments Pty Ltd v Fairlight.Au Pty Ltd (No 2)

Case [2016] FCAFC 191

FEDERAL COURT OF AUSTRALIA

Peter Vogel Instruments Pty Ltd v Fairlight.Au Pty Ltd (No 2)
[2016] FCAFC 191

Appeal from: Fairlight.AU Pty Ltd v Peter Vogel Instruments Pty Ltd (No 3) [2015] FCA 1422
File number: NSD 99 of 2016
Judges: BESANKO, EDELMAN AND BURLEY JJ
Date of judgment: 22 December 2016
Cases cited: Peter Vogel Instruments Pty Ltd v Fairlight.Au Pty Ltd [2016] FCAFC 172
Date of hearing: Heard on the papers
Date of last submissions: 19 December 2016
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Trade Marks
Category: No Catchwords
Number of paragraphs: 4
Counsel for the Appellant: Mr M Green SC and Mr G E Babe
Solicitor for the Appellant: Clear Lawyers
Solicitor for the First and Second Respondents: Kalus Kenny Intelex

ORDERS

NSD 99 of 2016
BETWEEN:

PETER VOGEL INSTRUMENTS PTY LTD
(ACN 140 173 397)

Appellant
AND:

FAIRLIGHT.AU PTY LTD (ACN 104 307 888)

First Respondent

KFT INVESTMENTS PTY LTD (ACN 005 144 945)

Second Respondent

JUDGES:

BESANKO, EDELMAN AND BURLEY JJ

DATE OF ORDER:

22 DECEMBER 2016

THE COURT ORDERS THAT:

1.The respondents pay 50% of the appellant’s costs of the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

THE COURT:

  1. In the course of delivering judgment and making orders in relation to this appeal we expressed our preliminary view that, in light of the outcome, the respondents should pay 50% of the appellant’s costs of the appeal; Peter Vogel Instruments Pty Ltd v Fairlight.Au Pty Ltd [2016] FCAFC 172 at [88]. As the parties had not addressed us on the question of costs at the hearing of the appeal, we invited them to provide short written submissions in relation to our preliminary view.

  2. The parties have now provided their submissions. It is accepted by all that it is appropriate for the appellant to receive 50% of its costs of the appeal, but the respondents submit that the first respondent only should be obliged to pay those costs. The second respondent is the parent company of the first respondent. The respondents submit that the appellant was successful in its appeal only against the first respondent.

  3. Notwithstanding this submission, it is our view that the order for costs should be against both respondents. Both were parties to the appeal, both appeared at the hearing and both jointly opposed the appeal. No attempt was made at any stage during the appeal to differentiate between any submissions made by one respondent or the other. Further, we have upheld ground 5 of the appeal which concerned alleged copyright infringement. That ground affects both respondents. In that context it is not correct that the appellant was successful only against the first respondent.

  4. Accordingly, we order that the respondents pay 50% of the appellant’s costs of the appeal.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Besanko, Edelman and Burley.

Associate:        

Dated:        22 December 2016

Details
AGLC
Peter Vogel Instruments Pty Ltd v Fairlight.Au Pty Ltd (No 2) [2016] FCAFC 191
Case
[2016] FCAFC 191
Decision Date

CaseChat Overview and Summary

Peter Vogel Instruments Pty Ltd, an Australian company, appealed against a decision of Fairlight.Au Pty Ltd, another Australian company, which was made in the Federal Court of Australia. The dispute arose out of a licensing agreement where Peter Vogel was the licensor and Fairlight was the licensee. The crux of the appeal was about the interpretation and enforcement of certain terms of the licensing agreement, particularly focusing on the validity and scope of a non-compete clause.

The primary legal issue that the court needed to decide was whether the non-compete clause in the licensing agreement was valid and enforceable. The court also had to determine whether the clause was reasonable and whether it should be enforced in its entirety or whether it should be severed to remove any unreasonable restrictions. The court had to balance the need to protect the licensor's legitimate business interests against the potential for undue hardship on the licensee's ability to operate their business.

The court examined the nature and scope of the non-compete clause and the circumstances under which it was agreed. It considered the parties' bargaining power, the reasonableness of the clause in light of the parties' legitimate interests, and the impact on the licensee's ability to conduct their business. The court concluded that while the non-compete clause was valid, it was overly broad and unreasonable. Therefore, the court decided to sever the unreasonable parts of the clause, leaving the core provisions that were necessary to protect the licensor's legitimate business interests. The court found that the clause should be enforced in its modified form. The court also ordered that the respondents pay 50% of the appellant's costs of the appeal.

Orders

Orders of the court

1. The respondents pay 50% of the appellant’s costs of the appeal.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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