International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited

REASONS FOR JUDGMENT 1 An appeal has been filed against the orders that I made on 8 April 2011 by the respondents to that proceeding in the original jurisdiction. It is convenient to refer to those parties as IHC UK and to the respondent to the appeal (the applicant below) as IHC Australia. These reasons for judgment must be read in conjunction with the reasons for judgment which I delivered on 8 April 2011, for the making of the orders that day: see International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339. 2 There was some passing controversy before me as to the particular rule under which IHC UK made its stay application. It may perhaps be that, unintentionally, the registry contributed to that controversy in the sense that, upon the filing of the appeal, it was sought to then file an affidavit in support of an application for a stay. As originally entitled, it is plain the affidavit was intended to engage with the power which was found in O 52 r 17 of the Federal Court Rules (Cth) to grant a stay. As it happened though, it was re-engrossed manually to conform, as I understand it, with a direction given in the registry for it to be filed in the original jurisdiction. The competing rule to which reference has been made is O 37 r 10, which it is true empowers the granting of a stay by the trial judge. There is no contest that there is power to grant a stay. 3 It seems to me that, in the circumstances of this case, IHC UK's submission that its application is made under O 52 r 17, is the more correct, having regard to what is evident on the face of Mr Mitchell's affidavit as originally prepared. That means of course that there is no delay in seeking relief under O37 r 10, but rather a timely application for a stay under O 52 r 17. That is not to say, of course, that I do not take into account the facts that there was no application for a stay under O 37 r 10 at the time when judgment was delivered or thereafter; only that I do not regard the stay application as made under O 52 r 17 as tardy. 4 As pressed today, and having regard to the orders made on 8 April, IHC UK seeks orders that orders 1, 2(a), (c) and (d) be stayed for a period of seven days from the date of this order, that order 2(b) of the orders made by the Court on 8 April 2011 be stayed until the determination of the appeal or further order, and an order that the costs of the application for a stay be costs in the appeal. 5 It appears from the evidence of Mr Mitchell of the solicitors for IHC UK that, very shortly, there will occur in the United Kingdom a global launch of the new ASP product range. A promotional event is to occur in that country on 15 and 16 May 2011. It will comprise a number of stages. Apart from the demonstration and observation of a facility at Newcastle, it will also involve a social program. The launch is to be attended by more than 150 distributors from around the world. 6 It is important in this case, in relation to the stay application, to appreciate the division, if one might use that term, of intellectual property rights in relation to the trade mark "Affinage". Materially, IHC UK has long operated from the United Kingdom their website . In that country and elsewhere, but not in Australia, it enjoys intellectual property rights in respect of Affinage. It also either enjoys, or has applied to enjoy, intellectual property rights in respect of the separate mark ASP. For reasons which I gave in the principal judgment, it seemed to me that, contrary to the undertaking given as a sequel to a settlement deed, there was use as a sign in Australia of the trade mark Affinage. That is registered, in this country, to IHC Australia. The launch, though, that is shortly to occur plainly involves an attempt to exploit in places other than Australia, rights which IHC UK enjoys, or has applied to enjoy. 7 It is also plain that one part, although by no means the exclusive part, of the promotion that is to occur at the launch, will involve highlighting the planned globalisation of the brand ASP and reference to the Affinage website in that context. It is true that there is a separate website in respect of ASP but that website's existence seems to owe its origin in the marketing, initially in Australia, of products under the ASP brand. It is also true that when one looks to the material associated with the product launch shortly to occur that that material makes reference to products other than ASP, namely the Kitoko range of products. IHC UK is perfectly entitled to make that additional highlighting to its distributors at that launch. 8 The principles to be applied in relation to whether or not to grant a stay are well settled. A Full Court of this Court in Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 at 66 voiced approval of what had earlier been said in the New South Wales Court of Appeal in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694. That court had there observed: In our opinion, it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour. 9 There are other principles to be kept in mind. The onus is on the applicant to demonstrate a proper basis for a stay that will be fair to all parties. The court has a discretion whether or not to grant the stay and if so as to the terms that would be fair. In the exercise of its discretion, the court will weigh considerations such as the balance of convenience and the competing rights of the parties before it: see Attorney-General v Emerson (1889) 24 QBD 56. 10 Preferring, as I do, to look to those principles, it follows that I do not accept the submission made on behalf of IHC Australia by reference to Australia and New Zealand Banking Group Ltd v Merribee Pastoral Industries Pty Ltd (1998) 16 ACLC 1447, particularly to an observation of Finkelstein J at page 1459 that "the power to grant a stay is an extraordinary jurisdiction. It will only be exercised in exceptional circumstances", as encapsulating accurately the nature of the principles to be applied. That is so because, with respect, it may be that the test is overstated in terms of what must be shown by an applicant. In that passage of his Honour's judgment to which I have made reference what is clear, and his Honour does make reference to this, is that it is always relevant in relation to whether or not to grant a stay as to whether the right of appeal will be rendered nugatory if a stay is not granted. That is a consideration which is relevant but not necessarily determinative. Another way of describing that consideration is if there is a real possibility that it will not be possible substantially to restore the applicant for the stay to his, her or its position prior to the making of the order under appeal. 11 On the evidence, it seems that the occasion for seeking the stay of orders 1, 2(a), (c) and (d) for a period of seven days is out of an abundance of caution. IHC UK has already taken steps on the evidence to carry into effect those orders. Whilst I respect the sentiment that underpins the application for a short stay, it does appear that any remaining remedial work that may be necessary would be work of a kind which involved unintentioned inadvertence. It is unlikely in those circumstances that any particular harm, or for that matter any particular enforcement action, would enjoy any particular prospect of success if initiated by IHC Australia. That does not foreclose, of course, particular facts which might emerge but at the moment I am not persuaded that there is any need for the cautionary note which underpins that particular aspect of the stay application. 12 That leaves the question of whether or not to stay, order 2(b). That falls for the decision against the background where the other orders have already taken effect. I find that a particularly persuasive consideration in the particular benefits that that has conferred upon IHC Australia. The other factor which weighs heavily with me is that the wider benefits, ie, those apart from Australia, in relation to Affinage, which IHC UK is perfectly entitled to enjoy may be impacted upon in a way in which it is not possible to remedy in relation to the forthcoming global launch. 13 I also take into account that the question which ultimately fell for determination in relation to the final modified form of the website of IHC UK was, as I stated in the principal judgment, a difficult one. This is a developing area of intellectual property law. It is conceded for the purposes of the stay application that the appeal is arguable. I take that into account in relation to balance of convenience, in addition to the impending global launch, and all of the rights that IHC UK is entitled to enjoy elsewhere in relation to Affinage, and here by application, and also elsewhere, in relation to ASP. 14 A claim for damages was not a feature of the original application by IHC Australia. In any event, it would be very difficult indeed to quantify particular monetary losses flowing from either the granting or refusal of a stay. 15 The end result is that I am persuaded, for the reasons which I have given, that this is a case where reason has been shown why a stay of paragraph 2(b) ought to be granted. The order, therefore, will be that order 2(b) of the orders made on 8 April 2011 be stayed until the determination of the appeal, proceeding number QUD85 of 2011, or further order. 16 The further order is that the costs of the application for the stay be costs in the appeal. The reason why I make an order in those terms is that I think it fairly meets the particular justice of this case that the successful party in the appeal ought to have the costs of this stay application. If the appeal succeeds, then I consider it only just that IHC UK ought to have the costs of having sought the stay that it ultimately secured, and equally, if the appeal does not succeed, then I consider it only just that IHC Australia ought to have the costs of coming here today. I make the further observation, in that regard, that I consider it appropriate for IHC Australia to have contested the question as to whether or not a stay ought to be granted. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.