Spagnuolo v Mantra IP Pty Ltd

REASONS FOR JUDGMENT 1 The applicant, Mr Danilo Spagnuolo, owns two apartments in a very large residential tower on the Gold Coast known as the "Q1" building. He also has letting agreements with the owners of a number of other apartments in that building. 2 The respondent, Mantra IP Pty Ltd (Mantra IP), is a member of the Mantra group of companies. It, too, has an interest in relation to the Q1 building. That interest arises in this way. Since September 2005, a company known as Sunleisure Hotels & Resorts Pty Ltd (Sunleisure) has been caretaker and letting agent appointed by the body corporate for the residential component of the Q1 building. Obviously enough, having regard to Mr Spagnuolo's circumstances, that does not carry with it rights to let all of the apartments in that building to the exclusion of others. Sunleisure became part of the Mantra group of companies in mid 2007. The Mantra group of companies is one of Australia's largest accommodation providers. 3 The Q1 building was developed by Sunland Group Limited. It was completed in 2005. In February 2006, certain Q1 logo marks which had been sought by and registered in favour of Sunland in the course of its developing the Q1 building were assigned by Sunland to Sunleisure Operations Pty Ltd, which is a related company of Sunleisure. As at May 2011, Sunleisure had letting agreements with the owners of some 193 apartments in the residential component of the Q1 building. 4 In March 2008, Mantra IP filed three trade mark applications for the word mark "Q1". The nature of those applications is more particularly described in the decision of the delegate of the registrar of the Trade Marks Office, Spagnuolo v Mantra IP Pty Ltd (2010) 90 IPR 413. In short, they were applications for three trade marks in class number 36 in respect of trade mark number 1128706, 39 in respect of trade mark number 1228707 and 35 and 43 in respect of trade mark number 1228708. Mr Spagnuolo opposed the registration of the trade marks. In this opposition, he was successful before the registrar. 5 As it was entitled so to do, Mantra IP appealed against the registrar's decision to this Court. In that appeal, it was successful: Mantra IP Pty Ltd v Spagnuolo [2012] FCA 769 (Reeves J). Judgment in respect of the appeal was given on 19 July 2012. 6 An appeal to the Full Court against a judgment given in respect of what is termed an "appeal" from the registrar requires a grant of leave: see s 195(2) Trade Marks Act 1995 (Cth) (Trade Marks Act). Under the former Federal Court Rules 1979 (Cth), an application for leave to appeal had to be filed within 21 days: see the former O 52 r 5. 7 The present Federal Court Rules 2011 (Cth) (Rules) came into force on 1 August 2011. These new Rules effected a change to the period within which an application for leave to appeal had to be filed. The present r 35.13 specifies a period of 14 days. 8 The effect, in this case of the difference is that, for reasons based on an assumption of a continuation of the period as between former and present rules, there was no filing within the 14 day period. Instead, the application was not filed until 8 August 2012. 9 When the "appeal" was commenced, the leave to appeal period was 21 days but by the time judgment was handed down it had become 14 days. The applicant must, therefore, seek an extension of time as well as a grant of leave. 10 So far as an extension of time is concerned, the principles were discussed by the Full Court in Jess v Scott (1986) 12 FCR 187. The long and the short of that discussed is that there is a discretion to be exercised which (at 194): … should not be trammelled by set rules, but should be exercised wherever sufficient cause is shown upon an examination of the circumstances of the particular case. 11 That does not mean that special circumstances need be shown. The present Rules do not require that. Nor does it mean that mere casual inadvertence to time limits should be excused. It does mean, though, that the Court's role is not one of taking a pedantic approach to time limits within the Rules, but rather one of deciding where, in the circumstances of the particular case, the interests of justice lie. 12 In this instance, that question, it seems to me, is inherently bound up with whether or not there is an arguable case in respect of a grant of leave to appeal and further, whether the particular point at issue raises a question both of general importance to the parties as well as more widely. I say that because it is evident from the reasons for decision of the registrar and also those of the primary judge that there is a very nice question indeed of trade mark law involved in this case. 13 The nature of the questions which Mr Spagnuolo wishes to agitate are set out, as they should be, in a draft notice of appeal which forms part of the material relied on. It is not necessary to set out all of the grounds of appeal which are specified in the draft notice. Rather, it is sufficient for present purposes to note that Mr Spagnuolo wishes to agitate whether there was error on the part of the primary judge in relation to s 41 of the Trade Marks Act and, in particular, whether, having regard to s 41(2), the marks sought were ever capable of registration. 14 More particularly, what is sought to be agitated is whether account has firstly, truly been taken, as s 41(3) requires, of whether the trade marks sought are inherently "adapted". The registrar thought not. The primary judge concluded that registration was possible. 15 Influential in the latter conclusion was an earlier judgment of the Full Court in MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 (MID Sydney). That case concerned trade marks associated with a building in Sydney known as Chifley Tower. The point which Mr Spagnuolo would wish to agitate is whether MID Sydney is distinguishable in the circumstances of the present where there is a disparate ownership of the premises rather than a single owner. In other words, has Q1 become, in effect, nothing more than the name of a locality? 16 That is by no means exhaustive of the grounds set out in the draft notice but it does permeate many of them. The question is not one which has been determined, so far as either party today can tell, otherwise then by the judgment in respect of which the extension and associated grant of leave are sought. It was common ground and common experience takes one to this proposition, that there are very many such residential premises in Australia, which are held by disparate ownership. Q1 also has the added feature that there is a retail precinct in the premises as well, adding yet another aspect of disparate ownership. 17 It would be quite inappropriate on an application for leave to appeal to engage in anything approaching a preliminary hearing of the appeal itself. Rather, the approach to take is, in my opinion, that set out by Jessup J in Scotch Whisky Association v De Witt (2008) 75 IPR 280 (Scotch Whisky), particularly at [12] and [16]. Like his Honour, I consider that a single judge deciding a question of leave should not embark upon a determination as to whether the applicant has a strong prima facie case. It is enough, in my opinion, if there is an arguable case. Relevant also to take into account is that the applicant here did enjoy success before the registrar. I say that because the procedure under the Trade Marks Act does not provide for an appeal to the Full Court as a right, thereby lending something of a summary quality to the disposition of an appeal against the trade mark registrar. 18 Success before the registrar also means, though, that Mantra IP has not had a longstanding prima facie entitlement, subject to appeal, to use the trade marks in question. I regard that as relevant to the extension of time aspect as well as an associated application for a stay. 19 This is not a case, so far as whether the point is arguable, which has the same obvious geographical connection as did the "Michigan" name, the subject of Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511. Neither though is it immediately apparent that it is on all fours with the MID Sydney case, which I have mentioned. Rather it is in an intermediate limbo, but a limbo which is very common. 20 Here, the time period which has been missed is short. The point is one which is arguable and whilst there are doubtless commercial benefits which flow from the success enjoyed before the primary judge, they have not been long in enjoyment. 21 I regard the principles to be applied in relation to a grant of leave to appeal in respect of this type of case as quite different to those which attend questions as to whether leave to appeal should be granted from interlocutory judgments that concern matters of practice and procedure. It is always a powerful consideration that such matters ought to be determined in the main in the original jurisdiction lest a party with a deep pocket oppress a party who is not as well provided financially. This case concerns a controversy with respect to a substantive right, not a mere question of practice and procedure. 22 It was influential with Jessup J in the Scotch Whiskey case and this was understandably pressed on behalf of Mantra IP that, even if there is an arguable case, other remedies are open to Mr Spagnuolo. In respect of the ultimate fate of the trade marks sought by Mantra IP, that did prove influential in the end in the Scotch Whiskey case. It does not prove influential with me. That is because it seems to me that the parties in this case agitated more than just a question of trade mark law in the so-called "appeal" from the registrar. There was a body of evidence led in this Court beyond that which was before the registrar. It would seem to me to be an unjust waste of expense already incurred by each of the parties in relation to the assembly of an evidentiary case for that process to be repeated under other guises at a later date. The evidence now is a given, but that given is the evidence that was before the Court not the registrar. The point being an arguable one, it will be the first occasion when appellate scrutiny of that body of evidence occurs if a grant of leave to appeal is given. For these reasons then, my conclusion is that an extension is warranted and, further, a grant of leave is warranted. 23 A stay also is sought. In that regard, as I have mentioned, Mantra IP has only briefly enjoyed the benefits of the judgment. Before then, its applications stood rejected. It was not greatly pressed, on its behalf, that there was any particular commercial harm that it would suffer beyond the obvious one of its position being unclear until there was a final judgment. It seems to me there would be much potential for mischief in the marketplace in the event that there were not a stay. 24 Finally, so far as costs are concerned, it was appreciated on the part of Mr Spagnuolo that however compelling the case was for an extension of time, it was nonetheless a situation where an indulgence was being sought. Mantra IP was perfectly entitled to make submissions in opposition to a grant of that indulgence. So doing does not deprive it of an entitlement to a favourable order in respect of the costs of the application. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.