Studio Magazines Pty Ltd v Studio SRL

[1995] FCA 311

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    NG 254 of 1994
  )
GENERAL DIVISION                 )

BETWEEN:STUDIO MAGAZINES PTY LIMITED (FORMERLY BUYING SYSTEMS (AUSTRALIA) PTY LIMITED)

Applicant

AND:     STUDIO SRL

First Respondent

EDIZIONE STUDIO SRL

Second Respondent

CORAM: Burchett J.
PLACE: Sydney
DATE : 3 May 1995

REASONS FOR JUDGMENT

BURCHETT J.:

In this matter the applicant proceeds, under s. 52 of the Trade Practices Act 1974, against the first respondent, Studio SRL. The proceeding is not being pursued against the second respondent, and I dismiss it as against that respondent.

The basis of the proceeding against the first respondent is that a settlement agreement, involving a term by which the first respondent was to transfer to the applicant a right to use the mark Studio in Australia, was entered into by the applicant in reliance upon an implicit representation.  The applicant brings the case within the principle discussed in a number of cases, including Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 and Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31, on the basis that both implicitly - and, indeed, expressly - in proceedings which were on foot between the parties in respect of the right to the Australian mark, the first respondent represented that it was the owner of the mark - subject only, of course, to the validity of the claims made by the applicant itself in those proceedings, which were in dispute.

The first respondent at no stage informed the applicant of the existence of an agreement, entered into in Italy between it and the second respondent some couple of years previously, the terms of which, on the face of them, appear to have involved an assignment of the relevant mark and the goodwill appertaining thereto without any limit as to territory.  Prior to the conclusion of the agreement with the applicant, the first respondent was also placed expressly upon notice by the second respondent of the fact that the second respondent did rely on that agreement and did claim that by virtue of that agreement, the first respondent was not entitled to assign the mark.  The nature of the proceedings, which the agreement was an attempt to settle, necessarily involved the relevance of the agreement reached in Italy, and that agreement should have been discovered in those proceedings, but it was not.  Notwithstanding this situation, at no time prior to the final conclusion of the agreement of settlement was any disclosure made, either of the reality of the assignment, or of the fact that there was any dispute about it.

As a consequence of the conclusion of the settlement agreement in those circumstances, the first respondent received an initial instalment of $50,000 from the applicant, being part of a total settlement price of $150,000.  Shortly after this, the applicant received notice of the matters to which I have referred and made complaint, and in due course the applicant brought the present proceeding.  Although the first respondent was represented in the earlier proceeding, which thereafter continued and was ultimately concluded in the applicant's favour, the first respondent has never appeared in the present proceeding which is now being heard by me ex parte, appropriate evidence having been given of the service of the proceedings and of notice that the matter would be heard today.

In all the circumstances, it seems to me there has been a breach of the obligation imposed by s. 52 of the Trade Practices Act, that the misleading conduct which that breach has involved was causally related to the conclusion of the settlement agreement, and that the applicant is entitled to the relief sought in the amended application. 

Accordingly, I make a declaration in terms of paragraph 1 of the amended application.  I think it is appropriate also to make a declaration in terms of paragraph 2, and I so declare. The sum of $50,000, which was applied towards satisfaction of the initial obligation of the applicant under the agreement, should in the circumstances be repaid to the applicant, and I make an order in terms of paragraph 3.

Pursuant to s. 51A of the Federal Court of Australia Act 1976, interest should be paid upon an order for the payment of money, of this kind, unless there is a satisfactory reason why the Court should order otherwise - in other words, the prima facie position is that interest is exigible - and I think that in this case I should make an order for the payment of interest. It is the practice of this Court, when sitting in New South Wales, to order that the calculation of that interest be on the basis of the rates from time to time applicable upon similar orders in the Supreme Court of New South Wales, and I direct that the applicant bring in a calculation of the interest from 15 February 1994 calculated utilising the rate or rates applicable during the period since then. I order that the first respondent pay the applicant's costs.

LATER IN THE DAY HIS HONOUR ADDED: I am satisfied as I indicated this morning that it is appropriate to allow, as indeed is the practice of most judges of this court sitting in Sydney, the same rate or rates of interest which the Supreme Court of New South Wales generally allows.  There is of course a discretion in the matter, but I am satisfied it is appropriate to apply those rates.  Accordingly, I add to the judgment sum which I indicated this morning the further sum, for interest, of $6,533 (rounding up the interest calculation to the nearest dollar), making the total amount $56,533.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

Associate:

Date: 17 May 1995

Counsel for the Applicant:       Mr M.R.J. Ellicott

Solicitors for the Applicant:        Norton Smith & Co

No appearance on behalf of the Respondents.

Date of hearing:                 3 May 1995