Unilever Aust Ltd v George Karounos & Anor [2001] FCA 125

FEDERAL COURT OF AUSTRALIA

Unilever Aust Ltd v George Karounos & Anor [2001] FCA 125

UNILEVER AUSTRALIA LIMITED (ACN 004 050 828) v

GEORGE KAROUNOS AND ANOTHER

NG 732 of 1998

HILL J 14 FEBRUARY 2001 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 732 OF 1998

BETWEEN: UNILEVER AUSTRALIA LIMITED (ACN 004 050 828)

APPLICANT/CROSS-RESPONDENT

AND: GEORGE KAROUNOS

SECOND RESPONDENT/SECOND CROSS-CLAIMANT

REVELINU PTY LIMITED (ACN 067 545 117)

[in voluntary administration] (previously known as

RFC Nominees Pty Limited)

FIRST CROSS-CLAIMANT

SABRE INTERNATIONAL LIMITED

THIRD RESPONDENT/THIRD CROSS-CLAIMANT

JUDGE: HILL J

DATE: 14 FEBRUARY 2001

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT 1 Before the Court are motions of Revelinu Pty Limited in voluntary administration (Revelinu) and, at least by implication, Mr Karounos, seeking to vacate the hearing date of proceedings between Unilever and them and Sabre International Limited, which have been set down before me for four days, commencing 19 February 2001. 2 The proceedings involve, in essence, a claim by Unilever that trade marks which for present purposes can compendiously be described as involving the word "real", presently registered in the name of Sabre International Limited, but in respect of which at least in the past Mr Karounos and Revelinu had an interest, should be removed from the register of trade marks. The substance of the cross-claim is the claim for damages against Unilever for infringing the marks on the basis that they are valid marks in which the cross-claimants have at various times had an interest. 3 Revelinu was placed into voluntary administration on 21 November 2000. The administrator has not consented to the proceedings in which it is involved being continued having regard to the provisions of the Corporations Law. No application has been made by any party to the relevant Supreme Court for consent that the proceedings continue. The administrator says that funding is not yet at least completely in place and is in any event subject to an opinion being obtained by Dr Emmerson QC as to the prospects of success. For reasons which are asserted in the affidavit of John Maxwell Morgan of 7 February 2001, Dr Emmerson has not yet given an opinion. 4 So far as the proceedings involving Revelinu are concerned, I have no discretion, they simply cannot proceed. The issue that is raised is whether I should permit the hearing to proceed, at least so far as it concerns the claim by Unilever against Mr Karounos and Sabre International Limited. But for an issue of damages, the outcome of the principal proceeding will determine the outcome of the cross-claim. It is put that the whole proceedings should, because of the placing into administration of Revelinu, be adjourned to some later date. Just what that later date could be, having regard to the fact that I have no dates available until the second half of this year, is not clear. 5 The disadvantage of permitting the matter to proceed without the cross-claims proceeding, is obvious enough. Insofar as Revelinu has an interest in the proceedings, it would not be bound by a decision which would necessarily have to be made in the main proceedings, namely whether in all the circumstances the registered proprietor of that mark should have been entitled to register. There are obviously issues that arise as to prior use and the like, assuming that the mark is one capable of registration. 6 It is to be noted that Revelinu was a trustee of a trust. It has ceased to be trustee as a result of a memorandum, which if registered under the law of South Australia would operate to transfer all causes of action which it had to the new trustee, namely Mr Karounos. There is no evidence before me as to whether the memorandum has been registered. If it has, of course, Revelinu is not a party that would seem to have any interest at all in the litigation, for its interest would have passed to Mr Karounos. 7 The question is a very difficult one. In the normal course, and indeed this is the prima facie position, it would seem undesirable for a case to be heard in part where all of the issues cannot be resolved between the parties. This prima facie position is reinforced because the evidence which may be led for Revelinu, assuming that the cross-claims proceed, is different from the evidence that may be led in the principal proceedings, so that there is at least the possibility that the outcome in the claim and cross-claim could be different. That would be clearly a position which is not to be desired. 8 On the other side of the matter, and I put to one side the difficulty of finding an adjourned date, given the time that has already elapsed since this matter commenced there must be taken into account the fact that it could not be said at least on a prima facie view, and without knowing what the evidence ultimately will be and what submissions will be made arising from it, that the case for the validity of the mark "real" appears to be a strong one. On the face of it, it seems difficult to see that the word "real" could have a role in the identification of a product as a product of a particular manufacturer, at least without perhaps repeated evidence of use so as to be capable of registration. 9 It is, I suppose, appropriate to take into account in forming a view matters that have been put to me by Mr Karounos in support of an adjournment being granted in any event of the major claim. It might be noted that this is the third time that Mr Karounos has made an application to vacate the hearing of proceedings which were commenced at least two years ago. Although he has personally not been a party at all times, he has been intimately involved in the litigation as appointor of the trust of which Revelinu was a party. 10 Mr Karounos says he now finds himself in the position where, because Unilever has discontinued its main proceedings against Revelinu, he is unable to rely upon the evidence which Revelinu has filed. This evidence includes affidavits of Mr Karounos and associates of his but also includes evidence of some expert witnesses involved in marketing, food technology and other areas. This is hardly a matter that Mr Karounos has been taken by surprise at this stage about. Indeed, he was aware of it on the last occasion in December when the hearing date then set was vacated and the matter relisted for 19 February 2001. 11 Mr Karounos says that since December he has had to re-read some 5000 pages of material which has been produced on discovery. I emphasise the word "re-read". He says that he has had to source the transcripts by which I take him to be referring to transcripts of interlocutory hearings which, had he wished to no doubt, he could have obtained as they occurred. In any event, it is difficult to see how the transcripts of interlocutory hearings have anything to do with the substantive issues which would be dealt with at the hearing. He also refers to having need to read the various ex tempore reasons which I have delivered on the innumerable interlocutory applications that he has made or others have made. 12 Again, it is hard to see, particularly as he was present when each of the reasons was given ex tempore, why he needs time to read them assuming he has not done so before. In any event, it seems difficult to see what this has to do with the substantive issues. 13 He has said that he has in the time since December to now, something in excess of just over two months, tried to reconstruct the events of the past two years. He has of course filed an affidavit in the matter. 14 The filing of affidavit evidence in the matter is closed and has been closed for some time subject to any question of cross-examination. It is hard to see what the reconstructing of events really has to do with the major hearing. However, even if it does, it hardly justifies an adjournment. Perhaps the most substantial matter in support of Mr Karounos' application for adjournment is that he says he has endeavoured to source funding to obtain legal representation but to date has been unable to do so. He says that he is hopeful that he will be able to do so in the future. Just how long in the future, of course, he does not say. 15 He says that he first sought to source funding immediately after the last interlocutory hearing in December. The fact is that he has known for a considerable time that this matter is to proceed for hearing but seems to have made no attempt to source funding since the end of December. His attempts on his own admission have so far been fruitless. There is no evidence before me as to what attempts he has made, save that Mr Karounos has told me that he has made attempts from the bar table. 16 I should say I have no reason to disbelieve what he said. The question is the significance of it. I have no real confidence, given the prima facie view I have already suggested as to the merits of the case, that finding funding would be easy given also that Mr Karounos says that he is indigent. Further, there are other disputes, apparently in which he has been involved, at least one of which is in the periphery of the present proceedings involving the ultimate registration of Sabre International Limited as proprietor of the mark. 17 I should add, though it is known to all parties, that Sabre International Limited has indicated it does not wish to participate in the hearing although it reserves the right to make submissions should it wish to. Whether to grant an adjournment on Mr Karounos' applications, of course, is a matter of discretion that involves weighing the various matters put by Mr Karounos, none of which seems to me to be substantial given the various dates for hearing that have been given and the fact that he has had two months notice of the fact that the hearing is to proceed. 18 On the other hand, I have to weigh up the prejudice to the applicant in not having the matter resolved and in circumstances where it would seem that the applicant has used the word "real" on products where whether that use is use as a mark is a matter for ultimate determination. In considering this matter, I must of course take into account the difficulty I will have in allocating another hearing date in the reasonable future although that is a matter of course that must ultimately give way to the justice of the situation. Of course, conversely, there is the Revelinu cross-claim and the fact that, if the matter involving Mr Karounos proceeds alone, there is the corresponding cross-claim that will still remain outstanding. 19 I have to say that I think the matters are finely balanced. I am most concerned that if the main claim of Unilever proceeds that this could ultimately give rise to difficulties with the cross-claim. Here is a matter that clearly requires careful consideration. However, balancing as best I can all these matters and particularly seeking to take account of where the justice in the matter lies, I propose not to vacate the hearing date that has already been set but will proceed on that day to hear just the main claim that is brought by Unilever against Mr Karounos and Sabre International Limited. 20 The issues involved in the cross-claim are I think better left to be decided together except so far as they involve the basic issue in which Mr Karounos will be bound, namely the validity of the mark. I will reserve costs on both the application by Revelinu and the application by Mr Karounos. I would direct Revelinu however to notify the Court within 48 hours whether the memorandum removing it as Trustee has in fact been registered and give liberty to apply to any party on 24 hours notice depending upon the outcome of that inquiry. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill.