Pleading amendments
16 The first amendment that arises for consideration is the proposed change to the description of the services to the Designated Services.
17 Citigroup submits that no proper explanation has been provided for the delay in seeking to amend the services for which it seeks registration and that the scope of services is relevant to all of Citigroup's grounds of opposition. There is no explanation why someone else, for example, Mr Rose, the chief financial officer, could not have turned their mind to the question of whether the services in the applications were appropriately framed at an earlier point in time. There is no evidence that the services offered have changed or that there is an intention to change them in the future.
18 Citigroup also submits that this is not a case where there is a proposal to move from a definition comprising a list of items where an applicant now says it no longer presses some of those items. Rather, the Designated Services encompass concepts that did not appear before and which do not clearly arise on the existing evidence. While Gain Capital says that the description is clear and the concepts are described in the Webster Affidavit, Citigroup submits that Mr Webster will not be a "footnote to the Register of Trade Marks" and there is no clear explanation of what is meant by the Designated Services. The Designated Services may be a narrowing of the services as previously described and, ordinarily, a narrower case ought to be allowed to proceed. However, because of the opacity of the description of the Designated Services, Citigroup contends that there is a lack of clarity which would enable the issues to be confined.
19 Citigroup's position is that the Court does not have power to entertain an application that was not in substance considered by the Registrar, because the Court stands in the shoes of the Registrar and the question of the proper scope of services is to be considered at the time of the application. However, it also accepts that the contrary position is arguable. Accordingly it does not contend the question of power alone is a sufficient ground to refuse the amendment.
20 Gain Capital submits that there are examples where, in hearing appeals from the Trade Marks Office, the Court has exercised its power to narrow proposed specifications: see Kowa Company v NV Organon (2005) 223 ALR 27. In that case, of course, the Court narrowed the specification itself, rather than on application by the appellant. Gain Capital also points to other cases where the Court and the Registrar of Trade Marks have rewritten specifications in the context of non-use and cancellation proceedings under the Trade Marks Act. Gain Capital submits that it would not be a proper exercise of the Court's power for the Court to refuse a trademark applicant's request for it to consider, on appeal, a narrower subset of the services in respect of which registration was initially sought. That is, it would not be a proper exercise of the Court's power for the Court to insist upon a trade mark applicant running a broader appeal than it wishes to or pressing grounds of appeal that it does not wish to press. Gain Capital thus submits that the allowing of such an amendment is not a matter of an exercise of discretion.
21 However, if that is not the case and it does require the exercise of a discretion, Gain Capital submits that the discretion would be exercised in its favour such that the amendment is allowed because:
(1) there is a proper reason for Gain Capital's decision to narrow the services to the Designated Services and a proper explanation of the timing for that decision;
(2) there is no, or at best minimum, prejudice to Citigroup from such an amendment. Citigroup no longer faces the risk that the Court will allow the Gain Marks to be registered across the range of services previously specified and, in any event, Citigroup's evidence ought to already have addressed the Designated Services. In that regard Gain Capital relies on [39] of the affidavit of Nigel Rose affirmed 27 November 2014 and [3.2] of the affidavit of Nigel Rose affirmed 29 July 2015 in which Gain Capital says there is reference to trading in derivatives and contracts for difference trading; and
(3) the narrowing of the issues in dispute between the parties is consistent with s 37M of the FCA Act.
22 Having considered the submissions of the parties I am of the view that the amendment to the services should be allowed. Regard must be had to the nature of the amendment which will narrow the matters in issue. Gain Capital should not be required to pursue its appeal on a wider basis in these circumstances. I note that Citigroup has raised the issue of power and whether the Court has power to entertain an application that was not in substance considered by the Registrar. Gain Capital is on notice of Citigroup's position and if that issue does arise, it is an issue for another day.
23 In the event that the allowing of this amendment requires the exercise of a discretion, I would exercise my discretion in favour of allowing it. While this decision came late, there is, in my view, sufficient evidence to explain the delay. That is, Gain Capital only acquired the City Index business in 2015. It is thus understandable that decisions about review of future direction of the business may have only been made in the recent past. I accept that there is no evidence before me as to whether the services that Gain Capital actually offers have or will change. However, in light of Ms Hauduc's evidence, I am prepared to accept there is an explanation for the delay in making the amendment which is sufficient. Further, I have had regard to the prejudice that will inevitably be suffered by Citigroup by reason of this amendment and the forceful submissions that have been put in that regard. I accept that it will need to make enquiries, review the Statement of Grounds and its evidence, including the content of its court book, and consider whether further evidence needs to be prepared. However, in my view that prejudice is outweighed by the nature of the amendment which is of importance to Gain Capital and which, in effect, ought narrow the issues in dispute.
24 The next amendment is the proposed reliance on s 44(3) of the Trade Marks Act. Citigroup submits that a party must expressly plead a matter of fact or point of law that, if not expressly pleaded, might take another party by surprise if later pleaded: see r 16.08(b) of the Federal Court Rules 2011. I accept that submission. Gain Capital submits that in denying paragraphs 9 and 25 of the Statement of Grounds, there was always an intention to rely on s 44(3) of the Trade Marks Act. It contends that was implicit in the denial and arises out of the wording of s 44(2) of the Trade Marks Act. In my view that is not at all clear based on Gain Capital's reply as currently pleaded. Understandably, Citigroup did not think, prior to the application to amend the reply, that Gain Capital was relying on s 44(3) of the Trade Marks Act.
25 Gain Capital also submits that Citigroup ought to have been on notice of its reliance on s 44(3) because of the evidence of Mr Rose set out at [20] to [38] of his affidavit affirmed on 27 November 2014. That evidence provides examples of CIL's advertising and sponsorship in Australia, its presence on social media platforms and its turnover in advertising expenditure. While that evidence might be relevant to reliance on s 44(3) of the Trade Marks Act it is also relevant to other matters raised by Citigroup in its Statement of Grounds, for example, its reliance on s 59, such that, in my view, the adducing of that evidence did not make it clear that there was to be reliance on s 44(3) of the Trade Marks Act.
26 Gain Capital contends that it is incumbent on a decision maker considering a matter under s 44(2) to consider s 44(3) given the opening words of s 44(2). That is, for the Registrar and indeed a Court to be satisfied that s 44(2) of the Trade Marks Act is made out it must be satisfied that ss 44(3) and 44(4) do not apply and thus necessarily there must be a consideration of those subsections in making a determination under s 44(2). It seems to be suggested that consideration must be made whether or not there is an indication of positive reliance on ss 44(3) or 44(4). That would seem to me to be an unusual outcome.
27 Notwithstanding the above, this amendment is said to be made in the interests of clarity and it is said that Gain Capital always intended to rely on s 44(3). I accept the explanation given by Mr Chrysiliou. It is not an amendment which can be said to arise because of choices made in the litigation, for example, a change in course. It is better that any clarification be made now than on the first day of the trial. While I accept that prejudice will flow to Citigroup of the nature identified by Mr Jordan and as submitted by counsel for Citigroup, in my view that prejudice is outweighed by the importance of the amendment to Gain Capital and the need for the case to be decided on its merits. The interests of justice are best served if all matters in issue between the parties are properly ventilated at trial. I will allow the amendment.
28 In relation to the amendments sought by way of the addition of particulars to paragraphs 6 and 22 of the reply, Citigroup accepts that those particulars have work to do independent of s 44(3) but submits that, given the stage the matter has reached, if the additional particulars are allowed, then Gain Capital ought to identify what the "surrounding circumstances" are that are referred to in proposed particular (c) and (b) to paragraphs 6 and 22 respectively of the amended reply. I will allow the amendment on that basis.