Tobias Qld Pty Ltd v Thomson
[2018] FCA 1659
•30 October 2018
FEDERAL COURT OF AUSTRALIA
Tobias Qld Pty Ltd v Thomson [2018] FCA 1659
File number: QUD 695 of 2018 Judge: LOGAN J Date of judgment: 30 October 2018 Catchwords: PRACTICE AND PROCEDURE – interlocutory application – application for compliance with Court orders – Federal Court Rules 2011 (Cth) r 41.09 – substituted performance – whether grounds for relief met. Held – relief appropriate – substituted performance order granted. Legislation: Competition and Consumer Act 2010 (Cth)
Federal Court of Australia Act 1976 (Cth) s 23
Evidence Act 1995 (Cth) s 140(2)
Federal Court Rules 2011 (Cth) rr 41.09, 41.09(2), 41.09(2)(b)
Cases cited: Australian Competition and Consumer Commission v Purple Harmony (No 3) 196 ALR 576
Reckitt & Colman Products Limited v Borden Incorporated (1990) 1 WLR 491
Sumitomo Mitsui Banking Corporation v Sumitomo Mitsui Finance Group Proprietary Limited (No 2) (2009) FCA 496
Date of hearing: 30 October 2018 Date of last submissions: 30 October 2018 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 29 Counsel for the Applicant: Mr D Elliades Solicitor for the Applicant: Clayton Utz Counsel for the Respondents: Mr C Thompson appeared on behalf of the Respondents (by leave in respect of the corporate respondent). ORDERS
QUD 695 of 2018 BETWEEN: TOBIAS QLD PTY LTD ACN 130 614 532
Applicant
AND: CHRISTOPHER ANDREW THOMSON
First Respondent
AMY LOUISE SARGEANTSON
Second Respondent
NCF FOOD GROUP PTY LTD ACN 626 021 592
Third Respondent
JUDGE:
LOGAN J
DATE OF ORDER:
30 OCTOBER 2018
UPON THE APPLICANT’S UNDERTAKING TO SUBMIT TO SUCH ORDER (IF ANY) AS THE COURT MAY CONSIDER TO BE JUST FOR THE PAYMENT OF COMPENSATION (TO BE ASSESSED BY THE COURT OR AS IT MAY DIRECT), TO ANY PERSON (WHETHER OR NOT THAT PERSON IS A PARTY), AFFECTED BY THE OPERATION OF THE ORDER
THE COURT ORDERS THAT:
1.For the purpose of facilitating and ensuring the following orders, the Court declares that the Applicant be treated as standing as the owner of GoDaddy account number 64537394, pending completion of the following:
(a)Anthony John Deane, solicitor for the Applicant, be appointed by, and authorised by, the Court pursuant to r 41.09 of the Federal Court Rules 2011 to do all things (including giving oral or written directions or authorisations to any person on behalf of any Respondent and executing all instruments, documents and things, whether in the name of any Respondent or otherwise) as may be necessary to effect the Applicant gaining control and sole use of:
(i)the website associated with the domain name “noosachocolatefactory.com.au” formerly bearing Registry Domain ID “D40700000000062564-AU (as previously held on GoDaddy account number 64537394) in the same condition as at midnight 11 October 2018; and
(ii)the SquareSpace subscription historically and currently used to edit the website “noosachocolatefactory.com.au”, and
(iii)all email accounts associated with or linked at any time to the domain name “noosachocolatefactory.com.au” through on GoDaddy account number 64537394.
(b)The Applicants shall cause to be appointed an independent suitably qualified person to supervise the completion of the orders and such independent person shall report to the court and parties on the activities undertaken.
2.The matter be mediated before A Crowe QC on Monday 5 November 2018, with position papers of not more than 5 pages being delivered by the parties to each other and to the mediator on or before 4.00pm Friday 2 November 2018.
3.As to the mediation:
(a)the applicant is to attend by its director;
(b)the first and second respondent are to appear in person;
(c)the third respondent is to attend by its director(s); and
(d)each party is to comply with the directions made by the mediator for the purpose of the mediation.
4.The Applicant file and serve any amended statement of claim on or before 4.00pm Friday 9 November 2018.
5.The Respondents file and serve their defences and any cross claims on or before 4.00pm Friday 16 November 2018.
6.The Applicant file and serve any reply on or before 4.00pm Wednesday 21 November 2018.
7.The Applicant file and serve affidavits of evidence in chief on or before 4.00pm Wednesday 28 November 2018.
8.The Respondents file and serve affidavits of evidence in chief on or before 4.00pm Friday 7 December 2018.
9.The parties file and serve any expert evidence on or before 4.00pm Thursday 13 December 2018.
10.The parties confer and provide a trial bundle and list of objections to any lay evidence on or before 4.00pm Thursday 13 December 2018.
11.The matter be listed for trial on 17, 18 and 19 December 2018.
12.Liberty to apply on two clear working days’ notice in writing to all parties.
13.Costs of and incidental to the Applicant’s interlocutory application filed 22 October 2018 be paid by the Respondent as agreed or failing agreement as taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised From Transcript)LOGAN J:
On 12 October 2018, upon the applicant, Tobias Queensland Proprietary Limited (Tobias), by its counsel giving the usual undertaking as to damages, I made the following orders:
1.Until determination by this Court of this proceeding or further order:
(a)the First Respondent and Second Respondent, whether by themselves, their employees or agents or otherwise howsoever,
(b)the Third Respondent whether by itself, its directors, officers, employees, or agents or otherwise howsoever,
must not use (or threaten to use) the following names (including domain names), words, acronyms and marks:
i.“Noosa Chocolate Factory”;
ii.
iii.“NCF”;
iv.noosachocolatefactory.com.au ;
v.“Noosa Chocolate Factory Founders”;
vi.“Noosa Chocolate Factory Wholesale”,
or any names (including domain names), words, acronyms and marks that are misleadingly or deceptively similar to the Applicant’s names and the Applicant’s mark in the course of trade on or in relation to any chocolate; coffee; chocolate coffee; iced coffee (coffee based beverages); coffee beverages with milk (the “Applicant’s products”) or goods of the same description as the Applicant’s products or goods that are closely related to the Applicant’s products, save for a statement to the effect that the:
i.First Respondent was associated with the Applicant’s business from 2009 to April 2018.
ii.Second Respondent was associated with the Applicant’s business from 2012 to April 2018,
provided that such limited use does not tend to bring the Applicant into disrepute and that the Respondents have 7 days from the date of this order to change the name of the Third Respondent by removing the reference to NCF.
2.Until determination by this Court of this proceeding or further order, the Respondents must take all necessary steps and do all such things as may be necessary and within their power, to:
(a)Forthwith provide access, passwords and authorities to the Applicant to the domain name NOOSACHOCOLATEFACTORY.COM.AU bearing Registry Domain ID “D40700000000062564-AU” and all associated emails and further, within 48 hours of the making of this order transfer the same to the Applicant in the same condition as on midnight 11 October 2018;
(b)Forthwith provide access, passwords and authorities to the Applicant to Facebook, Instagram and any other social media and social networking service which use the Applicant’s names and the Applicant’s mark and further, within 48 hours of the making of this order transfer the same to the Applicant in the same condition as on midnight 11 October 2018.
3.Within a reasonable time of the transfer of control of the web site, Facebook site and Instagram referred to above, the Applicant will cause the following to occur:
(a)Until midnight 12 January 2019, the following message be displayed on the website referred to in paragraph 2(a) above in 14 point font displayed at the foot of the index page which appears after entering the first level of the website:
“Chris Thomson and Amy Sargeantson have served with the Noosa Chocolate Factory for many years. They have founded their own chocolate making business by the name of ‘Amy Sargeantson Chocolate Maker’ //Insert hyperlink//. They have opened a shop at 133 Adelaide Street Brisbane in the city we wish them all the very best of luck for the future.”
(b)Until midnight 12 January 2019, establish a link from the index page to a URL to be provided by the Respondents for ‘Amy Sargeantson Chocolate Maker’.
(c)Post the same message and link from the Instagram and Facebook account.
The making of those orders entailed the exercise of a judicial discretion, but the respondents, who were then legally represented, did not in the end oppose the making of those orders. That was in recognition that, in terms of the requirements for the granting of interlocutory injunctive relief, Tobias had established that there existed a serious question to be tried and that the balance of convenience did favour the granting of interlocutory injunctive relief, in that form.
Tobias conducts, in the inner city, a business known as the Noosa Chocolate Factory. The name of that business recalls its origins in Noosa Shire, and in particular at the markets conducted periodically at Eumundi. Over time the applicant, Tobias, has come to use a particular get-up in the promotion of that business. The form of get-up is set out in the order made on 12 October 2018. In the founding of that business, a number of persons have been active. These include the parents of Mr Christopher Thomson, who is the first respondent. Mr Thomson and his de facto wife, Ms Amy Sargeantson, have also had a role to play in relation to the founding of the business and its later conduct.
In what I observed, in the course of submissions on 12 October 2018, to be something of a Shakespearean tragedy, there has been, on the evidence, an unfortunate, intergenerational falling out that has seen Mr Thomson and Ms Sargeantson choose to set up a rival chocolate retailing and manufacturing business. A retail outlet for that is also now established in the inner city. The particular get-up used by Tobias is not the subject of a registered trademark as yet, although an application for registration has been made. It has invoked this Court’s federal jurisdiction by the pleading of a claim under the Competition and Consumer Act 2010 (Cth) (CCA) alleging misleading or deceptive conduct in the conduct of the now rival chocolate retailing business. Associated with that claim under the CCA, and thus also within the court’s jurisdiction, is a claim in respect of passing off.
Associated with the conduct of the Noosa Chocolate Factory business are a number of internet platforms and also an internet domain name, noosachocolatefactory.com.au.
What has particularly motivated the application made today by Tobias is the apprehension that Mr Thomson, Ms Sargeantson and the corporate respondent have neglected to comply with the terms of the orders made on 12 October 2018. They invoke r 41.09 of the Federal Court Rules 2011 (Cth) (Federal Court Rules), which provides:
41.09 Substituted performance
(1)If a person (the first person) is bound, but neglects or refuses, to do an act, a party may apply to the Court for an order:
(a)that the act be done by another person, appointed by the Court; and;
(b)that the first person pay the costs and expenses incurred by the making of the order.
(2) Subrule (1) does not limit:
(a) the power of the Court to punish for contempt; or
(b)any other mode of enforcement of the judgment or order available to the party.
Rule 41.09(2)(b) correctly recognises that there is an overarching power possessed by the Court under s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) to make orders of such kinds, including interlocutory orders, as the court thinks appropriate.
In order to establish passing off, the applicant would have to establish these three elements:
·First, reputation, in other words, that it has a good will or reputation attached to its goods or services, as perceived by the consumer who associate a specific get-up with its goods or services.
·Next, misrepresentation, in other words, that the corporate respondent has offered goods or services to the public, to consumers, and represented that these originated from the same source as those of the applicant, or are in some other way associated with it.
·Thirdly, damage, or at least potential damage, in other words, that it has suffered, or will likely suffer, damage as a result of the consuming public’s erroneous belief in the alleged misrepresentation:
see Reckitt & Colman Products Limited v Borden Incorporated (1990) 1 WLR 491 and 499.
There is evidence in Tobias’ affidavit material, of the get-up apparently used by and on behalf of the corporate respondent, which is strikingly similar to that set out in the order of 12 October. Natural persons may be made responsible for being knowingly concerned in corporate misleading or deceptive conduct contrary to the CCA.
In relation to the present application, and while the ultimate merits are a matter for trial, Tobias’ case is sufficiently strong to persuade me that there is a need for it to have further pre-trial relief, if it is shown that there has been a neglect at least in relation to compliance with the orders made on 12 October 2018. As to that, it is necessary to recall that non-compliance with a court order can amount to a contempt if there be no reasonable excuse.
Compliance on the part of the respondents with the court’s orders of 12 October 2018, has fallen to Mr Thomson. Ms Sargeantson has deposed that she has not had a role in that regard.
On the evidence that division is understandable, as Mr Thomson has some expertise in relation to matters of information technology, an expertise which prior to the unfortunate falling out was deployed to good effect in the conduct of the Noosa Chocolate Factory business by Tobias.
If only out of an abundance of caution, and because non-compliance with a court can have serious consequences, I have applied not just the ordinary civil standard of proof, but done so having regard to the matters set out in s 140(2) of the Evidence Act 1995 (Cth). Bearing this in mind, the evidence establishes that Mr Thomson has taken particular measures to comply with the Court’s order of 12 October 2018. It is not a case where he has disregarded completely those orders, far from it. The burden, though, appears to be one of having the diversion of devoting time both to compliance with the Court’s order, as well assist in the conduct of a newly established business. Further, it may well be that there is just an unfortunate, incomplete state of communication between Tobias and those acting for it, and Mr Thomson in particular.
On 16 October 2018, at a time when each of the respondents was still represented by lawyers, their then lawyers stated to those acting for Tobias that, amongst other things, there was no longer access to noosachocolatefactory.com.au. That correspondence also dealt with other information technology issues, particularly relating to Instagram and Facebook accounts.
For some reason, though, on 24 October 2018, it was possible, inferentially for Mr Thomson in his capacity as a representative of “Amy Sargeantson Chocolate”, a name under which the corporate respondent trades, to send an email to Tobias’ solicitors from the address [email protected] (see p 36 of the affidavit of Mr Deane filed on 29 October 2018).
That this was so is a source of concern and does persuade me that there has been a neglect in compliance in relation to the completion of the transfer of the internet domain name noosachocolatefactory.com.au. I am far from persuaded that this has been a wilful neglect, but there has been a neglect established. It may well be that this is unintentional, but it has occurred. It is of course possible that one reason for that is insufficient attention to the imperatives of compliance with a Court order. Court orders, as has been said by some in the past, are not aspirational statements.
The upshot, though, is that in dealings with the operator of “GoDaddy” which, amongst other things, operates or facilitates the domain name concerned, it has not been possible to complete a transfer to the applicant, as contemplated by the orders of 12 October 2018.
I am convinced that it would be unfair both to Tobias, and for that matter Mr Thomson, just to leave them to their own devices in dealing with GoDaddy to try and complete the transfer. What is necessary is an order which appoints particular persons to deal with GoDaddy for that purpose, in substitution for whatever rights might otherwise have been Mr Thomson’s in terms of dealing with GoDaddy, to facilitate the transfer.
Another particular concern on the evidence is ensuring the placing of Tobias in possession of years of email traffic relating to its business. That also requires a transfer to be affected via GoDaddy.
The applicant, Tobias, in its submissions, has made reference to an order made by Foster J in Sumitomo Mitsui Banking Corporation v Sumitomo Mitsui Finance Group Proprietary Limited (No 2) (2009) FCA 496 in which, acting under a predecessor of r 49.09(1), namely, the then O 37, r 3, his Honour made an order allowing for substituted performance, noting:
It seems to me that the rule empowers the court to take a sensible approach to ensuring that its orders are complied with.
Earlier in time, Goldberg J in Australian Competition and Consumer Commission v Purple Harmony (No 3) 196 ALR 576 at page 587, para 35 observed:
35.As the registrant of the domain name the company has control over the use of the domain name on the internet which cannot be used by anyone else. As registrant, the company has the right to instruct the registrar, Verisign Inc, to transfer the domain name to another person, and the administrative contact, in this case Mr Lyster, has the authority and the right to instruct Verisign Inc to transfer the registration of the domain name, to another person.
In that case, Goldberg J made provision by way of a default position for the Australian Competition and Consumer Commission to take all necessary steps to have the domain name transferred to it.
Having regard to these cases, I am quite satisfied that there exists power to make an order which provides for a form of substituted performance. Its making is supported, in terms of at least a benign neglect by r 41.09 of the Federal Court Rules and also, for that matter, s 23 of the FCA Act.
Originally Tobias sought an order which went as far as a declaration that the ownership of the GoDaddy account vested in it. There is some evidence that the account was paid for via a corporate credit card issued to Mr Thomson by Tobias. When one recalls that this was a closely held family company at the time, and that remuneration can take the form of drawings by payments by the company on behalf of officers or employees, the prima facie position is not necessarily reflective of what one might ultimately find as to ownership of the GoDaddy account. Evidence given by Mr Thomson was that the GoDaddy account supports not just the Noosa Chocolate Factory domain name, but also others which he uses. What is clear enough on the evidence is that he does have control of the GoDaddy account.
In the end, the declaratory relief in relation to that account was not pressed for Tobias, but rather a more limited and targeted form of substituted performance was promoted. Upon that coming to his attention Mr Thomson, in turn, hardly unreasonably, did not actively oppose the making of such an order.
The form of order proposed would see the Court appointing for a particular limited purpose particular persons to deal with GoDaddy for the purpose of facilitating the transfer of the internet domain name and an email account.
The question then becomes what provision ought to be made in respect of costs? Originally, indemnity costs were sought by Tobias. But upon reflection and, with respect, sensibly, that particular type of costs order was not pressed. Events in this case have occurred over a compressed timeframe, and perhaps without an appreciation of the expedition that was attending the progress of the case through the Court, and the need for related priority of action by the respondent parties. I am satisfied that it was necessary for Tobias to come to Court. It has succeeded at least in persuading me of the need for a substituted performance order. On this basis it is entitled to its costs. It has not sought that they be paid immediately.
With what can only be described as a commendable disposition to assist the interests of justice, Mr Andrew Crowe QC, who is well known in terms of expertise in intellectual property and who is unsurprisingly amongst those considered by the parties for a mediator, has signified that he is prepared to donate pro bono a day of his time to act as mediator. He is available as soon as 5 November 2018. Each party wishes to avail him, her or itself of his services as mediator on that day.
Accordingly, there will be provision for a mediation to occur that day and related requirements for attendance in person, including attendance by directors of corporate parties.
There is also a need, given that this case concerns competing businesses in the inner city, for expedition in relation to trial, if possible. As it happens, I do have time in December for a trial. Accordingly, I shall make provision by orders today for directions to the end of a trial commencing on 17 December 2018 in the event that the case does not settle at mediation.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate:
Dated: 14 November 2018
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