Enagic Co., Ltd v Horizons

Federal Court of Australia|2020-08-21|Before: Markovic J

THE COURT ORDERS THAT:

Paragraphs 1, 2 and 4-9 of the respondent's notice to produce dated 23 July 2020 be set aside.
The balance of the respondent's notice to produce dated 23 July 2020, being paragraphs 3 and 10, be made returnable before a Registrar of this Court at 9.30 am on 2 September 2020.
The respondent pay the appellant's costs of its interlocutory application filed on 5 August 2020.
Paragraphs 5, 6 and 7 of the respondent's interlocutory application filed on 12 August 2020 be dismissed.
Leave be granted to the respondent to file and serve any application for dispensation, pursuant to r 1.34 of the Federal Court Rules 2011 (Cth) (Rules), by it of compliance with r 4.01(2) of the Rules which requires that a corporation must not proceed in the Court other than by a lawyer, together with its affidavits in support setting out in detail why it is that the respondent is unable to be represented by a lawyer in this proceeding, with such application to be made returnable for case management hearing on 16 September 2020 at 9.30 am.
The proceeding otherwise be listed for case management hearing on 16 September 2020 at 9.30 am. THE COURT NOTES THAT:
In the event that solicitors come on the record for the respondent, the application referred to in Order 5 above will not be required. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background 2 The Notice to Produce comprises 10 categories. As noted, this application only concerns categories 1 to 2 and 4 to 9 which are as follows: 1. Managing Director and Secretary Appointment Agreement: a document recording the agreement to appoint Kenso Matsuoka as Managing Director and Secretary of Enagic Australia pty Ltd (ACN 141 931 919). 2. Shareholding Register: a document of record of the shareholding and the shareholder(s) of Enagic Australia Pty Ltd (ACN 141 931 919). … 4. Consent to act as Managing Director: a copy of the Consent to Act as Managing Director and Secretary of Enagic Australia Pty Ltd (ACN 141 931 919) signed by Kenso Matsuoka. 5. Contracts of Employment: a copy of each of the employment agreements recording the terms of Kenso Matsuoka's employment with: a. the Appellant in Tokyo, Japan b. the Apellant's branch office in Hawaii c. the Appellant's branch office in Hong Kong d. and/or the Appellant's Chief Executive Officers, including Hironari Oshiro 6. Payslips of Kenso Matsuoka: in the event that the employment agreement of Kenso Matsuoka with the Appellant and/or its Chief Executive Officers, including Hironari Oshiro, are verbal, or alternatively, not available to produce, a copy of at least one payslip per year since 2003 issued by the Appellant's Office in Chuo-Ku (Tokyo, Japan) and Branch Offices in Hawaii and Hong Kong, as appropriate, to Kenso Matsuoka. 7. Company reports: a government issued document recording the registered office and place of address, its office holders and shareholding of the Appellant in: a. Chuo-Ku, Tokyo Japan (in Page 30 of Annexure KM-3 to the Affidavit of Kenso Matsuoka affirmed on 13 June 2019) b. the Appellant's branch offices in Osaka (Japan) and Okinawa (Japan) c. the Appellant's branch offices in Hawaii and Hong Kong: 8. Lease agreement: a copy of the Appellant's lease agreement for its lease of the premises recorded as the Appellant's principle [sic] office or place of business in: a. Chuo-Ku, Tokyo, Japan b. Osaka, Japan c. Okinawa, Japan d. Hawaii e. Hong Kong 9. Authority To Act for the Appellant: a signed document recording the Authority to Act for the Appellant by Kenso Matsuoka in these proceedings. 3 Before proceeding further, it is convenient to say something about the substantive proceeding. This is an appeal by Enagic from the decision of the Registrar of Trade Marks (Registrar) given by a delegate of the Registrar on 27 November 2018. By that decision, the Registrar's delegate determined that each of the grounds of opposition raised by Enagic had not been established and that the application by Horizons for registration of trade mark no 1798917 for the mark KANGEN could proceed to registration. Without descending into the detail, Enagic relies on ss 58, 44, 60, 62A and 42(b) of the Trade Marks Act 1995 (Cth) (Act) as grounds of opposition. 4 The parties each rely upon some evidence in relation to the application. I do not propose to set out that evidence in any detail, although I will refer to some of it in addressing the categories of the Notice to Produce the subject of this application.

Parties' submissions 5 In summary, Enagic contends that paragraphs 1 to 2 and 4 to 9 of the Notice to Produce should be set aside because those categories serve no legitimate forensic purpose and do not call for documents which are necessary to resolve the issues in dispute. It also contends that the Notice to Produce is tantamount to an abuse of process and that it mimics a notice to produce served by Enagic on Horizons dated 8 July 2020 (Enagic Notice to Produce). 6 Horizons submits that paragraphs 1 to 2 and 4 to 9 of the Notice to Produce are relevant and that they should not be set aside. In its written and oral submissions it contends that the only evidence to be relied on by Enagic in the appeal is that of Kenso Matsuoka. Mr Matsuoka affirmed an affidavit on 13 June 2019 which is extensive. Horizons submits that Mr Matsuoka claims to be independent and that his company, Enagic Australia Pty Ltd (Enagic Australia), "is also [an] independent entity, making hundreds of thousands, if not millions of dollars of sales in Australia". 7 Horizons submits that these claims are consistently made and maintained by Enagic and its lawyers. Horizons says that, however, based on a company search obtained from the Australian Securities and Investments Commission, the factual position of Enagic Australia is vastly different to that claimed by Mr Matsuoka. Horizons submits that it is reasonable for it to wish to see the documents sought in the Notice to Produce in order to understand exactly what is claimed by Enagic in its evidence in chief. 8 In oral submissions Ms Ng, who appeared with leave today on behalf of Horizons, further explained this submission. It appears that the gravamen of Horizons' position is that, through the Notice to Produce, it seeks to establish the true situation. That is, whether Mr Matsuoka is independent or not independent of Enagic and, by that, to establish Mr Matsuoka's ability to give the evidence that it is proposed he will give in the appeal when it is ultimately heard.

Consideration 9 Rule 30.28 of the Federal Court Rules 2011 (Cth) permits a party to serve on another party a notice in accordance with Form 61, requiring the party served to produce any document or thing in the party's control at, relevantly, any trial or hearing in the proceeding. However, a notice to produce must call for or seek the production of documents which are relevant to the proceeding. The test of relevance is "whether the documents are 'reasonably likely to add, in the end, in some way or other, to the relevant evidence of the case'": see Seven Network Limited v News Limited (No 11) [2006] FCA 174 at [6]. 10 Having regard to the nature of the dispute, the matters in issue and the categories of documents sought in paragraphs 1 to 2 and 4 to 9 of the Notice to Produce, I am not satisfied that those categories of documents are relevant to any matter in issue in the proceeding or that they are reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case. 11 To the extent that Horizons says that it wishes to test the independence or otherwise of Mr Matsuoka, that desire reflects a misunderstanding of Mr Matsuoka's evidence. Part of Mr Matsuoka's affidavit was before me in evidence on this application. Mr Matsuoka quite clearly describes his role in the appellant and its related companies including Enagic Australia, which he describes as the Australian affiliate of the appellant. He also describes his role over many years with the appellant and its various branches in other parts of the world as well as Australia. Mr Matsuoka's independence or otherwise is not a matter that needs to be explored any further. That said, ultimately Horizons will have the ability to test Mr Matsuoka's evidence, if the matter proceeds to trial, by way of cross-examination. But the task which it seeks to embark on by way of the Notice to Produce is not one which has any legitimate forensic purpose as contended for by Horizons. 12 Looking more closely at some of the categories, it is not apparent how obtaining documents recording any agreement to appoint Mr Matsuoka as managing director and secretary of Enagic Australia, or recording his shareholding in Enagic Australia, is relevant to any matter in issue, having regard to the issues in the proceeding. Those matters are, in any event, evident from a company search of Enagic Australia. That Mr Matsuoka's shareholding may have changed over a period, which seems to be the case based on the two company searches in evidence, is neither here nor there and, ultimately, is of no relevance to the matters in issue. 13 The same can be said about documents going to Mr Matsuoka's consent to act as a director and secretary of Enagic Australia and his contracts of employment with the appellant around the world. More particularly, what is in issue is the registration or otherwise of a trade mark in Australia and therefore the use of the relevant trade mark in this country. Mr Matsuoka's employment with the appellant in other parts of the world cannot possibly be relevant to that issue, nor can the employment of other officers within the appellant be relevant to that issue. Similarly, the lease agreements for the appellant's places of business around the world cannot be relevant to those issues. 14 The final category, category 9, calls for an authority for Mr Matsuoka to act for the appellant. It is difficult to know what is in fact contemplated by this category. However, Mr Matsuoka will appear as a witness in this case and, as I have already said, his evidence can be tested in cross-examination. Therefore, the relevance of any document going to his authority to act is not apparent. 15 Accordingly, paragraphs 1 to 2 and 4 to 9 of the Notice to Produce should be set aside.

Costs 16 That then leaves the costs of this application. Enagic seeks those costs on an indemnity basis payable forthwith. It submits that, in serving the Notice to Produce, Horizons has pursued a course of forensic inquiry that has no utility and that the Notice to Produce should never have been issued and is an abuse of process. It relies, in part, on the fact that the Notice to Produce has an uncanny resemblance to the Enagic Notice to Produce. In response, Horizons contends that it did not intend to mimic or copy the Enagic Notice to Produce and that it had a proper forensic purpose in issuing the Notice to Produce. 17 Enagic also submits that the observations of Perram J in Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 4) [2017] FCA 436 at [9] are apt and should apply by analogy to this case. His Honour said that, based on the facts as found, the respondents in that case had "attempted to exploit the Applicants' reputation by using a product and name designed to confuse the relevant class of consumer into thinking that there was an association with the Applicants, which did not exist" and that they pursued at trial factual allegations which were found to be false in many instances. His Honour noted that the applicants had been put to a great deal of inconvenience in meeting those allegations which ought never to have been made such that an indemnity costs order was appropriate. 18 This case is not in that same extreme category. While I have found that categories 1 to 2 and 4 to 9 of the Notice to Produce should be set aside in that they do not call for documents which are in any way relevant to the matters in issue, I also take into account the fact that Horizons is not legally represented at this time and is appearing, with leave, through Ms Ng, who describes herself as an administrator. The Notice to Produce does indeed bear some resemblance to the Enagic Notice to Produce and it is difficult to resist the inference that Horizons based the Notice to Produce on that of Enagic. However, I am prepared to give Ms Ng and Horizons the benefit of the doubt on this occasion that that was not intentional. 19 While there is no doubt that Enagic should have its costs of this application, I do not intend to order that those costs be paid on an indemnity basis or that they be paid forthwith, given, most critically, that Horizons remains unrepresented at this time. While there has been some use of the Court's resources and time which perhaps, on reflection, ought not to have been used in this way, I am not prepared to make an order of that nature.

Conclusion 20 Orders will be made setting aside paragraphs 1 to 2 and 4 to 9 of the Notice to Produce and for Horizons to pay Enagic's costs of its application to have those paragraphs of the Notice to Produce set aside. I certify that the preceding twenty (20) numbered paragraphs areare a true copy of the Reasons for Judgment of the Honourable Justice Markovic.

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