FEDERAL COURT OF AUSTRALIA Cadbury Schweppes Pty Ltd ACN 004 551 473 v Darrell Lea Chocolate Shops Pty Ltd ACN 000 498 386 [2004] FCA 1718 CADBURY SCHWEPPES PTY LTD ACN 004 551 473 AND CADBURY LIMITED v DARRELL LEA CHOCOLATE SHOPS PTY LTD ACN 000 498 386 V50 of 2003 RYAN J 23 DECEMBER 2004 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 50 of 2003 BETWEEN: CADBURY SCHWEPPES PTY LTD ACN 004 551 473 First Applicant CADBURY LIMITED Second Applicant AND: DARRELL LEA CHOCOLATE SHOPS PTY LTD ACN 000 498 386 Respondent JUDGE: RYAN J DATE OF ORDER: 23 DECEMBER 2004 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The trial fixed to commence on 14 March 2005 be vacated. 2. The respondent's motion on notice filed 12 November 2004 stand over to a date to be fixed to enable the applicants, if so advised, to seek leave to discontinue and, alternatively, for the Court to receive submissions as to the further orders to be made in light of the reasons published this day. 3. The costs of all parties of the hearing on 1 December 2004 be reserved. 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 50 of 2003 BETWEEN: CADBURY SCHWEPPES PTY LTD ACN 004 551 473 First Applicant CADBURY LIMITED Second Applicant AND: DARRELL LEA CHOCOLATE SHOPS PTY LTD ACN 000 498 386 Respondent JUDGE: RYAN J DATE: 23 DECEMBER 2004 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 There are before the Court two motions on notice, one dated 12 November 2004 by the respondent ("Darrell Lea") and the other by the applicants, to which I shall refer collectively as "Cadbury". By its motion Cadbury seeks leave to file and serve a fourth further Amended Statement of Claim. However, Darrell Lea's motion seeks, as the most extreme alternative, that, pursuant to O 35A r 3 of the Rules of this Court, the proceeding be dismissed as to the whole of the relief claimed. The alternative claims for relief in Darrell Lea's notice of motion are expressed as follows: '2. The Applicants pay the Respondent's costs of the proceeding on a solicitor/own client basis. 3. In the alternative to 1 above, the Applicants be restrained from filing and serving any further evidence in chief in this proceeding from the date of this Motion. 4. In the alternative to 2 above, the Applicants pay the Respondent's costs of this Motion; and (a) the Respondent's costs as ordered by Justice Ryan on: (i) 10 February 2004; (ii) 31 May 2004; (iii) 2 July 2004; and (iv) 23 July 2004, and (b) the Respondent's costs of and incidental to the case management conferences/hearings conducted before Registrar Efthim on 9 and 16 August 2004 respectively, such costs to be taxed and payable forthwith.' 2 In the circumstances it is convenient and logical to consider first Darrell Lea's motion. The history of the litigation 3 The application herein was issued on 4 February 2003. It was accompanied by a statement of claim which has since frequently been amended by leave. In its present form, it alleges that Cadbury had acquired a reputation and goodwill in a colour identified as "Cadbury purple" which it had used in the packaging, promotion, sale and distribution throughout Australia of chocolate and other confectionery products. It is then alleged that Darrell Lea has engaged in misleading or deceptive conduct by using a shade of purple approximating to Cadbury purple in "signage, badging, wrapping, store fit out, point of sale facilities and advertising in association with the sale of chocolate confectionery so as to signify that Darrell Lea was associated with, owned by, endorsed by, approved by, or had some other economic link with Cadbury". It is further alleged that, by packaging its products in materials making prominent use of a colour purple approximating to Cadbury purple ("the purple packaging conduct"), Darrell Lea has misleadingly or deceptively represented that Darrell Lea products were made by or offered for sale by or with the licence or approval of Cadbury or that the Darrell Lea products enjoyed a commercial connection with Cadbury. Further or alternatively, it has been alleged in Cadbury's statement of claim that, by using a colour purple deceptively or confusingly similar to the Cadbury purple, Darrell Lea had passed off its confectionery as that of Cadbury. 4 Cadbury's amended application seeks both interlocutory and final relief. The claim for interlocutory relief has not been pursued but the final relief includes injunctions restraining contraventions of ss 52, 53(c) and (d) and 55 of the Trade Practices Act 1974 (Cth) and damages said to have arisen from the same contraventions. Injunctive relief and damages, or alternatively, at Cadbury's election, an account of profits, are also sought in respect of the cause of action in passing off. The application also claims declaratory relief and all necessary accounts and inquiries. After two amendments to Cadbury's statement of claim, directions were given by consent on 3 April 2003 which provided for, amongst other things, separate trials as to liability and the quantum of damages, the provision of further and better particulars, the filing of a defence by Darrell Lea and the completion of discovery by 20 June 2003. Some of those interlocutory steps had been taken by 27 June 2003 when I gave directions for, amongst other things, the further amendment of the statement of claim, an amended defence, the exchange of lists of discoverable documents and the inspection of discovered documents. 5 Thereafter, the activity in relation to the proceedings in this Court was largely focused on discovery until 20 October 2003 when I gave further directions, including some pertaining to discovery including further discovery, and ordered that Cadbury file and serve its evidence in relation to liability by 12 December 2003 and Darrell Lea file and serve its corresponding evidence by 6 February 2004. Further steps in relation to discovery were then taken and a mediation was conducted on 24 November 2003 which proved unsuccessful. Cadbury failed to file and serve by 12 December 2003 the affidavits containing its evidence in relation to liability which had been ordered on 20 October 2003. In ensuing correspondence between solicitors, the solicitors for Cadbury sought to excuse their clients' failure to file, as directed, affidavits of evidence by 12 December 2003 by pointing to alleged inadequacies in Darrell Lea's discovery. After further correspondence between solicitors and an inspection by Cadbury's solicitors of documents produced on discovery by Darrell Lea on 10 February 2004, I made, amongst others, orders on a motion by Darrell Lea for filing and service on each side of supplementary lists of documents, for the preservation of confidentiality in certain specified documents and for mutual inspection of further discovered documents. I also ordered that the time for filing and service of Cadbury's evidence in relation to liability be extended to 26 April 2004 and for that of Darrell Lea to be extended to 21 May 2004. The rest of February 2004 was taken up with the filing by Darrell Lea on 16 February of a supplementary list of documents and further correspondence between solicitors concerning discovery. On 17 March 2004 Cadbury filed a supplementary list of documents and, on 22 April, Darrell Lea filed a further supplementary affidavit of documents. However, 26 April 2004 came and went without the filing by Cadbury of any affidavits of evidence in accordance with the order of 10 February 2004. On 3 May 2004 the solicitors for Cadbury wrote to the solicitors for Darrell Lea a letter signed by Ms Whiting, a partner in the firm Corrs Chambers Westgarth ("Corrs") who had taken over the supervision of the conduct of the action on behalf of Cadbury. Ms Whiting's letter was in these terms: 'We refer to the above matter and note that Cadbury was required to file its evidence in relation to liability by 24 April 2004. We advise that although the preparation of Cadbury's witness statements is well advanced, we require additional time to finalise them. We expect that Cadbury's witness statements will be finalised in a couple of weeks. We appreciate that this has an impact on the Court timetable and we will of course agree to an appropriate extension of time which enables Darrell Lea to file its evidence. We will keep you informed in respect of our progress.' 6 Despite the assurances in that letter, Cadbury's affidavits of evidence had not been filed by 19 May 2004 when Darrell Lea's solicitors took out a notice of motion to compel the filing of Cadbury's material. On the return of that motion on 31 May 2004, I made orders which included these paragraphs: '1. That the time fixed by order of 10 February 2004 for filing and service by the applicant of its evidence in relation to liability be further extended to 16 July 2004. 2. That the time fixed by the said order for filing and service by the respondent of its evidence in relation to liability be further extended to 13 August 2004. 3. That the time fixed by the said order for filing and service by the applicant of any evidence in reply be further extended to 3 September 2004. 4. That subject to further or other order the applicant be precluded from relying on any evidence in chief other than that filed within the extended time specified in paragraph 1 of this Order.' 7 Although further interlocutory steps were taken and additional correspondence passed between the solicitors for the parties after the making of those orders, by 16 July 2004 Cadbury had still not filed or served its evidence in relation to liability. On that date, it took out a notice of motion seeking that the time for the filing and service of that evidence be further extended to 17 December 2004. In support of that motion an affidavit was sworn by Ms Whiting. In the course of that affidavit, Ms Whiting deposed that she had taken over the conduct of the matter in January 2004. She also expressed the opinion that compliance with the order of 10 October 2003 requiring Cadbury to put on its evidence-in-chief by 12 December 2003 was never achievable and that; '… there is extensive preparation that needs to be carried out in these proceedings. Cadbury Schweppes is entitled to have put before this Court its best case. In order to do this all of the preparation required to achieve this needs to be undertaken and tested before the evidence to be adduced at trial is served or filed. To do otherwise, ie. by undertaking a piecemeal approach in the finalisation and serving of material will result in prejudice to Cadbury Schweppes.' 8 Ms Whiting's affidavit then descended to some detail of the work involved in the preparation of Cadbury's witness statements. She indicated that, to the date of swearing her affidavit, twelve statements had been drafted, four of which were substantial and "in an advanced stage." It was then deposed in paragraphs 19 to 22 of the affidavit that: '19. Quite simply, as more potential witnesses are spoken to, more information becomes available which assists in the identification of matters which may be of assistance in putting forward Cadbury Schweppes' case to this Court. Those issues then need to be considered more fully and the relevant information obtained. In some circumstances the issues and information will result in a witness statement. In other situations a further examination of the issues will result in the conclusion that the information is not relevant to the matters the subject of this proceeding and accordingly a witness statement will not evolve. 20. The matters referred to in the preceding paragraph are not exclusive to this matter and are, in the main, part of the standard process of preparation of a proceeding such as this. However, it is a necessary process and is very time consuming. It is also very difficult to assess with certainty the amount of time required to complete the process. 21. Since taking over this matter the pleading has been reviewed and on 2 July 2004 the Third Further Amended Statement of Claim was filed and served in these proceedings. The need for the amendment of the pleading was brought about as a part of the ongoing general preparation process which developed and clarified issues. 22. Until the issues in relation to the Statement of Claim were resolved, it was not possible for me to identify the requirements that I had for expert evidence in these proceedings. In my view, I am now in a position where I would be able to engage properly in advancing this aspect of the matter.' 9 After doubting the appropriateness of the consent order which had been made for separate trials as to liability and quantum, Ms Whiting's affidavit concluded with these paragraphs: '25. Having regard to the matters as set out in my affidavit, it is my professional opinion that the Applicants are not in a position to file their evidence in chief at this time and will not be able to do so for another five to six months. 26. It would be prejudicial to the Applicants to require them to file evidence before they had completed preparation of all such evidence. The Applicants would be prejudiced if they were not given an opportunity to present their best case to this Court and that cannot occur if the Applicants are required to file some of their evidence prior to finalising the remainder of its evidence. 27. Similarly, the Respondent should be provided with all of the evidence against it before being required to file material in response.' 10 On the return of Cadbury's motion on 23 July 2004, I made an order that the action be fixed for trial limited, subject to any further or other order, to issues of liability, to commence on 14 March 2005. At the same time, I vacated several earlier orders including those imposing time limits for the filing and service of evidence on affidavit. It was next directed that "There be further direction hearings and case management conferences before Registrar Efthim on such dates and at such times as the Registrar may direct, such hearings and conferences to be concerned with but not confined to the giving of directions and fixing of times for compliance therewith to ensure that the application" be ready for trial to commence on 14 March 2005. As contemplated by the order of 23 July 2004, case management conferences were conducted by Registrar Efthim on 3 and 9 August 2004 in the course of which the learned Registrar directed that Cadbury furnish an affidavit explaining the reasons for its delay in filing statements of the evidence-in-chief on which it proposed to rely at trial. After further correspondence between solicitors, Registrar Efthim, on 16 August 2004, directed, amongst other things, that Cadbury file and serve its evidence by 29 October 2004 and that Darrell Lea file and serve its evidence in reply by 21 January 2005. 11 There was then yet further correspondence between solicitors principally about discovery and about perceived deficiencies in Darrell Lea's defence to the most recent version of the further amended statement of claim. Between September and October 2004, Cadbury issued a voluminous body of some 45 subpoenas requiring various third parties, including franchisees of Darrell Lea, advertising agents and marketing consultants, to produce documents said to be relevant to the action. The issue and return of those subpoenas provoked another spate of correspondence between solicitors about confidentiality claimed on behalf of Darrell Lea to attach to some documents produced on subpoena and other objections raised by Darrell Lea's solicitors, Middletons, to the release to Cadbury of some of those documents. 12 Despite the order made by Registrar Efthim on 16 August 2004, which is noted at [10] above, Cadbury failed to file by 29 October 2004 any affidavits containing its evidence-in-chief. However, subpoenas issued at the instance of Cadbury continued to be returned before various Registrars and the solicitors for the parties conducted further correspondence about the sufficiency of discovery and the release to Cadbury of certain documents produced on subpoena. Cadbury have pointed to what it claims is obstructionism or lack of co-operation on the part of Darrell Lea in relation to these issues as partly explaining its inability to file and serve a complete body of evidence or otherwise to be ready for the trial of the action which has been fixed to commence on 14 March 2005. Further explanations for that inability have been furnished in these paragraphs of an affidavit sworn on 30 November 2004 by Ms Cressida Wall, a solicitor employed by Corrs. '3. By the beginning of September 2004 eight draft affidavits had been substantially completed, drafts for other witnesses had been prepared, and a further six to eight affidavits remained to be prepared for lay witnesses. No expert evidence had been prepared, as it was necessary to complete the lay evidence first. During the period late September to October 2004 Cadbury personnel have provided to Corrs, for the first time, in electronic and hard copy form, approximately sixty lever arch folders of documents covering marketing of chocolate confectionery products which appear to be relevant to Cadbury's claim that it has reputation and goodwill in the colour Cadbury purple ("Cadbury's reputation claim"). 4. During October Corrs have reviewed these documents for relevance. Where the relevant documents have been in electronic form and have been considered relevant they have been printed, copied, numbered and listed. This work has taken considerable time. 5. My review of the documents to date has revealed that not all documents which may be relevant to Cadbury's reputation claim have been provided, or their absence explained. We are currently seeking further instructions from Cadbury in this regard. Given the time of year, the fact that Cadbury's financial year ends on about 31 December and the likelihood of personnel absences in January 2005, the best I can estimate is that any further relevant documents will have been identified and located by the end of February 2004, at the earliest. 6. Considerable resources have been applied by Corrs to the completion of interlocutory work in this matter. 7. However, it is becoming increasingly clear that the enormity of the preparation of this case for trial flows from the fact that Cadbury's use of Cadbury purple extends throughout its whole confectionery business and has done so for the whole of the period since January 1990. The adduction of the evidence of this use, and in particular the deliberate and planned use of Cadbury purple so as to invest it with an advertising quality such that it alone signals Cadbury chocolate confection to the Australian public is a significant task. 8. The task of preparation of this evidence is difficult. It is difficult because Cadbury personnel have changed over the period. It is difficult because Cadbury's deliberate and planned use of Cadbury purple has, at least since 1990, extended throughout Cadbury's chocolate confectionery business in Australia. It is difficult because Cadbury in Australia is a subsidiary of the UK headquartered Cadbury group, not a stand alone Australian company. 9. At present it is not possible to say precisely what evidence will be relied upon by Cadbury in support of Cadbury's reputation claim until all potential affidavits have been prepared, and provided to counsel for settling and review as a whole. This includes lay and expert evidence. The importance of this task has recently been emphasised by the High Court in the Toll Holidays v Alphafarm case (see at [35]). Only once all "potential" evidence has been prepared will counsel, Linda Fisicaro, Janet Whiting and I be in a position to properly assess precisely what evidence has to be led in order to put Cadbury's best case in support of its claim to reputation and goodwill in Cadbury purple. … 12. Further, it has been necessary to examine approximately eight lever arch folders of documents produced pursuant to subpoena and to assess the adequacy of the material produced and correspond with the addresses in relation to these issues. It appears to me at present that many of the subpoenas have not been fully complied with and Corrs is currently pursuing those parties.' The submissions of the parties 13 Mr Wyles of Counsel for Cadbury pointed to an affidavit sworn 30 November 2004 by Mr Stern, the partner of Corrs having the carriage on behalf of Cadbury of the proceedings in the Trademarks Office, which discloses that, after Cadbury's application to the Trademarks Office for registration of "a spectrum of shades of the colour purple used as the substantial colour of packaging for chocolate and chocolate confectionery" had been advertised on 18 September 2003, Darrell Lea filed a notice of opposition to the application. Mr Stern went on to depose to an extension of time sought by, and granted to, Darrell Lea in the Trademarks Office proceeding and a subsequent application for a further extension of time which was refused. As well, Mr Stern, has referred to extensive evidence in opposition which has been filed in the Trademarks Office on behalf of Darrell Lea and other opponents being The Sugarless Company and two associated companies, Nestle Australia Limited and Societe des Produits Nestle. 14 The proceedings in the Trademarks Office were said by Mr Wyles to constitute the "test case." Whether that meant that some issues in those proceedings were common to the issues in the action in this Court is not clear. However, Mr Wyles went on, in the same context, to contend that Darrell Lea and its advisers had perceived that the evidence relied on in the Trademarks Office presents Cadbury's "sub-optimal case on purple" and were seeking to compel Cadbury to rely on the same evidence in this Court. That contention was echoed later in Mr Wyles' submissions when he contended that "If we were compelled to meet the trial date it would be on oral evidence and we would be presenting a third or fourth-rate case on behalf of Cadbury." 15 In support of Cadbury's application for leave further to amend its third amended statement of claim, Mr Wyles referred to the recent judgment of Finkelstein J in BP p.l.c. v Woolworths Limited [2004] FCA 1362 where his Honour observed, at [23]-[24]; 'Whichever test is applied the colour green (in the particular shade shown on the applications) is not inherently distinctive of BP's goods and services. Applying the negative test, green is not inherently distinctive because, as I will soon show, it is a colour used quite innocently by other owners and operators of service stations. The colour is not inherently distinctive according to the positive test because the colour is simply descriptive. The marks will only be distinctive of them if, by the filing date of each application, the colour had acquired a secondary meaning. Accordingly, for BP to succeed in its appeals it must establish two things: first, that it has used the particular shade of green as a trade mark and, second, that in the minds of the public the primary significance of that shade of green, when used in connection with the supply of petroleum products or the provision of petroleum services, identifies the source of those goods or the provider of those services as originating from a particular trader, though not necessarily from an identified trader. The evidence must be scrutinised very carefully when it is said that a single colour has been used as a trade mark. Most objects have to be some colour. So merely applying a colour to a product will not act as an identifier for that product. In deciding whether colour functions as a trade mark it is necessary to determine whether the trader has used the colour in a way that informs the public that the product emanates from a particular source. Put another way, colour must be used to distinguish products and not as mere ornamentation or decoration. Moreover, I propose to begin from the premise that in most cases the public will consider colour as ornamentation and not as indicating a particular origin. For that reason I will require substantial evidence to show acquired distinctiveness or secondary meaning for a single colour. Without wishing to be repetitive (but the point is so important that some repetition is in order), what is required is the promotion of the colour itself in a way that it attracts attention, just like the established institution of advertising, so as to lead the public to associate the colour with the products and services in question.' 16 Reference was also made to later passages in the same reasons where his Honour adverted to the fact that green was regarded as BP's dominant corporate colour but was "only one aspect of its total image." Accordingly, Finkelstein J considered, at [64], that separate components of a single get-up or design may qualify for registration as a trademark and be capable of registration if each feature considered separately distinguishes the goods or services in question. On the other hand, his Honour thought, if the get-up or design creates "a separate and distinct commercial impression", then the separate parts will not be registrable. Those observations were said by Mr Wyles to necessitate a further amendment to Cadbury's third amended statement of claim to allege that Cadbury purple is, and has at all times been, a separate component of Cadbury's get-up which, considered separately from the name and printed or other devices, distinguishes its confectionery. In anticipation of being granted leave to make that amendment, Mr Wyles submitted that "What Cadbury seeks in this case is an opportunity to put on its best evidence as to having invested in the colour purple that advertising quality which Finkelstein J identified." 17 That submission rested on the proposition that Finkelstein J had erected a "very onerous test" which will oblige Cadbury to adduce evidence at length of the use which it has made of Cadbury purple and the reasons and policies underlying that use, including marketing briefs, reports and the like. It was not possible, Mr Wyles asserted, for the necessary work to be done in time for that evidence to be adduced in March 2005. He also called in aid the responsibility, recently reiterated by the High Court in Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 at [35], which a party to litigation bears of assessing the available evidence to ensure that the court is only burdened with what is admissible and essential to make that party's case. The discharge of that responsibility would further prolong the time required by Cadbury for the preparation of its case. Exercise of the Court's discretion 18 After considerable anxious reflection on how the Court's discretion under O 35A r 3 should properly be exercised in this case, I have concluded that the present proceedings should be brought to an end. They have been on foot now for almost two years and Counsel for Cadbury has conceded that the applicant cannot be ready for the trial, even one confined to issues of liability, which has been fixed to commence on 14 March 2005. 19 If an order dismissing the action under O 35A r 3 were to have the consequence that the very considerable amount of time and costs so far expended by Cadbury would be thrown away entirely, that would be a powerful factor militating against acceding to Darrell Lea's application. However, it was not suggested on either side that an order dismissing the proceeding as to the whole of the relief claimed by Cadbury would give rise to an issue estoppel or would otherwise preclude Cadbury from reviving the action when it has assembled all, or most, of the evidence on which it intends to rely. I contemplate that, in assembling that evidence, Cadbury would have the benefit of recourse to documents obtained on discovery or produced on subpoena by third parties in the present proceedings. I am prepared to include in the order giving effect to these reasons a stipulation framed to preserve that benefit to Cadbury. It follows, of course, that if the action is reinstated in the future, Darrell Lea should, correspondingly, be able to use any documents produced to it on discovery or obtained by subpoena to third parties. 20 Cadbury's resistance to Darrell Lea's motion and to the action proceeding to trial on 14 March 2005 seems to be predicated on the assumption that it is entitled to collect and sift evidence until it judges that it is able to present its best or "optimal" case. Only then, and after Darrell Lea has had an opportunity to meet that case, it seems to be implied, should the action be set down for trial. Those assumptions misconceive the exigencies which require modern courts to assume direct responsibility for the expeditious despatch of litigation. The following observations of Wilcox and Gummow JJ in Lenijamar Pty Ltd v AGC Ltd (1999) 27 FCR 388 at 395 apply, if anything, even more strongly to this Court's system of case management as it has evolved than they did to the situation which obtained in 1990 when their Honours were writing; 'In this Court, there is just such a system. From that circumstance we extract two propositions. First, the fundamental differences in procedure render inapplicable most, if not all, of the principles evolved by the English courts in relation to their own procedures. Secondly, the existence of a case management system within this Court is the backdrop against which the relevant rules must be considered and applied. That the Court follows the case management approach is well known to the legal profession. The practice was adopted immediately upon the establishment of the Court in 1977. It was, at that time, a radical innovation in Australian superior courts; and was recognised as such. It is reasonable to suppose that all litigious solicitors and all barristers are aware that if they choose this Court for the litigation of a claim - and, these days, there is a choice in matters arising under s 52 of the Trade Practices Act - they go to a Court which seeks to minimise the delays of litigation by issuing procedural directions to the parties which they are expected to observe. In return, the Court does its best to provide to the parties an early hearing date.' 21 Against that background, it is a frequent forensic experience that the case which a party is able to present must fall short of some perceived ideal or standard of perfection in order to accommodate the exigency of a fixed date for the commencement of trial. It also not infrequently happens that a party has to modify its case or defence in the light of some refinement or restatement of legal principle in a case decided during the last stages of preparation or even in the course of trial. I do not regard the publication of Finkelstein J's reasons in BP v Woolworths (supra) as changing the fundamental issues in the present case or as taking it out of the ordinary. 22 If the Court perceives that a well-resourced applicant, having enjoyed the latitude of several extensions of time to complete its preparation, is unable or unwilling to confront the reality of a fixed date for the start of the trial, it is an appropriate exercise of discretion to dismiss the application. In my view, the present case can be assimilated to the first category postulated in these terms by Wilcox and Gummow JJ in Lenijamar (supra) at 396; 'The discretion conferred by O 10, r 7 is unconfined, except for the condition of non-compliance with a direction. As it is impossible to foresee all of the circumstances under which the rule might be sought to be used, it is undesirable to make any exhaustive statement of the circumstances under which the power granted by the rule will appropriately be exercised. We will not attempt to do so. But two situations are obvious candidates for the exercise of the power: cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to co-operate with the Court and the other party or parties in having the matter ready for trial within an acceptable period and cases - whatever the applicant's state of mind or resources - in which the non-compliance is continuing and occasioning unnecessary delay, expense or other prejudice to the respondent. Although the history of the matter will always be relevant, it is more likely to be decisive in the first of these two situations. Even though the most recent non-compliance may be minor, the cumulative effect of an applicant's defaults may be such as to satisfy the judge that the applicant is either subjectively unwilling to co-operate or, for some reason, is unable to do so. Such a conclusion would not readily be reached; but, where it was, fairness to therespondent would normally require the summary dismissal of the proceeding.' 23 Those observations were cited with approval by R D Nicholson J in Brown v Zomba Music Publishers Australia Pty Ltd [2004] FCA 324 and, although O 10 r 7 has since been repealed I consider that they can be paraphrased to apply with equal force to the discretion which the Court is presently required to exercise under O 35A r 3. 24 Despite Registrar Efthim's direction during the hearings on 3 and 9 August 2004 that Cadbury furnish an affidavit explaining its reasons for delay in filing its statements of evidence-in-chief, no satisfactory explanation has yet been given. Ms Wall's affidavit of 30 November 2004 identifies the magnitude of the task but does not explain why it was not undertaken with greater urgency during the earlier months of 2004. In particular, no explanation has been provided by Ms Wall or any relevant employee of Cadbury as to why the 60 lever arch files of documents referred to in par 3 of Ms Wall's affidavit were not provided to Corrs until late September or October 2004. 25 In my view, a deferral for some months, which Cadbury concedes it requires, of the date on which the trial of this action is to commence will cause delay, expense and other prejudice to Darrell Lea. At the least, the protraction of interlocutory steps in this Court has the capacity to distract its legal advisers and relevant executives to some extent from the proceedings in the Trademarks Office. It will also necessitate the examination of Cadbury's evidence as and when Cadbury chooses to present it and the preparation and collation of evidence in response for a trial which, even now, cannot be fixed to commence on a day certain. As well, considerable costs of the action to date have doubtless been incurred on both sides. It would be oppressive in the circumstances, to require Darrell Lea to continue to incur them without any indication of when liability for, and the amount of, its own and Cadbury's costs will be ascertained. Conclusion 26 The considerations which I have canvassed above have led me to a clear view that it is appropriate to bring these proceedings to a summary end. However, when I raised with Mr Wyles the possibility that the application might be dismissed under O 35A r 3, he foreshadowed an application by Cadbury for leave to discontinue so that "all rights are preserved and [the applicant] can commence again." In light of the conclusion which I have reached about the exercise of the Court's discretion, there is much to commend that suggestion. An application for leave to discontinue pursuant to O 22 r 2(1)(d) allows the Court to attach such conditions as it thinks fit, including orders as to costs, to the grant of leave. Those conditions can be framed in appropriate cases to ensure that a respondent is not deprived of some advantage already gained in the litigation and that any such advantage is preserved; see Covell Matthews & Partners v French Wools Ltd [1977] 2 All ER 591 affirmed on appeal under the same name [1978] 2 All ER 800. 27 In the present case the conditions to be attached to leave to discontinue can be framed, as contemplated at [19] above, to preserve the benefit to the parties of the substantial work which has been done in the interlocutory stages of the present application. Accordingly, I shall today direct only that the trial fixed to commence on 14 March 2005 be vacated and that Darrell Lea's motion stand over to a mutually convenient date to enable Cadbury, if so advised, to seek leave to discontinue. At that adjourned hearing, I shall receive submissions as to the conditions to be attached to any grant of leave or, alternatively, as to the further orders which should be made to give effect to these reasons. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 23 December 2004 Counsel for the Applicants: Mr M Wyles Solicitor for the Applicants: Corrs Chambers Westgarth Counsel for the Respondent: Mr C Golvan SC Solicitor for the Respondent: Middletons Date of Hearing: 1 December 2004 Date of Judgment: 23 December 2004