Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 3)
[2021] FCCA 1277
•21 May 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Self Care Corporation Pty Ltd v Green Forest International Pty Ltd (No 3) [2021] FCCA 1277
File number(s): SYG 2771 of 2019 Judgment of: JUDGE BAIRD Date of judgment: 21 May 2021 Catchwords: PRACTICE AND PROCEDURE – applications for leave to request transfer of proceeding to Federal Court of Australia after First Court Date –leave granted – applications for transfer of proceeding to Federal Court – s 39 of Federal Circuit Court Act 1999 (Cth) – applications dismissed. Legislation: Federal Circuit Court Act 1999 (Cth) ss39, 40
Federal Circuit Court Rules 2001 (Cth) r 8.02
Trade Marks Act 1995 (Cth) s 122A
Cases cited: ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR
Addenbrooke Pty Limited v Duncan (No 2) [2017] FCAFC 76; (2017) 384 ALR 1
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175
BHP Billiton Limited v Schultz and Others [2004] HCA 61; (2004) 221 CLR 400
City of Sydney v Streetscape Projects (Australia) Pty Ltd [2011] NSWSC 1214; (2011) 94 IPR 35
Clayton v Bant [2020] HCA 44; (2020) 385 ALR 41
Commissioner of the Australian Building and Construction Commission v Hall & Ors (No 2) [2017] FCCA 18
Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31; (1992) 110 ALR 608
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303
Hashtag Burgers Pty Limited v In-N-Out Burgers, Inc [2020] FCAFC 235
KRJF v Minister for Immigration and Border Protection and Another [2018] FCCA 150
Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458
Lifeplan Australia Friendly Society Ltd v Woff [2016] FCA 248; (2016) 259 IR 384
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [2010] HCA 31; (2010) 241 CLR 357
Paul’s Retail Pty Limited v Sporte Leisure Pty Limited [2012] FCAFC 51; (2012) 202 FCR 286; (2012) 95 IPR 151
Pozniak v Smith [1982] HCA 39; (1982) 151 CLR 38
Self Care Corporation Pty Limited v Green Forest International Pty Limited (No 2) [2021] FCA 1000
Self Care Corporation Pty Ltd v Green Forest International Pty Ltd [2021] FCCA 129
Skandar (Aka Makari) v BSM Group Pty Ltd (As Trustee For The BSM Discretionary Trust) [2017] NSWSC 610
Wormald v Maradaca Pty Ltd [2020] NSWCA 289
Division: General Division Number of paragraphs: 130 Date of last submission: 19 May 2021 Date of hearing: 20 May 2021 Place: Sydney Counsel for the Applicants Mr J Hennessy SC Solicitor for the Applicants: Gilbert + Tobin Counsel for the First, Second, Fifteenth, and Seventeenth Respondents Mr D Parish Solicitor for the First, Second, Fifteenth, and Seventeenth Respondents H&H Lawyers Counsel for the Sixth Respondent Mr B Le Plastrier Solicitor for the Sixth Respondent Taylor David Lawyers Counsel for the Ninth and Fourteenth Respondents Mr M J Heath Solicitor for the Ninth and Fourteenth Respondents Matthews Folbigg Lawyers Solicitor for the Sixteenth Respondent Ms K Howard, HWL Ebsworth Lawyers ORDERS
SYG 2771 of 2019 BETWEEN: SELF CARE CORPORATION PTY LTD
First Applicant
SELF CARE IP HOLDINGS PTY LTD
Second Applicant
AND: GREEN FOREST INTERNATIONAL PTY LTD
First Respondent
YAOAN (ERIC) CHEN
Second Respondent
YILIN TRADING PTY LTD ACN 626 244 479 (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE BAIRD
DATE OF ORDER:
21 MAY 2021
THE COURT:
First and Second Cross‑claimants/Respondents’ Application in a Case for transfer
1.Pursuant to rule 8.02(2) of the Federal Circuit Court Rules 2001 (Cth), DISPENSES with the requirement for the First and Second Cross‑claimants/Respondents to make a request for transfer of the proceeding to the Federal Court of Australia before the first court date for the proceeding.
2.ORDERS until further order, and on the ground that it is necessary to prevent prejudice to the proper administration of justice under section 88G(1)(a) of the Federal Circuit Court of Australia Act 1999 (Cth), publication or any other form of public disclosure of Exhibit 1 confidential (Self Care Particulars of Quantum against Green Forest Parties dated 8 March 2021) be prohibited other than to:
(a)the Court;
(b)the external legal representatives of the Applicants and Respondents (solicitors and Counsel); and
(c)other persons with the prior written consent of the Applicants, provided such persons have provided signed undertakings in accordance with the confidentiality regime agreed by parties.
3.DISMISSES the Cross‑claimants’ Application in a Case for transfer dated 5 March 2021.
Sixth Respondent’s Application in a Case dated 12 March 2021
4.Pursuant to r 8.02(2) of the Rules, DISPENSES with the requirement for the Sixth Respondent to make a request for transfer of the proceeding to the Federal Court of Australia before the first court date for the proceeding.
5.DISMISSES paragraphs 4 and 5 of the Sixth Respondent’s Application in a Case dated 12 March 2021 for transfer.
6.DIRECTS by 1pm Friday 28 May 2021, the Sixth Respondent notify the Applicants, the other represented Respondents, and the Court by email to the Chambers of Judge Baird:
(a)what, if any, paragraphs of the Amended Statement of Claim of those listed in paragraph 1 of the Sixth Respondent’s Application are pressed, and the grounds on which the paragraphs are pressed, if any;
(b)whether or not he presses any of paragraphs 6 through to 11 of the Sixth Respondent’s Application, and if so, which paragraphs; and
(c)insofar as the Sixth Respondent intends to press any of paragraphs 1 and 6 to 11 of Sixth Respondent’s Application, he file and serve any further affidavits in support.
General
7.DIRECTS by 1pm Wednesday, 26 May 2021, any of the Participating Respondents (being the First, Second, Sixth, Ninth, Fourteenth, and Sixteenth Respondents) who wish to be heard against the order that they bear the Applicants’ costs of and incidental to the Cross-claimants’ and Sixth Respondent’s transfer applications, file and serve a short outline of submissions, limited to 2 pages.
8.STANDS OVER the proceeding to Monday, 31 May 2021 at 10:15am, for case management and any pre‑trial directions, and ADJOURNS all extant applications in the case to that date for directions, and/or hearing as the Court determines.
9.GRANTS liberty to apply on identified grounds.
REASONS FOR JUDGMENT
(ex tempore, revised from transcript)
JUDGE BAIRD
INTRODUCTION
I have before me for hearing yesterday and for judgment today two applications: first, an application from the cross‑claimants on their cross-claim, that is, the first respondent, Green Forest International Pty Limited, and the second respondent, that company’s director Mr Yaoan (Eric) Chen (the Green Forest parties), and, secondly, an application by the sixth respondent, Mr Pascal Skelin, that the proceeding be transferred to the Federal Court of Australia under s 39(2) of the Federal Circuit Court of Australia Act 1999 (Cth), and r 8.02 of the Federal Circuit Court Rules 2001 (Cth). Whilst the Green Forest parties and Mr Skelin bring their applications in a case on slightly different grounds, they are united in seeking transfer.
In support of the Green Forest parties’ and Mr Skelin’s transfer applications, the ninth and fourteenth respondents, Ms Yiping Yang and Mr Yulin Wang respectively, and the sixteenth respondent, Australian Vitamin Plus Pty Ltd (AVP), now support the applications for transfer.
The applicants, Self Care Corporation Pty Limited, and Self Care IP Holdings Pty Limited, oppose the transfer.
Green Forest parties’ and Mr Skelin’s transfer applications
By application in a case dated 5 March 2021, the Green Forest parties seek orders, first, pursuant to r 8.02(2) of the Rules, dispensing for the requirement to make the request for transfer before the First Court Date in the proceeding. I note here that the First Court Date in the proceeding was 25 October 2019, when the applicants commenced a proceeding by ex parte urgent interlocutory relief. Secondly, the Green Forest parties seek an order for transfer, as I have said, from this Court to the Federal Court. The Green Forest parties’ application is supported by an affidavit of Mr Tin-Lok Shea, sworn 5 March 2021.
Mr Skelin’s application in a case is dated 12 March 2021, and seeks a number of orders, including application to strike out paragraphs of the then amended statement of claim, and transfer orders in the same terms as the Green Forest parties, namely, first seeking the grant of leave to bring the application on a date other than the First Court Date in the proceeding, and, secondly, pursuant to rule 8.02(2) of the Rules and s 39(1) of the Act, that the proceeding be transferred, and additionally costs. Mr Skelin’s application in a case also sought relief from compliance with orders for lay and expert evidence, and a vacation of the hearing dates and a request that the matter be relisted not before 30 October 2021. That application in a case was supported by an affidavit of his solicitor, Mr Chad Walter Gear, filed 12 March 2021.
The application for grant of leave by the Green Forest parties was not opposed by the Self Care parties, and I granted leave accordingly at the commencement of the hearing yesterday. Further to the leave granted to the Green Forest parties, Mr Parish, counsel for the Green Forest parties, submitted that the reason his clients’ application was not made until 5 March 2021 was because it was not until 6 February 2021 when the applicants’ expert accountant’s (Mr Andrew Ross of KordaMentha) report (Ross report) was served in redacted form on the respondents that the Green Forest parties appreciated the scope and scale of the damages sought against them by Self Care.
Mr Skelin’s application for grant of leave, is opposed by the Self Care parties. I indicated at the commencement of the hearing yesterday that I would defer the question of leave, and that Mr Le Plastrier, counsel for Mr Skelin, should proceed to argue the leave and substantive matter of grounds for transfer, and I would hear and determine the matter together at the conclusion of argument.
Relevant procedural history
To interpose some history at this point in relation to Mr Ross’s report. The Ross report was, by orders made at a substantial case management conference on 3 December 2020, to be filed and served by 29 January 2021. The reason why that time was sought by the applicants was taking into account the Christmas/New Year period, and materials that, on the applicants’ case, they had been made aware of in the period leading up to the completion of the applicants’ lay evidence on or about 3 December 2020.
The first, second, sixth, ninth, fourteenth, and sixteenth respondents (together the Respondents), and the fifteenth respondent, all appeared at the 3 December 2020 case management conference and were present when the orders were made revising the parties’ timetable for provision of evidence. In the circumstances of the service of the Ross report a week later than ordered, and for reasons presented by the applicants, including late and/or incomplete disclosure of relevant materials, the applicants sought the consent of the respondents to a further variation in the evidentiary timetable by email from the applicants’ solicitors to all respondents on 10 February 2021. By 15 February 2021, the applicants, Green Forest parties (here including the fifteenth respondent, E-Go Channel Pty Limited), Ms Yang and Mr Wang, and AVP sought variation by consent of the evidentiary timetable, which orders were made in Chambers on 15 February 2021.
It is relevant, at this point, to note that Mr Skelin and his legal representatives had not responded to the applicants’ invitation for a variation of the timetable.
As a separate and unrelated matter, whilst the proceeding had been set down since 27 August 2020, for final hearing, with an estimate of five days plus, in the period commencing in March 2021, for unrelated reasons my Chambers wrote to the parties on the evening of 15 February 2021 vacating the March trial dates, and advising that at the next case management hearing on 17 February 2021 new hearing dates would be set. Since 17 February 2021, the proceeding has been set down for final hearing to commence on 12 July 2021, and to continue then through to Friday, 23 July 2021 (with an estimate of seven plus days) and thence for oral submissions on 10 and 11 August 2021.
By application in a case dated 16 February 2021, the applicants inter alia sought leave to file and serve a further amendment statement of claim and further amended application. On 17 February 2021, I made orders for circulation of draft pleadings and the responses of the respondents to those drafts. What then ensued is the subject of my judgment in Self Care Corporation Pty Limited v Green Forest International Pty Limited (No 2) [2021] FCA 1000 (Self Care No. 2). It suffices for today’s purpose to note that each of the Green Forest parties and Mr Skelin maintained, and ultimately pressed, objections to some 60 paragraphs of the further amended statement of claim, and the hearing of those objections, together with written submissions occupied the Court variously on 10 March 2021, 15 March 2021, and 23 March 2021, with submissions thence following in the period to and including 8 April 2021.
Some matters of chronology of the proceeding
I propose at this stage to set out some matters of chronology that give further context to these applications. As I have said, the proceeding was commenced by an urgent ex parte application on 25 October 2019. This proceeding has been docketed in the Court’s National intellectual property list, and before me as docket judge, since its commencement. The subject matter of the proceeding is sufficiently set out in Self Care No. 2 and by reference through there to Self Care Corporation Pty Ltd v Green Forest International Pty Ltd [2021] FCCA 129 (Self Care No. 1). The statement of claim dated 29 January 2020 was filed on 30 January 2020. The amended statement of claim and an amended application were circulated in June 2020. Leave was sought and obtained without opposition on 23 July 2020.
I note that on 23 July 2020, each of the Green Forest parties, and Mr Skelin were represented by counsel, and Ms Yang and Mr Wang (as interested parties but not then respondents) were also represented. On 27 August 2020, the matter was first set down for final hearing for 5 days plus, commencing 23 March 2021. I note that on that occasion, 27 August 2020, each of the parties who have expressed an interest in these transfer applications appeared.
The evidentiary timetable set out on the 27 August 2020 Orders included orders for the applicants’ filing and service of their evidence, and the respondents’ filing and service of evidence in answer on the applicants’ claims by, relevantly, 17 November 2020. Pre‑trial directions were made for the provision of consolidated statements of facts and issues, consolidated short-form chronology and, if relevant, consolidated schedules. The status of compliance with the evidentiary timetable was set out in Self Care No. 1.
I interpose here for the purposes of the transcript that I will use and adopt the defined terms in Self Care No. 2 and Self Care No. 1.
Grounds for transfer
Returning to the transfer applications, as I have said, it was only after 17 February 2021 that the matter of either application in a case appears to have been considered.
The Green Forest parties’ application in a case is focused on a point that is unique to the Green Forest parties’ position, namely, whether Green Forest has available to it, pursuant to its cross-claim, a claim akin to a recovery claim or set-off against Self Care for any damages or loss of profits awarded against the Green Forest parties to the extent that any claim exceeds the Court’s jurisdictional limit relating to Australian Consumer Law (ACL) claims.
Additionally, both the Green Forest parties and AVP in their respective defences raise a defence pursuant to s 122A of the Trade Marks Act 1995, which provision was introduced into the Trade Marks Act in 2018 by the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Act 2018 No 77, Schedule 1, Item 2, which was assented to on 24 August 2018, and commenced on 25 August 2018.
The third basis on which transfer is sought is that the matter is complex and, on Mr Skelin’s application, raises what he says are important issues because they are ‘critical to commercial law in this country’.
Fourthly, Mr Skelin’s basis for transfer, and the principal basis on which Mr Le Plastrier for Mr Skelin made oral submissions, is that Mr Skelin has yet to obtain a report from a forensic accountant in answer to the applicants’ expert accounting evidence, that is, the Ross report.
Mr Skelin’s position is that whilst since on or about 16 February 2021, Mr Skelin’s solicitors have sought, over the time, to contact one or more proposed experts, they have presently been instructed not to engage the expert now identified as available - Mr Lytras - who has, on 18 May 2021, provided an opinion letter as to the time required for his report of 12 to 15 weeks. Mr Gear attests that as at 18 May 2021, Mr Skelin has instructed his solicitors not to engage that expert, Mr Lytras, until a timetable is in place:
…with sufficient time to produce a complete report in advance of trial -
and -
If the court makes an order providing Mr Lytras with sufficient time to produce an expert report… you are instructed to have Mr Lytras prepare such report and I authorise [the sixth respondent’s solicitors] to incur the costs associated with having Mr Lytras prepare such report.
Thus, Mr Skelin’s position is that, because of the circumstances of him not being in a position now to have an appropriate expert accounting report in answer within the timetables set by the Court - including the times as have been extended to 21 May 2021 – he will suffer extreme prejudice.
THE PRESENT APPLICATIONS
I have had the benefit of written outlines of submissions from each of the Green Forest parties and Mr Skelin, and supporting written submissions from Mr Heath of counsel, of one page, on behalf of Ms Yang and Mr Wang, and from Mr Di Francesco, counsel for AVP, and responsive written submissions by Mr Hennessy SC on behalf of the Self Care parties. I have also had the benefit of oral submissions in person by counsel for the Green Forest parties, Mr Skelin, Ms Yang and Mr Wang, and the applicants, and solicitor by MS Teams for AVP.
I have formed the view that in light of the upcoming trial date, and foreshadowed applications by Mr Skelin for amendment of the timetable and/or vacation of the hearing dates, and his outstanding response as to whether he continues to press a strike‑out application in light of Self Care No. 2, that it is appropriate that I give oral reasons now, having come to a concluded view.
For the reasons that follow, the Green Forest parties’ application must be dismissed.
For the reasons that further follow, Mr Skelin’s application should be dealt with as follows:
(i)first, I grant leave to Mr Skelin to bring the application in a case other than on the First Court Date; and
(ii)secondly, for the reasons that follow, that application must be dismissed.
Whilst neither Ms Yang, Mr Wang, nor AVP brought applications in a case, and as Mr Heath colourfully described it, ‘he was participating in the uplift for the same reasons’, the supporting submissions of those parties do not add anything over and above what has been submitted by the principal proponents of the applications for transfer.
Principles and relevant Rules
Section 39 of the Act provides that:
39 Discretionary transfer of proceedings to the Federal Court or the Family Court
(1)If a proceeding is pending in the Federal Circuit Court of Australia, the Federal Circuit Court of Australia may, by order, transfer the proceeding from the Federal Circuit Court of Australia to the Federal Court or the Family Court.
(2)The Federal Circuit Court of Australia may transfer a proceeding under this section:
(a)on the application of a party to the proceeding; or
(b)on its own initiative.
(3)In deciding whether to transfer a proceeding to the Federal Court under subsection (1), the Federal Circuit Court of Australia must have regard to:
(a)any Rules of Court made for the purposes of subsection 40(2); and
(b)whether proceedings in respect of an associated matter are pending in the Federal Court; and
(c)whether the resources of the Federal Circuit Court of Australia are sufficient to hear and determine the proceeding; and
(d)the interests of the administration of justice.
…
(5)If an order is made under subsection (1), the Federal Circuit Court of Australia may make such orders as it considers necessary pending the disposal of the proceeding by the Federal Court or the Family Court, as the case requires.
(6)An appeal does not lie from a decision of the Federal Circuit Court of Australia in relation to the transfer of a proceeding under subsection (1).
Section 40 of the Act provides relevantly for the Rules of Court about the discretionary transfer of proceedings as follows:
(1)The Rules of Court may make provision in relation to transfers of proceedings to the Federal Court under subsection 39(1).
(2)In particular, the Rules of Court may set out factors that are to be taken into account by the Federal Circuit Court of Australia in deciding whether to transfer a proceeding to the Federal Court under subsection 39(1).
I note s 41 of the Act provides for the mandatory transfer of proceedings to the Federal Court or the Family Court of Australia. That section is not relevant for today’s purposes.
Rule 8.02 of the Rules provides for transfer to the Federal Court or Family Court. Relevantly, in relation to transfer to the Federal Court, r 8.02 provides that:
(1)The Court may, at the request of a party or of its own motion, transfer a proceeding to the Federal Court or the Family Court.
(2)Unless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding.
(3)Unless the Court otherwise orders, the request must be included in a response or made by application supported by an affidavit.
(4)In addition to the factors required to be considered by the Court under subsections 39(3) and (4) of the Act for transfer of proceedings to the Federal Court or the Family Court, the following factors are relevant:
(a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;
(b)whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding is not transferred;
(c)whether the proceeding will be heard earlier in the Court;
(d)the availability of particular procedures appropriate for the class of proceeding;
(e)the wishes of the parties.
Factors relevant to s 39 of the Act
I turn to and address below each of the factors to which regard is required further to sub‑s 39(3)(a) of the Act, and also the factors prescribed by sub‑ss 39(3)(c) and (d).
Jurisdiction of this Court
I wish to address, first, some general observations that have been made by the Respondents as to the jurisdiction of this Court and its appropriateness to deal with intellectual property matters and matters that have consequential commercial or contract claims.
In relation to the jurisdiction under the Trade Marks Act, this Court has had civil jurisdiction in relation to matters arising under the Trade Marks Act since 2012, under its former incarnation as the Federal Magistrates Act1999 (Cth), and by legislation in 2012, since this Court commenced in 2013.
Pursuant to the Intellectual Property Laws Amendment (Raising the Bar) Act2012 (Cth), which was operational on 15 April 2013, and the Federal Circuit Court of Australia (Consequential Amendments) Act 2013 (Cth), this Court is a ‘prescribed court’ within s 190 of the Trade Marks Act, and pursuant to s 191A, has jurisdiction with respect to matters arising under the Trade Marks Act. This Court has the jurisdiction to hear and determine appeals against decisions, directions, or orders of the Registrar of Trade Marks exclusive of the jurisdiction of any other court except the jurisdiction of the Federal Court and the High Court. I note that the jurisdiction is civil jurisdiction, and not for prosecution of offences under the Trade Marks Act. So too, the Court has extensive concurrent jurisdiction under the Copyright Act 1968 (Cth), and, relevantly, in relation to the ACL under Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CC Act).
I also note that, as was described by then Lucev FM in 2008 in Verge v Devere Holdings Pty Limited [2008] FMCA 1421 at [98] (before the jurisdiction of this Court was broadened), the Court:
exercises jurisdiction, often concurrent (including concurrent but limited) jurisdiction with the Federal Court in a number of areas of federal law including various aspects of administrative law, admiralty, bankruptcy, consumer protection (trade practices), copyright, human rights and equal opportunity, migration, privacy and workplace relations. This Court also has has [sic] associated jurisdiction…
His Honour concludes (at [98]) saying that:
… Thus, many of the cases now [that is, as at 2008] heard by the Court, particularly in its copyright, workplace relations, trade practices and human rights jurisdictions, may take a week or more to hear. Since this Court’s inception in 2000 the jurisdiction of the Court has increased and there can be little doubt that the complexity of matters heard by it has also increased as a consequence of the expansion of jurisdiction and generally.
More recently, Judge Neville of this Court in Commissioner of the Australian Building and Construction Commission v Hall & Ors (No 2) [2017] FCCA 18 (Commissioner v Hall No 2), referred to certain matters relating to the complexity of matters in the Fair Work jurisdiction dealt with by this Court.
In KRJF v Minister for Immigration and Border Protection and Another [2018] FCCA 150, Judge Lucev considered the jurisdiction of this Court in relation to Migration Act matters and judicial review applications relevant to that matter. In KRJF, this Court had no jurisdiction to hear the applicant’s judicial review application by reason of sub‑ss 476(1) and (2)(b) of the Migration Act 1958 (Cth), in its then form, and accordingly, dismissed for want of jurisdiction the originating application and the applicant’s oral application for transfer of proceedings to the Federal Court. Whilst his Honour adverted to the powers of this Court to transfer proceedings to the Federal Court, as the Court did not have jurisdiction, the proceeding had to be dismissed for want of jurisdiction.
$750,000 ACL jurisdictional constraint
I turn now to the point raised by the Green Forest parties of the jurisdictional constraint on the recovery for damages under the ACL in this Court, which is relevant to the Green Forest parties’ cross‑claim. Section 138A of the CC Act confers jurisdiction on this Court in relation to any matter arising out of the ACL when a civil proceeding is instituted by a person other than a Commonwealth Minister. Section 138A(2), however, prevents this Court from awarding an amount for loss or damage by reason of a contravention of the ACL where the amount exceeds $750,000. It follows that whilst the Court has jurisdiction in relation to ACL matters, it may be placed in a position where the amount of damages that can be ordered is limited to $750,000.
The Green Forest parties have submitted that this constraint limits the amount they can be compensated under the cross-claim to a maximum of $750,000, whereas Self Care’s damages under the principal claim are not so limited. This is because Self Care bring proceedings for infringement of intellectual property rights, namely, trade mark and copyright infringements, breach of confidence, for common design in relation to those infringements, breach of fiduciary duties, breaches of contract, and the tort of inducing breach of contract, and the tort of negligent misstatement, to touch on some of the claims for relief which are not so limited in terms of recovery, as well as for contravention of the ACL. In respect of, relevantly, the claimed contravention of the ACL, the applicants acknowledge and accept the maximum jurisdictional constraint on the damages that may be awarded to them for contravention of the ACL.
The Green Forest parties say that because of their cross‑claim, the effect of the jurisdictional constraint on the Green Forest parties is that even if the Court finds that Self Care is found to have misled and deceived the Green Forest parties pursuant to the cross-claim, and even if the Court finds that the Green Forest parties are liable to Self Care, the Green Forest parties say ‘for millions’, notwithstanding the Green Forest parties never would have undertaken the contravening acts had they not been misled and deceived, they can still only recover (or more accurately offset) a maximum of $750,000 against the millions for which they might be liable to Self Care. The Green Forest parties submit that the simple fact is that the Court may be left unable to give relief that corresponds to its findings. I add to this, the qualification, if, and only if, those findings lead to the Green Forest parties succeeding on the cross‑claim.
The Green Forest parties’ cross‑claim has been on foot since 18 March 2020. An amended cross‑claim dated 19 February 2021 and filed that day is in the same terms as the 18 March 2020 cross‑claim, save that references to the statement of claim and paragraphs of the statement of claim are amended to correspond to the amended statement of claim (generally my reference to cross‑claim includes both cross‑claim and amended cross‑claim). Mr Parish has drawn my attention to [14] to [22] of the amended cross-claim (which are in the same terms as the 18 March 2020 cross-claim), noting that the evidence has now led to some changed dates, so that the relevant date in at least [15], [17], [18], and consequentially to be understood in [21], is ‘as and from April 2019’.
The Green Forest parties refer to one or possibly two orders placed by them for products which may be alleged to be counterfeit freezeframe products. These are an order for some 20,000 units of freezeframe REVITALEYES in July 2019 by Green Forest, and, secondly, an order placed by E-Go in October 2019, which latter order, E-Go contends, was cancelled. I note, in any event, that E-Go is not a cross‑claimant, and it must follow, at least on the pleading, that that second order, whether or not it was fulfilled and/or cancelled, is not relevant for the purposes of the consideration of the cross‑claim.
It was clarified for me in oral submissions from Mr Parish, first, that there is no suggestion or evidence that Self Care had directly supplied any freezeframe products to, or had any direct dealings with, the Green Forest parties. A review of the above paragraphs of the cross‑claim reveals that the Green Forest parties’ cross‑claim depends on dealings with Mr Ivan Wang, who is a non‑participating respondent, and what can be described as ‘the EPAQ parties’. To the extent that the term ‘EPAQ parties’ may be used by Mr Parish to encompass Mr Skelin, it is only Mr Skelin who is participating in the proceeding.
Secondly, I note that there is no cross‑claim or set‑off sought by the Green Forest parties against any of the EPAQ parties, or Mr Skelin (or Mr Ivan Wang). I accept Mr Parish’s submissions that those parties are variously in liquidation namely, the fourth respondent, or are non‑participating, or, in the case of the fifth respondent and Mr Skelin, have since approximately February 2020, placed themselves into bankruptcy, and that, in any event, it is a matter for the Green Forest parties who they seek to obtain a set-off, or otherwise pursue.
Green Forest parties’ further amended defence
During the course of yesterday, and in compliance with the timetable, the Green Forest parties have filed a further amended defence to the further amended statement of claim. That further amended defence, inter alia, pleads defences under [138B] as follows:
138B.The First, Second, Fifteenth, and Seventeenth Respondents deny paragraph 138B of the Further Amended Statement of Claim and further:
(a)Repeat paragraphs 187 to 192 hereto;
(b)Say further or in the alternative to the preceding paragraph, that Self Care armed the EPAQ Parties with all the necessary indicia to hold themselves out as being authorised, affiliated or approved to sell freezeframe Products regardless of geographical location;
(c)Say therefore that if the First, Second, Fifteenth, and Seventeenth Respondents together or independently have breached any duty of care owed to Self Care (which is denied) then Self Care has failed to take reasonable care and has contributed to its own loss or damage.
Particulars of Contributory Negligence
(i) Self Care failed to take reasonable care to:
(a)Properly supervise its agents including the EPAQ Parties;
(b)Properly maintain and protect distribution lines with suppliers including the EPAQ Parties;
(c)Properly protect its intellectual property;
(d)Further particulars will be provided in due course.
(ii) Self Care was careless with respect to whom they granted licences, sponsorship or approval to act on their behalf or deal with freezeframe Products on their behalf.
At [173] of the further amended defence, in addition to denying any loss or damage was caused by any alleged infringements, contraventions, passing off, and breach of duties set out in the further amended statement of claim (which are, in any event, denied), the Green Forest parties plead that freezeframe Products sold by Green Forest and/or E-Go were supplied on behalf of Self Care or were the subject of a licence, sponsorship or approval of Self Care that was not revoked until effectively 6 October 2019 and by virtue of the facts and matters pleaded in the cross‑claim; and plead that any loss or damage for any ACL claim is limited to $750,000.
Additionally, as I have noted above at [18], the Green Forest parties raise a defence which was raised in the now‑superseded Green Forest defence, in reliance of s 122A of the Trade Marks Act, and to which s 123(1) of the Trade Marks Act is now added in respect of matters pleaded on or before 24 August 2018 (see Green Forest parties’ further amended defence [182]‑[185]).
There is a positive defence under [181A] of the Green Forest parties’ further amended defence (in similar terms to [173]), as follows:
Further or in the alternative, if the Applicants suffered loss and damage then it arose partly or wholly from their own failure to take reasonable care and so the amount of loss or damage which the Applicants may recover ought to be reduced pursuant to section 137B of the [CC Act] on the basis that the freezeframe Products sold by Green Forest and/or E-Go were supplied on behalf of Self Care or were the subject of a licence, sponsorship or approval of Self Care that was not revoked until effectively 6 October 2019 and by virtue of the facts and matters pleaded in the Cross-Claim.
By [186], as in their superseded defence the Green Forest parties assert they are entitled to a set off, under the cross‑claim. The Green Forest parties’ further amended defence now includes pleas of ostensible or actual authority conferred upon the EPAQ parties by Self Care and estoppel set out in [187] to [192]. Thus, as was submitted by Mr Parish, it can be seen that the amended cross claim (as was the cross‑claim) is a defensive claim, and comes into play if, and only if, certain claims of the applicants are established.
There is no want of jurisdiction. The issue for the Green Forest parties is, as Mr Parish has readily and properly described it, a constraint on recovery.
Items of recovery
In relation to the possible items of recovery, the Green Forest parties rely on 2 items in the applicants’ schedule of quantum of loss and damage as against the Green Forest parties. The first item, which is confidential and is not necessary to disclose for the purposes of this judgment, is a direct claim against Green Forest relating to the supply of alleged counterfeits. The upper amount that the Self Care applicants claim is considerably under the ACL jurisdictional limit of this Court. The second item to which Mr Parish drew my attention is the particulars of quantum in relation to a common design with the EPAQ parties for the supply of alleged counterfeits. That amount is above the jurisdictional limit.
Appropriate forum and reasonable prospects
I have considered the cross claim and whether it is fanciful or without prospects, and whether it has or so lacks reasonable prospects of success, for the assessment of quantum. It is apparent that the Green Forest parties’ cross claim asserts misleading and deceptive conduct by silence in circumstances where Green Forest and Mr Chen had not ever dealt directly with Self Care, and it appears that the Green Forest parties were seeking to import product from the EPAQ parties, and from China, including possibly Hong Kong.
Whilst the cross‑claim is drafted so as to assert at [14] that Self Care had at a certain time ‑ August 2018 and/or February 2019 – had ended a commercial relationship with the fourth to seventh respondents (whom I have assumed are the EPAQ parties), and suspected that those parties may have been offering for sale, sold or otherwise distributed counterfeits in Australia and China, the Green Forest parties say at [15] that on and from March 2019 Self Care ‘knew or ought to have known that Green Forest and Mr Chen were persons or part of a class of person who had been induced to believe that’. EPAQ and FreezeFrame China:
(a)were official suppliers and distributors of its Freezeframe products;
(b)had a close commercial relationship with Self Care; [and]
(c)distributed official and authentic Freezeframe products.
and as particularised that Self Care ‘knew’ that Green Forest was selling Self Care’s freezeframe Products in the market.
Therefore the Green Forest parties, or a class of persons that included the cross claimants, had a reasonable expectation, as set out in [16] of the cross claim, that Self Care would have notified the Green Forest parties that the EPAQ parties were no longer authorised to supply freezeframe Products, and that Green Forest should cease ordering such products from EPAQ and FreezeFrame China. The Green Forest parties (at [17]) say that in the premises Self Care’s conduct by silence in failing to notify the Green Forest parties that EPAQ and FreezeFrame China were no longer authorised to supply freezeframe Products was misleading and deceptive in contravention of s 18 of the ACL, and at [18] further or alternatively by Self Care’s failure to notify them by August 2018 at the earliest and February 2019 at the latest that EPAQ and FreezeFrame China were not reliable sources, contravened s 18 of the ACL.
Whilst silence may amount to misleading or deceptive conduct in a variety of circumstances, the essential question is whether, in all the circumstances constituted by acts, omissions, statements, or silence, there has been conduct likely to mislead or deceive. I have had regard to the discussion in Miller’s Australian Competition and Consumer Law Annotated 2020 at [ACL.18.380] of the Full Court’s consideration of the principles in Addenbrooke Pty Limited v Duncan (No 2) [2017] FCAFC 76; (2017) 384 ALR 1, to which Mr Parish drew my attention. I incorporate that summary of the relevant principles:
(a)Conduct involving silence or nondisclosure may, in some circumstances, constitute misleading or deceptive conduct.
(b)In considering whether conduct is misleading or deceptive, silence or nondisclosure is to be assessed as a circumstance like any other.
(c)Mere silence is unlikely to constitute misleading or deceptive conduct. However, remaining silent will constitute misleading or deceptive conduct if the circumstances give rise to a reasonable expectation that, if some relevant fact does exist, it will be disclosed.
(d)The existence or otherwise of such a reasonable expectation is to be determined objectively.
(e)It is not possible to categorise all of the circumstances in which a reasonable expectation of disclosure may arise. Such circumstances may exist, for instance:
(i)when either the law or equity imposes a duty of disclosure;
(ii)when a statement conveying a half‑truth only is made;
(iii)when the respondent has undertaken a duty to advise;
(iv)when a representation with continuing effect, although correct at the time it was made, has subsequently become incorrect; and
(v)when the respondent has made an implied representation.
(f)In commercial dealings, in assessing whether there is a reasonable expectation that a fact, if it exists, will be disclosed, it will often be the case that one party to a commercial dealing has more knowledge about a relevant matter than the other but will not, in accordance with ordinary commercial expectations, be guilty of misleading or deceptive conduct by failing to make that knowledge known to the other party.
I have also had regard to the recent discussion by Bell P in the New South Wales Court of Appeal in Wormald v Maradaca Pty Ltd [2020] NSWCA 289, including at [85], and at [86] the reference to the case of Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [2010] HCA 31; (2010) 241 CLR 357, and the important observation of Gleeson CJ in Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458. In Wormald it is the President’s observations at [107], [111] to [113], and at [114] in particular to which I have had regard.
I have also considered the Full Court’s decision in Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31; (1992) 110 ALR 608, and specifically the decision of Gummow J, then a member of that Court. Demagogue concerned both a positive misrepresentation, and misleading conduct from the failure to say certain things, with the whole of the circumstances creating a clear but erroneous impression that was found to be misleading. As Gummow J said at page 41:
… consistently with regard to the natural meanings of the terms of s 52, [now section 18 of the ACL] the question is whether in the light of all relevant circumstances constituted by acts, omissions, statements, or silence, there has been conduct which is or is likely to be misleading or deceptive. Conduct answering that description may not always involve misrepresentation…
Having regard to the above authorities to which I have had reference, in my view, the cross‑claim is without reasonable prospects, at least insofar as the quantum may exceed the jurisdictional limit for recovery of damages for contravention of the ACL in this Court.
It is not such that, in the circumstances to which I now turn, it is more appropriate that the matter be transferred.
Consideration of the factors
By reference to the provisions of s 39 of the Act, and r 8.02 of the Rules, as I have stated, the Court’s decision whether to transfer a proceeding to the Federal Court of Australia is a discretionary one. It is not appellable. In exercising this discretion, the Court must have regard to the factors in s 39(3), which include the factors prescribed as relevant in r 8.02(4) of the Rules. Pursuant to s 39(3), the Court must have regard to the rules made for the purposes of s 40(2) of the Act, that is r 8.02 of the Rules.
Rule 8.02(4)(a)
Is the proceeding likely to involve questions of general importance?
Rule 8.02(4)(a) of the Rules requires the Court to consider whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue.
The Green Forest parties say that there are 3 matters of general importance:
(1)the Green Forest parties and AVP plead s 122A(1) of the Trade Marks Act, and there has been no published decision on the matter;
(2)in the further amended statement of claim Self Care relies on Clayton v Bant [2020] HCA 44; (2020) 385 ALR 41, particularly at [34] and [76], which Mr Parish describes as standing for the proposition that statutory misleading and deceptive conduct, and negligent misstatement are the same; and
(3)the Green Forest parties have been unable to find any authority that decided the question of how a party can be liable in common design for a negligent misstatement by silence which is pleaded against all the respondents by Self Care.
I observe here (as to (2)) that first, I do not apprehend that Self Care says that statutory misleading and deceptive conduct, and negligent misstatement are the same; and secondly, I do not read Clayton v Bant as saying that they are the same. It suffices to refer to the paragraphs of the High Court on that matter, and thus the general principle that there arises.
This Court, and indeed, a first instance judge in the Federal Court, will be applying the principles from existing authorities, including ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR, and as I have already referred to, Clayton v Bant.
The claimed issue about liability and common design for negligent misstatement by silence, appears, in substance, to be a straightforward point about concealment of infringing activity between joint tortfeasors. This concept is familiar to the IP practitioners appearing in this Court, is a concept familiar to the specialist IP judges of this Court, and is an issue that can, and is, properly dealt with in the context of this Court’s intellectual property jurisdiction.
As paraphrased by the Green Forest parties, it seems conceptually impossible to ‘enter into a common design negligently not to do something’.
As to the amendment to the Trade Marks Act, and, indeed, amendment to many of the statutes in respect of which this Court has jurisdiction, it does not follow that every time an amendment is made to a law of the Australian Parliament in relation to which this Court has jurisdiction that this Court should not hear and determine issues arising from, or as a consequence of, that amendment. This Court regularly does so, as is apparent, even on a brief consideration of many of the matters that have been decided in this Court in the administrative law and Migration Act areas of the Court’s jurisdiction, in the Court’s Fair Work, bankruptcy, and in its intellectual property jurisdiction, specifically, in copyright in relation to decisions on moral rights.
This Court is a Commonwealth trial court; as such, it is and can be useful for hearings to be undertaken in this Court concerning legislation and jurisdiction conferred on this Court. Section 122A of the Trade Marks Act is no different. It is apparent from the Explanatory Memorandum and from the Second Reading speeches, both in the House of Representatives on 28 March 2018 and in the Senate on 27 June 2018, that s 122A was introduced into the Trade Marks Act to clarify the circumstances in which genuine trade marked goods may be imported into Australia or sold in Australia without infringing a registered trade mark.
The Explanatory Memorandum in schedule 1, which addresses the responses to the Productivity Commission in respect of parallel importation at [10] through to [28], provides good guidance of the circumstances giving rise to the amendments, what the amendments are intended to do and what they do. See also in the Second Reading Speech before the House of Representatives, in which Mr David Coleman said:
Part 1 clarifies the circumstances in which the importation of genuine trademarked [sic] goods do not infringe a registered trademark [sic]. Recent legal decisions have increased the difficulty for importing legitimately marked goods into Australia. This bill will amend the Trade Marks Act 1995 to reduce uncertainty for importers, which will ultimately strengthen competition, benefiting the market and consumers.
As I have said, this proceeding is in the specialist intellectual property docket in this Court. I adopt Mr Hennessy SC’s submission at [27] of his principal outline of submissions: that the purpose of s 122A was to clarify the law on parallel imports following a line of cases, including Paul’s Retail Pty Limited v Sporte Leisure Pty Limited [2012] FCAFC 51; (2012) 202 FCR 286; (2012) 95 IPR 151. The Federal Circuit Court (that is, this Court) is more than capable of applying the provision. I observe here, as submitted by Mr Hennessy none of the respondents suggested that there was any problem, or that this was a matter of general importance, prior to the present applications for transfer, despite the Green Forest parties pleading s 122A in its defence in March 2020, and AVP pleading the provision in its defence in August 2020.
Whether a matter is heard at first instance in this Court, or at first instance in the Federal Court, it will still be a matter that has been heard at first instance. It can be useful for an appeal court to have the benefit of the consideration of a trial judge of the provision and its application to the particular facts before the Court.
As to the second matter relied on by the Green Forest parties, I have addressed that above.
Further, as to the third matter of principle relied on by the Green Forest parties, that is a matter which will be based on the factual findings in the case. This Court is capable of doing that. It is not a matter which gives rise to a matter of general importance.
Sixth Respondent – matters of general importance
To the Green Forest parties’ matters of general importance, Mr Skelin adds (in Mr Le Plastrier’s written submissions) that the proceeding raises for consideration issues such as:
(a)whether a case of knowing assistance in a breach of confidence requires proof of a dishonest and fraudulent design with respect to the breach, citing Einstein J in City of Sydney v Streetscape Projects (Australia) Pty Ltd [2011] NSWSC 1214; (2011) 94 IPR 35, and Besanko J in the Federal Court in Lifeplan Australia Friendly Society Ltd v Woff [2016] FCA 248; (2016) 259 IR 384, and which I note was referred to by me in Self Care (No. 2); and
(b)the precise test to be applied for director joint tortfeasor liability after the Full Court decision in Hashtag Burgers Pty Limited v In-N-Out Burgers, Inc [2020] FCAFC 235.
In relation to the matters of general importance raised by Mr Skelin, first, in relation to knowing assistance, I am guided by the authorities upon which Mr Le Plastrier relies, as would any trial judge. Secondly, in relation to Hashtag, the application of the test for the liability of directors is well known, and it has been further clarified by the Full Court in Hashtag. The decision of the Full Court is either binding upon, or provides strong guidance to, a first instance judge, whether in the Federal Court or this Court. It is, with respect to Mr Skelin, misconceived to submit that it is for a judge of the Federal Court, at first instance, to depart from the Full Court’s reasons.
Mr Skelin’s overarching submission that the issues should be dealt with by the Federal Court because they are ‘…critical to commercial law in this country’, does not withstand scrutiny. I note, whilst matters may be important to parties, that does not make them important to commercial law in Australia generally.
Mr Heath’s submissions on behalf of the ninth and fourteenth respondents (Ms Yang and Mr Wang) to not say anything in relation to general importance, but otherwise raises the matters of jurisdictional limits, and a derivative interest which Mr Heath says, although his clients are not cross-claimers, might be imposed upon them.
Turning to AVP’s outline of submissions regarding transfer, Mr Di Francesco asserts an issue of general importance is the defence under s 122A(1) of the Trade Marks Act (that is, the same issue raised by the Green Forest parties at (1)).
I conclude that the proceeding is unlikely to involve questions of general importance such that it would be more desirable for there to be a decision of the Federal Court at first instance on those points rather than a decision of this Court.
Rule 8.02(4)(b)
I turn now to rule 8.02(4)(b), whether the proceeding, if transferred, is likely to be heard and determined at less cost and more convenience to the parties than if it is not transferred. This proceeding is presently set down for hearing from 12 July 2021 continuing for up to two weeks, and then continuing on 10 and 11 August 2021. The Court has allocated the time and has available to it other times, either in that period or after, should the proceeding require more time. Case managed efficiently, it should not. Currently, no respondent has filed any expert evidence, noting that there is some indication that the Green Forest parties and AVP may jointly be in the process of seeking an expert report. I will come to Mr Skelin’s position in relation to his accounting evidence shortly.
Green Forest claims that this factor is a ‘neutral factor’ and AVP appears to adopt this position. I accept Self Care’s submission that no reasonable practitioner with experience in both Courts could consider that transfer to the Federal Court would involve this proceeding being determined with less cost and more convenience than in this Court at the scheduled trial in July 2021, which is the test under the Rules. Even were the trial in this Court either to be adjourned or extended, I am not persuaded that less cost and more convenience would follow were the proceeding to be transferred, or that the same cost and convenience will be the same in either place.
Whilst, as the Respondents’ counsel have submitted, the Federal Court and this Court operate a docket system in relation to general federal law matters and courts such as the Supreme Court of New South Wales do not, it does not follow that a Federal Court judge, even were the Federal Court to accept the transfer, would be in a position to hear a matter which, on the Respondents’ case, is two weeks and possibly longer, any earlier than the present listing. Indeed, the Federal Court traditionally has fixed periods in at least August, November, February, and May reserved for Full Court hearings. It may be unrealistic, to the extent that the possibility of less cost would follow from an earlier listing, that an earlier listing would be able to be obtained than the present dates on which the hearing of the proceeding in this Court is listed.
Rule 8.02(4)(c)
If the current trial dates are maintained, as AVP acknowledges, it is inevitable that the proceeding will be heard earlier in this Court. I have recently emphasised to the parties that they should proceed on the basis of the current timetabling orders, including the hearing dates.
Rule 8.02(4)(d)
Contrary to the submissions of the Green Forest parties and AVP that, effectively, discount this factor, as I have cited already, this proceeding is currently included in the Court’s specialist intellectual property list, and the Court, and this proceeding, are able to make use of the Court’s procedures for the efficient determination of IP claims, and, indeed, the efficient determination of general federal law claims or claims more generally. Of course, whether in this Court or in other courts, there is the prospect of extensive challenges to pleadings, and to steps in the proceedings. I need only repeat what I said in Self Care No. 2 about the objects of the Rules, and that it is the duty of practitioners to cooperate to give effect to those objects (and see r 1.03(4) of the Rules).
Rule 8.02(4)(e)
Turning next to rule 8.02(4)(e): the wishes of the parties. This is a neutral factor in the present case. The participating Respondents seek the matter be transferred. The applicants oppose transfer. I observe here that, whilst the Green Forest parties brought their application first and I have granted leave, the position of at least Ms Yang and Mr Wang has very recently changed from a neutral position on transfer to an active support of transfer. While Mr Di Francesco raised the matter of s 122A of the Trade Marks Act, to my recollection, on or about 17 February 2021, or on the next occasion, to date, and even as at yesterday’s hearing, AVP did not make its own application in the case, and in part, has made submissions that are more properly arising in the Green Forest parties’ application on the cross-claim.
As to Mr Skelin, his application for transfer follows the Green Forest parties’ application, and is incorporated in an application in a case that seeks to challenge many aspects of the proceeding, notwithstanding that Mr Skelin has been in the proceeding since 25 October 2019, and has been represented since the first return after ex‑parte orders were made, on 1 November 2019. Indeed, Mr Skelin’s current solicitors have been instructed for most of the time that the proceeding has been on foot. Now, whilst Mr Skelin has changed counsel, at least three times, to my recollection, Mr Gear, solicitor for Mr Skelin, first referred to Mr Gregory Sirtes SC, as having been approached to be briefed by Mr Skelin in about late August 2020. I note that Mr Le Plastrier yesterday, informed the Court that, at least, as at 16 February 2021, he was not formally briefed in the matter. I say formally, because it was unclear from Mr Le Plastrier’s response whether he had been briefed in any way, at that time.
Section 39(3)(b)
There are no proceedings in respect of an associated matter pending in the Federal Court.
Section 39(3)(c)
Turning next to s 39(3)(c), the resources of this Court, in its specialist IP jurisdiction, and indeed in the general federal law jurisdiction, are sufficient to hear and determine this proceeding.
Section 39(3)(d)
Lastly, I turn to the interests of the administration of justice. In KRJF, although a judgment concerned with want of jurisdiction, which this is not, Judge Lucev observed that the interests of the ‘management’ of justice, being the management by the Court of proceedings pending before the Court, is to be distinguished from the ‘interests of justice’.
In Commissioner v Hall No 2, Judge Neville, in dismissing the application in a case for transfer by the applicant, Commissioner, of a matter that had been listed for trial for 10 days in the then very near future, observed concerning the management of justice, a number of particular paragraphs from the High Court judgments in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, and Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303.
I refer to and incorporate paragraphs [26], to [30], [32], and [52] from Commissioner v Hall No 2:
[26]First, at [5] in Aon French CJ said: “… the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system.”
[27]Then at [24], his Honour said (emphasis added):
… Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non-compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation….
[28]At [26], French CJ noted comments from the earlier High Court decision in Sali v SPC Ltd (1993) 116 ALR 625, thus (internal citations omitted; emphasis added):
By majority, this Court held that in the exercise of a discretion to refuse or grant an adjournment, the judge of a busy court was entitled to consider “the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties.” Brennan, Deane and McHugh JJ went on to say:
What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources.
[29]Finally, at [27] French CJ said:
The observations made in the two joint judgments in Sali were linked to the particular knowledge that a judge or court, called upon to exercise a discretion to adjourn, would have of the state of that court's lists. However, the mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond their particular effects on the court in which those delays occur. In that connection, there have been a number of cases after Sali in which it has been accepted, in the context of Judicature Act Rules, that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjourn.
[30]Accepting that the current Application is for a transfer and not, strictly speaking, an application for an adjournment or to amend, the practical effect is the same. Any transfer will necessarily mean a delay in the resolution of a matter that has been on foot since December 2014. Accordingly, in my view, the principles set out by French CJ in Aon apply, mutatis mutandis, to the current Application for a transfer.
…
[32]Returning then to Aon, the comments of the plurality, which noted (at [93], [95] and [114]) that “the timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants”, are equally apposite. So too are the comments (at [100] – [101]) regarding the stress on litigants and the need for a prompt and efficient determination of the matters in issue.
…
[52]In this regard I note the comments of the High Court in Expense Reduction, at [56] and [57] (emphasis added):
[56]… Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose.
[57]That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. … The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs…
Having regard to the above matters adverted to by Judge Neville, having regard to case management principles and what was said in Aon, I consider it is a factor in the management of justice that litigants have confidence that parties can both bring and defend proceedings in this Court, and that, where the Court has available time and resources, and the parties have expended time and resources in the proceeding, those matters be taken into account.
In BHP Billiton Limited v Schultz and Others [2004] HCA 61; (2004) 221 CLR 400, in the consideration of cross-vesting legislation and the application to transfer proceedings instituted in the Dust Diseases Tribunal of New South Wales to the Supreme Court of South Australia, Gummow J at [77] observed that the phrase in the Cross-vesting Act ‘otherwise in the interests of justice’ required the Supreme Court to determine a transfer application by identifying the more appropriate forum without any specific emphasis in favour of the choice of forum made by the plaintiff. At [100], his Honour observed of the significance the primary judge attached to the relevant section of the Dust Diseases Tribunal Act, that the ‘interests of justice’ are even‑handed. His Honour there adopted the remarks of Mason J in Pozniak v Smith [1982] HCA 39; (1982) 151 CLR 38 at 182 to 185 that:
“The only safe course, in a case where the relevant law in the competing jurisdictions is materially different in its effect on the rights of the parties, is to remit to the State whose law has given rise to the cause of action. As Brennan J observed in Robinson v Shirley, the power ‘is intended to facilitate the course of litigation rather than to enhance or diminish a plaintiff’s rights or correspondingly alter a defendant’s obligations’ (184).’’
To that may be added remarks of Mason J which are particularly apposite to the legislative policy manifested in the transfer provisions of the cross-vesting legislation. Mason J said (185):
‘‘I would resist the notion that in determining which court shall hear the case when there is a material difference in the laws of the States we should give effect to the so-called right of the plaintiff to select the place of hearing, subject only to the balance of convenience. It is inconsistent with a just result that the plaintiff should be able to select the forum which applies the law most favourable to his cause, so long as he is not ‘forum shopping’.’’
See also the observations of Callinan J in BHP Billiton at [258] that:
The party beginning proceedings will always be the party who selects the jurisdiction in which they are to be heard. It is to beg the question to say that because a plaintiff has chosen his or her forum, a defendant cannot ask, or should suffer a disadvantage in asking that it be changed to a more appropriate one ... one person's legitimate advantage is another person's disadvantage. There should be no presumption in litigation in favour of any party. Courts are required to do equal justice.
Respondents’ counsel have submitted that, should the matter be transferred to the Federal Court, that will ‘free up’ the time available that this Court has for other matters to be heard and determined, or at least case managed. That is true. The ‘administration of justice’, however, will have a consequential effect in the Federal Court where, although there is no reason why a judge in the Federal Court would not be able to familiarise themselves with the procedural matters that have taken place, the state of the pleadings, and the parties’ participation and non‑participation, and other matters concerning the upcoming trial, their time will be taken in so doing.
Whilst Mr Parish has very properly submitted to the Court that the Green Forest parties will continue to be bound and would not seek to, as I understood it, revisit or overturn any of the interlocutory orders that have been made with respect to his clients, this Court has no assurance from any other respondent that he, she, or, it would likewise so be bound. Indeed, one of the basis on which Mr Skelin seeks transfer is that the matter, if in the Federal Court, would not be heard before at least October 2021, and possibly thereafter.
As I have said in relation to the Green Forest parties’ principal point, I have considered what the appropriate forum is. In Skandar (Aka Makari) v BSM Group Pty Ltd (As Trustee For The BSM Discretionary Trust) [2017] NSWSC 610 at [46] to [51], it was held that where there was any doubt about the jurisdiction of a court, the appropriate forum was a court where there was no doubt; that matter was addressing the cross-vesting legislation. I have taken into account the cross‑claim and, for the reasons I have already said, I do not consider that the more appropriate forum for the hearing and determination of that claim and, thus, the proceeding, is the Federal Court.
Mr Skelin relies on two matters which could fall under the question of administration of justice. Mr Skelin accepts that administration of justice, or that s 39(3)(d) of the Act, is directed to the consideration of the interests of the management of justice, which must mean management by the Court, of the proceedings pending before the Court. Of course, that includes the present proceeding and its management. Mr Skelin points to ‘complexity’, and secondly to his prejudice in being unable to produce any expert loss valuation evidence by the current hearing date.
As to complexity of the proceedings, it is true that this proceedings is concerned with 17 respondents. However, in terms of active or partially active respondents, there are first the Green Forest parties (the first, second, fifteenth, and seventeenth respondents), secondly, Mr Skelin, thirdly, together, Ms Yang and Mr Wang (the ninth and fourteenth respondents), and fourth, AVP, the sixteenth respondent. Whilst Mr Skelin adds to the causes of action that I have already adverted to, principal‑agent and accessorial permutations of the causes of action for breach of confidence, breach of contract, copyright, joint tortfeasor, negligent misrepresentation, misleading or deceptive conduct, passing off, the Copyright Act, and the Trade Marks Act, tortious interference with contractual relationships, and harm to reputation goodwill of the applicants, he further adds to those breaches of certain articles of the trade mark laws of the People’s Republic of China, and breaches of the copyright laws of the People’s Republic of China.
In simple terms, the matters reduce into various permutations arising from dealings in alleged counterfeit freezeframe product, and dealings outside the terms of an agency arrangement in genuine freezeframe Product. As Judge Neville said in Commissioner v Hall No 2, as to so-called complexity, this Court regularly deals with contraventions of the ACL, with breaches of copyright law, trade mark law, breaches of contract, accessorial and joint tortfeasor liability, and arising out of the same conduct passing off, and ACL claims, and it is not unusual that claims would extend to negligent misrepresentation.
Volume of causes of action, or indeed, as in the Commissioner v Hall No 2 case, volume of contraventions is not of itself sufficient to amount to complexity. Volume may simply go to matters of case and time management of the evidence. Further, nor is complexity a necessary function of the number of respondents or parties more generally. Again, such matters are simply factors for appropriate time and case management.
Next, as to the time the proceeding can take, whilst it is the case that many proceedings in this Court are matters that should take a few days or less, I note that in the Commissioner v Hall No 2 case, it was a 10-days’ matter, and matters, particularly in the Fair Work jurisdiction, regularly take more than a week and including, so far as this the Judges of this registry have had reason to experience, two and three weeks plus. As to the commerciality of the matter, it is apparent from the Intellectual Property jurisdiction, the Fair Work jurisdiction, and the ACL jurisdiction, that matters involving commercial parties are regularly before this Court.
I turn to the second matter raised by Mr Skelin under the head of the interests of the administration of justice – Mr Skelin stated inability to produce any expert loss valuation evidence by the current hearing date. On Self Care’s case, Mr Skelin faces significant potential personal exposure. These claims are considerable. These claims, Mr Skelin says, will cause him significant difficulties in the contexts of loss, in the absence of any expert evidence in answer to what Mr Le Plastrier describes, properly, as Mr Ross’s lengthy and detailed expert loss evaluation report. It is therefore, Mr Skelin submits, appropriate and in the interests of the administration of justice to transfer the proceeding.
For the purposes of Mr Skelin’s transfer application, Mr Le Plastrier read and relied on two affidavits from Mr Skelin’s instructing solicitor, Mr Gear, and a recent affidavit containing an opinion letter from Mr Lytras.
As I have said earlier, Mr Lytras’s opinion was provided on 18 May 2021, and is directed to his estimate of the time required to complete a report in response to the Ross report. In his initial view, the time he requires is 12 to 15 weeks elapsed. As to its scope he opines that:
The scope of any report will be subject to instructions, however, assuming a full responsive report is required then all 13 heads of loss examined in the Ross Report will … require investigation.
There will be some additional matters, he says, noting that Mr Ross identified limitations on information included in the Ross report and how this might affect the preparation of his report.
Mr Lytras then explains:
So as to ensure the court is fully informed on the subject, it will then be necessary to seek explanation and further information from the EPAQ parties as to the veracity of the information they have disclosed and their views upon Mr Ross’ conclusions regarding that information.
I interpose here to observe that the EPAQ parties, except to the extent that they may encompass Mr Skelin, are not participating in the proceeding, and Mr Skelin’s evidence is limited to an affidavit from himself. Mr Lytras expects further issues will arise.
Mr Le Plastrier submitted that it could not be expected that Mr Skelin’s instructors or indeed Mr Skelin would have taken any steps to enquire about the availability of an expert accountant or other forensic accounting expert to provide any report, let alone any responsive report, to the Applicants’ expert evidence until the Ross report was served, first, and secondly that because Mr Ross is a very experienced forensic accounting expert it would be hard to – and I paraphrase – promptly find an appropriate expert.
I have already observed that Mr Skelin has instructed and had legal representatives in this proceeding since at least 31 October 2019 when Mr Weinberger of counsel appeared, instructed by Thomson Geer. Mr Skelin’s present solicitors, Taylor David, have been representing Mr Skelin and have been his instructing solicitors on the record since 13 March 2020.
Mr Skelin’s defence to the statement of claim was filed on 3 April 2020, apparently with the benefit of instructing solicitors and counsel. His defence to the amended statement of claim was filed on 19 August 2020, at a time when Mr Gear’s evidence is that Mr Sirtes SC had been approached, although the defence was, it appears, settled by previous counsel Mr Lucarelli.
Since at least 22 April 2020, the applicants’ solicitors Gilbert + Tobin have notified the parties in writing, including Mr Skelin, that,
access to further information, including electronic accounting records, is required at this stage of the proceedings to enable the applicants to complete their evidence-in-chief on quantum, which will include expert accounting evidence (emphasis added).
At least as at 29 April 2020, Mr Skelin’s current solicitors, Taylor David, have been on notice that there would be expert accounting evidence. They wrote on that date to Gilbert + Tobin with a list of interrogatories, including a series under the heading, ‘3. Expert Accounting Evidence’. As early 13 May 2020, at a case management hearing before me, at which Mr Lucarelli and Mr Gear are recorded as having appeared for Mr Skelin, Mr Hennessy SC for the Self Care applicants, had referred to Mr Ross as Self Care’s forensic accountant.
At the case management hearing on 27 August 2020, I note, in response to submissions from Mr Gear, Mr Hennessy reconfirmed that Self Care would be relying on expert accounting evidence given by Mr Ross in the proceeding. At the case management hearing on 3 December 2020, I observe that there was an exchange between myself and Mr Gear, in which Mr Gear informed the Court that Mr Skelin anticipated adducing expert evidence in answer to the Ross report, but that Mr Skelin was waiting to retain an accounting expert until the Ross report was served.
As I have already said in relation to 15 February 2021, on the request by Ms Smith of Gilbert + Tobin following the service of the Ross report one week late (on 6 February 2021), Mr Skelin did not respond with any indication of consent or objection to any variation of the timetable for the provision of evidence in answer, including, and specifically, expert evidence. On Mr Gear’s evidence, it was only on 16 February 2021, that Mr Gear first contacted any accounting experts, of those about which he gives any evidence.
It is not necessary for these purposes to set out the further chronology of when Mr Gear contacts first, a Mr Neil Gray at Deloittes, secondly, a Mr Andrew Howard at BDO, and in March, a proposed expert, Mr Tony Samuel from Sapere. Only after having received responses from various experts in April, did Mr Gear, then, it appears, talk to other litigation lawyers within his firm about a further expert, and, on or about 9 April 2021, he first called and left a message for Mr Lytras.
On 9 April 2021, based on Mr Gear’s evidence the following appears to have happened:
(a)Mr Gear emails Gilbert + Tobin, stating that Mr Skelin:
…has not instructed an expert to commence work, and we have not released the unredacted Ross report to any expert -
(b)Mr Andrew Howard advises Mr Gear in a phone call that he could complete a high-level review of the Ross report by 2 May 2021 (the current ordered date) but that would not be admissible;
(c)Mr Neal Gray advises Mr Gear’s firm his estimate in preparing his expert report will be in the range of $150‑$175,000, ex GST; and
(d)Mr Gear emails Mr Lytras, attaching a redacted Ross report, and asking whether Mr Lytras had any conflicts, how long he would need to prepare a competing report in response to the Ross report, and whether he could start work immediately.
It is apparent from these references to the chronology that Mr Skelin and/or his instructing solicitors have taken a deferred, and then leisurely, approach to contacting experts, which approach, except with the first two contacts to Mr Gray and Mr Howard, has, in large part, awaited any response of one expert before contacting the next.
For the purposes of the transfer application, in the context where, even as at today, it appears that no expert has been retained, and, on Mr Le Plastrier’s submission, it is the desire, should the matter be transferred to the Federal Court, that the proceeding be delayed to October 2021 or beyond. The position in which Mr Skelin finds himself is one of his own making. The above chronology discloses that Mr Skelin has been on notice that expert accounting evidence would be relied upon by the applicants for over 12 months. It is further apparent that the timing of that expert evidence report would have been, at least initially, by November 2020, and thereafter it was further apparent by 3 December 2020, that the expert report would be served in late January. In my experience this is an unusual course to take, having regard to the experience of senior counsel and experienced junior counsel of the calibre appearing before me in this matter.
Having regard to the principles of the management of the administration of justice, which includes the case management of this and other matters before the Court, and having regard to the importance of parties complying with orders of the Court, and not treating orders as mere guidelines, I do not consider that, in the present case my discretion should be exercised in favour of transferring the matter to the Federal Court.
Other matters
There are two matters raised by the applicants to which I will briefly advert. First, as to the question of timing of the Green Forest application, as a discretionary matter, given that I have granted leave to the Green Forest parties to bring this application, the matters raised by Self Care in its submission as to timing, are matters I do not need to further address.
Secondly, as to the matters which were responded to by Mr Heath, any suggestion by Mr Hennessy SC whether there might be a possibility that the quantum aspect of the cross‑claim could be dealt with as a discrete matter, it suffices to say that is not a matter that has factored in my consideration.
I have approached the application on the basis that either the whole of the proceeding is transferred or none of the matter is transferred, considered it accordingly, and, on discretionary grounds, have refused that application for transfer.
I do note here that Mr Heath made a submission that should the matter be transferred to the Federal Court, an extant contempt application against his clients should similarly be transferred, and I accept that submission; however, it does not arise in the present instance.
Lastly, there is the question of leave for Mr Skelin to raise the issue of transfer at this stage and bring those paragraphs [3], [4], and [5] of his application in the case of 12 March 2021. I have considered whether or not Mr Skelin should obtain leave. As a discretionary matter, I would objectively, not favouring one party or the other, have had to take into consideration several, at least, of the matters that Mr Skelin’s counsel raised in submissions. Accordingly, I have considered that it is appropriate, notwithstanding the delay and other factors that are raised by the applicants and their submissions that I do not need to attend to it on this application, as I foreshadowed, to grant leave to Mr Skelin to bring the application for transfer by his application in the case dated 12 March 2021, and, for the foregoing reasons, paragraphs [4] and [5] of Mr Skelin’s application are dismissed.
As I have said above, I reiterate that, for the above reasons, I have concluded that the Green Forest parties’ application in the case, paragraphs [2] and [3], be dismissed. It follows there is no need for paragraph [4]. That is dismissed as well.
The question follows as to costs. I consider that costs should follow the event. The Self Care parties have succeeded in opposing the two applications for transfer, and the supporting submissions on behalf of Ms Yang and Mr Wang, and AVP. I am conscious that the Self Care parties have sought an order that the costs be ordered as against all the participating respondents. I am inclined to so order.
However, I note the hour, and that counsel for the various respondents have sought leave to be excused from today and, whilst I have, by MS Teams, appearances from instructing solicitors for each of the participating respondents, I consider it is appropriate that if any respondent wishes to be heard against the order I propose to make, as I have stated above, they should file and serve a short outline of submissions limited to two pages by 1 pm next Wednesday, 26 May 2021.
I will make orders as I have indicated.
I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Baird. Associate:
Date: 10 June 2021
SCHEDULE OF PARTIES
SYG 2771 of 2019 Respondents
Fourth Respondent:
FREEZEFRAME CHINA CO PTY LTD ACN 621 016 975
Fifth Respondent:
KEFEI (EMILIO) WANG
Sixth Respondent:
PASCAL SKELIN
Seventh Respondent:
EPAQ INTERNATIONAL PTY LTD ACN 608 870 588
Eighth Respondent:
QUANJIAN PTY LTD
Ninth Respondent:
YIPING YANG
Tenth Respondent:
TAOYU PAN
Eleventh Respondent:
KEFEI (IVAN) WANG
Twelfth Respondent:
ZUREN INTERNATIONAL PTY LTD
Thirteenth Respondent:
SIQI HUO
Fourteenth Respondent:
YULIN WANG
Fifteenth Respondent:
E-GO CHANNEL PTY LTD
Sixteenth Respondent:
AUSTRALIAN VITAMIN PLUS PTY LTD
Seventeenth Respondent:
YAN (CYNTHIA) LI
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