Halal Certification Authority Pty Limited v Quality Kebab Wholesalers Pty Limited

AND: QUALITY KEBABS WHOLESALERS PTY LIMITED ACN 096 787 174

JUDGE: PERRAM J DATE: 11 August 2014 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 There are now two interlocutory issues: should I vary the orders of 13 June 2014 in relation to damages; and what form should the corrective advertising take?

1. Variation Application 2 I gave judgment in this matter on 13 June 2014: see Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614. In that judgment, the sum of $91,005.00 was awarded for additional damages under s 126(2) of the Trade Marks Act 1995 (Cth) against the first respondent. This was, apparently, the first occasion on which that (new) provision had been used. 3 Novelty always carries with it risk. The first respondent has now applied to vary the judgment sum to $35,890. The primary basis for the application is that s 126(2) was not in force prior to 15 April 2013. The breaches which I concluded were to be the subject of the award of additional damages under s 126(2) occurred over the period August 2012 to September 2013: see [113]. The argument is that the award of additional damages should be confined to the period after 15 April 2013 (when s 126(2) came into force). 4 The Court's jurisdiction to entertain an application to vary orders which it has made is located in Division 39 of the Federal Court Rules 2011 (Cth). Under FCR 39.04 the Court has an unfettered jurisdiction to set aside orders which have not been entered, but in this case the applicant took the orders out before the present application was made and this power is not available. So far as entered orders are concerned, the relevant rule is FCR 39.05 which provides: '39.05 Varying or setting aside judgment or order after it has been entered The Court may vary or set aside a judgment or order after it has been entered if: (a) it was made in the absence of a party; or (b) it was obtained by fraud; or (c) it is interlocutory; or (d) it is an injunction or for the appointment of a receiver; or (e) it does not reflect the intention of the Court; or (f) the party in whose favour it was made consents; or (g) there is a clerical mistake in a judgment or order; or (h) there is an error arising in a judgment or order from an accidental slip or omission.' 5 The first respondent relies upon subparagraphs (c), (e) and (h). I have no doubt that (e) has no application. The orders precisely reflected the Court's intentions. As to (c) and (h), these generate separate issues: are the orders which were entered interlocutory or final; and was the failure to deal with the time at which s 126(2) came into force a slip or omission to which the rule applies since the issue was not raised by the first respondent in its defence to the claims under s 126 at trial?

Final or interlocutory? 6 The orders which were made and which were entered were as follows: '1. Judgment for the applicant against the first respondent for $91,015.00. 2. Judgment for the applicant against the third respondent for $10. 3. The first and second respondents not use trade mark 1005647. 4. The first and second respondents pay the applicant's costs as taxed or agreed. 5. The parties bring in a form of agreed order for corrective advertising within fourteen days failing which the matter may be relisted by the applicant to have the form of the order determined. 6. The application be otherwise dismissed. 7. No order as to costs in relation to the third respondent. 8. The applicant is to pay the costs of the fourth respondent as taxed or agreed.' 7 These orders left open the possibility that there might be further debate about the form of the corrective advertising order. The first respondent submitted that this meant that the rights of the parties had not been finally determined and, hence, that the orders were to be seen as interlocutory. Reliance was placed upon the reasons for judgment of Gibbs CJ in Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 at 767: 'The test for determining whether a judgment is final, which has been laid down in a number of cases including Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246, 34 ALR 449, is whether the judgment finally determines the rights of the parties, and the authorities have held that the court in applying the test must have regard to the legal rather than the practical effect of the judgment. So that the question in the present case is whether the whole judgment finally determined, in a legal sense, all the rights of the parties that were at issue in these proceedings. And the answer is, plainly, that it did not, because it left undetermined the question whether any, and what, damages were payable. The conclusion that the judgment is not a final judgment is supported by a short passage from the judgment of Dixon CJ in John Grant & Sons Ltd v Trocadero Building and Investment Co Ltd (1938) 60 CLR 1 at 35, where his Honour said: "The judgment of the Supreme Court did not determine the action, for the demurrers did not affect pleas to or replications in relation to all counts of the declaration. The judgment was, therefore, interlocutory, and this appeal did not lie without leave."' 8 The lynchpin of the first respondent's argument was that the orders of 13 June 2014 had not dealt with the issue of corrective advertising. At [121] of the initial reasons, I concluded that a corrective advertising order was justified. I did not, however, make such an order in Order 5, instead merely directing the parties to confer on the proposed order's form. Order 6 dismissed the balance of the application. There is a conceptual tension between the failure of Order 5 to embody an actual order that there should be corrective advertising and the effect of Order 6 that the application should otherwise be dismissed. Read literally, Order 6 would have the consequence that the claim for corrective advertising had been dismissed. In light of [121] of the reasons this cannot, however, be what Order 6 does. As a matter of substance, Order 5 embodies the conclusion that the applicant had prevailed on the corrective advertising issue. It does not, however, resolve what the form of that advertising should be. Indeed, after the submissions on the present issue had been provided, my chambers was informed that the parties had been unable to reach agreement on the form of the corrective advertising and wished the matter to be relisted for a determination of that issue. 9 This underscores the fact that not all of the issues in the case have been resolved. To use the language of Gibbs CJ, I cannot say that all of the rights of the parties that are in issue in the proceedings have been resolved. I do not accept, as the applicant submitted I should, that the present situation was akin to a grant of liberty to apply upon the issue of a decree of specific performance (which has been held not to deprive the decree of its final nature). The order for corrective advertising simply has not yet been made. In those circumstances, I conclude that the orders of 13 June 2014 were interlocutory for the purposes of FCR 39.05. 10 The power to recall the orders therefore exists. It is not necessary, in that circumstance, to consider whether the slip rule may also be invoked in this case. For the sake of completeness I will record my view that it could not. There was no slip. The first respondent simply did not defend the case on the basis that s 126(2) had not been in force. I resolved precisely the arguments I was asked to. 11 The power in FCR 39.05 involves the exercise of a discretion. I would not exercise the discretion in favour of the first respondent because, as argued, I do not regard the point now raised as sound. The question is whether s 126(2) authorized an award of damages for the period prior to its commencement on 15 April 2013. That section was introduced into the Trade Marks Act 1995 (Cth) by item 29 of Schedule 5 of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). Although other parts of the Act included transitional provisions (see Schedules 1 and 3 in particular), Schedule 5 did not. 12 Unless a statute otherwise suggests, it is not construed to have retrospective operation. On the other hand, it is sometimes said that there is an exception to this in the case of statutes said only to have procedural effects: Maxwell v Murphy (1957) 96 CLR 261 at 267-8 per Dixon CJ and 286 per Fullagar J. A more accurate statement may be that procedural statutes apply, like other statutes, prospectively but that the nature of procedural regulation is such that it will often apply to events in the past. Thus an increase in a court filing fee will only apply from the day of its adoption but will apply to any case filed after that day even if the events with which that case is concerned pre-date the change. This is, I think, what the High Court was saying in Rodway v The Queen (1990) 169 CLR 515 at 518 and Victrawl Pty Ltd v Telstra Corp Ltd (1995) 183 CLR 595 at 615. 13 The amendments to s 126 added subsection (2) so that it then provided: 126 What relief can be obtained from court (1) The relief that a court may grant in an action for an infringement of a registered trade mark includes: (a) an injunction, which may be granted subject to any condition that the court thinks fit; and (b) at the option of the plaintiff but subject to section 127, damages or an account of profits. (2) A court may include an additional amount in an assessment of damages for an infringement of a registered trade mark, if the court considers it appropriate to do so having regard to: (a) the flagrancy of the infringement; and (b) the need to deter similar infringements of registered trade marks; and (c) the conduct of the party that infringed the registered trade mark that occurred: (i) after the act constituting the infringement; or (ii) after that party was informed that it had allegedly infringed the registered trade mark; and (d) any benefit shown to have accrued to that party because of the infringement; and (e) all other relevant matters. 14 The right to pursue a claim for infringement is conferred by s 125. At all times relevant to this case it has provided: 125 What courts may hear action for infringement of registered trade mark (1) An action for an infringement of a registered trade mark may be brought in a prescribed court. Note: For prescribed court see section 190. (2) Subsection (1) does not prevent an action for infringement of a registered trade mark from being brought in any other court that has jurisdiction to hear the action. 15 Thus a right of the applicant to pursue a claim for infringement already existed as did the right to claim damages. What has changed is that the Court may now award additional damages. Is a variation in the quantum or kind of damages which may be awarded procedural or substantive? 16 The cases in this area are difficult to explain on a consistent basis. In Australian Iron & Steel Pty Ltd v Najdovska (1988) 12 NSWLR 587 the New South Wales Court of Appeal concluded that an amendment to s 113 of the Anti-Discrimination Act 1977 (NSW) increasing the damages which could be awarded from $20,000 to $40,000 was procedural and applied, therefore, to the respondents' claims. On the other hand, the same Court determined in Fuller v K & J Trucks Coffs Harbour Pty Ltd (2006) 67 NSWLR 516 that s 131 of the Motor Accidents Compensation Act 1999 (NSW) which prevented an award of damages for non-economic loss unless a person injured in a car accident had suffered more than a 10% degree of permanent impairment was substantive. This was because the amendment changed 'the law of entitlement to damages and goes beyond putting a procedural obstacle in the path of injured persons' (at [33] per Bryson JA (Handley JA agreeing)). 17 This Court has held that the addition by statute of a fresh remedy to facts which were already actionable is purely procedural: Re Hassell; ex parte Norman (1984) 1 FCR 387 at 389 per Toohey J. In that case, s 39B of the Judiciary Act 1903 (Cth), which authorises this Court to grant constitutional writs, came into force after the action in question was commenced. There was on foot in that case an appeal under the Repatriation Act 1920 (Cth) from a decision of the Repatriation Review Tribunal. Toohey J held the amendment procedural and relief under s 39B therefore available. 18 The first respondent submitted that the High Court had held in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 543-544 that all questions about the kind or amount of damages were substantive. However, I am bound by a decision of the New South Wales Court of Appeal to conclude that that statement was not intended to apply outside a conflict of laws setting: see Fuller v K & J Trucks Coffs Harbour Pty Ltd at [32]-[33] per Bryson JA (Handley JA agreeing). 19 This case, in my opinion, most closely resembles the decisions in Australian Iron & Steel and Hassell. That inclines me to the view that s 126(2) is procedural. For completeness, no argument was addressed to me that s 126(2) was punitive in effect and hence not to be construed as having retrospective effect. 20 In all of those circumstances, I conclude that I should not vary the orders which have been made. The application will be dismissed with costs.

2. Corrective Advertising 21 The applicant seeks the publication of the following advertisement: 'PUBLISHED BY ORDER OF THE FEDERAL COURT OF AUSTRALIA Quality Kebabs Wholesalers Pty Ltd ACN 096 787 174 reproduced the Halal Certification Authority Symbol being a registered trademark of Halal Certification Authority Pty Ltd ACN 068 275 203 on purported certificates of halal certification. Quality Kebabs Wholesalers Pty Ltd's use of the Halal Certification Authority Symbol was done so without the authority or permission of the Halal Certification Authority Pty Ltd and constituted a breach of trademark. Quality Kebabs Wholesalers Pty Ltd states that at no time was its products certified halal by Halal Certification Authority and undertakes to immediately cease the improper use of the registered trademark of the halal Certification Authority Pty Ltd.' 22 In the first judgment (at [121]) I indicated that a corrective advertisement was to be published once only in two leading Islamic newspapers of the applicant's choice on page 5 and was to be 10 cm wide and 5 cm high. The first and second respondents do not consent to the form proposed above for three reasons: (a) if an order for corrective advertising is made the orders of 13 June 2014 will cease to be interlocutory and their application to vary the orders (which I have dealt with above) will necessarily fail; (b) the advertisement should not bear the applicant's seal; and (c) the advertisement does not reflect the conclusions of the Court. 23 The issue in (a) does not arise as I have dealt with the variation application already. 24 As to (b), despite the first and second respondent's submission it is important for the seal of the applicant to appear in the advertisement. The litigation was about the seal and its use is the best way to dispel the misleading nature of what occurred. 25 As to (c), the first and second respondent's point is correct. The conclusion that there should be corrective advertising was premised on the fact of misleading and deceptive conduct under s 18 of the Australian Consumer Law ('ACL') rather than trade mark infringement. I do not think that there is power to order corrective advertising under the ACL to point out that there had been trade mark infringement. Further, in my opinion the proposed advertisement is deficient in that: (a) it does not identity the misleading conduct; (b) identify when the conduct occurred; or (c) correct the conduct. 26 The advertisement I will order will be as follows: 'PUBLISHED BY ORDER OF THE FEDERAL COURT OF AUSTRALIA In proceedings entitled Halal Certification Authority Pty Limited v Quality Kebabs Wholesalers Pty Ltd and Ors NSD 2107 of 2013 the Federal Court of Australia has ordered Quality Kebabs Wholesalers Pty Ltd ("Quality Kebabs") to publish this corrective advertisement. Between 2012 and 2013 Quality Kebabs distributed certificates that meat provided by it had been prepared in accordance with halal requirements. These certificates were provided to a number of kebab shops in the Sydney area and placed on display by them. The certificates bore the seal of Halal Certification Authority Pty Limited ("Halal Certification Authority"): In fact, Quality Kebabs' meat had not been certified by Halal Certification Authority, which had given no permission whatever for its seal to be used by Quality Kebabs. For that reason, the Court has concluded that by using Halal Certification Authority's seal Quality Kebabs has engaged in misleading and deceptive conduct contrary to s 18 of the Australian Consumer Law.' 27 The parties were in agreement that the corrective advertisement should be published in the newspapers Zaman Avustralya and Al Wasat. I will so order. On the issue of the form of the corrective advertising order I will make no order as to costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.