Knight v Beyond Properties Pty Ltd

BACKGROUND 4 The application was filed on 25 January 2005. Contrary to O 4 r 4(1)(a) of the Rules and Form 5, Mr Knight did not state his residential or business address in the application. This non-compliance with the Rules was remedied only on the hearing of the motion when a further amended application was filed in Court stating Mr Knight's address as 5B St Michaels Road, Mitcham SA 5062. 5 Evidence on the substantive application has not yet been filed. The nature of the proceeding is revealed by the amended statement of claim filed on 11 April 2005, the further amended application filed on 1 June 2005, the respondents' defence filed on 27 May 2005, and a cross claim brought by the first two respondents (collectively, 'Beyond'), also filed on 27 May 2005. 6 The following account is based on the amended statement of claim and does not represent any finding by me. 7 Mr Knight is, and has at all material times been, involved in the development of television programs and the writing of novels. He is an internationally acclaimed writer. 8 Beyond is involved in the production and distribution of television programs. The third respondent ('Discovery') carries on business as a television distributor. The fourth respondent ('SBS') carries on business as a national free to air television broadcaster. The fifth respondent ('Foxtel') carries on business as a provider of pay television. All respondents are represented by the same firm of solicitors ('Phillips Fox'). 9 Since 1988 Mr Knight has continuously carried on in Australia and internationally the business of, inter alia, developing, writing, producing and selling television programs, screenplays and novels, concerning the investigation of myths, under or by reference to the name and mark 'Mythbusters'. The respondents admit that Mr Knight is the author or co‑author of three named 'Mythbusters' books, but otherwise deny his allegation as to his business activity. Apparently there will be an issue on the final hearing as to whether Mr Knight has a reputation 'in television' in Australia. 10 Since 1988 goods and services provided by Mr Knight have been extensively promoted by reference to the name 'Mythbusters' in Australia and elsewhere. Mr Knight claims that since 1994 he has promoted a 'Mythbusters' television series in Australia based on the concept of the investigation of myths and mysteries contained in his 'Mythbusters' books. He claims to have submitted to Beyond a copy of a production 'bible' for the 'Mythbusters' television series, together with a copy of his third 'Mythbusters' book, a colour promotional brochure, and a copy of the pilot for the 'Mythbusters' television series. 11 Beyond has produced a television series entitled 'Mythbusters' concerned with the investigation of myths, without Mr Knight's licence or authority. Mr Knight alleges that Beyond has permitted Discovery, SBS and Foxtel to broadcast, or to permit or procure the broadcasting of, the series in Australia and elsewhere. 12 Mr Knight asserts that the conduct of the respondents has given rise to various misrepresentations in contravention of s 52 of the Trade Practices Act 1974 (Cth) ('the TP Act') and to various forms of passing off. 13 In its cross claim, Beyond complains that Mr Knight has made misrepresentations in various letters sent by his solicitors to various respondents. Beyond alleges that Mr Knight has misrepresented that the production or broadcast of the 'Mythbusters' series contravenes the TP Act and passing off. The cross claim seeks injunctive relief against Mr Knight and damages or other orders, pursuant to ss 82 and 87 of the TP Act, and ss 68 and 72 of the Fair Trading Act 1987 (NSW) or ss 84 and 85 of the Fair Trading Act 1987 (SA).

General 14 The respondents rely on an affidavit of their solicitor Shannon Elizabeth Platt, a partner of Phillips Fox. Phillips Fox instructed Trade Mark Investigation Services ('TMIS') to make enquiries concerning Mr Knight's financial position. Annexed to Ms Platt's affidavit is a report from TMIS dated 31 March 2005. 15 I will not summarise all aspects of the TMIS report. The respondents submit that in the light of it, and Mr Knight's non‑responsiveness to it, I should accept that:

(a) Mr Knight lacks sufficient assets to meet an adverse costs order;

and that his practice in this respect, if continued, is likely to make it difficult for the respondents to enforce a costs order against him.

Weakness of case 16 The strength of Mr Knight's case is relevant to the exercise of my discretion, and the respondents submit that on the basis of para 6 of the amended statement of claim, it is unlikely that Mr Knight will establish sufficient reputation in Australia to lead to consumers being misled into thinking that he is the source or licensor of the 'Mythbusters' television program. 17 Paragraph 6 refers to:

(a) Mr Knight's 'Mythbusters' television segment in association with the trade mark 'Mythbusters' having been first broadcast in the United Kingdom in August 1988;

(b) Mr Knight's 'Mythbusters' television series in association with the trade mark 'Mythbusters' having been first offered for sale in the United Kingdom in 1994; and

(c) the first of Mr Knight's books in the 'Mythbusters' series having been published in association with the trade mark 'Mythbusters' in 1991, followed by two further novels of his under or by reference to the name 'Mythbusters'.

18 The respondents submit that on these particulars, any television reputation that Mr Knight has is located in the United Kingdom, not in Australia. They also submit that his reputation as an author of books, although it may exist in Australia, is irrelevant to the cause of action which relates to television. 19 The particulars given all relate to 'firsts': a first broadcast, a first offering for sale, and a first publication of a book. These are inadequate particulars of the continuous carrying on of a business in Australia and internationally which is pleaded. The respondents would be entitled to further and better particulars, but that is not the present motion. 20 There is no substance in the attack on Mr Knight's pleaded case on the basis of lack of the relevant 'television reputation in Australia' because: · the pleading in para 6 is broader than the particulars of para 6, as explained above; · Mr Knight's reputation as known to Australian television viewers may arise from the matters pleaded and particularised in para 6A as well as in para 6; · passing off is not the only cause of action pleaded; Mr Knight also asserts misleading and deceptive conduct in contravention of s 52 of the TP Act. 21 The evidence, when filed, may bear out the respondents' submission that Mr Knight's case is weak, but it is premature to reach that view on the pleading alone.

Changes of name and address 22 A certified copy of an entry in the records of the General Register Office, Somerset House, London, shows that Mr Knight was born on 17 August 1964 in England. He claims to be the biological son of 'Beatle', George Harrison. He is not an Australian citizen but has 'permanent resident status'. 23 The TMIS report shows that he has used the name 'Bowvayne' and a nickname 'Bow', and has the ABN for an unregistered business, 'Vayne Entertainment'. Searches show that he has lived at a number of addresses in Adelaide over what is suggested to be a fairly short period. Apparently he had lived at two of the addresses with his solicitor, Emily Ciccocioppo of Kelly & Co. Mr Knight is not listed or recorded with Telstra as a telephone subscriber. 24 This evidence suggests that Mr Knight is not a person with firmly established roots in a particular place, but this falls far short of circumstances which would warrant an order depriving him of his day in Court unless he provides security.

Impecuniosity 25 In substance, the respondents say they have raised so many questions that an evidentiary onus passes to Mr Knight to establish that he does have the means to satisfy an adverse costs order. I disagree. 26 Mr Knight has in fact put on some evidence relating to his financial position, including statements in relation to his Westpac bank account and Optus tax invoices, but with all the figures blackened out. Subsequently, fresh copies of the Optus tax invoices, but not of the bank statements, have been provided with the figures shown. One of these shows that there was a 'balance overdue' of $236.95. Mr Knight has also put into evidence three residential tenancy agreements, and publishing contracts. 27 The respondents have not proved that Mr Knight is impecunious. He may be, and the evidence that he has put before the Court does not prove that he is not. But this is not the point. The onus is on the respondents to prove that Mr Knight would not be able to satisfy a costs order in their favour, and they have not discharged that onus. The most that can be said is that they have raised cause for question or suspicion.

Failure to state address in originating process 28 Mr Knight's failure to state his address in the application which was filed to commence this proceeding has not been explained, but his omission was remedied on the hearing, as noted earlier. I do not know why he did not state his address originally. He may have wished to withhold that information so as to make it more difficult for the respondents to enforce a costs order against him. If so, this alone would not show an 'intention to deceive' for the purposes of O28 r 3(2) of the Rules, although it would remain a factor relevant to the exercise of discretion under s 56(1). If there were evidence showing that Mr Knight had led the respondents to believe that his address was at a certain place, and, unbeknown to them, he had changed addresses and then filed his application without disclosing any address in an attempt to lead them to believe that his address was still the old one, that conduct might show an intention to deceive. But it is not suggested that that is this case. 29 Counsel for the respondents seemed to accept that the failure to state any address in the application had lost its significance once the further amended application, which included the statement of Mr Knight's address, was filed in Court on the hearing. While O 28 r 3(1)(c) serves an important purpose, in the circumstances of this case I think that the applicant's failure to state his address as required by the Rules tells against him only marginally on the present motion.

Beyond's cross claim 30 Another factor which tells against the making of an order is the existence of Beyond's cross claim. Neither counsel referred to this on the hearing. Beyond did not offer to discontinue the cross claim in the event that I should order Mr Knight to provide security and he failed to do so within the time allowed. 31 So long as Beyond's cross claim is pursued, Mr Knight will be entitled to defend it, and in order to defend it, he will lead evidence on the very factual and legal issues that are raised by the head claim. The present case is one of those in which, so long as the cross claim remains on foot, it is a matter of form rather than substance which party is to be regarded as applicant and which as respondent. I should approach the matter in the same way as I would if Beyond had initiated the proceeding and Mr Knight, as respondent, had brought a cross claim against the present respondents.

Important that natural persons have access to the courts 32 Many cases can be cited for the proposition that there is a disinclination to order an applicant who is a natural person to provide security, at least, in the absence of some factor in addition to impecuniosity. Cases which can be cited against the ordering of security and in favour of allowing natural persons, even impecunious ones, free access to the courts, include Hinde v Haskew (1884) 1 TLR 94; Pearson v Naydler [1977] 1 WLR 899 (Megarry VC) at 902; Orr v Lusute Pty Ltd (1987) 72 ALR 617 (Sheppard J) at 622: Morris v Hanley [2000] NSWSC 957 at [15]; The Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 1400 (Branson J) at [22]; Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [25]; James v Australia and New Zealand Banking Group Ltd (No. 1) (1985) 9 FCR 442 (Toohey J) at 445; Weston v Beaufils (1993) 43 FCR 292 (Burchett J) at 298; Famel Pty Ltd v Burswood Management Ltd (1989) 11 ATPR 40-962 (French J) at 50,514; Cameron's Unit Services Pty Ltd v Kevin R Whelpton and Associates (Australia) Pty Ltd (1986) 13 FCR 46 (Burchett J) at 53; Gartner v Ernst & Young (No. 3) [2003] FCA 1437 (Mansfield J) at [36]. 33 In the cases in which natural persons have been ordered to provide security, some factor in addition to impecuniosity has been present; cf Barton v Minister for Foreign Affairs (1984) 2 FCR 463 (Morling J) at 594 (impecuniosity and residence outside Australia); Cunningham v Olliver (unreported, Burchett J, 21 November 1994) (but for delay, security would have been ordered on ground of impecuniosity and bringing of claim to a significant extent for benefit of others); Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [32] (impecuniosity and lack of prospects of success); Loque v Hansen Technologies Ltd [2003] FCA 81 (Weinberg J) (impecuniosity and residence outside Australia); Morris v Hanley [2000] NSWSC 957 (Young J) at [21], [38] and [39] (but for delay, Young J would have ordered security on grounds of impecuniosity and lack of prospects of success and large costs involved to defendants. Young J's decision was reversed on appeal on the ground that defendants had not adequately explained their delay in moving for security, but the Court of Appeal did not consider other aspects of his Honour's reasons: see Morris v Hanley & Ors [2001] NSWCA 374 at [30]-[31]); Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82 (CA) at [132] (per Heydon JA) (impecuniosity and applicant's failure to show that order would stultify proceeding and sum ordered by primary Judge not oppressive).

CONCLUSION 34 Mr Knight is a natural person who resides in Australia; there may be suspicion but there is no satisfactory evidence, that he is impecunious; his pleading does not establish that he has poor prospects of success; his changes of name and of address are not a dominant consideration; his failure to state his address in the originating process tells against him only marginally in view of his correction of that omission on the hearing; and the presence of the cross claim tells against the ordering of security. 35 Accordingly, the motion will be dismissed with costs. I certify that the preceding thirty five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate: Dated: 9 June 2005 Counsel for the Applicant: Ms S Chrysanthou