Superior IP International Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys

Superior IP International Pty Ltd applied to the Federal Court of Australia to set aside a statutory demand issued by Ahearn Fox Patent and Trade Mark Attorneys. The statutory demand claimed $10,706.33 in unpaid invoices for services rendered in relation to a patent application for an improved timber connector. The primary legal issue before the court was whether Superior IP had demonstrated a genuine dispute over the whole or part of the debt claimed, as required by section 459H of the Corporations Act 2001. Additionally, the court considered the obligations of lawyers under the Civil Dispute Resolution Act 2011 in preparing genuine steps statements and the implications of failing to comply with these obligations on costs.

The court found that there was indeed a genuine dispute regarding the amounts claimed in six of the nine invoices. The dispute centred on whether Superior IP had authorised the expansion of patent claims or the validation of the patent in certain jurisdictions, leading to additional charges. The court also noted that Ahearn Fox's voluntary reduction of one invoice did not negate the existence of a genuine dispute. Since the undisputed portion of the debt was below the statutory minimum of $2,000, the court was obligated to set aside the statutory demand under section 459H(3) of the Act.

Regarding costs, the court observed that Superior IP, having been successful in its application, would typically be entitled to an order for costs following the usual principle that costs follow the event. However, the court also noted the provisions of the Civil Dispute Resolution Act, which require the filing of a genuine steps statement in civil proceedings in eligible courts. The court highlighted the duty of lawyers to advise clients of this requirement and assist in compliance, with potential consequences for non-compliance. The court ultimately set aside the statutory demand and left the costs issue to be determined in accordance with the principles of the Act and the specific circumstances of the case.