Skill Tiling Pty Ltd v Quality Skill Tiling Pty Ltd
[2022] FedCFamC2G 177
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Skill Tiling Pty Ltd v Quality Skill Tiling Pty Ltd [2022] FedCFamC2G 177
File number(s): MLG 3126 of 2021 Judgment of: JUDGE FORBES Date of judgment: 16 March 2022 Catchwords: PRACTICE AND PROCEDURE – application for default judgment under r 13.05 of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 – default by respondents - where failure of respondents to engage with proceeding – whether applicant entitled to relief on statement of claim – deemed admissions by reason of default - whether Court has power to grant relief sought
TRADE MARKS - infringement of applicant’s registered trade mark – declaration of infringement – permanent injunction restraining further infringement – costs
Legislation: Competition and Consumer Act 2010
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Act 2021 (Cth)
Trade Marks Act 1995
Cases cited: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427
Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56
Engineered Thermal Systems Pty Ltd v Salmon, In the matter of Salmon and Speck Pty Ltd (In. Liq) [2012] FCA 1159
Ex parte McNally (1999) 198 CLR 511
Fair Work Ombudsman v Sails Waterfront Bar & Grill Pty Ltd [2021] FCCA 1511
Geneva laboratories Ltd v Prestige Premium Deals Pty Ltd (No.4) [2016] FCA 867
Maggie Sottero Designs LLC v Loner [2018] FCA 1151
Speedo Holdings BV v Evans (No.2) [2011] FCA 1227
Toll Transport Pty Ltd & Ors v Erikson [2017] FCCA 3120Division: Division 2 General Federal Law Number of paragraphs: 43 Date of hearing: 11 March 2022 Place: Melbourne Counsel for the Applicant: Mr Thompson Solicitor for the Applicant: Furman+Furman The Respondent: No appearance ORDERS
MLG 3126 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF SKILL TILING PTY LTD V QUALITY SKILL TILING PTY LTD & ANOR
BETWEEN: SKILL TILING PTY LTD
ApplicantAND: QUALITY SKILL TILING PTY LTD
First RespondentNAZARI KHADIM
Second Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
11 MARCH 2022
PURSUANT TO SECTION 141(1) OF THE FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA ACT 2021 (CTH) (FCFCOAA) AND UPON ADMISSIONS THAT THE FIRST AND SECOND RESPONDENT ARE TAKEN TO HAVE MADE, CONSEQUENT UPON DEFAULT OF THEIR NON-COMPLIANCE PURSUANT TO RULE 13.04(2) OF THE RULES, THE COURT DECLARES PURSUANT TO RULE 13.05(2)(c) THAT:
1.The First Respondent has infringed the Applicant’s registered trade mark number 2114771 (Applicant’s Registered Mark) under s. 120(1) of the Trade Marks Act 1995 (Cth) (TMA).
2.The Second Respondent is liable for the First Respondent’s infringement under the TMA as a joint tortfeasor with the First Respondent.
THE COURT ORDERS PURSUANT TO RULE 13.05(2)(c) THAT:
3.Pursuant to s 126(1)(a) of the TMA that the Respondents be permanently restrained whether by themselves, their servants, agents or howsoever from continuing to infringe the Applicant’s Registered Mark.
4.The Respondents jointly and severally pay the Applicant’s costs of this application fixed in the amount of $9,798.
AND THE COURT FURTHER ORDERS THAT:
5.The proceeding be otherwise adjourned to a date to be fixed on application by the Applicant.
6.A copy of these orders be served personally on the Respondents.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE FORBES
By an application filed on 7 February 2022 the applicant, Skill Tiling Pty Ltd (Skill Tiling), sought default judgement against the respondents, Quality Skill Tiling Pty Ltd (QST) and its sole director, secretary and shareholder Mr Khadim Nazari.
On 11 March 2022, I made orders granting the applicant default judgement against the respondents. Those orders included a declaration that the first respondent had infringed the applicants trademark, a declaration that the second respondent is liable for the first respondent’s infringement as a joint tortfeasor and permanent injunctions under section 126(1)(a) of the Trade Marks Act 1995 (“the Trade Marks Act”) restraining the respondents from further engaging in the impugned conduct. I also ordered that the respondents should pay the applicants costs fixed at $9,798.
These are the reasons for making those orders.
BACKGROUND
The applicant, Skill Tiling has since 20 February 2007 been a corporation registered in Victoria. Skill Tiling is the registered owner under the Trade Marks Act of trademark registration number 2114771 (the ST Registered Mark). The precise form of the registered mark is reproduced at paragraph 4 of the applicant’s statement of claim filed on
6 December 2021.
In its statement of claim filed in this proceeding, the applicant states that it has since 2007 been carrying on a business in Victoria of providing tiling services to the trade and general public under and by reference to the distinctive trading name and style “Skill Tiling”
(the ST Trading Name) and the ST Registered Mark. The applicant also asserts in its statement of claim that it has developed a good and valuable reputation and substantial goodwill amongst trade customers and consumers in Australia in relation to the tiling services represented and symbolised by the ST Trading Name and the ST Registered Mark.
The applicant alleges that the first respondent, Quality Skill Tiling, has since at least 2017 been providing tiling services to the trade and public in Victoria under and by reference to the trading name “Quality Skill Tiling” (the QST Trading Name) and a common law trademark
(the QST Name and Logo), the form of which is reproduced at paragraph 8 of the statement of claim.
The applicant alleges that the QST Trading Name and the QST Name and logo are marks which are substantially identical or deceptively similar to the ST Registered Mark and that by using those marks as trademarks in respect of tiling services, QST has thereby infringed the
ST Registered Mark under section 120(1) of the Trade Marks Act.
Moreover, the applicant also alleges that QST has misrepresented to the trade and public that its tiling services are or are associated with the tiling services supplied by the applicant and has thereby contravened sections 18 and 29(1)(g) of the Australian Consumer Law
(Schedule 2 to the Competition and Consumer Act 2010) and engaged in passing off.
The applicant also alleges that the second respondent, Mr Nazari, is a common law joint tortfeasor with QST in relation to its impugned conduct. In making that allegation at paragraph 10 of the statement of claim, the applicant relies upon the facts pleaded in paragraph 3 of the statement of claim, namely that Mr Nazari was the sole director, secretary and sole shareholder of QST, was aware of QST’s conduct, was instrumental in its actions, was in effective control of the QST business and was its guiding mind.
By reason of the above, Skill Tiling seeks various forms of relief against the two respondents including declarations, injunctions restraining them from engaging in the infringing conduct, damages or alternatively an account of profit and other orders.
The respondents have not engaged in the proceeding and have not taken any step to respond to or defend it. I am satisfied on the evidence filed in support of this application that the respondents have been served with relevant documents including the statement of claim and the application for default judgement. The respondents have not filed any documents in the proceeding and they have not appeared in any case management hearing in the proceeding. The applicants accordingly sought an order for default judgement against the respondents.
HISTORY OF THIS PROCEEDING
This proceeding was commenced by the applicant on 13 December 2021 by an application supported by a statement of claim in accordance with rules 4.01(1) and 4.04(b) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (“Rules”). The principal allegations contained in the statement of claim have been summarised in the Background above.
On 7 February 2022, the applicant applied for default judgement against the respondents pursuant to Rule 13.05(2)(c). A copy of the application and supporting affidavit from the applicants’ solicitor was served on the respondents on 10 February 2022 and that service has been confirmed in a subsequent affidavit.
The matter came before me for a case management hearing on 10 February 2022. On that day I made orders to the following effect:
(a)that the applicant’s application for default judgement be taken to have been regularly filed in accordance with the Rules;
(b)
that the application for default judgement be listed for hearing on
11 March 2022;
(c)that leave be granted to the applicant to proceed at the hearing uncontested in the event the respondents did not appear;
(d)
that the applicant file a written submission in support of its application by
4 March 2022; and
(e)that the Court’s orders be served on the respondents.
Subsequently, an affidavit of service dated 1 March 2022 was filed which deposed to the Court’s orders having been duly served on the respondents on 28 February 2022. I am satisfied on the basis of that affidavit that the requirements for service pursuant to the Court’s order and the Rules have been complied with.
On 1 March 2022, the applicant filed a written submission in support of its application for default judgement.
The application for default judgement was listed before me on 11 March 2022 at 2:15pm. On that occasion Mr Thompson of counsel appeared on behalf of the applicant. There was no appearance by or on behalf of the respondents.
Mr Thompson relied upon and spoke to the written outline of submissions filed on
1 March 2022. It is unnecessary for me to summarise Mr Thompson’s very comprehensive written submissions because the analysis set out below has been informed by those submissions and largely adopts its contentions.
I note at this juncture that upon the hearing of its application for default judgement, counsel for the applicant informed the court that his client was only pressing for a subset of the final relief sought in the originating application. Specifically, counsel informed the Court that the applicant was seeking only:
(a)a declaration that the first respondent has infringed the applicants registered trade mark under section 120(1) of the Trade Marks Act;
(b)a declaration that the second respondent is liable for the first respondent’s infringement under the Trade Marks Act as a joint tortfeasor with the first respondent; and
(c)permanent injunctions, under section 126(1)(a) of the Trade Marks Act restraining the respondents, by themselves, their servants, agents or howsoever from continuing to carry out the infringing conduct.
Counsel informed the Court that other relief sought in the originating application, namely damages or an account of profits, was not being sought by way of default judgment. Moreover, the applicant did not press relief under the Australian Consumer Law, at least on this occasion of default judgement.
RELEVANT PRINCIPLES
Rule 13.05(2) of the Rules provides that if a respondent is in default, the Court may give judgement or make certain orders against the respondent. Relevantly, Rule 13.05(2)(c) states:
“[i]f a respondent is in default, the court may
….
(c)if the proceeding was started by an application supported by a statement of claim … give judgement against the respondent for the relief that:
(i)the applicant appears to be entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant.”
The principles guiding the exercise of this Court’s power in relation to default judgement and similar powers available to the Federal Court of Australia under its rules are well-settled. Distilled[1], those principles include that:
(a)the power afforded to the Court is discretionary and the discretions should generally be exercised with caution;
(b)the discretionary power to enter a judgement by default is enlivened when an applicant makes application to the Court for an appropriate order. In the absence of such an application, the power cannot be invoked;
(c)an applicant is not required to prove by way of evidence the claim which is sought to be advanced. The requirement is that the Court needs to be satisfied on the face of the statement of claim that the applicant appears entitled to the relief claimed and the Court is satisfied that it has power to grant that relief;
(d)in order to be satisfied that an applicant is entitled to the relief claimed in the statement of claim, the Court needs to be satisfied that each element of the relevant civil wrong has been properly and discreetly pleaded in the statement of claim;
(e)it is permissible for the court to permit recourse to limit further evidence that is relevant to the relief sought; and
(f)the Court retains a discretion not to make an order even if the preconditions have been satisfied.
[1] Speedo Holdings BV v Evans (No.2) [2011] FCA 1227 at [15]-[26] per Flick J; Engineered Thermal Systems Pty Ltd v Salmon, In the matter of Salmon and Speck Pty Ltd (In. Liq) [2012] FCA 1159 at [36] per Foster J; Maggie Sottero Designs LLC v Loner [2018] FCA 1151 at [6] per Nicholas J; Fair Work Ombudsman v Sails Waterfront Bar & Grill Pty Ltd [2021] FCCA 1511 at [14]
I am satisfied that the statement of claim filed in this matter and upon which the applicant relies complies with the rules of pleading and properly pleads causes of action that support the granting of relief. In particular, I am satisfied that the statement of claim properly pleads a cause of action against the first respondent for trademark infringement and a common-law claim against the second respondent as a joint tortfeasor in that infringement.
Dealing specifically with the allegation that the first respondent infringed the applicant’s trademark under section 120(1) of the Trade Marks Act, the statement of claim pleads that the respondent has used the QST Mark as a trade mark, that the QST Mark is substantially identical with or deceptively similar to the ST Mark and that the QST Mark has been used in relation to goods or services in respect of which the ST Mark is registered. Accordingly, the statement of claim pleads each necessary element of an infringement case under section 120 of the Trade Marks Act and the claim pleads that section 120 has been infringed.
The applicant contends, and I accept, that the Rules do not require proof of the applicant’s infringement by evidence, only that there be a claim for the relief sought which pleads each element of the relevant cause of action. I am not required to determine, on a final basis, whether the trademarks are identical or deceptively similar. However, to the extent my assessment is relevant to the exercise of the Court’s discretion in granting default judgement, I am comfortably satisfied that there is a reasonably arguable prima facie case that the Marks referred to in the pleading are deceptively similar. To that end, it is quite apparent that the
QST Mark includes the words SKILL TILING which is arguably the dominant element of the ST Registered Mark.
In circumstances where the first respondent has not filed any defence, it is unnecessary for the Court to speculate whether it may have any available defence to the allegation of trademark infringement. It suffices that the claim for infringement under section 120(1) is properly made. Nonetheless, in his written submission, counsel for the applicant helpfully addressed the potential availability of defences in so far as they may be relevant to the Court’s discretion. I have read that submission and accept that in the absence of evidence there is no obvious defence which weighs against the exercise of my discretion in favour of the applicant.
As to the liability of the second respondent, the applicant pleads in the statement of claim that Mr Nazari is a joint tortfeasor by reason of his close personal involvement in the impugned conduct of the first respondent. Furthermore, the applicant expressly pleads that since
August 2020, Mr Nazari has been aware of the applicant and the ST Trade Mark by reason of correspondence putting him on notice regarding the infringing conduct.
Counsel for the applicant contended, correctly, that it is only necessary to plead that the joint tortfeasor was involved in the first respondent’s impugned conduct, not that he was aware that the conduct was a contravention. The pleaded case against Mr Nazari is that he was aware of and was instrumental in QST’s alleged infringing acts and was at all material times its guiding mind and will. These pleaded allegations are plainly capable of supporting a finding that
Mr Nazari was knowingly involved in the infringing acts, whether or not he knew he was contravening any law. I accept the applicant’s submission that the statement of claim pleads a case which, if proven at trial, would give rise to a claim for relief against the second respondent.
RELIEF
As stated earlier, the applicant in its application for default judgement seeks only a subset of the final relief sought in the originating application. The applicant seeks declarations as against each of the first and second respondents and permanent injunctions against both of them restraining their infringing conduct.
For there to be an order for summary judgement in favour of the applicant, the court must also be satisfied that the court has power to grant the relief sought.
Declaration
Section 141(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Act 2021 (Cth) (“the FCFCOA Act”) gives the Court jurisdiction to make binding declarations of right in relation to a matter in which it has original jurisdiction. The Court has jurisdiction in relation to matters under the Trade Marks Act and I am satisfied that this power extends to the making of the declarations sought by the applicant in this case.
The Court has a wide discretionary power to make declarations. Before making a declaration, the Court should be satisfied that the question is real, not hypothetical or theoretical and that the applicant has a real interest in raising the issue.
There is no requirement, as there once was, for there to be a proper contradictor before declaratory relief can be granted. The requirement for a contradictor is met if there is a party who had an interest to oppose the declaratory relief that was being sought.[2] This encompasses a range of responses from a respondent who is in outright opposition, to a respondent who does not appear, despite awareness that a declaration was to be sought, especially if there was precise knowledge of the date of the hearing of the application.[3]
[2] Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56 at [30] per Greenwood, Logan and Yates JJ.
[3] Geneva laboratories Ltd v Prestige Premium Deals Pty Ltd (No.4) [2016] FCA 867 at [82]
That being said, in exercising appropriate caution when considering declaratory relief, it is to be remembered that on an application for default judgement the Court is proceeding on the basis of the claim as pleaded by the applicant and in the absence of a defence or contradictory evidence. Accordingly, it is appropriate to make clear that there has been no adjudication on the merits of the applicant’s claims by including wording in the declaration to the effect that the declarations are made “upon admissions which the respondent in question are taken to have made consequent upon their non-compliance with the requirements of the rules of Court”, as suggested by Keifel J, as Her Honour then was, in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427 at [59], cited in Geneva Laboratories (No.4) at [86].[4]
[4] Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427
I am satisfied that this is an appropriate case for declaratory relief, and I propose including the introductory words so as to ensure the reader of the declarations understands the circumstances in which they were made.
As to the application for injunctive relief, there is no doubt that the Court has power to grant an injunction against the first respondent pursuant to s126(1)(a) of the Trade Marks Act. I consider this an appropriate case for the grant of that relief.
I am also satisfied that the Court has power to grant both declaratory and injunctive relief sought against the second respondent.
Section 134 of the FCFCOA Act confers jurisdiction on Division 2 of this Court in respect of “matters” not otherwise within its jurisdiction that are “associated with” matters in which its jurisdiction is invoked. It is well-settled that this Court may deal with common-law causes of action, such as that pleaded against the second respondent, under its associated jurisdiction.[5]
[5] Toll Transport Pty Ltd & Ors v Erikson [2017] FCCA 3120 at [38]
As counsel for the applicant submitted, a single matter may comprise different claims arising out of a “common transaction and facts” or “a common substratum of facts”.[6] In the present case, the claim that the QST infringed the ST Registered Mark and the pleaded claim that
Mr Nazari was a joint tortfeasor in QST’s infringement are “but a single matter” because the claim against the second respondent is so related to that against the first respondent that the determination of the claim against the first respondent is essential to the determination of the claim against the second respondent. I am satisfied that the claims arise out of a common substratum of facts and as such comprise a matter in relation to which the Court has jurisdiction to grant the relief sought.
[6] Re Wakim; Ex parte McNally (1999) 198 CLR 511 per Gummow and Hayne at [139]-[141]
COSTS
The applicant’s statement of claim also claimed an order that the respondents pay its costs of this proceeding.
At the hearing, counsel for the applicant submitted that I should order costs fixed in the sum of $9,798 (including disbursements) calculated in accordance with Schedule 2 of the Rules. Counsel submitted to my chambers immediately after the hearing a schedule of the costs sought and having considered that document I am satisfied that it is appropriate to make the costs order. I am satisfied that the costs incurred by the applicant are fair and reasonable and proportionate to the nature and complexity of the matter. I will make an order that the respondent’s jointly and severally pay the applicants costs of and incidental to the proceeding.
CONCLUSION AND ORDERS
For the reasons explained above, the respondents are in default for the purposes of the Rules, the Court has jurisdiction in respect of the applicant’s claims and I am satisfied that the applicant is entitled to the relief it seeks. The respondents have had an opportunity to remedy the default but have totally ignored this proceeding and have failed to engage with it. In all the circumstances of the case, I am satisfied that an order should be made pursuant to rule 13.05(2)(c) of the Rules giving judgement against the respondents for the relief claimed in its application.
I have considered the draft form of orders proposed by the applicant. The orders I have made depart slightly from them but conform with the reasons set out above.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes. Associate:
Dated: 11 March 2022
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