Karlsson v Griffith University

Federal Court of Australia (Full Court)|2024-11-22|Before: Raper JJ

The appeal be dismissed.
The appellant pay the respondent's costs of the appeal as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT: 1 Ms Karlsson owns a trade mark and brought proceedings against Griffith University in 2019 in the Supreme Court of New South Wales alleging, amongst other causes of action, infringement of her registered trade mark. Those proceedings were struck out and Ms Karlsson was ordered to pay costs. Ms Karlsson thereafter sought unsuccessfully to appeal that decision before the Court of Appeal and in the High Court. Undeterred, Ms Karlsson then brought unsuccessful proceedings in this Court. These unsuccessful actions led to various costs orders, which culminated in the issuing of a bankruptcy notice on 24 August 2023. The debt, including interest, comprises $122,910.04. Ms Karlsson then unsuccessfully applied for the bankruptcy notice to be set aside. On 7 November 2023, a Registrar of this Court dismissed the application and then on 29 November 2023, the Registrar also awarded costs against Ms Karlsson, assessed in the amount of $8,004.25. Thereafter, Ms Karlsson applied before the primary judge for a review of the decision of the Registrar. 2 The primary judge dismissed, with costs, Ms Karlsson's application for review of that decision of the Registrar: Karlsson v Griffith University, in the matter of Karlsson [2024] FCA 205 (PJ). It is the decision of the primary judge, and only that decision, that can be the subject of this appeal. 3 The amended notice of appeal filed on 11 June 2024 contains the following two grounds of appeal: 1. The JUSTICE YATES an error the law of Bankruptcy Act 1966 (Cth) ss40(1)(g) in support relied upon JUSTICE RARES made order on 15 August 2022 at paragraph 1[.] The applicant's interlocutory applications filed on 7 June 2022 seeking a stay on the execution of the orders of the primary judge made on 24 May 2022 and leave to appeal be dismissed. The Appellant this appeal a relevant has not been stayed. 2. The JUSTICE YATES an error the law of Bankruptcy Act 1966 (Cth) s 41(7) in support relied on Application's (B2) has applied to the court for an order setting aside the bankruptcy notice on the ground that the Appellant has such a counter-claim, set-off or cross demand as is referred to s40(1)(g). 4 By an amended notice of objection to competency, the University has objected to the competency of the amended notice of appeal on grounds that Ms Karlsson has failed to clearly and unambiguously state the grounds relied upon to support the appeal and the relief sought. 5 For the reasons which follow, the appeal must fail on its merits and there is no need to address the notice of objection to competency.

The relevant background 6 The debt claimed in the bankruptcy notice arises from costs orders made against Ms Karlsson in two proceedings instituted by her against the University in the Supreme Court of New South Wales, in which she alleged that the respondent was liable to pay damages for trade mark infringement: Karlsson v Griffith University [2019] NSWSC 1335 (Adamson J); Karlsson v Griffith University [2020] NSWSC 365 (Wright J). The history of the proceedings in the Supreme Court and in this Court are conveniently summarised in the University's outline of submissions, as follows: (a) In the proceedings commenced by Ms Karlsson in the Supreme Court of NSW in 2019: (i) On 1 October 2019, Adamson J struck out Ms Karlsson's statement of claim and ordered that she pay Griffith University's costs of the application. (ii) On 7 April 2020, Wright J dismissed the proceeding and ordered that Ms Karlsson pay Griffith University's costs of the proceeding. (iii) Ms Karlsson appealed the decision of Wright J to the NSW Court of Appeal. Payne and White JJA dismissed the appeal on 14 August 2020, and said that the NSW Court of Appeal did not have the power to hear and determine Ms Karlsson's appeal (pursuant to s 7(5) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)) because the appeal should have been heard and determined only by the Full Court of the Federal Court. However the Court of Appeal determined that Adamson J and Wright J did have power to make the decisions they made in the proceedings below, prior to the appeal to the NSW Court of Appeal (pursuant to ss 125, 190 and 192 of the Trade Marks Act 1995 (Cth)). As to costs, although the Court of Appeal had power to make a costs order in that case, Griffith University did not request that Ms Karlsson pay their costs because the jurisdiction issue (specifically, the Court of Appeal's lack of power) was raised by the court and not by the parties. (iv) Ms Karlsson's application for special leave to appeal to the High Court was dismissed on 10 February 2021 with no order for costs. (b) On 28 March 2021, the costs orders made by Adamson J and Wright J in favour of Griffith University were assessed. On 21 April 2021, Griffith University obtained judgment in the Local Court for the amount of $63,552.80. (c) In the proceedings started by Ms Karlsson in the Federal Court in 2021: (i) On 24 May 2022, Katzmann J made summary judgment in favour of Griffith University and ordered Ms Karlsson to pay their costs. (ii) Ms Karlsson then applied for leave to appeal the decision of Katzmann J. Her application was dismissed on 15 August 2022 by Rares J, who ordered that she pay Griffith University's costs. (d) On 2 May 2023, certificates of taxation were issued in relation to the costs that Ms Karlsson was required to pay Griffith University pursuant to the orders of Katzmann J and Rares J. Those costs were assessed as $31,207 and $16,101 respectively. (Citations omitted).

The reasons of the primary judge 7 The primary judge noted that Ms Karlsson's submissions failed to squarely address the existence of a "counter-claim, set-off or cross demand" referred to in s 40(1)(g) of the Bankruptcy Act 1966 (Cth) that exceeds the amount of the debt in the bankruptcy notice: at PJ[34]. 8 The primary judge addressed each of Ms Karlsson's contentions in turn. Firstly, Ms Karlsson contended that the Registrar, in arriving at the assessment of costs, had not taken into account a submission she made in respect of those costs: at PJ[35]. The primary judge rejected that submission on the basis that the Registrar's orders of 29 November 2023 expressly referred to Ms Karlsson's affidavit of 15 November 2023, which comprised her submissions on costs. The order of the Registrar records that the Registrar did not consider Ms Karlsson's affidavit to have raised any substantive objection: at PJ[36]. After considering the affidavit evidence of the respondent, the second affidavit of Ms Allcock sworn on 10 November 2023, his Honour considered that Ms Karlsson's response raised no objection of substance: at PJ[37]. 9 Secondly, Ms Karlsson contended that, because the proceeding for damages in this Court was found to be an abuse of process, the costs awarded against her in respect of that proceeding, and in respect of her application for leave to appeal, could not be debts on which a bankruptcy notice can be issued: at PJ[38]. The primary judge rejected that contention on the basis that there was nothing before his Honour which suggested the issue of the bankruptcy notice was an abuse of process: at PJ[40]. 10 Thirdly, Ms Karlsson made an allegation that the University had stolen her trade mark, and is, and was, using that trade mark. His Honour found that the University's use of the trade mark appeared to be dated in the period when the University held its own registration for the mark. Further, the University's use was within the scope of that registration. His Honour was not satisfied that the evidence on which Ms Karlsson relied, showed infringement by the University of Ms Karlsson's registered mark: at PJ[41]-[42]. 11 Fourthly, Ms Karlsson complained that the University did not provide her with documents to substantiate its claim that its former registered mark was developed by the respondent with external marketing agencies. His Honour found that this complaint did not advance her application to set aside the bankruptcy notice: at PJ[43]. 12 Fifthly, Ms Karlsson complained that in the proceeding in this Court for damages, the University failed to comply with the orders made on 11 February 2022 to file and serve submissions in reply by 1 April 2022. The primary judge considered that this submission did not assist her application to set aside the bankruptcy notice: at PJ[44]. 13 Sixthly, Ms Karlsson submitted that the costs awarded against her (in her application for leave to appeal before Rares J (Karlsson v Griffith University [2022] FCA 997)) should not have included the costs of the University filing an appeal book. The primary judge found that no jurisdiction had been invoked to review the assessment of costs made in respect of Ms Karlsson's unsuccessful application for leave to appeal: at PJ[45]. 14 Seventhly, Ms Karlsson complained about the fairness of the summary dismissal of her proceeding for damages in this Court. The primary judge considered that the basis of this submission appeared to be Ms Karlsson's disagreement with findings of facts in the judgment, and, that the submission did not advance her application to set aside the bankruptcy notice: at PJ[46]. 15 Eighthly, Ms Karlsson disagreed with certain findings of fact in the judgment given in respect of the application for leave to appeal before Rares J. The primary judge further considered that this submission also did not assist her application to set aside the bankruptcy notice: at PJ[47]. 16 Ninthly, Ms Karlsson asserted a general contention that the bankruptcy notice was defective and that everything in it is "not correct": at PJ[48]. 17 In the result, the primary judge considered that the "counter-claim, set-off or cross demand" that Ms Karlsson asserts did not fall within the meaning of s 40(1)(g) of the Bankruptcy Act; nor had Ms Karlsson established any viable claim against the respondent, including for pecuniary relief for $4,515,160.46: at PJ[49]. His Honour was also not satisfied that the bankruptcy notice was defective. The amount of the costs of the proceeding before the Registrar was found to be supported by Ms Allcock's affidavit sworn on 10 November 2023. Those costs were held to be fair and reasonable. Ms Karlsson's response to the amount of costs sought by the University did not raise any argument of substance.

Ms Karlsson has no counter-claim, set-off or cross demand within the meaning of s 40(1)(g) 18 Ms Karlsson's submissions were prolix and difficult to follow. However, her primary contention, by ground 2, appears to be that the primary judge erred in failing to find that she has a counter-claim, set-off or cross demand within the meaning of s 40(1)(g) of the Bankruptcy Act to set aside the bankruptcy notice issued 24 August 2023. 19 Section 40(1)(g) of the Bankruptcy Act provides that a debtor commits an act of bankruptcy: (g) if a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia - within the time fixed for compliance with the notice; or (ii) where the notice was served elsewhere - within the time specified by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained; 20 Therefore, by operation of s 40(1)(g), a person may only, by "counter-claim, set-off or cross demand", answer the act of bankruptcy, where the person was not able to make such a claim in the action or proceeding in which the judgment or order was obtained. Here, in direct contradistinction to the terms of s 40(1)(g), the claim Ms Karlsson says the primary judge failed to consider, was the very source of the judgments underlying the act of bankruptcy. 21 Ms Karlsson brought to this Court's attention parts of her affidavit sworn on 26 September 2023, relied upon below, in which she describes when her trade mark was registered and asserts claims: (a) for an account of profits; (b) for "lost opportunities for making income"; (c) for "lost time in proceeding registration" of a mark; and (d) for "[l]iability of lawyer to their client for misconduct"; and (e) for a "[t]ax invoice under section 100 of Competition and Consumer Act 2010 from external marketing agencies" for which she then claimed that the University's business had been enriched by $2,285 million, for which she has a claim of $4,540,630.50 (less the debt of $122,910.04 claimed in the bankruptcy notice). 22 Notably, the primary judge expressly dealt with this evidence in his reasons, at PJ[26]-[27], and found at PJ[49]-[51]: 49 The "counter-claim, set-off or cross demand" that the applicant asserts is not a "counter-claim, set-off or cross demand" of the kind referred to in s 40(1)(g) of the Bankruptcy Act (i.e., one that could not have been set up in the proceedings in which the costs orders were obtained). In any event, I am not satisfied that, on the evidence before me, the applicant has any viable claim against the respondent, let alone a claim that would sound in pecuniary relief for $4,515,160.46. 50 Further, I am not satisfied that the bankruptcy notice is defective. 51 The applicant's present application is misconceived insofar as it seeks: (a) final judgment against the respondent for $4,515,160.46; and (b) orders setting aside the costs orders on which the debt in the bankruptcy notice is based. Nothing more need be said on that score. 23 We can discern no error in the primary judge's reasons. 24 Such a "counter-claim, set-off or cross demand" can only provide an answer to the act of bankruptcy, if the debtor "could not have set up in the action or proceeding in which the judgment or order was obtained". In Smith v Achieve Homes Pty Ltd [2024] FCA 327 at [73], Thawley J considered that: …The words "that he could not have set out in the action or proceeding in which the judgment or order was obtained" mean[s] "which he could not by law set up in the action" 25 In Smith, the counter-claim could not be brought, as the decision-maker of the earlier adjudication proceeding had no jurisdiction to make such an award: Smith at [73]. Similarly, in Re Vicini; Ex parte EA Sealey & Co (1982) 64 FLR 323 at 326 per Fisher J, quoting with approval Re Stockvis (1934) 7 ABC 53 at 57: I take as a counterclaim, set off or cross demand which could not be set up as one which, from point of time, or from its nature, or from absence of empowering provisions, or from positive inhibition so to do, could not be set up in the particular case in which judgment was obtained …. Mere failure to take advantage of the opportunity can hardly be said to be inability. 26 Dispositive of the issue in Re Vicini, the debtor had filed his counter-claim as an addendum to his defence, but had failed to call evidence to establish the debt. It was held that, as a matter of law, he was not prevented from setting up the counter-claim. Accordingly, the counter-claim alleged by the debtor was not a counter-claim that "could not have set up in the action or proceeding in which the judgment or order was obtained". 27 Here, the very so-called "counter-claim, set-off or cross demand" was the source of the judgments underlying the act of bankruptcy. For these reasons, ground 2 must fail.

The primary judge did not err by relying on the order for costs made by Rares J (ground 1) 28 By ground 1, Ms Karlsson appeared to contend that the primary judge erred in some way by relying on the orders made by Rares J on 15 August 2022, dismissing her application for leave to appeal, with costs: Karlsson v Griffith University [2022] FCA 997. Justice Rares had refused her leave to appeal, on the basis that Ms Karlsson had been unable to articulate any arguable or coherent allegation of error in the primary judge's reasons. The Court also found that the application for leave to appeal, like the principal proceeding, was an abuse of the Court's process. This prior decision was referred to by the primary judge as part of the history of proceedings, but it was not determinative of the review and was not used by his Honour in that way. 29 Ms Karlsson made no submissions in writing or orally to substantiate this ground of appeal and it must fail.

None of the other matters raised by Ms Karlsson outside the grounds of appeal, even if leave were granted, could demonstrate error in the primary judge's reasons 30 Ms Karlsson thereafter made numerous submissions which either reagitated matters which the primary judge had disposed of, did not relate to either of her grounds of appeal, or failed to articulate any error in the primary judge's reasons. We are unpersuaded that any of these additional submissions could found a basis for appeal, for the following reasons. 31 First, whilst difficult to decipher, it appears that Ms Karlsson is reagitating a contention made before the primary judge that the Registrar failed to take into account her grounds of opposition with respect to the bankruptcy notice and her disagreement with the costs order made by the Registrar for $8,004.25. 32 The primary judge dealt with these arguments, at PJ[35]-[37]: 35 The first matter raised by the applicant is the assessment of the costs that has been awarded against her by the Registrar. The applicant's submission is that, in arriving at the assessment, the Registrar had not taken into account a submission that the applicant made in respect of those costs. 36 I reject that contention. The applicant's submission on costs is recorded in Annexure "AK-1" of her affidavit of 15 November 2023 (see above) under the heading "Response" (the applicant's response). The Registrar's order of 29 November 2023 (which recorded the Registrar's assessment of the amount of the costs) specifically refers to the applicant's affidavit. The order records that the Registrar did not consider that the applicant's affidavit raised any substantive objection to the costs being sought. 37 The Registrar's assessment of costs is supported by Ms Allcock's affidavit sworn on 10 November 2023. Having looked at the applicant's response to the amount of costs claimed by the respondent, I agree with the Registrar's conclusion. The applicant's response does not raise any objection of substance. 33 Ms Karlsson appears to also contend that the primary judged erred, at PJ[35], where his Honour rejected her submission that the Registrar had not taken into account a submission that she made in respect of costs awarded against her. Ms Karlsson submitted in this respect "Appellant stated raise substantive disagrees costs summary $8,004.25, within Interim application and within Affidavit Annika Karlsson sworn on 15 November 2023". In that affidavit, Ms Karlsson refers to the decision of the Court of Appeal, where the University did not seek its costs. Further, the affidavit annexes an extract purportedly from the Judicial Commission of New South Wales referring to circumstances where a self-represented litigant may recover certain costs (but not travelling expenses). The extract says nothing about the costs which may be recovered by a legal practitioner. Ms Karlsson then attaches part of a bill of costs which included the flight expenses for the solicitor for the University. There is no apparent symmetry between these documents; nor do they suggest any basis upon which the primary judge's reasons could be impugned. 34 Further, Ms Karlsson appears to rely on a "response" at Annexure AK-1 to the affidavit of 15 November 2023. That response alleges that she is a "victim" of "Costs claim and then Costs issues arising on the Costs Summary" and refers to certain provisions under the Federal Court of Australia Act 1976 (Cth) and the Federal Court Rules 2011 (Cth) regarding costs but makes no link between the operation of those provisions and any error arising from the Registrar's costs order. 35 The Court has been unable to identify any error in the primary judge's reasons when his Honour concluded that the Registrar's orders as to costs were appropriate. Further, that costs order was made after the bankruptcy notice and therefore does not form part of the debts which are the subject of the bankruptcy notice. 36 Secondly, Ms Karlsson asserts error at PJ[37] of primary judge's reasons. The submission is incomprehensible in its terms, claiming error: on Interim application stated of Interim orders sought at [4] C the Court of appeal Supreme Court nor order for the costs. It is incorrect on the bankruptcy notice. Judgment/order number 2021/00105741 37 The Court is unable to discern what the allegation is with respect to the Local Court judgment/order. The Court also, is only able, on appeal, to correct error as arising from the primary judge's reasons. 38 In addition, Ms Karlsson submits that the University failed to meet a requirement under ss 41(1)(a)(i), (b)(i) of the Bankruptcy Act, as the bankruptcy notice was served on the debtor "as following": I. In the bankruptcy notice dated 16 April 2021 Judgment/order number 2021/00105741 principal amount on which interest is claimed $63,552.90 it is not a final judgment or final order of Supreme Court of New South Wales: Karlsson v Griffith University [2019] NSWSC 1335 Karlsson v Griffith University [2020] NSWSC 365 Rely upon LORD & ANOR v RANKINE & ORS [2010] FMCA 668 at [8] The Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915 at [32] [34] [42] II. Identify Respondent failure filed to Local Courts of New South Wales. NOTICE OF ORDERS MADE dated 16 April 2021. Claim amount: $63,552.80 had add the costs assessor $3,229.05, incorrect of notice of order made Local Court of New South Wales. Costs assessor to be paid before release of the cost's assessment corticates, $3,229.05 had been paid to the assessor. Legal Profession Uniform Law Application Act 2014 s7 l (3)(a) this is document Local Courts of New South Wales notice of order made not seal or sign by the Court. Then bankruptcy notice BN261319 issued 24 August 2023 Judgment/order 2021/00105741 incorrect. Rely upon LORD & ANOR v RANKINE & ORS [2010] FMCA 668 at [10] 39 In terms similar to above, Ms Karlsson also appears to submit that error lies in the primary judge's reasons at PJ[34], [38], [40], [46], [47], [48], as the bankruptcy notice is "not a final judgment or final order of Supreme Court of New South Wales and bankruptcy notice incorrect Judgment/order 2021/00105741". 40 This claim must fail. The University, as creditor, had obtained final judgments and orders as against Ms Karlsson. 41 Thirdly, Ms Karlsson contends error at PJ[44] of the primary judge's reasons, where his Honour dismisses Ms Karlsson's complaint concerning the University's alleged failure to comply with a procedural order made on 11 February 2022 to file and serve submissions in reply by a particular date: Identify primary judge error of Reasons for Judgement at [44] incorrect of the bankruptcy notice Judgment/order number NSD1102/2021 principal amount $31,207.00. rely upon rule 40.07(2)(a)(v) federal court rules Liability of lawyer to their client for misconduct if, (a) a proceeding or an application is delayed adjourned or abandoned because of the lawyer's failure. (v) to comply with these rules or an order of the Court. 42 It appears by this submission that Ms Karlsson alleges that the University's legal representatives have somehow engaged in misconduct by their delay. Regardless of the delay, as the primary judge reasoned correctly, even if this contention as to delay were accepted, it does not advance Ms Karlsson's application to set aside the bankruptcy notice. 43 Ms Karlsson then appears to repeat the same submission, in respect of PJ[45], asserting error in the "bankruptcy notice Judgment/order number NSD431/2022 principal amount $16,101.00. rely upon rule 40.07(2)(b)(ii) federal court rules Liability of lawyer to their client for misconduct if, (b) the lawyer (ii) incurs costs that are unnecessary or wasteful". For the same reasons expressed immediately above, we reject this submission. 44 Fourthly, Ms Karlsson submits that the bankruptcy notice is in error because of "Judgment/order Interest amount claimed $240.85/$231.68". Most of her submissions in this regard were incomprehensible. Ms Karlsson relied upon s 51A(1)(a) of the Federal Court of Australia Act, which Ms Karlsson asserted "provides for the making of order for the inclusion of interest in judgments". Ms Karlsson submitted that it was for the judge to determine the interest, not the parties. However, as submitted by the University, s 51A concerns the assessment of interest up to judgment. After judgment, a judge is not required to determine the interest amount; rather, interest is payable either at such rate as fixed by the Rules or as otherwise determined by the Court: Federal Court of Australia Act s 52. 45 It is also not apparent that this issue was a matter before the primary judge nor how any error could arise. The submission is rejected. 46 Lastly, Ms Karlsson alleged error, at PJ[41], where the primary judge found that there was no basis for Ms Karlsson's contention that the University had stolen her trade mark. Her submission at the appeal hearing was that the primary judge had erred by reference to the decision in Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58. Ms Karlsson failed to articulate the error in the primary judge's reasons. The mere reference to a case where a party has succeeded in achieving comparable relief is not sufficient to prove the allegation has been made out.

Conclusion 47 For all of these reasons, the appeal must fail, and Ms Karlsson be ordered to pay the University's costs. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Perry, Bromwich and Raper.

Bankruptcy Act 1966(Cth)ss 40(1)(g), 41(1)(a)(i), 41(1)(b)(i), s 41(7)

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