Re Jonathan Ross Sceats v Jonathan Sceats Design Pty Limited [1990] FCA 3 (12 January 1990)

FEDERAL COURT OF AUSTRALIA

Re: JONATHAN ROSS SCEATS
And: JONATHAN SCEATS DESIGN PTY LIMITED
No. N G463 of 1989
FED No. 5
Trade Marks

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Foster J.(1)

CATCHWORDS

Trade Marks - summary judgment - removal of mark from register for non-use - ownership of mark previously disputed in Supreme Court - whether evidence sufficient to warrant exercise of discretion refusing removal of mark - circumstances in which discretion exercisable.

Federal Court Rules - Order 20

Trade Mark Act 1955 (Cth) - s 23

Carl Zeiss Pty Limited's Application [1969] HCA 17; (1969) 122 CLR 1

J. Lyons and Co Limited's Application (1959) RPC 120

HEARING

SYDNEY
12:1:1990

Counsel for the applicant: P. Gray

Solicitor for the applicant: Williams Niblett

Counsel for the respondent: P.K. Catterns

Solicitor for the respondent: Michael Rogers

ORDER

That trade mark No. A 373707 be removed from the Register in respect of all goods for which it is registered.

That the Respondent pay the Applicant's costs of these proceedings.

DECISION

The court has before it a notice of motion in these proceedings, seeking summary judgment for the applicant, pursuant to Order 20 of the Federal Court Rules.

2. The proceedings were commenced by application in which two orders were sought. Summary judgment is sought in respect of the second of those orders, namely that Trade Mark no. 373707 be removed from the Register in respect of all goods for which it is registered.

3. The statement of claim filed with the application dealt with a number of grounds in respect of which relief was sought. It is unnecessary to refer to all those grounds as the basis upon which summary judgment is sought in the notice of motion relates only to one of them. That ground is set out in paragraph 11 of the statement of claim. It reads as follows:
"11. Up to one month before the date of

commencement of these proceedings a continuous
period of not less than three years has elapsed
during which the trade mark has been a registered
trade mark and during which there has been no use
in good faith of the trade mark in relation to the
goods in respect of which it is registered or any
of them by the respondent or a registered user of
the trade mark for the time being."

4. That paragraph of the statement of claim is founded upon s 23(1)(b) of the Trade Marks Act 1955 ("The Act") and in substance repeats the terms of that section: for that reason I will not set out the section afresh.

5. The respondent's defence in relation to that aspect of the statement of claim reads as follows:

"4. In answer to paragraph 11 of the Statement of
Claim:
(a) the Respondent admits that it did not use the
trade mark as alleged;
(b) the respondent says that it did not use the
trade mark because the applicant has issued
proceedings, no. S734 of 1982, in the
Administrative Division of the Supreme Court of
New South Wales against the respondent seeking
inter alia a declaration that the applicant was
the proprietor of the mark; and;
(c) by reason of the foregoing this Honourable
Court should refuse the relief specified in the
application"

6. The applicant relies on two affidavits, that of the applicant himself dated 28 September 1989 and the affidavit of Khajak Kourdian of 24 November 1989. I have also had the benefit of a chronology of events which summarizes major matters referred to in the evidentiary material.

7. There has been no affidavit evidence placed before me on behalf of the respondent, nor any application made to place such evidence before me or to call oral evidence.

8. The section to which I have just made reference has been the subject of consideration by courts of high authority. It is quite clear that the word "may", used in the section, requires that a court, in determining whether relief should be granted, exercise a discretion. Accordingly, a court in considering the matters raised by s 23 may, even though it be satisfied that the desiderata of the section have been made out, nevertheless refrain from ordering the removal of the trade mark in the manner contemplated by the section.

9. The question of the operation of this discretion is considered in Shanahan's Australian Trade Mark Law and Practice (1982 ed.), page 212, under the heading, "Discretion under s 23(1)". The learned author refers to the decision of Kitto J in Carl Zeiss Pty Limited's Application [1969] HCA 17; (1969) 122 CLR 1, which clearly establishes the existence of the residual discretion in the court, to which I have made reference.

10. It is also clear, as the learned author points out, that the discretion is one of general application and not restricted specifically to sections of The Act. However, he also goes on to say:

"It has been said that the discretion should be
exercised only in 'exceptional circumstances';
however, there may well be cases where the public
interest requires that the registration be
retained."

11. Reference is made to the case of J. Lyons and Co Limited's Application, (1959) RPC 120, at page 130. I consider that the law is quite clear in this regard: although the discretion not to make an order of removal exists even though the enabling circumstances required by the section are proved, the discretion to refuse such an order is only to be exercised in the exceptional circumstances referred to.

12. It is quite clear that the prima facie right to an order has been established on the material placed before me, in the sense that the applicant has fulfilled the requirement of putting material before the court which would bring his case within the operation of section 23(1)(b).

13. The significant question however is whether the matter raised in the defence, to which I have made reference, produces a situation where the court should not exercise its discretion in favour of granting the summary judgment sought. The material relied upon is the material relating to the continuance throughout the relevant period of the proceedings in the Administrative Division of the Supreme Court.

14. The pleading itself is not sworn to, however, it is fair to say that no part of Order 20 requires affirmatively that the respondent to an application under that section should either swear to the defence which he says he has, or go further and produce some form of prima facie evidence in support of it.

15. It is clear, however, that in many cases these steps are taken. Cases referred to in relation to the analogous section under the Supreme Court Act 1970 of New South Wales, namely Part 13 Rule 2 of the Rules of Court, are cases where it appears quite clearly that issues of fact were raised in the application for a summary judgment by way of evidence being placed before the court by both sides as to the existence and the bona fides of the defence pleaded.

16. In the present case it has been put to me on behalf of the respondent to the application that, consistent with the authorities relating to procedure in summary judgment applications, there has been raised a triable issue by the very existence of the matter raised in the pleadings, to which I have made reference. It is said that in these circumstances there should be no summary judgment granted to the applicant.

17. Whilst it is quite true that the general principle applicable in matters of this kind is that the party seeking judgment under this rule bears the onus of satisfying the court that in all the circumstances the case is appropriate for the exercise of the power to award summary judgment, it is clear in my mind that that statement refers to the general onus which lies upon the applicant for summary judgment. It has no relevance to the subsidiary but important question as to the shifting which can occur from time to time of the evidentiary onus upon the respective parties.

18. I have to decide in this case whether what appears in the respondent's defence, unsupported by any evidence as to its truth, given either directly or by means of supporting evidence of one kind or another, is, in light of the fact that an admission is made in the pleadings that the necessary requirements of s 23(1)(b) are made out, sufficient in the whole of the circumstances to require that summary judgment be refused.

19. In determining this matter I must necessarily take into account the evidence that has been placed before me as to the proceedings in the Administrative Division of the Supreme Court. Those proceedings were commenced on 16 November 1982, shortly after the respondent had lodged the application to register the trade mark in question in these proceedings.

20. The respondent has placed before me documentary evidence in these proceedings consisting of the summons in the Supreme Court proceedings and the supporting affidavit of the plaintiff in those proceedings, he being the applicant in these proceedings.

21. That summons and affidavit does support what the respondent has said in his defence in the present proceedings to the effect that the Supreme Court proceedings existed and that they were of the nature described in the defence. They do no more than that. I have not been provided with any material that was put before the Supreme Court in support of the defence to those proceedings, if, indeed, any material was put before that Court.

22. What appears from the material placed before me is that, after those proceedings were commenced there were numerous appearances before the Supreme Court, by way of mention, commencing shortly after the initiation of the proceedings and running through to a date in late 1984. After that date it would appear that the proceedings became dormant.

23. They were, in fact, discontinued on 6 October of this year. However, I must consider the prior existence of those proceedings and the lack of activity of either side since late 1984 in the admitted context that the applicant in these proceedings has in fact been using the disputed trademark and that no attempt was made either in the Supreme Court proceedings or in any other proceedings by the respondent to restrain that use.

24. It has been very properly put on behalf of the respondent that the matter raised in the defence to paragraph 11 of the statement of claim is a matter going to the exercise of the discretion contemplated in s 23 of The Act. It does not however operate in any sense to bar the claim; it does not raise a matter specifically provided for under the Trade Marks Act which could operate in extinction of rights given under s 23(1) or in modification of them. It simply goes to the question of whether the powers given by that section should or should not be exercised.

25. As I have said previously, what is put to me is that the relief sought in the proceedings by the applicant is discretionary and that this matter of the existence of the Supreme Court proceedings and its potential effect upon the respondent is a matter sufficient in itself to prevent the exercise of the discretion in favour of the applicant to make the order sought.

26. The defence is compendiously stated. It is necessary to spell out from it, as a necessary ingredient, the requirement that the respondent genuinely refrained from using the trademark because of the existence of the claims being made in the Supreme Court as to the applicant's alleged proprietary rights in the trademark and his consequential claims for a declaration and damages.

27. The pleading itself does not state that. Obviously, however, such an assertion would be a significant part of the establishment of such a discretionary defence. The very paucity of the material that has been placed before me by the respondent must militate strongly against even a prime facie finding of the genuineness of its claim that the exercise of rights under the trademark was foregone simply because of the existence of the Supreme Court proceedings.

28. I have to consider whether in the whole of the evidence, the applicant has satisfied me that the case is an appropriate one for the exercise of a power which should only be exercised rarely and on appropriate grounds. I have come to the view that the applicant has so persuaded me.

29. I therefore make the following orders:

1. That trade mark No. A 373707 be removed from the
Register in respect of all goods for which it is
registered.
2. That the Respondent pay the Applicant's costs of these
proceedings.