Seafolly Pty Ltd v Madden (No 3) - [2013] FCA 316

FEDERAL COURT OF AUSTRALIA
Seafolly Pty Ltd v Madden (No 3) [2013] FCA 316

Citation: Seafolly Pty Ltd v Madden (No 3) [2013] FCA 316

Parties: SEAFOLLY PTY LTD (ACN 001 537 748) v LEAH MADDEN

File number: VID 764 of 2010

Judge: TRACEY J

Date of judgment: 9 April 2013

Catchwords: COSTS – Application for lump sum costs order – application for stay pending hearing and determination of appeal – whether proper foundation for acceding to application for stay – unnecessary to resolve application for fixing of lump sum

Legislation: Bankruptcy Act 1966 (Cth)
Federal Court Rules 2011 (Cth)

Cases cited: ACCC v BMW (Aust) Limited (No 2) [2003] FCA 864 – referred to
Alexander v Cambridge Credit Corp Ltd (Receivers Appointed) (1985) 2 NSWLR 685 - applied
Momentum Productions Pty Ltd v Lewarne [2007] FCA 1988 – referred to
Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 – referred to
Premier Pet Pty Ltd v Brown [2013] FCA 17 – referred to
Seafolly Pty Ltd v Madden (No 2) [2013] FCA 46 – referred to
Seafolly Pty Ltd v Madden [2012] FCA 1346 – referred to

Date of hearing: 9 April 2013

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 32

Counsel for the Applicant: Mr E J C Heerey

Solicitor for the Applicant: K & L Gates

Counsel for the Respondent: Mr G S Clarke SC and Mr I P Horak

Solicitor for the Respondent: Phillips Ormonde Fitzpatrick Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 764 of 2010

BETWEEN:
SEAFOLLY PTY LTD (ACN 001 537 748)
Applicant

AND:
LEAH MADDEN
Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

9 APRIL 2013

WHERE MADE:

MELBOURNE

UPON THE RESPONDENT UNDERTAKING TO THE COURT THAT:
She will not until the hearing and determination of appeal (VID 1108 of 2012) or further order, without providing 21 days prior notice to the solicitors for the Applicant, do or attempt to do any of the following:
(a)sell or transfer any of her interest in her property at 7 La Spezia Court, Isle of Capri, Queensland being the land more particularly described in certificate of title reference 14235170 being part of Exhibit LSM-2 to the affidavit of the Respondent sworn on 13 march 2013 (“the La Spezia Property”); and
(b)encumber any of her interest in the La Spezia Property to an extent greater than $400,000.

THE COURT ORDERS THAT:
1. The enforcement of the costs order made against the Respondent on 29 November 2012 be stayed until the hearing and determination of the appeal (VID 1108 of 2012) without prejudice to the Applicant’s rights to apply for taxation of those costs pursuant to Division 40.2 of the Federal Court Rules 2011 (Cth).
2.The parties’ costs of the Respondent’s interlocutory application filed on 26 February 2013 be reserved.
3.The Applicant’s interlocutory application filed 22 February 2013 be adjourned to a date to be fixed.
4.The parties’ costs of the Applicant’s interlocutory application filed 22…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] FCA 316
Decision Date

CaseChat Overview and Summary

The matter before the Federal Court of Australia in Seafolly Pty Ltd v Madden (No 3) [2013] FCA 316 involved Seafolly Pty Ltd, a company in the women's swimwear market, and Ms Leah Madden, a competitor. The dispute originated from Ms Madden's public statements suggesting that Seafolly copied and marketed her designs. Seafolly initiated proceedings against Ms Madden for misleading and deceptive conduct, injurious falsehood, and copyright infringement. Ms Madden cross-claimed for defamation and misleading and deceptive conduct based on Seafolly's press releases. The court, in previous proceedings, ruled in favor of Seafolly and ordered Ms Madden to pay costs. However, Ms Madden sought to vary these orders due to a Calderbank offer, which was refused.

In this case, both parties filed interlocutory applications. Seafolly sought a lump sum costs order, while Ms Madden applied for a stay on the enforcement of the costs orders pending the appeal. The court's primary task was to decide whether there was a proper foundation for granting Ms Madden's stay application and whether it was necessary to resolve Seafolly's lump sum costs application. The court considered the principles guiding the exercise of discretion in granting stays, including the balance of convenience and the competing rights of the parties. Ms Madden argued that she had limited assets and would need to sell her home to pay the costs, which would be unfair if her appeal succeeded. Seafolly, on the other hand, argued that Ms Madden had assets she could use to meet her obligations.

The court found that a stay, subject to Ms Madden's undertakings not to dispose of or encumber her property beyond a certain limit, would be fair in the present circumstances. It was not necessary to resolve Seafolly's lump sum costs application at that time. The court ordered that the enforcement of the costs order be stayed until the hearing and determination of the appeal without prejudice to Seafolly's rights to apply for taxation of those costs. The parties' costs of the interlocutory applications were reserved.

Orders