Unilever Aust Ltd v George Karounos & Anor [2001] FCA 162

FEDERAL COURT OF AUSTRALIA

Unilever Aust Ltd v George Karounos & Anor [2001] FCA 162

UNILEVER AUSTRALIA LIMITED (ACN 004 050 828) v

GEORGE KAROUNOS AND ANOTHER

NG 732 of 1998

HILL J 21 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 OF ORDER: 21 FEBRUARY 2001

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. Mr Karounos pay the costs thrown away today. Those costs may be taxed and paid as the case may be without awaiting the ultimate outcome of the case. 2. Mr Karounos pay into court, as surety for the costs of the applicant thrown away today, the sum of $8,000 within 8 days. 3. The proceedings be adjourned until 8 March 2001. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

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: 21 FEBRUARY 2001

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT 1 The history of this matter has been dealt with in various interlocutory judgments, including those which deal with applications made to vacate dates on which the proceedings have been set down for hearing. For what is the second time, the proceedings have commenced to be heard. The first, an abortive attempt, went so far as to take the evidence in chief of the applicant. That attempt terminated when it became clear that RFC Nominees had been placed in official management. 2 At the close of the applicant's evidence (that is, the evidence of Unilever Australia Limited ("Unilever")) yesterday, and I emphasise that I reminded the parties that that evidence had been lodged a considerable time ago, Mr Karounos sought to submit that the applicant had no case to answer. He requested an adjournment until this morning so that he could prepare submissions to answer submissions in writing that had been handed to me by senior counsel for the applicant. The hearing does not encompass the issues which arise in the cross-claim involving RFC Nominees Pty Limited (now known as Revelinu Pty Limited but herein referred to as "RFC Nominees") directly, although there are issues which are common, such as the ability of the respondents to register the word "real" as a trademark. 3 This morning, Mr Karounos tendered some written submissions most of which do not deal with the question of whether there is a case for him to answer. In particular, he applies yet again to have the proceedings adjourned to a later date. The date he is prepared to accept is a date I had indicated to him yesterday as being available, that is to say, the period from Thursday 8 March 2001 until Tuesday 13 March 2001, something approximating two weeks away. Among the reasons that led me to refuse an adjournment to him yesterday was that the evidence he had put before me, particularly about seeking funds from legal aid sources, suggested he had made no attempt to do so since mid-October last year. Nothing in the correspondence suggested that he would, at a later time, be in a position where moneys were available to him to fund legal representation and have his case put as well as it could be. 4 This morning he has introduced into evidence by affidavit a letter from a firm of accountants, Letcher & Jeffery, which advises him that an amount of $30,000 is available for him to borrow on terms and conditions set out in that letter. He was cross-examined on that affidavit and letter and said that there were no conditions upon the loan other than, one assumes, ordinary conditions appropriate to loans that require no security and that it was available to fund his legal representation. For Unilver, it is submitted that I should proceed with the hearing and ignore a threat, if that is what one should call it, on the part of Mr Karounos to seek leave to appeal if I refuse an adjournment and grant a stay of proceedings until that appeal could be heard. 5 Unilever submits that if the adjournment is granted it will throw away something in the order of $15,650 in costs. That figure includes, it is said, approximately $8,000 in witnesses' costs which have been incurred to have witnesses available today to call in reply to affidavits which Mr Karounos may or may not have read had he proceeded with his defence. Unilever also submits that if I were minded to grant a further adjournment, I should do so only subject to an undertaking from Mr Karounos that if the matter is stood over until the period of four business days commencing 8 March 2001 he would not apply for a further adjournment on that day or for that matter before that day. Mr Karounos opposes an order sought by Unilever, namely, that the costs thrown away by Unilever as a result of the adjournment application be paid by him before the proceedings recommence in March. 6 The figure sought by Unilever is, I should say, rather higher than one might expect but that is said to arise because at least one of the witnesses had to put off some engagement which cost a sum of money and that is included in the figure together with airfares of the two witnesses who have apparently travelled to Sydney for the proceedings. 7 There is always a difficult problem dealing with a litigant in person who is opposed by experienced counsel. This probably is particularly so in the area of trademarks where there are distinctions which are perhaps subtle and which would hardly be known to a lay person seeking to defend an application such as that brought by Unilever. I am conscious of the difficulty that Mr Karounos has in not presently being represented and the advantage that could come to him, and the Court, by his being represented. 8 Among the reasons for which I yesterday refused an adjournment was, as I have said, that the evidence did not satisfy me that Mr Karounos would be likely to obtain legal aid should he now apply for it. Indeed, the evidence suggested that he had been refused legal aid from all recognised sources up until October and that no attempt had thereafter been made by him to obtain finance. It is this matter which the letter from Letcher & Jeffery, Accountants, marked "GILFIB" refutes by making it clear that Mr Karounos could have at least $30,000 made available to him for legal assistance. 9 For reasons that I will shortly indicate, a submission of no case to answer is misconceived. Once the submission that there is no case to answer is ruled against Mr Karounos, it is obvious that he must then seek to adduce evidence. I understand notice to attend has been given to deponents of affidavits (the witnesses involved had all sworn affidavits on behalf of the corporation now known as Revelinu Pty Ltd) although none are presently in Court. 10 I have, of course, a discretion to permit that evidence to be read notwithstanding the non-attendance of witnesses although how I would exercise that discretion would depend on matters that would be put to me and the parties have not at this stage agitated that question. The question whether a case should be adjourned, particularly after the hearing has commenced, is a very serious one. It is possible that it will cause considerable disadvantage to Unilever not merely because it has today brought witnesses that it might or might not have been required to use but also because it means that it will incur further expense for the case to be properly prepared on 8 March 2001 assuming an adjournment is granted. 11 Senior counsel for Unilever has made the point that Mr Karounos has given no undertaking not to apply for an adjournment if the proceedings are, as he requests, adjourned for further hearing on 8 March 2001. I do not, as such, regard that as a particularly significant matter in the exercise of discretion. What is important is to endeavour to do justice as between the parties. In this endeavour, while no doubt case management is a relevant matter it is not conclusive. It is necessary to consider all relevant factors. 12 The real criticism advanced by Unilever is the magnitude of the costs which it will have thrown away if an adjournment is granted. A mere adjournment for two weeks hardly seems of itself to create a great deal of prejudice to Unilever. It might be different if the period of adjournment were considerably longer. Whether it would have been necessary to call the two witnesses, who apparently come from Melbourne, and whose expenditure accounts for $8,000 of the $15,650 estimated for both witnesses' costs and legal fees for yesterday and today, is not clear. It would depend on the course Mr Karounos took. 13 The small delay would have the consequence to Unilever also that senior counsel who has appeared for Unilever would not be available on some at least of the four potential days that are available. There is some difficulty in requiring Mr Karounos to pay the costs of witnesses that would be thrown away by Unilever in that those costs were only necessary to deal with affidavits which Mr Karounos may or may not read should the matter proceed. However, it is clear that significant amounts of money will be thrown away by Unilever if an adjournment is granted. 14 In any event, it is difficult to quantify at this stage whatever amount might be allowed on taxation for counsel fees and solicitors and witnesses, for the costs thrown away. The other side of the coin, of course, is that there is a real expense to Unilever whatever the amount which, if Mr Karounos indeed is insolvent, might never be recouped by Unilever. 15 The other matter which gives me considerable concern is that, although requested to do so, Mr Karounos is not prepared to give an undertaking that when the matter comes on again on 8 March 2001, he will not apply for a further adjournment. For my part, I am not sure I would require an undertaking but I would certainly want it to be abundantly clear that on no account would a further adjournment be permitted unless some act of God or other calamity may justify it. Certainly, inability to obtain legal representation or other matters concerned with Mr Karounos' ability to deal with the case would not justify an excuse to obtain yet another adjournment. 16 The interests on both sides, I have to say, are very much finely balanced. There is no doubt that not only would Mr Karounos be assisted by legal representation but so too would the Court. It is a matter I take into account as I do the interests of justice as between the parties. The question of case management really does not matter in this case, as I have said, particularly since the days happen to be available, in any event, for the Court to hear an adjourned hearing. 17 I would propose, therefore, to grant an adjournment, but subject to firstly ordering Mr Karounos within eight days to lodge with the Court, by way of security for the costs thrown away today, the sum of $8,000. In settling that figure, I am aware that it is considerably less than the figure which senior counsel estimates it will have cost Unilever. On the other hand, it is almost impossible for the Court to be able to calculate the actual figure at this stage. 18 An undertaking has, as I have already indicated, been requested by Unilever and declined by Mr Karounos to the effect that he would not apply for a further adjournment. I have told Mr Karounos that the application is only granted on the basis that he would not apply for an adjournment on the next occasion, short of a calamity which might justify it, and he accepted that position. I wish to make it clear to him that it will not be an excuse for an application for a further adjournment that he is not prepared or that he is unable to get evidence of witnesses or legal representation being the matters which really he continues to agitate or, for that matter, that he is unable to obtain finance or assistance from RFC Nominees. 19 At the request of Unilever, I will list the proceedings for directions on 6 March 2001. That can be done by video link. I will direct my associate to advise the administrator of RFC Nominees that the matter is listed for directions on that date and that the administator should indicate to me, and to all the parties, preferably not less than 48 hours before the directions hearing, whether the administrator has in the meantime consented or not consented to the proceedings by way of cross-claim continuing. Liberty is given to all parties to apply to have the video conference directions hearing vacated if the circumstances require it. 20 I would order Mr Karounos to pay the costs thrown away of today. Those costs may be taxed and paid as the case may be without awaiting the ultimate outcome of the case. 21 I further order that Mr Karounos pay into Court, as surety for the costs of Unilever thrown away, $8,000 within 8 days from today. 22 I propose to give full reasons on the no case to answer submission when I deliver full judgment on the application. Suffice it to say, here, as indicative of the reasons I will give that, in essence, there are two issues which the applicant seeks to agitate. The first is that both the word-mark "real" and the logo-mark "Real Fish and Chips" were not, in the relevant period, used by the respondents/cross-claimants after their registration on the evidence as it presently stands. The second issue is whether the word "real" is capable of being a trademark, having regard to its descriptive nature relating to ingredients, authenticity, etcetera. 23 As to the first of those matters, the evidence of Unilever indicates no use. One of its witnesses who kept a database of newspaper advertising which included the Adelaide Advertiser where one would expect there might be some indication of use had nothing in its files which suggested use. The other, and I suppose equally significant matter, is that ultimately when all the evidence is in the question of use or non-use will need to be determined having regard to where the onus is in trademark matters. It is not an appropriate case for saying, at this stage, that there is no case to answer when the only evidence is that there is no use. 24 The second matter is certainly a more difficult one and perhaps that is a sufficient answer to the no case to answer submission. There is much to be said for the view that the matter is not one of evidence but rather one of law since the word "real" is an English word of description. There is also, at the very least, a prima facie argument, which should not be decided on a no case to answer basis, that when "real" is used as a label on packaging it does not indicate the origin of goods and, therefore, it is for that reason incapable of being registered. To some extent, it is sufficient at this stage that there are real arguments on the part of the applicant to support its proceedings to have the two marks expunged from the register. 25 The giving of proper evidence on the part of the respondents will have an obvious impact on the use issue. I draw Mr Karounos' attention, if he has not looked at it, to s 92(4)(b) of the Trade Marks Act 1995 (Cth), which puts the onus on him, in this proceeding, to establish actual use, rather than on Unilever to establish non-use. In fact, non-use in one sense is established by no evidence of use in any event. It may well be, and I do not at this stage think it is appropriate to seek to resolve it, that even a word as common as "real" could, given actual use, become distinctive of a particular item of goods and, for this reason too, it would seem to me to be more appropriate to deal with the matter at the full conclusion of evidence rather than at this stage as a mere no case to answer submission. 26 Although Mr Karounos has sought an adjournment, I have thought it desirable nevertheless to deal briefly with the no case to answer issue both because it does not really prejudice him ultimately, when the proceedings continue, and also because it will avoid any delay that may arise in the proceedings on 8 March 2001. I would again warn Mr Karounos that a further application for adjournment would not be entertained except in the most exceptional circumstances.