Issue 3 - The Blatch v Archer/Jones v Dunkel point
82 At trial there was a dispute about who bore the onus of proof on the question of consent. His Honour said it was unnecessary to decide the issue because, either way, he was satisfied that the trade mark owner had not given its consent. Nevertheless, he observed that, as s 123 of the Act created an exception to infringement, in accordance with ordinary principles of statutory construction, Paul's bore the onus of proof. Paul's accepted this on the appeal but argued that the respondents had an evidential onus. Paul's submitted that, in discharge of that onus, the respondents were required to call Mr Singh and their failure to do so meant that Paul's was entitled to succeed on the issue of "consent".
83 Paul's submitted that Mr Singh was "plainly" in the respondents' camp and the reasons for not calling him were not adequately explained. Paul's submitted that Mr Singh's evidence would have "directly elucidated two evidentiary matters found against [Paul's]".
84 The first was that the Greg Norman products "were specifically manufactured by BTB for supply by it to Sunsports outside India" and the only person who could have given direct evidence about this, Paul's argued, was Mr Singh. Paul's submitted that if the primary judge had applied the principles in Blatch v Archer and Jones v Dunkel, no such inference would have been drawn; the contention would not have been proved. Alternatively, Paul's submitted that the primary judge would have drawn an inference from the evidence that the Greg Norman products were not made to order, but rather as part of the common stock manufactured by BTB with the licence of GNC, where the evidence showed that BTB was in the habit of producing overruns of products bearing the Greg Norman trade marks and there was no evidence of made-to-order goods.
85 The second evidentiary matter upon which Mr Singh's evidence would have borne directly was the question of consent. Paul's submitted that his Honour appears to have based his finding upon an inference drawn from a conversation between Mr Singh and Ms Blackwell after BTB had supplied the Greg Norman products to Sunsports.
86 The principle in Blatch v Archer is that "all the evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted". The relevant aspect of the rule in Jones v Dunkel (which Paul's argued was an application of the principle in Blatch v Archer) is that the unexplained failure of a party to call a witness may in appropriate circumstances lead to an inference that the witness would not have assisted the party's case.
87 For the reasons that follow, the primary judge made no error in failing to draw an inference in Paul's favour from the respondents' failure to call Mr Singh.
88 First, the primary judge was not obliged to draw the Jones v Dunkel inference. As the Full Court observed in Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [78]-[79], "the rule in Jones v Dunkel is one of the most invoked but least understood rules in litigation". The rule merely reflects commonsense. The inference is not mandatory and, "generally speaking, these inferences only become material where the balance of the evidentiary record is equivocal". Here, the evidentiary record was not equivocal. All the evidence was against Paul's on the question of consent.
89 Paradoxically, Paul's relied on the licence agreement. The construction it urged on the Court was that, despite the express terms of cl 2.4, the licence enabled BTB to affix the marks to goods it made in India. Provided that it did one of the things for which the licence provided authority in India, so the argument ran, then the fact that it sold the goods outside India was not a breach of the licence, merely a breach of a condition of the licence. The condition, it submitted, did not go to the root of the licence so as to affect the question of whether the Greg Norman marks had been applied with consent. However, whether or not the condition went to the root of the licence, on any proper reading of the agreement it provides no basis for inferring consent.
90 Paul's submitted that Mr Singh's email of 21 December 2009 contradicts the proposition that GNC did not consent to BTB supplying Greg Norman products to Pakistan. But the email does nothing of the kind. In it Mr Singh said he sold to Sri Lanka, Nepal and Pakistan because "they constituted the territory of India under the Reebok India sales charter". He did not say that he sold to Pakistan because he had GNC's consent to do so and nothing in the email gives rise to such an inference.
91 As the respondents submitted, the mere fact that BTB had overrun production of some products for other customers provided no basis to infer that the garments ordered by Sunsports were not made for the specific purpose of sale in Pakistan, where the contemporaneous documents pointed inexorably to that conclusion. An email BTB sent to Sunsports recorded that the goods would be produced only after the letter of credit was confirmed by both the Indian and the Pakistani bank and the letter of credit as well as other documents identified the port of discharge of the garments as Karachi, Pakistan.
92 The email from Mr Singh sent on 21 December 2009 included the statement (without alteration):
In all our emails to Sunsports, its been made clear that the product is entitled for sale in Pakistan only.
93 The evidence did not give rise to any available inference against the respondents on the question of consent.
94 His Honour drew an inference that GNC did not approve of BTB supplying Greg Norman products to Pakistan from evidence given by Alexandra (known as Sasha) Blackwell, the international accounts manager of Lifestyle Brands Holdings LLC, the third respondent in this appeal. Paul's submitted that it appears likely that if Mr Singh had been called he would have said that BTB received GNC's consent to sell products outside India. It said that his evidence would have been preferred to Ms Blackwell's because the licence agreement was not terminated until five months after she first learned that BTB was supplying goods bearing the Greg Norman marks outside India. The first proposition is no more than speculation. And it does not follow from the second.
95 Thus, his Honour was faced with the lack of any evidence of actual consent and a licence agreement that prohibited sales of trade marked goods outside India. As Paul's called no evidence to prove consent, the respondents had no evidential onus. The rule in Jones v Dunkel simply did not apply here. The purpose of the rule is to enable the tribunal of fact to more readily draw an inference "fairly to be drawn from the other evidence" if a witness able to contradict that inference has not been called: State Bank of NSW v Brown (2001) 38 ACSR 715 at [17]-[18] per Spigelman CJ. Such an inference is drawn, if at all, once all the evidence in the case is in. Before that can happen, there must first be an available inference against the party on the evidence: Manly Council v Byrne [2004] NSWCA 123 per Campbell J, Beazley JA and Pearlman AJA agreeing at [54]. Here, there was none.
96 The second problem with Paul's argument is that the mere fact that Mr Singh, if called, might have given a different account, is insufficient to disturb his Honour's finding. The question here is not whether a Jones v Dunkel inference is available, but whether his Honour's finding should be set aside because he failed to draw it. In JPQS Pty Ltd v Cosmarnan Constructions Pty Limited [2003] NSWCA 66 Meagher JA (with whom Beazley JA and Mason P agreed) said at [24] in a passage cited with approval in Manly Council v Byrne at [74]:
[W]hen a finding of fact has been made in a party's favour by a judge, the fact that an absent witness's evidence, if it were given, would not support that finding, cannot disturb the finding actually made.
97 The third problem for Paul's is that the circumstances did not call for the inference to be drawn. In Fabre v Arenales (1992) 27 NSWLR 437 at 449-450 Mahoney JA, with whom Priestley and Sheller JJA agreed, said:
The significance to be attributed to the fact that a witness did not give evidence will in the end depend upon whether, in the circumstances, it is to be inferred that the reason why the witness was not called was because the party expected to call him feared to do so. But there are circumstances in which it has been recognised that such an inference is not available or, if available, is of little significance. The party may not be in a position to call the witness. He may not be sufficiently aware of what the witness would say to warrant the inference that, in the relevant sense, he feared to call him. The reason why the witness is not called may have no relevant relationship to the fact in issue: it may be related to, for example, the fact that the party simply does not know what the witness will say. A party is not, under pain of a detrimental inference, required to call a witness "blind".
… A Jones v Dunkel inference may not arise if, for example, a witness has a reason for not telling the truth or refusing to assist and the party who may call him is aware of this.
98 Here, the respondents had reason to believe that Mr Singh had been dishonest with them. Before the trial started GNC had terminated the licence and distribution agreements, the licence was not renewed or extended, and it made serious allegations of impropriety against Mr Singh. In the letter of termination it sent to Mr Singh on 17 December 2009, two months before the trial started, GNC accused Mr Singh, in effect, of deceit in his dealings with GNC. Litigation between them was a real possibility. In the result, Mr Singh was likely to be uncooperative, if not hostile.
99 In the circumstances, the notion that Mr Singh was in the respondents' camp at the time of the trial must be rejected.