FEDERAL COURT OF AUSTRALIA Pacific Dunlop Ltd v Youngdown Pty Ltd [1999] FCA 413 PACIFIC DUNLOP LTD v YOUNGDOWN PTY LTD NO. V 88 of 1999 HEEREY J 25 MARCH 1999 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 88 of 1999 BETWEEN: PACIFIC DUNLOP LTD (ACN 004 085 330) Applicant AND: YOUNGDOWN PTY LTD (ACN 003 393 548) Respondent JUDGE: HEEREY J DATE OF ORDER: 25 MARCH 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The proceedings be transferred to the New South Wales District Registry. 2. The applicant pay the respondent's costs of the application for transfer, such costs to be taxed and paid forthwith. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 88 of 1999 BETWEEN: PACIFIC DUNLOP LTD (ACN 004 085 330) Applicant AND: YOUNGDOWN PTY LTD (ACN 003 393 548) Respondent JUDGE: HEEREY J DATE: 25 MARCH 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The respondent has brought a motion seeking an order that these proceedings be transferred to the New South Wales District Registry. The applicant's claim is for infringement of trademark in relation to golf balls, and also for breach of an agreement said to have been reached between the respondent and the applicant in which the respondent allegedly gave an undertaking not to sell more of the offending balls. 2 No defence has yet been delivered, and indeed one of the main points made by counsel for the applicant was that it was too soon to consider whether the matter should be transferred to New South Wales. She argued that no decision should be made before the defence is delivered, and perhaps before more evidence was filed. I disagree. A respondent who might otherwise have a good case for having a proceeding transferred to another State might well fail to obtain an order for transfer if he or she stood by and allowed the applicant to continue with interlocutory proceedings. In such event, the progress of the case might itself generate reasons outweighing the respondent's initial case for transfer. For example, solicitors, counsel and experts retained by the applicant might acquire specialised knowledge of the case which would make it unreasonable to transfer it to another State at a later date. Generally speaking, if a respondent has a good case for a transfer, as I think the present respondent has, it should move promptly. 3 The respondent operates a chain of discount variety goods stores throughout NSW, the ACT and Victoria. However, the business is run from Sydney and the great bulk of the operations are in NSW. In that State there are 56 stores, in the ACT five stores, and in Victoria three stores. The allegedly infringing golf balls, which are being held by the respondent pursuant to the arrangement reached between the parties, are in Sydney. 4 Although I accept that the applicant has not finally elected to take an account of profits, if there is to be an account of profits the relevant documentation will be in Sydney, as will the witnesses who can explain it. 5 As to witnesses generally, the principal witness for the respondent would be its managing director, Mr Neumann. Other witnesses are Mr Abraham, Ms Nicholson and Ms Bartlett. From what I know of the case at the moment, all these are likely to be relevant witnesses. The principal witness for the applicant is Mr Davis, who himself lives and works in Sydney. The only potential witnesses from Melbourne seems to be a Ms Quan, who on one occasion purchased some of the golf balls in question, the solicitor, Mr McLeod, who negotiated the agreement already referred to with Mr Neumann, and a private investigator. In terms of the convenience of witnesses, I think the balance favours Sydney. 6 The applicant says that the Melbourne office of Freehill, Hollingdale and Page ("Freehills,") and its predecessor have been acting for the applicant for 100 years. I must say I am not immediately struck by the relevance of this historical fact. The material on behalf of the applicant, in particular Mr Davis's affidavit, does not suggest that he has reposed any particular confidence in any member of Freehills' office in Melbourne or that there is some particular reason why that, and no other branch of the firm, could not competently handle the matter. There was in evidence the Freehills brochure which includes as an insert details as to the firm's intellectual property group in Sydney, which seems to be substantial. There are some three Sydney partners who specialise in intellectual property work. The firm is said to provide a full service in intellectual property law practice and was ranked the top intellectual law practice in the 1996-97 edition of Legal Profiles, a digest of client opinion of the leading law firms in Australia and New Zealand. 7 Counsel for the applicant said that this was "quite a simple trademark case". From what I have seen of it, I agree. In the respondent's case profits on the infringing sales would amount to three to four thousand dollars. There is another issue as to whether the re-export to the United Kingdom of the remaining balls would incur a licence fee of some $17,000. There is no reason why the matter could not be dealt with perfectly adequately from the applicant's point of view, from the Sydney office of Freehills. On the contrary, the respondent's solicitor is a sole practitioner in a suburb of Sydney and has an intimate knowledge of the respondent's business. There is evidence of considerable cost and expense with the Sydney solicitor and Sydney counsel having to travel to Melbourne. 8 For all those reasons, I am satisfied that there is a sound reason within the meaning of the authorities for transferring the matter to Sydney. 9 The respondent must have its costs but I do not think it is an appropriate case for indemnity costs. Looking at the discussion of the matter in Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225, one useful insight into the sort of considerations involved comes from the expression "litigious misconduct" used by Tadgell J in Australian Guarantee Corporations Ltd v De Jager [1984] VR 483. That seems to be one theme running through the many disparate kinds of situations indemnity costs have been awarded. 10 I think what has happened in this case is that the applicant, not totally capriciously, issued proceedings in Melbourne. I mean by that that there were some reasons for proceeding in Melbourne, even though objectively one might have said even at the outset with the factors then known to the applicant's solicitors that an application for transfer to Sydney was likely to succeed. But it is a discretionary matter and neither side could absolutely guarantee what would be the result of an application for transfer. 11 It does not necessarily follow that where one party to an interlocutory dispute correctly predicts the result and warns that indemnity costs will be sought, that the Court will in fact award indemnity costs. All in all, this is a case where one party has succeeded in obtaining a discretionary order. I think it had, as I have indicated, quite a strong case for obtaining that order, and its success might have been, objectively speaking, reasonably predictable, but in opposing that order I do not think it could be said fairly that the applicant, either in issuing the proceeding in the first place or in opposing the transfer order, engaged in litigious misconduct. 12 However, it does seem to be an appropriate case that the costs be taxed and paid forthwith. I will not make an order staying the further proceeding of the action until those costs are paid because the applicant is a company of substance and the applicant's solicitors are a reputable firm, and I have no reason to think that this obligation will not be honoured. I will make an order that the proceedings be transferred to the New South Wales District Registry and that the applicant pay the respondent's costs of the application for transfer, and that such costs be taxed and paid forthwith. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 16 April 1999 Counsel for the Applicant: Ms E A Strong Solicitor for the Applicant: Freehill Hollingdale & Page Counsel for the Respondent: Mr S Jacobs Solicitor for the Respondent: David Greenstein & Associates Date of Hearing: 25 March 1999 Date of Judgment: 25 March 1999