The various offers made
8 This proceeding was commenced on 23 October 2014. On 9 November 2014 the applicant wrote to Mr Morcom, the patent and trade marks attorney for the respondent. Mr Morcom was the representative with whom the applicant had consistently dealt in relation to the trade mark proceedings. In my reasons of 20 March 2015, I made some findings about Mr Morcom's role, or what I thought was the lack of it, in relation to this proceeding. In light of the evidence now adduced by the applicant, and not contradicted by the respondent, I do not consider this Court was given a completely accurate description by Mr Morcom of the role he played in this proceeding on behalf of the respondent. When he told the Court at the directions hearing on 21 November 2014 that he had "no instructions" from the respondent and could not represent it, he apparently did continue to receive instructions from the respondent and to represent it, certainly insofar as he dealt with Mr Beling on its behalf, and in the context of this very proceeding.
9 It now appears, as I set out below, that in his dealings with the applicant, Mr Morcom purported to represent the respondent in this proceeding, and to have instructions from the respondent in relation to the conduct of this proceeding.
10 The 9 November 2014 offer was sent at a time when Mr Morcom was still named as a respondent to the proceeding, and so the letter appears to be addressed to Mr Morcom in a dual capacity. The letter states:
I refer to the above matter.
1. I offer to settle the above matter if you or your client or you and your client pay me the sum of $25,000 (twenty-five thousand dollars) which sum is calculated as a proportion of my full professional costs as a solicitor acting on my own behalf in proceedings before IP Australia and the Federal Court of Australia to date in full and final satisfaction of my claim as to costs.
2. As part of agreeing to term (1), I agree to forgo interest (compound), calculated at 10 percent or another sum determined by the Court to be paid on the total of the judgment sum, from 10am on Monday 15th December 2014 to the date of judgment by either the Federal Court of Australia or, if necessary, the High Court of Australia.
3. Further, as part of agreeing to term (1), I agree to forgo my costs incurred in litigating the Federal Court of Australia hearing and, if necessary, the High Court of Australia hearing.
4. If you or your client do not accept this offer, I advise I will be seeking interest (compound), calculated at 10 percent or another reasonable sum determined by Court to be paid on the total of the judgment sum, from 10 am on Monday 15th December 2014 to the date of judgment by either the Federal Court of Australia or, if necessary, the High Court of Australia.
The reasons for this offer are that I was successful on the merits against your client and, as a solicitor litigant, I am entitled to my full professional costs pursuant to the High Court's ruling in Guss v Veenhuizen (No 2) (1976) 136 CLR 47 and Cachia v Hanes [1994] HCA 14; (1994) 179 403 [sic]. Further, you and your client unreasonably commenced and prosecuted proceedings against me for the reasons particularized in my Notice of Appeal in the present proceeding.
I advise I will be relying on this offer at the above hearing and, if I am not awarded my full professional costs as a solicitor acting on my own behalf before the Court including my costs incurred up to the hearing, in an appeal to the Full Court of the Federal Court of Australia and to the High Court of Australia.
This offer is made pursuant to the principles of, and which may be extrapolated from, Calderbank v Calderbank and is open to acceptance up to and until 10:00 am on Monday 15th December 2014.
I thank you for your attention and await your response.
11 There are parts of this letter which are somewhat contradictory, and parts which are wrong, such as the claim for interest. The first paragraph, however, is clear. It purports to cover the settlement not only of this proceeding but of what the applicant saw (correctly as it turned out) as the still outstanding costs dispute before the Registrar.
12 Neither Mr Morcom nor the respondent replied to this letter or to the offer. However on 14 November 2014 the applicant had a telephone conversation with Mr Morcom for approximately an hour. The applicant deposes to the content of the conversation:
On 14 November 2014 I had a telephone conversation with Mr. Morcom of approximately one hour in an effort to resolve my dispute with the respondent. I explained to Mr. Morcom the legal principles underpinning my appeal and stated that the relevant law was clear with respect to a self-represented solicitor-litigant's right to his or her professional costs when successful on the merits. I mentioned the cases of Guss v Veenhuizen [No. 2] (1976) 136 CLR 47, Cachia v Hanes (1994) 179 CLR 403, and Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 4) [2008] FCA 1085. Mr. Morcom wrote down the citation to Freehills' case, which I dictated to him. I explained to Mr. Morcom the unreasonable conduct of the respondent during the proceedings before the Registrar of Trade Marks, including the fact that he advised me the respondent's mark was "Energy Men" and that the respondent, in my opinion, failed to file adequate evidence in support and failed to file any evidence in reply despite seeking at least two extensions of time to file such evidence. Without making admissions to the respondent's conduct, Mr. Morcom asked me essentially how much it would take for me to "go away." I advised Mr. Morcom that I just sought my reasonable and necessary costs above the scale in Schedule 8 of the Trade Mark Regulations in view of the Respondent's unreasonable conduct in commencing and prosecuting the opposition. Mr. Morcom advised me that he believed that a great deal of the work I had undertaken was unnecessary and could not be claimed. I replied that I wanted the calculation of my costs to be fair and reasonable and that I was happy for the Law Institute of Victoria's costing service to assess the costs which I had reasonably and necessarily incurred. Mr. Morcom stated that he would consider the offer.
13 On 20 November 2014, Mr Morcom wrote to the applicant, on the letterhead of Morcom Pernat, Patent and Trade Mark Attorneys. The letter stated:
I refer to our telephone conversation on Friday 14 November 2014 and in particular to the aspect of that conversation concerning the quantum of any costs that could have been awarded by the Registrar's delegate in the decision dated 16 October 2014.
I will leave aside at this time any consideration of the merit or otherwise of the refusal of the Registrar's delegate to make an award of costs in favour of the applicant. However I wish to ensure you understand the quantum of such costs is not a matter for determination by some official of a Law Institute as you proposed during the abovementioned phone conversation.
The quantum and its means of determination are instead set by Federal Statute and in particular Schedule 8 of the Commonwealth Trade Mark Regulations 1995 and its associated subregulation 21.13(3). Enclosed for your reference are a copy of the Schedule 8 and Regulation 21.13 plus Section 105 of the Trade Marks Act referred to in Reg. 21.13.
By my calculation, according to Schedule 8 the costs that would have been taxed, had the delegate awarded costs in your favour, would have been as follows:
Item 4: Notice of intention to defend $400
Item 6: Receiving and perusing a notice of opposition $130
Item 8: Receiving and perusing evidence in support $300
Item 9: Evidence in Answer $700
Item 13: Preparation of case for hearing $525
Total $2,055
With the aim of putting paid to the proceedings, we are accordingly prepared to offer a one-off payment of three thousand dollars ($3,000) if you agree for your Appeal to the Federal Court of Australia to be dismissed with no order as to costs.
14 It appears from the applicant's affidavit that Mr Morcom informed the applicant he had obtained advice from senior counsel in relation to the applicant's claim for costs. I infer from that evidence (which the respondent did not contradict), together with the content of the letter, that counsel's advice had been sought by Mr Morcom on behalf of the respondent, and in relation to this proceeding.
15 In making this offer, Mr Morcom is clearly purporting to act on behalf of the respondent, not only in relation to the proceeding before the Registrar, but also in relation to the proceeding in this Court. The letter is headed "Re: VID626 of 2014, Federal Court of Australia, Beling v Sixty International S.A. and Another", and expressly states the offer is put "[w]ith the aim of putting paid to the proceedings, we are accordingly prepared to offer …".
16 The applicant did not accept this offer. Instead, on 24 November 2014 he wrote again to Mr Morcom. His letter bore a heading referring to the proceeding in this Court. In the first sentence, he also referred to "the Court's decision dated 21 November 2014", which I take to be a reference to my decision to remove Mr Morcom as a party to the proceeding and to give directions preparing the matter for trial.
17 Mr Beling stated:
1. Leaving aside the merits of my claim for costs in the proceedings before the Registrar of Trade Marks, I offer to settle the above matter if your client agrees to pay me the sum of $3,000 (three thousand dollars) which sum is calculated as a proportion of my full professional costs as a solicitor acting on my own behalf in proceedings before the Federal Court of Australia to date in full and final satisfaction of my claim for costs before the Federal Court of Australia only (excluding my claim for costs in the proceeding before the Registrar of Trade Marks) if and only if your client consents to the Court making a declaration to the effect that the Registrar of Trade Marks must hear and determine the issue of costs in the opposition proceeding relating to Trade Mark No. 1441489 on the merits.
2. As part of agreeing to term (1), I agree to forgo interest (compound), calculated at 10 percent or another sum determined by the Court to be paid on the total of the judgment sum, from 10am on Monday 29th December 2014 to the date of judgment by either the Federal Court of Australia or, if necessary, the High Court of Australia.
3. Further, as part of agreeing to term (1), I agree to forgo the remainder of my costs incurred in litigating the above Federal Court of Australia hearing and, if necessary, the High Court of Australia hearing.
4. If your client does not accept this offer, I advise I will be seeking interest (compound), calculated at 10 percent or another reasonable sum determined by Court to be paid on the total of the judgment sum, from 10am on Monday 29th December 2014 to the date of judgment by either the Federal Court of Australia or, if necessary, the High Court of Australia.
The reason for this offer is that Her Honour Justice Mortimer has already provided a preliminary view in open Court on 21 November 2014 that the Registrar of Trade Marks in his decision on the written record dated 16 October 2014 failed to sufficiently deal with the issue of costs and that the Court would likely issue a declaration requiring the Registrar of Trade Marks to deal with the question of costs. I also refer you to the Registrar's of Trade Marks' [sic] decision on the written record dated 16 October 2014 which does not provide sufficient reasons for its decision on the question of costs. I also note that despite proper service of the Notice of Appeal (which was conceded by you in open Court), your client failed to appear, by itself or through legal representatives, at the Directions Hearing on 21 November 2014, which caused me to incur unnecessary expenses.
I advise I will be relying on this offer at the above Federal Court of Australia hearing and, if I am not awarded my full professional costs as a solicitor acting on my own behalf before the Court including my costs incurred up to the hearing, in an appeal to the Full Court of the Federal Court of Australia and to the High Court of Australia.
This offer is made pursuant to the principles of, and which may be extrapolated from, Calderbank v Calderbank and is open to acceptance up to and until 10:00 am on Monday 29th December 2014.
I thank you for your attention and await your response.
(Emphasis in original.)
18 Mr Beling misstates, perhaps through a misunderstanding, my remarks made in the directions hearing on 21 November 2014. I expressed no "preliminary view" of the kind attributed to me. Rather, on that occasion, I expressed only a strong preliminary view that, if the application were to succeed, the matter should be remitted for the question of costs to be determined by the Registrar.
19 Notwithstanding the misstatement in the applicant's letter, there is a critical difference between this offer and the first offer made by the applicant. As the applicant deposes, he had listened to and considered my observations made during the directions hearing on 21 November, to the effect that even if he were successful, the most likely order would be an order remitting the costs issue for determination by the Registrar, rather than this Court entering into the question of whether costs should be ordered under s 221 of the Act and, if so, in what amount.
20 As a consequence of listening to those remarks, as he deposes in paragraph 9 of his affidavit, he made this second offer on quite different terms. The sum of $3,000 is referable only to his costs in this proceeding.
21 Neither the respondent nor Mr Morcom replied to this offer, although it was, as I find below, a reasonable one.
22 The conduct of the respondent and Mr Morcom in this proceeding has been unsatisfactory. Despite having had Mr Morcom acting for it in this proceeding by way of making offers to settle the proceeding to the applicant, the respondent refused to take any of the steps required by the Federal Court Rules to appear and participate in the proceeding until the day before the final hearing. Yet now, having ignored the Court's Rules and procedures, the respondent seeks to rely on what it and its representative Mr Morcom did by way of communication with the applicant in order to advance its own interests in not paying professional costs to Mr Beling, although he has been successful.