Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd
[2016] FCA 610
At a glance
Source factsCourt
Federal Court of Australia
Decision date
2016-05-30
Before
Sundberg J, Mortimer J
Source
Original judgment source is linked above.
Judgment (7 paragraphs)
- The interlocutory application dated 29 April 2016 seeking an order pursuant to r 30.01 of the Federal Court Rules 2011 (Cth) that questions of liability in the proceeding be heard and determined separately and prior to any questions of quantum be dismissed.
- The applicant pay the respondent's costs of the interlocutory application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Introduction 1 In this proceeding, the applicant seeks relief relating to use by the respondent of the name "Shape" in relation to the promotion, provision and sale of what are described by the applicant as "commercial construction services". The applicant commenced the proceeding on 23 December 2015 by filing a fast track application and fast track statement. The respondent filed a fast track response on 2 February 2016. 2 The applicant alleges that it has promoted, provided and sold commercial construction services under what it describes in the fast track application as the "Shape Trade Mark" since approximately July 2012 and that, by doing so, it has developed a valuable reputation and substantial goodwill in the commercial construction sector. It claims that the respondent began to promote, provide and sell commercial construction services under the "Shape Trade Mark" in approximately October 2015, when the respondent changed its corporate name from "ISIS Group Australia Pty Ltd" to "Shape Australia Pty Ltd". By this conduct the applicant alleges the respondent has contravened ss 18, 29(1)(g) and 29(1)(h) the Australian Consumer Law and engaged in passing off. Section 18 of the Australian Consumer Law prohibits conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive. Section 29(1)(g) prohibits false or misleading representations that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits. Section 29(1)(h) prohibits false or misleading representations that the person making the representation has a sponsorship, approval or affiliation. 3 The applicant claims the respondent has represented falsely that the respondent's services are those of the applicant; and, or alternatively, that the respondent's services are promoted, provided and sold with the licence, authority, sponsorship or approval of the applicant; and, or alternatively, that the respondent has the sponsorship or approval of, or an affiliation with, the applicant. Those allegations form the basis of the applicant's case under the Australian Consumer Law. They also form the basis of the applicant's claim of passing off, although there the applicant additionally claims that the respondent's conduct was calculated to injure, has injured, and is likely to injure the reputation and goodwill of the applicant, its services and the "Shape Trade Mark". 4 Under the Australian Consumer Law, the applicant seeks declaratory relief, a permanent injunction restraining the respondent from engaging in the impugned conduct, damages, and compensation. In relation to passing off, the applicant seeks damages and, or alternatively at its election, an account of profits. The applicant also seeks orders requiring the respondent to deliver for destruction all material in the respondent's possession, custody or control that, if used by the respondent, would contravene the injunctions sought by the applicant. Further, the applicant seeks mandatory orders that the respondent change its corporate name to remove the word "Shape" from its name, and orders that it deregister the domain name . 5 In its fast track response, the respondent pleads that the name "Shape" is not, and could not be, a registered trade mark and that the dispute relates simply to the use of the word "shape" in business names. The respondent says that the applicant's passing off claim is bound to fail because the applicant "could not seriously contend" the respondent chose "Shape" as its business name in order to trade off the applicant's reputation. The respondent also contends that the passing off claim appears to be made to enliven an account of profits as a potential remedy, but that such a remedy would be of no utility because of the principles in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25. In that case, the High Court held that an account of profits for infringement of a trade mark is limited to profits made when the infringer knew of the owner's rights in the mark (at 34-35) and that a defendant is not liable for profits it can prove are attributable to the intrinsic value of its goods (or, as here, services) as opposed to being attributable to the use of the mark (at 42). In oral argument, counsel for the respondent explained that the respondent would contend the custom it has received since changing its name is derived from its prior reputation and has nothing to do with the use of the "Shape Trade Mark". In its pleading, the respondent denies the applicant's claims under the Australian Consumer Law and as to passing off and says that the applicant is not entitled to any relief. 6 At a case management hearing on 5 February 2016, the applicant foreshadowed that an application might be made at a later date for orders that the trial be split such that questions of liability would be determined separately and prior to questions of quantum. On 8 April 2016, the Court made orders by consent listing the proceeding for trial on 3 April 2017 for an estimated eight days, but leave was also given for the applicant to file an interlocutory application for a split trial. Given this sequence of events, it is appropriate to waive compliance with the requirement in r 30.01(2) of the Federal Court Rules 2011 (Cth) that any application for a split trial must be made before the matter is fixed for trial. 7 Since the case management hearing on 5 February 2016, a mediation in the proceeding has been conducted but it has not been successful. At the interlocutory hearing, counsel for both parties accepted the parties remained considerably apart on both liability and quantum. 8 On 29 April 2016, the applicant filed an application seeking an order pursuant to r 30.01 of the Federal Court Rules that questions of liability in the proceeding be heard and determined separately and prior to any questions of quantum. The respondent opposes the application. 9 For the reasons that follow, I consider that the proceeding should not be split in the manner sought by the applicant.