Aussie Red Equipment Pty Ltd v Antsent Pty Ltd

Introduction 1 On 20 December 2000 the applicants commenced proceedings in this Court against Antsent Pty Ltd ("the first respondent") and the director of the first respondent responsible for its day to day activities, Mr Steven Power ("the second respondent"). The statement of claim alleged that the respondents had breached the Trade Practices Act 1974 (Cth) ("TP Act"), engaged in passing off and infringed the applicants' registered trade mark. Without the matter proceeding to hearing, the parties reached agreement on the substantive issues raised in the application and on 20 June 2001 consent orders were entered which effectively disposed of the matter. However, the issue of costs as between the applicants and the respondents remains unresolved.

History of the proceedings 2 The following appears not to be in issue. The applicants specialise in providing and marketing cleaning services, in particular a high pressure water cleaning system designed for hard surfaces which is registered under the "AQUA FORTIS" mark. In June 1998, the first respondent purchased a machine equipped with that cleaning system from the second applicant and obtained from the second applicant a letter authorising the use of "Aqua Fortis Cleaning Capture System, Brisbane" as a business name in Queensland. On 6 June 1999, the first applicant licensed the first respondent to use the "AQUA FORTIS" mark until such time as the license agreement expired or was terminated. The agreement was terminated by the first applicant on 28 February 2001, however, the first respondent continued to trade using the "AQUA FORTIS" mark in signage and advertising, on its internet website and in its registered business names. 3 On 22 November, solicitors acting for the applicants wrote to the second respondent informing him that, by continuing to use the AQUA FORTIS mark, the first respondent was infringing trade mark, breaching s 52 and 53 of the TP Actand engaging in passing off. The letter also advised the second respondent that, having been knowingly concerned in and a party to the first respondent's conduct, he may also be liable for any pecuniary penalties under the TP Act. The applicants' solicitor advised the respondents that unless an undertaking was given to the effect that the first respondent would cease using and trading under the AQUA FORTIS mark by 1 December 2000, proceedings would be commenced against the respondents. On 5 December 2000, the second respondent advised the applicants' solicitor by telephone that the undertaking sought would not be given. These proceedings were subsequently commenced on 20 December 2000. 4 The proceedings first came before the Court for directions on 20 February 2001. At that time, because of difficulties in locating the second respondent, only the first respondent had been served with the application and statement of claim. There was no appearance for the first respondent. Orders were made that the first respondent file and serve a notice of appearance by 27 February 2001 and file and serve a defence by 6 March 2001. The matter was then stood over for further directions on 20 March 2001. The applicants' solicitors were directed by me to arrange for service of those orders on the first respondent. 5 On 7 March 2001, the second respondent was served with the application, statement of claim and the orders of 20 February 2001. The matter came before the Court for directions for a second time on 20 March 2001. There was no appearance on behalf of either of the respondents and the orders from the first directions hearing had not been complied with by the first respondent. Orders were made in substantially the same form as the short minutes of order handed up by the applicants. Those orders were as follows: "The Court orders that: 1. The Applicant have leave to file and serve any amended application joining Melbourne Information Technologies Australia Pty Ltd within 7 days. 2. The Second Respondent file and serve any defences on or before 3 April 2001. 3. The Applicants file and serve any replies on or before 17 April 2001. 4. The Applicants file and serve any notice of motion seeking judgment in these proceedings on or before 24 April 2001 together with any supporting affidavits. 5. Liberty to apply on 2 days' notice. 6. The Applicants be granted leave to effect service of documents, including these directions on the Second Respondent in the following manner: (a) by fax to (07) 3869 1833; (b) by email at ; and (c) by post to 76 Barclay Street, Deagon, Queensland. 7. These proceedings be stood over for further directions on 30 May at 9.30am." At that directions hearing the applicants also informally undertook to write to the respondents explaining to them that, if no appearance was entered by them, judgment and costs may be awarded against them and informing them of the likely amount of such costs. 6 The respondents took no action to comply with the Court's orders and the applicants consequently filed a notice of motion for judgment and two supporting affidavits on 24 April 2001. Those documents were served on the respondents. Four additional affidavits of service were prepared but never filed because the hearing of the applicants' notice of motion did not eventuate. On 26 April 2001, the second respondent contacted the applicants' solicitor and over the next two days discussions took place. Following those discussions the applicants' solicitor on 1 May 2001 sent to the second respondent, both by fax and by express post, a "without prejudice" letter containing an offer to resolve the proceedings. The letter gave the respondents until 12pm on 18 May to reply. If the respondents accepted the terms of the offer, the applicants undertook to discontinue the proceedings on the basis that there would be no order as to costs. On the same day, the second respondent contacted the applicant's solicitor by telephone to expressly reject the offer. There was no further contact between the parties until the 30 May 2001 when the applicants' notice of motion, and the matter generally, were listed for directions before me. 7 On that day the second respondent appeared in person on behalf of himself and the first respondent (leave was given for the second respondent to appear for the corporation). The applicants claim that, as they had not heard from the second respondent after his rejection of the offer, they did not expect him to appear and as such the applicants' solicitors prepared for an ex parte hearing of the application for summary judgment and briefed counsel to appear. The hearing of the application did not proceed and instead the matter was stood over for further directions on 20 June 2001 in order to enable the respondents to obtain legal advice. The costs of the directions hearing of 30 May 2001 were reserved. 8 The respondents then instructed Julian Harrison of the firm Gill & Lane to act on their behalf. Discussions between the parties' solicitors commenced and shortly thereafter the parties agreed on short minutes of order resolving the matter, save for the issue of costs. The Court made orders in accordance with those short minutes on 20 June 2001, which were entered on the same day. The orders provided as follows: "By consent the Court orders that: 1. TheFirst and Second Respondents, their servants and agents and each of them be restrained from infringing trade mark registration No. 759,103 ("the Trade Mark). 2. The First and Second Respondents, their servants and agents and each of them be restrained from, in trade or commerce in Australia, advertising promoting, offering to supply or supplying any cleaning services under or by reference to any business name, company name, domain name or any trade mark consisting of or including the AQUA FORTIS Marks (as that term is defined in paragraph five of the Statement of Claim filed in these proceedings) or any of them or any other words substantially identical to and deceptively similar to any of the AQUA FORTIS Marks. 3. Subject to order 4 herein, within seven days, the Respondents deliver up on oath to the Applicants for destruction all signage, brochures, business cards and other advertising or promotional material in the possession, custody or control of the First and/or Second Respondent or either of them which refer to any business name, domain name or any trade mark consisting of or including the Aqua Fortis Marks or any of them or any of the AQUA FORTIS Marks. 4. All signage appearing on any trailer or vehicle or equipment operated by the First and/or Second Respondent in the conduct of any cleaning business containing any reference to the AQUA FORTIS Marks be obliterated by the respondents within seven days. 5. The First and Second Respondents, within 7 days, deliver to the Applicants' solicitors signed Forms 5 - Notice of Cessation of Business Name for the following business names: (a) AQUA FORTIS QUEENSLAND - BN16925439 (b) AQUA FORTIS SUNSHINE COAST - BN16925440 (c) AQUA FORTIS GOLD COAST - BN16925427 (d) AQUA FORTIS CLEAN AND CAPTURE BRISBANE - BN7153510 6. The First Respondent, within seven days, deliver to the Applicants' solicitors duly executed authorisation to terminate a .com.au domain name licence form for the domain name "aquafortis.com.au" and take any other steps necessary to terminate the .com.au domain name licence for the domain name "aquafortis.com.au" and delete it from the Aunic Registry and from the .com.auDNS. 7. If the First Respondent fails to comply with paragraph 6 hereof, the Third Respondent through its division, Internet Names Worldwide, terminate the licence for "aquafortis.com.au" and delete that domain name from the Aunic Registry and from the .com.auDNS. 8. If the First and Second Respondent do not comply with paragraph 5, a Registrar of the Federal Court will sign Notice of Cessation of Business Name forms in respect of the business names set out in paragraph 5 above, on behalf of the Respondents. 9. The First and Second Respondents, within seven days, take all necessary steps to remove all references to the AQUA FORTIS Marks or any of them or any words substantially identical or deceptively similar to any of the AQUA FORTIS Marks from the web site located at "aquacapture.com.au". 10. As between the Applicants and First and Second Respondent, costs be reserved. 11. As between the Applicants and the Third Respondent, each party pay its own costs. 12. Leave be granted to enter orders forthwith."