Autumnpaper Ltd v Metropolitan Investment Group Pty Ltd

Federal Court of Australia|2017-12-08|Before: Lee J

The appeal from the decision of the delegate of the Registrar of Trade Marks given on 13 December 2016 be allowed.
The decision of the delegate be set aside.
The respondent is to pay the appellant's costs of the appeal and of the opposition to the application the subject of the decision of the delegate on a party/party basis.
The appellant serve forthwith on the respondent a sealed copy of these Orders.
Liberty be reserved to the respondent to file an interlocutory application and any affidavit evidence upon which it proposes to rely to seek to set aside the Order for costs against respondent, with such liberty to be exercised within 14 days of service of these Orders.
In the event that the Order for costs is not the subject of any application by the respondent: (a) the appellant be awarded a lump sum for its costs in an amount to be determined by a Registrar of the Court; and (b) the Registrar be directed pursuant to FCR 1.37 to determine the quantum of the lump sum payable and, at the conclusion of the quantification process, to order that the respondent is to pay whatever sum has been quantified pursuant to Order 6 above within 28 days from the date of the Registrar's Order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

A INTRODUCTION 1 This is an appeal pursuant to s 56 of the Trade Marks Act 1995 (Cth) (Act) from a decision of a delegate of the Registrar of Trade Marks made in December 2016, which decision upheld an opposition by the respondent (Metropolitan) to the registration of Australian trade mark application number 1564493 (Application) for the word "McQueen" in classes 3, 9, 14, 18, 25 and 35 on the Register of Trade Marks. 2 It is trite that an appeal is a creature of statute and in order to understand the precise nature of the curial process that is to be undertaken, regard needs to paid to the statute creating the appeal: see ACN 078 272 867 Pty Ltd (In liq) v Deputy Commissioner of Taxation [2011] HCA 46; (2011) 86 ALJR 4 per Heydon J. In the present circumstances, it is well established that an appeal pursuant to s 56 of the Act is a hearing de novo: see Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 at [166] per Rangiah J; Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; (1999) 93 FCR 365 at 376-377 per French J. 3 The affidavit evidence read by Mr Smith, who appears on behalf of the appellant, being the affidavits of Lisa Maree Egan sworn on 20 April 2017 and 24 November 2017, establishes, relevantly, service on Metropolitan of both the notice of appeal and also correspondence recommending that Metropolitan obtain legal advice prior to the first case management hearing. Subsequently, Ms Egan arranged for the service of orders made by the Court at the first case management hearing on 21 April 2017 which, among other things, notified Metropolitan of the hearing listed today. When the matter was called on for hearing at 10.15 this morning, I arranged for the matter to be called three times outside the Court. Consistently with having taken no prior part in the proceeding or filing a notice of appearance, there was no appearance on behalf of Metropolitan. 4 The evidence of Ms Egan also details communications with IP Australia. By letter dated 18 April 2017, the appellant's solicitors informed IP Australia that no appearance had been filed by Metropolitan in the proceeding, nor had it responded to any of the communications sent to it. A request was made for IP Australia to advise whether the Registrar of Trade Marks wished to appear at the case management hearing in April 2017, and the letter also sought clarification as to the approach the Registrar would take if Metropolitan did not take any part in the proceeding. On 20 April 2017, the appellant's solicitors received a letter from a Senior Examiner, Trade Marks & Designs Hearings & Opposition at IP Australia, in which the appellant's solicitor was advised that the Registrar of Trade Marks would not play an active part in the proceeding nor take on an amicus role, but did wish to be kept informed of any developments. 5 Accordingly, the matter proceeded today without any opposition to the relief sought by the appellant.

B CONSIDERATION OF THE APPEAL 6 I referred above to the importance of paying regard to the statutory context in which this appeal arises. An important part of that context is s 68 of the Act, the effect of which is to provide that: (a) at the expiry of the two month opposition period, if there has been no opposition, then the Registrar must register the trade mark; and (b) if there has been an opposition, and the opposition is rejected, withdrawn or dismissed (for a failure to provide security for costs), then the Registrar must register the trade mark. 7 A different but similar statutory regime was the subject of consideration by Lindgren J in Cadbury Schweppes Plc v Effem Foods Pty Ltd [2006] FCA 1267; (2006) 69 IPR 584. In dealing with an analogous appeal with regard to a patent opposition, his Honour observed at 586 [17], that: It is important to note that in the light of the history of the application, and, in particular, the commissioner's acceptance of the application and the complete specification, s 61 of the [Patents Act 1990 (Cth)] would have obliged the commissioner to grant the patent if there had been no opposition to the grant. In substance, that is now the position on the appeal. 8 The approach of Lindgren J has been applied a number of times in relation to appeals made by trade mark applicants: see Societe Des Produits Nestle S.A. v Aldi Stores (A Limited Partnership) [2010] FCA 218 per Nicholas J; Suyen Corporation v Americana International Limited [2011] FCA 300 per Dodds-Streeton J; Raytheon Company v Lockheed Martin Corporation [2014] FCA 1063 per Perram J. 9 In Apple Inc v Macpro Computers (Aust) Pty Limited [2010] FCA 1505 at [5], Emmett J noted that: Section 56 provides that either the applicant or the opponent may appeal to the Court from a decision of the Registrar under s 55. Where there is an appeal from a decision of the Registrar to refuse to grant a trademark, but at the hearing of the appeal there is no evidence tendered in support of any ground of opposition, the appeal should be allowed if there is no opposition to that course. In such circumstances the decision of the Registrar should be set aside and the trademark application should proceed to registration. 10 To similar effect, in Societe Des Produits Nestle S.A., Nicholas J, referred to a letter in which the Deputy Registrar of Trade Marks indicated that the Registrar had no objection to the decision of the delegate being set aside so that the applicant may proceed to registration - a subtly different but nonetheless equivalent communication as occurred in this case. His Honour approached the resolution of the appeal by noting that it was not 'self-evident' that the mark the subject of the appeal should not have been registered, "nor is there any evidence before the Court which would lead me to the conclusion that it should not be registered" (at [9]). 11 I do not consider that there is any difference, in substance, to the approach taken by Emmett J and the approach taken by Nicholas J to the circumstances where there is an absence of evidence by which the opposition is sought to be maintained and the Registrar has not indicated an intention to appear to oppose the orders sought. 12 In the absence of Metropolitan, there is simply no evidentiary basis before the Court upon which it should find that the Application is not capable of distinguishing the appellant's goods and services from those of other traders, and hence there is no reason to uphold the opposition on the ground which commended itself to the delegate of the Registrar. 13 If I was to put it in the terms used by Nicholas J, it is in no sense self-evident that the mark the subject of the appeal should not proceed to registration on the material that I have seen, nor is there evidence presently before the Court on this appeal which would lead me to the conclusion that it should not be registered. 14 In the course of delivering these ex tempore reasons, I have been informed that there is another extant opposition by Maya McQueen Pty Ltd, which was the subject of a stay by the delegate of the Registrar of Trade Marks pending the disposition of this appeal. Nothing, other than the mere fact of the existence of this opposition, has been brought to my attention regarding the substance of this opposition, and I know nothing further of it. The conclusion I have expressed to the effect that there is nothing before me which would lead me to the conclusion that the mark should not be registered is limited to the context of the Metropolitan opposition which gave rise to this appeal.

C COSTS 15 As to costs, the appellant submits that the appeal would have been unnecessary, had Metropolitan not opposed the Application. The appellant further submits that it is appropriate that "costs follow the result in the ordinary way" and that an unconditional order for costs should now be made. 16 It is often said that there is a 'rule' that costs follow the event. The correct position is as was explained by Gleeson CJ, Gummow, Hayne and Crennan JJ in Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at 62-63 that although there is no "absolute rule", one of the "general propositions" regarding an award of costs is that the "award is discretionary, but generally that discretion is exercised in favour of the successful party" (see also Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 88 [40] per Gaudron and Gummow JJ). 17 It is also sometimes said that the Court has an 'unfettered' discretion in relation to costs. To the extent that this was ever true, it is clear it is no longer the case. The provisions of Part VB of the Federal Court of Australia Act 1976 (Cth) (FCAA) require the Court to take account of the overarching purpose provisions in exercising the costs discretion under s 43 of the FCAA. When one has regard to the overarching purpose, it might be thought that a decision made not to participate in a proceeding (and hence to accept tacitly the consequences of non-attendance) is not significantly different from expressly consenting to the orders sought by an opposing party. For my part, I consider there is real difference. Significant costs have been incurred which would not otherwise have been incurred. An appeal book comprising five lever arch folders was prepared, together with a bundle of authorities. Much of that material has not been referred to because there has been no opposition to registration advanced. To suggest that the preparation of the appeal on the basis that there may well have been opposition at the hearing was not justified, however, is to pay insufficient regard to the fact that the position of Metropolitan could have changed at any time up to the date of the hearing of the appeal. 18 Having noted this, it seems to me that the position in relation to a costs order may have been strengthened if steps had been taken by the appellant to draw Metropolitan's attention specifically to the intention to seek costs against Metropolitan, together with informing Metropolitan that a different approach to costs would be taken if consent orders were signed. No such step was taken in this case. 19 I do have some misgivings as to the precise, unconditional form of the costs order sought by the appellant in circumstances where there is no evidence that Metropolitan took to heart the entreaties of the appellant to obtain legal representation. I would be hesitant to visit upon Metropolitan a costs order without Metropolitan having had the opportunity to be heard on the question of costs if it wished to do so. 20 Accordingly, in the broad exercise of my discretion, I think the appropriate course is to make an award of costs but to reserve liberty to Metropolitan to put any material before the Court in relation to costs within a period of 14 days after the service of the orders I will shortly make. 21 The appellant also seeks a lump sum costs order. The Court's central practice and costs practice notes (Central Practice Note:National Court Framework in Case Management (CPN-1) and Costs (GPN-COSTS)) provide that the determination of the quantum of the costs of the successful party in a proceeding should not be delayed and, to this end, the Court will, where appropriate, facilitate the making of lump sum costs orders. It has now become the Court's practice, wherever it is practicable and appropriate to do so, to make lump sum costs orders so as to finalise costs and avoid potentially expensive and lengthy taxation hearings. I am satisfied in this case that it is fair, logical and reasonable to avoid a taxation and to proceed to have the appellant's costs assessed on a lump sum basis (subject to the liberty reserved to Metropolitan to which I have already made reference). 22 Adopting an approach that has been taken in other cases, including by Perram J in Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 4) [2017] FCA 436, I propose to direct that the process of assessing the lump sum costs be carried out by a Registrar of the Court. The process of quantification will obviously be a matter for the Registrar. Without seeking to bind the Registrar in relation to the question of quantification, it may be that the Registrar regards the comments I have made above about the preparation of the appeal book to be relevant to the quantification process in the sense that the appeal was one that may have had to be heard in the context of a late appearance on behalf of Metropolitan.

D ORDERS 23 In these circumstances, I make the following orders: (1) The appeal from the decision of the delegate of the Registrar of Trade Marks given on 13 December 2016 be allowed. (2) The decision of the delegate be set aside. (3) The respondent is to pay the appellant's costs of the appeal and of the opposition to the application the subject of the decision of the delegate on a party/party basis. (4) The appellant serve forthwith on the respondent a sealed copy of these Orders. (5) Liberty be reserved to the respondent to file an interlocutory application and any affidavit evidence upon which it proposes to rely to seek to set aside the Order for costs against respondent, with such liberty to be exercised within 14 days of service of these Orders. (6) In the event that the Order for costs is not the subject of any application by the respondent: (a) the appellant be awarded a lump sum for its costs in an amount to be determined by a Registrar of the Court; and (b) the Registrar be directed pursuant to FCR 1.37 to determine the quantum of the lump sum payable and, at the conclusion of the quantification process, to order that the respondent is to pay whatever sum has been quantified pursuant to Order 6 above within 28 days from the date of the Registrar's Order. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.

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