DGM Support BV v DGM Australia Pty Ltd [2010] FCA 1349 (25 November 2010)

Last Updated: 8 December 2010

FEDERAL COURT OF AUSTRALIA

DGM Support BV v DGM Australia Pty Ltd
[2010] FCA 1349

Citation:		DGM Support BV v DGM Australia Pty Ltd [2010] FCA 1349
Parties:		DGM SUPPORT B.V. v DGM AUSTRALIA PTY LTD ACN 053 082 045
File number:		NSD 572 of 2009
Judge:		RARES J
Date of judgment:		25 November 2010
Date of hearing:	25 November 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	20
Counsel for the Applicant:	J Baird SC
Solicitor for the Applicant:	Middletons
Counsel for the Respondent:	M Hoffman QC and J Hynes
Solicitor for the Respondent:	Minter Ellison

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 572 of 2009

BETWEEN:	DGM SUPPORT B.V. Applicant
AND:	DGM AUSTRALIA PTY LTD ACN 053 082 045 Respondent

JUDGE:	RARES J
DATE OF ORDER:	25 NOVEMBER 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Leave be granted to the applicant to amend the amended statement of claim in the form of the further amended statement of claim attached to the notice of motion filed 23 November 2010, save as to the amendments to pars 20 and 20A in the draft, and any amendment consequential on that rejection to the document.
2. The applicant pay the respondents costs thrown away by reason of the amendment including the hearing today.
3. The applicant provide to the respondent an outline of the evidence proposed to be given by Ms Petillon that identifies all the documents she proposes to refer on or before 26 November 2010.
4. Pursuant to s 53A of the Federal Court of Australia Act 1976 (Cth), the proceedings be referred to the Registrar for mediation, such mediation to take place on or before 3 December 2010, the Registrar may make such directions necessary including that there be a scheduling conference between the parties before the mediation, otherwise such mediation is to be conducted in accordance with O 72 of the Federal Court Rules.
5. The time for the applicant to comply with O 5(c) made 17 November 2010 be extended to 5 pm today.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 572 of 2009

BETWEEN:	DGM SUPPORT B.V. Applicant
AND:	DGM AUSTRALIA PTY LTD ACN 053 082 045 Respondent

JUDGE:	RARES J
DATE:	25 NOVEMBER 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)

1. This is an application to further amend the statement of claim less than three weeks before the date fixed for the hearing of these proceedings. On 17 November 2010 I ordered, on the application of the respondent, DGM Australia Pty Limited, that the applicant, DGM Support BV, give full and proper particulars of the allegations contained in pars 14, 15 and 21 of its amended statement of claim. These proceedings concern the eponymously named parties’ relationship in dealing with each other, together with their rights in respect of the common law trademarks or goodwill attaching to the trademarks of Dangerous Goods Management BV, DGM Support and logos which they use.

THE PROPOSED AMENDMENTS TO PARS 14 AND 15

2. Paragraphs 14 and 15 of the amended statement of claim pleaded that a partly oral and partly written agreement was entered into in about July 1991 by the predecessor of DGM Support, a company called Dangerous Goods Management BV, with DGM Australia and its then shareholders. That agreement was allegedly provided for:
   • the issue of shares in DGM Australia to either Dangerous Goods Management BV or Dangerous Goods Management (Support) BV;
   • the creation of a relationship between DGM Australia and, what was then understood to be, the DGM Worldwide Network which used the system for dangerous goods management with which the Netherland companies were associated;
   • a licence to DGM Australia by Dangerous Goods Management BV of the names and trademarks DGM and Dangerous Goods Management together with the then logo for cargo activities in Australia and New Zealand;
   • the provision of training support and certification in respect of those activities.
3. When the solicitors for DGM Australia sought particulars of those allegations in late October 2010 were met with a refusal to provide any. That occasioned my making the order for their provision. Paragraph 15 of the amended statement of claim asserted that it was a term of this initial agreement that goodwill in the names and trademarks used by DGM Australia would be owned by Dangerous Goods Management BV and, later from about 1992, by the applicant, DGM Support. Again that allegation was unparticularised.
4. DGM Support has applied to amend those two paragraphs by particularising them, substantively to identify about 22 documents that have been discovered that, it asserts, support the inference that the pleaded agreement was made. DGM Support no longer relies on any oral terms of such an agreement. DGM Australia objects to this amendment on the basis that it is inconsistent with the previous pleading of a partly oral agreement. It contends that, by reason of the amendment being put forward so close to the trial, due to commence on 6 December 2010, it will suffer the ordinary prejudice of having to assimilate the new way in which the case is now sought to be put and to marshal its resources to deal with those matters.

THE PROPOSED AMENDMENTS TO PAR 21

5. The second significant issue arises out of amendments sought to be made to the particulars of par 21. That paragraph had pleaded that, in substance, by reason of the first agreement as originally elaborated and a subsequent agreement in writing, pleaded in pars 16-19, that was entered into on about 1 January 1996, DGM Support and DGM Australia agreed that:
   • DGM Support was the owner of each of the names and trademarks Dangerous Goods Management, DGM Support, DGM Services, DGM Specialists and any related DGM names (including what subsequently became the current DGM logo) and a particular logo, a representation of which was attached to the 1996 agreement;
   • DGM Support licensed DGM Australia to use those marks and logos and provide services within the ambit of DGM Support’s business;
   • DGM Support would own any goodwill that was created through DGM Australia’s uses of the marks and logo in its business; and
   • The 1996 agreement superseded any previous agreement.
6. In that context, par 21 alleged that the 1996 agreement, together with the earlier agreement, gave rise to the consequence that DGM Support was the exclusive owner of the goodwill arising by use of the DGM trademarks, the current logo and the composite logo that DGM Australia had used in connection with the provision of cargo activities in Australia and New Zealand.
7. DGM Support today seeks to particularise the claim in par 21 by reference to the following facts. First, the predecessor to DGM Support, namely Dangerous Goods Management BV, was the first person to use the DGM trademarks and composite logo. Secondly, because of the matters pleaded as supporting the proposed new pars 14 and 15 in respect of the first agreement referred to above and, thirdly, the 1996 agreement. The fourth particular relied on what the pleading called “the continuation agreement”. That allegation of the continuation agreement is the subject of the third question that arises on the amendment and I will explain it shortly.
8. DGM Australia objects to the amendment to par 21 on the basis it raises a new issue of first use of that mark that, it contends, had never been a part of the proceedings. It argued that, again, DGM Support had given no explanation for its delay in raising this new issue and that it seeks to confuse, rather than elucidate, the controversy.
9. DGM Support retorted by asserting, among other things, that first use was a matter that was always in issue. Indeed, senior counsel for DGM Australia had said at the recent hearing on 17 November, during the hearing, that the case would come down to “a question of first use of the mark” and that this would be DGM Australia’s case at the trial.

THE PROPOSED AMENDMENTS TO PARS 20 AND 20A

10. The third set of proposed amendments is to pars 20 and 20A. Paragraph 20 originally pleaded that, pursuant to the 1996 agreement, in the period between 1996 and until about late 2008, DGM Support licensed DGM Australia to use the marks and logo for cargo activity related products and services within Australia, New Zealand and Australasia and that DGM, in fact, used those marks and logos and provided the cargo activities, related products and services by reference to those names and trademarks.
11. The proposed amendments propose to add, at the commencement of par 20, the words “with the permission of the Applicant and” before the words “pursuant to the 1996 agreement”. The new particulars proposed assert that, first, DGM Australia was bound by the 1996 agreement during its express term, that expired on 31 December 2006, and secondly, DGM Support’s licence to DGM Australia to use the marks under the 1996 agreement “continued under the terms of the [1996 agreement]” in the period 2006 to 2008 save for two particular clauses. Next, the proposed par 20A asserts that by reason of the conduct pleaded in par 20, the parties agreed that the terms of the 1996 agreement would continue and agreed to be bound by those terms after 31 December 2006, save for the two particular clauses that were excepted.
12. DGM Australia argues that these amendments do not plead any coherent material facts. It contends that there is no basis that identifies what the alleged permission, said to have been given by DGM Support, was. It submits that the pleading is, in effect, embarrassing for want of particularity.

EVIDENCE CONCERNING THE AMENDMENTS

13. In arguing for the amendments, DGM Support relied on an affidavit of its solicitor, Jane Owen, sworn on 24 November 2010. Ms Owen said that DGM Support did not seek to lead any new evidence or tender new documents in support of the amendments beyond the material that had already been furnished by way of outlines of the evidence proposed to be led from its witnesses and the identified documents that it proposed to tender. She recited that discovery had been made initially in late May 2010, with a supplementary list served on 19 November 2010, pursuant to the orders I had made two days previously. She said that draft tender bundles of documents had been provided in July and August 2010 and that some documents on which DGM Support now relied were contained in those bundles but had not been previously discovered in the May list of documents. She said that a further five documents, predating 1996, that may have some limited relevance to the proposed amendments, had recently been provided to the solicitors for DGM Australia. Ms Owen asserted that some matters traversed by outlines of evidence of DGM Support’s witnesses in reply may be also relevant to the proposed amendments to pars 20 and 20A. I have been informed from the bar table that one of those outlines was given by a Mr Teering. Apparently, he will assert there that a meeting occurred in March 2007 at which some agreement along the lines asserted in pars 20 and 20A for the continuation of any license or permission could be established. As is patent from my recitation from what is proposed to be alleged in those two paragraphs, Mr Teering’s evidence could not be adduced under their aegis because no oral agreement or meetings have been particularised in the proposed form of pars 20 and 20A.
14. A detailed affidavit was sworn on 24 November 2010 by the solicitor for DGM Australia, Joshua Simons, in which he identified the objections that his client had to the proposed amendments. Apart from the general pleading deficiencies, which have been elaborated in the hearing today, and the general inferred prejudice from the late introduction of such amendments, Mr Simons did not suggest that there was any substantive disadvantage occasioned to DGM Australia by allowing any of these amendments to the extent that they might properly plead and raise aspects of the controversy between the parties.

AMENDMENT - PRINCIPLES

15. The question of whether or not amendments should be granted has been the subject of many decisions. In this Court, Pt VB of the Federal Court of Australia Act 1976 (Cth) has given effect to the overarching purpose of the civil practice and procedure provisions in that Act and the Federal Court Rules. That overarching purpose, identified in s 37M(1), is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. The overarching purpose includes in s 37M(2) the objectives of the just determination of all proceedings before the Court, efficient use of its resources, efficient disposal of the Court’s overall case load, disposal of all proceedings in a timely manner and the resolution of the disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
16. Where the effect of an amendment is to introduce a small, new issue that causes no substantive prejudice, does not adversely affect the conduct of the proceedings, the lack of, or a deficient explanation for a party’s delay in raising that issue may be a factor to be weighed. But, ordinarily that factor is hardly likely to be decisive: see Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at 214-215 [102] per Gummow, Hayne, Crennan, Keifel and Bell JJ. As their Honours said there:

“It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial and the application of amendments made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment having regard to the other litigants awaiting trial dates.”

17. Here, the proposed amendments have been raised very shortly before the trial. But, they are raised in a context which the parties have had the benefit of some understanding of the controversy which they have asked the Court to resolve.

AS TO PARS 14 AND 15

18. I made the order for the provision of particulars on 17 November 2010 so as to clarify on what material, already deployed, DGM Support sought to prove its case. In substance, the proposed amendments to pars 14 and 15 have narrowed the case by eliminating the suggestion that the alleged agreement was partly oral. These particulars now precisely identify the 22 or so documents on which DGM Support relies to seek to make good its case that an agreement should be inferred in respect of DGM Australia’s use of, or association with, the DGM trademarks and logos, and the nature of the relationship between the parties. Those documents appear to have been discovered. Nothing in Mr Simons’ affidavit suggests that any of them would occasion DGM Australia difficulty or surprise in understanding how they could be used to seek to make out DGM Support’s case. While there is some lateness in DGM Support’s provision of these particulars and the proposed elaboration of its case, I am satisfied that it is appropriate to allow those amendments to be made for the just resolution of this controversy.

AS TO PAR 21 - THE FIRST USE ALLEGATION

19. In my opinion, the circumstances in which the DGM marks and goodwill first came to be used and deployed in Australia must always have been understood by DGM Australia to have been an issue. So much is evident from its senior counsel’s comment, that I have set out above, which he made during the course of the previous directions hearing. Moreover, DGM Australia’s defence pleaded that it had traded under the names DGM and Dangerous Goods Management since about 1991 and it used a particular form of the trademark since about 1993. As part of its defence, it had denied that DGM Support had ever had a presence in or traded into Australia. The defence claimed DGM Australia had ownership of the trademark and copyright in a particular form of the logo, which is the DGM current logo. I am satisfied that question of first use of the DGM trademarks and logos has always been understood by the parties to have been an issue. I am not satisfied that any embarrassment or difficulty is caused by permitting the amendments to par 21.

AS TO PARS 20 AND 20A

20. During the course of argument, when the question of admissibility of Mr Teering’s proposed statement in reply concerning the alleged making of an agreement in early 2007 was raised, senior counsel for DGM Support suggested that she may require further instructions in respect of how that evidence could be relevant on the proposed pleading. In my opinion, the criticisms made of the proposed amendments to pars 20 and 20A by DGM Australia are valid. There is no substantive material fact, as proposed to be pleaded in those paragraphs, from which permission or conduct can be discerned to advance DGM Support’s case. If the purpose of these proposed amendments is to provide an umbrella under which Mr Teering’s assertion of an oral agreement made in 2007 would be admissible, the amendments manifestly fail to do so. They fail to identify any facts, matters or circumstances by reference to which, beyond what is already pleaded, it could be inferred that some new or further agreement had been made to continue the use of the trademarks and logos and the business by DGM Australia. In other words, these proposed amendments do not appear to have any content and do not advance the case beyond what has already been pleaded. In my opinion they are embarrassing and I will not permit them to be made.
    

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:

Dated: 3 December 2010