Spencer & Rutherford v Horizon Holidays & Ors
[2006] FMCA 386
•22 March 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SPENCER & RUTHERFORD v HORIZON HOLDINGS & ORS | [2006] FMCA 386 |
| PRACTICE & PROCEDURE – COPYRIGHT – TRADE PRACTICES – Application to have proceedings transferred to Federal Court of Australia pursuant to Federal Magistrates Court Act 1999, s.39(1)(a) – contravention of Trade Practices Act 1974, s.52 – passing off – infringement of copyright – important and complex issues to be tried – Copyright Act 1968, s.77 and s.77A – work of artistic craftsmanship – Trade Practices Act 1974, s.86AA – application granted. |
| Copyright Act 1968, ss.77, 77A Federal Magistrates Court Act 1999, ss.39, 40 Federal Magistrates Court Rules 2001, reg. 8.02 Trade Practices Act 1974, ss.52, 86AA |
| Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191 Sheldon & Hammond Pty Ltd v Metrokane Inc. (2004) 135 FCR 34 Dr Martens (Australia) Pty Ltd v Rivers (Australia) Pty Ltd [1999] FCR 136 |
| Applicant: | SPENCER & RUTHERFORD |
| First Respondent: | HORIZON HOLDINGS PTY LTD |
| Second Respondent: | TELPAC INTERNATIONAL PTY LTD |
| Third Respondent: | XI CHEN |
| Fourth Respondent: | LIN QING LIU |
| Fifth Respondent: | LISA SLAVIN |
| Sixth Respondent: | PANOLA FASHION PTY LTD |
| Seventh Respondent: | CLASSICAL FASHION PTY LTD |
| Eighth Respondent: | LIU LING HU |
| Ninth Respondent: | HONGBING HU |
| Tenth Respondent: | XIU YAN ZHANG |
| Eleventh Respondent: | FRANCE SHENGDIAN INTERNATIONAL GROUP COMPANY |
| File Number: | MLG 1573 OF 2005 |
| Judgment of: | Connolly FM |
| Hearing date: | 14 March 2006 |
| Date of Last Submission: | 14 March 2006 |
| Delivered at: | Melbourne |
| Delivered on: | 22 March 2006 |
REPRESENTATION
| Counsel for the Applicant: | Ms Caine SC |
| Solicitors for the Applicant: | Rigby Cooke Lawyers |
| Counsel for the Respondent: | Mr Strong SC |
| Solicitors for the Respondent: | Madgwicks Lawyers |
ORDERS
Pursuant to section 39 of the Federal Magistrates Act1999, these proceedings be transferred to the Melbourne Registry of the Federal Court of Australia to be listed with such priority as that Court deems appropriate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1573 of 2005
| SPENCER & RUTHERFORD |
Applicant
And
| HORIZONS HOLDINGS PTY LTD |
First Respondent
| TELPAC INTERNATIONAL PTY LTD |
Second Respondent
| XI CHEN |
Third Respondent
| LIN QING LIU |
Fourth Respondent
| LISA SLAVIN |
Fifth Respondent
| PANOLA FASHION PTY LTD |
Sixth Respondent
| CLASSICAL FASHION PTY LTD |
Seventh Respondent
| LIU LING HU |
Eighth Respondent
| HONGBING HU |
Ninth Respondent
| XIU YAN ZHANG |
Tenth Respondent
| FRANCE SHENGDIAN INTERNATIONAL GROUP COMPANY |
Eleventh Respondent
REASONS FOR JUDGMENT
The proceedings
This is an application by the respondents that the proceeding be transferred to the Federal Court of Australia pursuant to s.39(1)(a) of the Federal Magistrates Court Act 1999. The application is opposed by the applicant who wishes that it remain in this Court.
The applicant in the substantive proceeding is an Australian Company that sells handbags and other accessories through independent retailers and concept stores. It is alleged that the importation, sale and promotion of handbags by the respondents contravenes s.52 of the Trade Practices Act 1974 (“TPA”) and is a passing off and infringes the Copyright claimed to be owned by the applicant
On 16 December 2005, following a hearing on 13 December 2005 orders were made in favour of the applicant for an interlocutory injunction and a Norwich Pharmacal order (see Norwich Pharmacal Co. v Customs & Excise Commission [1974] AC 133). These orders are subject to an application for leave to appeal.
Counsel for each of the parties gave a written outline of their submission with respect to the transfer to the Federal Court and there are two affidavits by the respondents’ solicitor Catherine Maisie Pierce sworn 10 and 14 March 2006.
The law
The relevant legal provisions with respect to the transfer are as follows:
FEDERAL MAGISTRATES ACT 1999 – SECT 39
Discretionary transfer of proceedings to the Federal Court or the Family Court
(1) If a proceeding is pending in the Federal Magistrates Court, the Federal Magistrates Court may, by order, transfer the proceeding from the Federal Magistrates Court to the Federal Court or the Family Court.
(2) The Federal Magistrates Court 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 Magistrates Court 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 Magistrates Court 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 Magistrates Court 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 Magistrates Court in relation to the transfer of a proceeding under subsection (1).
FEDERAL MAGISTRATES ACT 1999 – SECT 40
Rules of Court about discretionary transfer of proceedings
(5) In making Rules of Court for the purposes of this section, the Federal Magistrates, or a majority of them, must have regard to:
(a) whether particular matters could be more appropriately dealt with in the Federal Court or the Family Court; and
(b) whether the resources of the Federal Magistrates Court are sufficient to deal with particular matters; and
(c) the interests of the administration of justice; and
(d) anything else that the Federal Magistrates, or a majority of them, considers relevant.
FEDERAL MAGISTRATES COURT RULES 2001 – REG 8.02
Transfer to Federal Court or Family Court
(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 Federal Magistrates Court;
(d) the availability of particular procedures appropriate for the class of proceeding;
(e) the wishes of the parties;
(f) for family law or child support proceedings, whether the hearing of the proceeding is likely to take longer than 2 days.
Note 1 Subsection 39 (3) of the Act provides that, in deciding whether to transfer a proceeding to the Federal Court, the Court must have regard to:
·the factors set out in these Rules to be taken into account
·whether proceedings in respect of an associated matter are pending in the Federal Court
·whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding
·the interests of the administration of justice.
Note 2 Subsection 39 (4) of the Act provides that, in deciding whether to transfer a proceeding to the Family Court, the Court must have regard to:
·the factors set out in these Rules to be taken into account
·whether proceedings in respect of an associated matter are pending in the Family Court
·whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding
·the interests of the administration of justice.
Conclusions and findings
The respondents submit that issues that are raised by the pleadings are very important issues for the handbag and fashion industry and that further the applicant’s case in relation to Trade Practices and Fair Trading claims requires the Court to reconsider the long standing principles laid down by the High Court in Parkdale Custom Built Furniture v Puxu Pty Ltd (1982) 149 CLR 191 which have been accepted and applied by the Full Courts of the Federal Court in various cases including Dr Martens (Australia) Pty Ltd v Rivers (Australia) Pty Ltd [1999] FCR 136. The applicant on the other hand contends that there is no real issue of legal principle that distinguishes this case from any other s.52 TPA and passing off cases based on the similar appearance of products. In my view there is a certain amount of truth in what the applicant says. These are not new legal principles and they have been well considered by numerous decisions of the superior courts. The task of the Court is to make findings of fact and apply those legal principles to the facts.
With respect to the claim for infringement of copyright the respondents rely on the defences provided pursuant to s.77 and s.77A of the Copyright Act. These defences do not apply if the copyright is a work of artistic craftsmanship as alleged by the applicants. It is submitted by the respondents that the case law with respect to what constitutes a “work of artistic craftsmanship” is not settled and is an area of some complexity. In that regard counsel for the respondents referred me to what Conti J. had to say in Sheldon & Hammond Pty Ltd v Metrokane Inc. (2004) 135 FCR 34 at 80 [118]:
The evolution of authority upon the meaning and implications of the statutory notion of artistic craftsmanship, in relation to manufactured goods, reveals the existence of a formidable area of complexity, at least insofar as manufactured goods are concerned. I have already discussed the conceptual enigmas arising in the context of the so-called copyright/design “overlap” protection provisions, as well as examine and cite in detail the authorities. There is something antithetical in the notion of a manufacturer gaining exclusive protection of a mass-produced article by way of copyright, for a period of time substantially longer than that provided by statute law in relation to designs and patents.
I certainly do not disagree with the views expressed by His Honour.
The respondents say this matter will take 5 to 7 days of hearing time and the applicant says the trial can be confined to 5 days. It seems to me the respondents’ estimate is probably the more accurate particularly given the possibility of a number of Chinese interpreters being required. I expect that there may also be some time taken up with pleadings issues prior to the Trial. Whilst this takes the matter to the longer end of the time scale which can be allocated to General Federal Law matters in this Court, I do not consider that it should be a factor which automatically precludes the court from determining it.
Finally I note the provision of s.86AA of the TPA which currently limits the amount the Federal Magistrates Court may award for loss or damage to $200,000.00.
TRADE PRACTICES ACT 1974 - SECT 86AA
Limit on jurisdiction of Federal Magistrates Court in proceedings under section 82
If proceedings under section 82 are instituted in, or transferred to, the Federal Magistrates Court, the Federal Magistrates Court does not have jurisdiction to award an amount for loss or damage that exceeds:
(a) $200,000; or
(b) if another amount is specified in the regulations–that other amount.
While it may well be argued that the passing off claim might be part of the associated or accrued jurisdiction of the Court and as such that the Court is not so confined, I must still take some guidance from the section which in my view is an indication of the nature and quantum of the disputes under the TPA over which the parliament intended the Court to exercise jurisdiction.
The Court clearly has jurisdiction to determine all of the claim before it. However, in my view in what is a finally balanced question, the fact that this is a substantial commercial dispute which involves a number of complex legal issues that will involve 5 to7 days of hearing time and perhaps some additional time for the determination of pleading issues, the appropriate forum is the Federal Court. I do not consider that it will involve the parties any additional cost and I have not been provided with any information as to when the Federal Court can hear the trial although I suspect the wait might be slightly longer than in this Court. Accordingly, I propose to transfer all extant applications to that Court for listing for hearing as is determined by that Court.
I certify that the preceding ten (`10) paragraphs are a true copy of the reasons for judgment of Connolly FM.
Associate: NK Morales
Date: 21 March 2006
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