Hunter Pacific International Pty Ltd v Martec Pty Ltd

NICHOLAS J: 1 Today I made orders in favour of the applicant based upon my finding that the respondent infringed the applicant's registered design (Hunter Pacific International Pty Ltd v Martec Pty Ltd [2016] FCA 796). I made a declaration, an order for delivery up and an order for an inquiry to determine the applicant's entitlement to any pecuniary relief. I also granted an injunction restraining the respondent from further infringing the registered design. The respondent was ordered to pay the applicant's costs of the proceeding to date. 2 The respondent wishes to appeal each of my orders and I have granted it leave to appeal. The question that must now be decided is whether any of the orders made by me should be stayed. The respondent seeks a stay of all the orders made by me in favour of the applicant. For its part, the applicant does not oppose the making of an order staying the order for delivery up or the order relating to the assessment of pecuniary relief. The real question is whether the injunction and the costs order should be stayed pending the determination of the respondent's appeal. 3 The evidence before me consists of affidavits made today by the respondent's solicitor, Ms O'Connell, and the applicant's solicitor, Ms Gouley. Ms O'Connell's affidavit includes an exhibit which identifies the approximate number of Razor ceiling fans in the respondent's possession (approximately 693 fans) and an additional number that it is expecting to receive that are being shipped to it from overseas (approximately 180 fans). I gather that these additional fans are due to arrive in the near future. In all, the applicant will soon be in possession of about 873 Razor fans. 4 Ms O'Connell's affidavit is relied upon by the respondent to establish that the respondent will suffer hardship if the injunction and the costs order are not stayed until the determination of the appeal. Before saying a little more about that, I should note that the respondent has offered to undertake that it will keep full and proper accounts of all further sales of Razor ceiling fans and that it will not acquire any further stock of such fans until the determination of the appeal. 5 The evidence does not say very much about the respondent's business or its financial circumstances except that, according to instructions given by Mr Care, the respondent's Managing Director, to Ms O'Connell: Martec is a trading entity, and will continue to trade, and there is therefore no reason to doubt that Martec has the ability to meet an award of damages and costs both now and following the determination of, an appeal. 6 That evidence was received in the absence of any objection by the applicant. Significantly, Ms O'Connell's affidavit does not indicate how many Razor fans the respondent has already sold nor does it provide any other evidence from which one might infer that the respondent has the financial capacity to pay the applicant's costs not to mention any pecuniary award in favour of the applicant. 7 In Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 the Full Court held that an applicant for a stay need not show special circumstances in order to obtain a stay. In so holding the Full Court followed the New South Wales Court of Appeal's decision in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 which had previously been followed by Heerey J in Henderson v Amadio Pty Ltd (No 3) (1996) 65 FCR 66. These authorities establish that the Court has a broad and unfettered discretion that may be exercised in favour of an applicant seeking a stay pending the determination of an appeal if the applicant establishes a case for exercising the discretion in his or her favour. Ultimately, however, it is for the applicant seeking the stay to satisfy the Court that the circumstances warrant the making of such an order. 8 The evidence relied upon by the respondent in support of the proposition that it will suffer a significant burden or hardship in the event that the injunction is not stayed is scant. Ms O'Connell's affidavit, referring again to instructions received from Mr Care, suggests that the respondent's relationship with retailers and other customers will be disrupted by any cessation in the supply of Razor ceiling fans by the respondent. It also suggests that if the injunction is not stayed, then the respondent will be prevented from honouring its warranty commitments in relation to any Razor ceiling fans supplied to date. In submissions it was explained that this is because, in the absence of a stay, the respondent will not be able to supply replacement fans to customers as and when required. 9 The respondent's evidence does not indicate how many Razor fans it has supplied to date, how many orders it currently holds for such fans or what proportion of the respondent's revenue is attributable to sales of Razor ceiling fans. Nor does the evidence provide any indication of the extent to which the respondent has previously been required to replace Razor ceiling fans that it has supplied pursuant to its warranty commitments. 10 It is necessary to weigh up any hardship to the respondent against any hardship to the applicant that might be occasioned by granting a stay. The applicant has statutory rights with a limited life, and it has now established after a trial that its rights have been infringed by the respondent apparently over a period of several years. Contrary to the respondent's submission, the fact that the applicant never sought an interlocutory injunction is not a factor to which I would attach any weight in this case, though I recognise, of course, that the respondent has been selling Razor ceiling fans for some considerable time. But matters have now changed given that there has been a trial at which the applicant prevailed. 11 In the circumstances, I am not persuaded that the interests of justice favour the grant of a stay of the injunction. That brings me to the question of the costs order. 12 I am also not persuaded that it would be appropriate to make an order staying the costs order. I have already drawn attention to the scant evidence concerning the respondent's financial circumstances. I do not think the applicant should be prevented from taking steps to enforce the costs order at least up until the point at which a certificate of taxation issues. At that point it will be open to the respondent to make a further application for a stay of the enforcement of the costs order in the event that the appeal has not already been determined, and I refuse the application for a stay of the costs order on that understanding. Further, in the event that the appeal is successful, it would be open to the Court to make a costs order in favour of the respondent to compensate it for any costs that may be thrown away in the event it is found that the respondent has been put to the expense of a taxation pursuant to a costs order that is set aside. 13 Orders accordingly. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.