The Upper Deck Company LLC v Reach NZ Limited HC Auckland CIV 2008-404-004944

[2008] NZHC 2595

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2008-404-004944

UNDER  Section 153 of the Trade Marks Act 2002

BETWEEN  THE UPPER DECK COMPANY LLC Plaintiff

ANDREACH NZ LIMITED Defendant

ANDTHE CHIEF EXECUTIVE OF THE NEW ZEALAND CUSTOMS SERVICE

Person To Be Served

Counsel:         N K Larnder for plaintiff

Appearance by: Junxian Li (director of defendant) by leave

Judgment:      25 September 2008

REASONS FOR ORAL JUDGMENT OF ASSOCIATE JUDGE ABBOTT

Solicitors:

DLA Phillips Fox, PO Box 160, Auckland 1140

Junxian Li, Reach NZ Limited, 13 Kent Street, Hamilton

THE UPPER DECK COMPANY LLC V REACH NZ LIMITED AND ANOR HC AK CIV 2008-404-004944

25 September 2008

Introduction

[1]      The plaintiff has applied for judgment by default.  The defendant was served with the claim on July 2008 but has taken no steps.   It has not filed notice of opposition to the application.   The application came before me in the first case management conference held by telephone. Although the defendant had taken no steps, its director (Ms Junxian Li) asked to be present at the conference.   I have granted her leave to attend on behalf of the defendant.

[2]      After hearing from counsel for the plaintiff and from Ms Li I granted the application  for  judgment  by  default  (as  sought  in  the  statement  of  claim),  and ordered costs to be paid by the defendant to the plaintiff.   The following are the reasons for judgment given in the conference, but clarifying the detail of the order for costs.

Background

[3]      The plaintiff says that the defendant has imported trading cards into New Zealand which infringe its registered New Zealand trade mark “UPPER DECK”. The cards have been seized by New Zealand Customs Service, which has issued a determination under s146 of the Trade Marks Act 2002 that the goods appear to bear infringing signs.  The defendant has not taken steps under the Act either to challenge detention of the cards or consenting to forfeiture.

[4]      The plaintiff has issued this proceeding seeking an injunction to prevent further dealing in infringing goods by the defendant, an order directing delivery up of any infringing goods, and an inquiry into damages, and as a second cause of action a declaration that the cards infringe the trade mark and seeking an order that they be forfeited and destroyed.

[5]      The defendant has taken no steps.  Its director has twice written to the Court and indicated that it does not wish to defend the matter on any basis other than costs. The  defendant’s  director  has  been  given  leave  to  attend  this  conference.    She

confirms the defendant’s position (stated in a letter to the Court of 23 September

2008) that the defendant does not wish to seek legal advice.

Application for judgment by default

[6]      In the absence of any steps having been taken to defend the proceeding, the plaintiff has applied for entry of judgment by default pursuant to r 465 of the High Court Rules.  None of the matters raised by the defendant in the correspondence to the Court, or by its director today, suggest that there is any basis for a defence.  The plaintiff is entitled to judgment as sought in its application dated 11 September 2008.

Costs

[7]      I will address additionally the matters raised on the defendant’s behalf as to costs.  The defendant says that it did not intend to infringe, and suggests that it was not given proper information as to the steps it was required to take.  It also says that the costs sought are unreasonable.

[8]      The plaintiff has produced a copy of a notice of determination received from NZ Customs Service dated 9 July 2008 which it sent to the defendant (at three different addresses) on 18 July 2008 under cover of a letter from the plaintiff’s solicitors requesting undertakings to cease  any further infringements, consent  to forfeiture and destruction of the goods held by NZ Customs Service, and delivery up of any further infringing goods held.  The defendant did not respond to that letter.  In the circumstances I consider it reasonable for the plaintiff to have issued this proceeding.

[9]      Further, I accept that it is reasonable for the plaintiff to have applied for judgment by default in the absence of any steps to defend the matter.  Although the defendant offered to sign a consent to forfeiture and to provide the requested undertakings, it did so only on condition that the plaintiff bear its own costs and withdraw the proceeding.    The  plaintiff  was  under  no  obligation  to  accept  that condition, it was entitled to proceed with its application.  The defendant could have

saved itself some part of these costs if it had either acted promptly or appropriately or taken legal advice.

[10]     The plaintiff has filed a memorandum seeking costs in respect of four items in Schedule 5 of the High Court Rules, on a 2B basis, and disbursements incurred. Ms Li has questioned the reasonableness of the costs sought, particularly in relation to items 1 and 4.11 of the schedule.

[11]     I have explained to Ms Li that costs are determined by reference to the scale in Schedule 3 to the High Court Rules rather than actual costs incurred.  The Court still has an overriding discretion as to whether those costs are reasonable.

[12]     Ms  Larnder  confirms  that  the  costs  sought  do  not  exceed  actual  costs charged.  She has outlined the work entailed in issuing the proceeding.  I consider that scale 2B costs are reasonable except in relation to the provision for preparation for and attendance at this conference.  I consider that 0.4 of a day is an appropriate total allowance for these two items.

Decision on costs

[13]     I award costs to the plaintiff on a 2B basis in respect of items 1, 4.10, 4.11 and 4.21 of Schedule 3 to the High Court Rules but reducing the costs for items 4.10 and 4.11 to 0.2 of a day in each case.  I also order the defendant to pay the plaintiff’s disbursements of $1,886.25 as set out in the schedule to the plaintiff’s memorandum

for this conference.

Associate Judge Abbott