FEDERAL COURT OF AUSTRALIA Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd (No 2) [2014] FCA 107 Citation: Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd (No 2) [2014] FCA 107 Parties: HARCOURTS WA PTY LTD ACN 009 120 227 v ROY WESTON NOMINEES PTY LTD ACN 073 213 920 ROY WESTON NOMINEES PTY LTD ACN 073 213 920 v HARCOURTS WA PTY LTD ACN 009 120 227 File numbers: SAD 224 of 2012 WAD 167 of 2013 Judges: MCKERRACHER J Date of judgment: 19 February 2014 Legislation: Federal Court Rules 2011 (Cth) rr 30.11, 30.25 Cases cited: Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd [2013] FCA 520 Date of hearing: 17 February 2014 Place: Perth Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 36 Counsel for Harcourts WA Pty Ltd: Mr T Duggan SC with Mr A Britten-Jones Solicitor for Harcourts WA Pty Ltd: Thomson Lawyers Counsel for Roy Weston Nominees Pty Ltd: Mr A Muscrave Solicitor for Roy Weston Nominees Pty Ltd: Elevation Legal IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 224 of 2012 BETWEEN: HARCOURTS WA PTY LTD ACN 009 120 227 Applicant/Cross-Respondent AND: ROY WESTON NOMINEES PTY LTD ACN 073 213 920 Respondent/Cross-Claimant JUDGE: MCKERRACHER J DATE OF ORDER: 19 FEBRUARY 2014 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application of each party heard on 17 February 2014 be dismissed. 2. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 167 of 2013 BETWEEN: ROY WESTON NOMINEES PTY LTD ACN 073 213 920 Applicant AND: HARCOURTS WA PTY LTD ACN 009 120 227 Respondent JUDGE: MCKERRACHER J DATE OF ORDER: 19 FEBRUARY 2014 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application of each party heard on 17 February 2014 be dismissed. 2. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 224 of 2012 BETWEEN: HARCOURTS WA PTY LTD ACN 009 120 227 Applicant/Cross-Respondent AND: ROY WESTON NOMINEES PTY LTD ACN 073 213 920 Respondent/Cross-Applicant IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 167 of 2013 BETWEEN: ROY WESTON NOMINEES PTY LTD ACN 073 213 920 Applicant AND: HARCOURTS WA PTY LTD ACN 009 120 227 Respondent JUDGE: MCKERRACHER J DATE: 19 FEBRUARY 2014 PLACE: PERTH REASONS FOR JUDGMENT INTRODUCTION 1 These brief reasons relate to interlocutory applications in these two sets of proceedings. The proceedings are set down for hearing for five days in less than a week from the date on which the interlocutory applications were heard. The two sets of proceedings are Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd SAD 224 of 2012 (Harcourts Proceeding) and Roy Weston Nominees Pty Ltd v Harcourts WA Pty Ltd WAD 167 of 2013 (Weston Proceeding). 2 The hearing is scheduled from Monday, 24 February to Friday, 28 February 2014. The matters are listed consecutively with Monday being allocated to hear two applications brought by Roy Weston Nominees Pty Ltd (Roy Weston) to remove two trade marks owned by Harcourts WA Pty Ltd (Harcourts) from the Trade Mark Register for non-use (the Weston Proceeding). Tuesday to Friday were allocated to hear the Harcourts Proceeding concerning Roy Weston's alleged infringement of Harcourts' registered trade marks, misleading and deceptive conduct, passing off and now breach of contract. BACKGROUND 3 Time does not permit a detailed examination of the issues in the case but they concern allegations and counter-allegations pertaining to the conduct of real estate businesses. Harcourts has operated a franchised real estate network in Western Australia since 30 January 1985, and as part of an international network since 2004. It is the registered owner of the trade marks 'Roy Weston' and 'The House Sold Word in Real Estate' (Harcourts Trade Marks). Roy Weston operates a real estate business in Western Australia and is the registered owner of the trade marks 'Roy Weston Real Estate' and 'Roy Weston Nominees The Trusted Name in Real Estate' (Weston Trade Marks). 4 In the Harcourts Proceeding (commenced in the South Australia Registry of this Court) it is alleged that Roy Weston infringed the Harcourts trade marks by using the trade marks without authority and registering the Weston Trade Marks which are substantially identical with, or deceptively similar to, the Harcourts Trade Marks. It is also alleged that Roy Weston has misled and deceived consumers contrary to s 18, Sch 2 to the Competition and Consumer Act 2010 (Cth), Australian Consumer Law, (ACL) by representing that it is the owner of the Harcourts Trade Marks, it has authority to act as a licensee of Harcourts or is connected with Harcourts and other false representations in relation to the ACL. In addition, Harcourts says that Roy Weston has engaged in passing off. It seeks a variety of relief including: rectification of the Register of Trade Marks to reflect the cancellation of the Weston Trade Marks; a restraint on Roy Weston from infringing or using the Harcourts Trade Marks, logos, domain names and business names; a restraint on Roy Weston from asserting that it is the owner of the Harcourts Trade Marks and other logos or that it conducts business under licence or authority of Harcourts; a restraint on Roy Weston from passing off its business as business conducted under licence or authority with Harcourts; a declaration that Roy Weston has contravened the ACL and engaged in passing off; delivery up; damages or account of profits for infringement of the Harcourts Trade Marks; damages or equitable compensation for passing off; and various other orders. 5 By Roy Weston's defence and cross-claim in the Harcourts Proceeding, it alleges that its registered trade marks do not infringe the Harcourts Trade Marks and by cross-claim seeks declarations that Harcourts has repudiated a franchisee agreement, that Roy Weston is the owner of the Weston Trade Marks and that Roy Weston has not infringed the Harcourts Trade Marks. 6 Within the Roy Weston defence and the cross-claim there are assertions of non-use and/or abandonment of the Harcourts Trade Marks. In that sense the non-use issues are common to each proceeding. 7 The Weston Proceeding is a non-use application brought by Roy Weston. Roy Weston made an application to the Registrar of Trade Marks for the removal of the Harcourts Trade Marks from the Register of Trade Marks for non-use. 8 In Harcourts WA Pty Ltd v Roy Weston Nominees Pty Ltd [2013] FCA 520 (Harcourts No 1) Gilmour J dismissed an application by Roy Weston for the non-use application (the Weston Proceeding) to be heard as a preliminary issue. Nevertheless, as indicated, for some time now the matter for listing next week has proceeded on the basis that the non-use application will be heard before the hearing of the Harcourts Proceeding. 9 Roy Weston contended in the course of argument that it may not be necessary for the Harcourts Proceeding to continue if Roy Weston receives a favourable outcome in the initial proceeding. I make no finding on that submission at this stage. I accept Harcourts' submission that the suggestion seems to imply an ex tempore judgment following Monday's hearing. THE INTERLOCUTORY APPLICATIONS 10 Although there has been some preceding correspondence, belatedly, interlocutory applications have been filed as follows: Harcourts' Application 1. Pursuant to r 30.25 of the Federal Court Rules 2011 (Cth) (FCR), evidence in the Weston Proceeding be admitted as evidence in the Harcourts Proceeding, and vice versa. 2. Pursuant to r 30.11 FCR, the Harcourts Proceeding and the Weston Proceeding be heard together. 3. Harcourts be dux litis of the concurrently listed trials and the trials proceed in the following manner: (a) Harcourts to open on all issues in both proceedings. (b) Harcourts to call of its evidence in both proceedings, apart from evidence in respect of the allegation that Harcourts employees or agents represented to Mr Taylor that Roy Weston could continue to use the 'Roy Weston' name after the expiry of the 2002 franchise agreement and the defence of that allegation, including whether the Harcourts employees or agents had authority to do so (Representation Issues). (c) Harcourts to close its case on all issues in both proceedings, apart from in response to the Representation Issues. (d) Roy Weston to open its case in both proceedings. (e) Roy Weston to call all of its evidence in both proceedings and then close its case. (f) Harcourts to call its evidence in response to the Representation Issues. Any evidence which Harcourts proposes to call in reply is to be given with leave of the Court. (g) Harcourts to close its case on the Representation Issues and in Reply. (h) Parties to address the Court. Roy Weston's Application 11 Roy Weston's application seeks further discovery and, specifically, discovery of the following documents before trial: (a) Documents pertaining to the alleged continued use of the Roy Weston brand and retention of goodwill in the Roy Weston name are relevant to [8], [9], [17], [18], and [22] of the further amended statement of claim and [14] of the cross-claim statement of claim; (b) Documents dealing with the alleged abandonment of the Roy Weston trade mark that are relevant to [9], [17], [18] and [22] of the further amended statement of claim and [14] of the cross-claim statement of claim; (c) Documents created during the rebranding exercise that was completed in 2007 that are relevant to [8], [9], [17], [18] and [22] of the further amended statement of claim and [14] of the cross-claim statement of claim; (d) Documents dealing with Roy Weston regarding: (i) the initial proposed rebranding; (ii) the enforced rebranding; (iii) Roy Weston refusal to undertake the rebranding; (iv) the determination of Roy Weston 2002 Franchise Agreement; (v) Roy Weston trading following their departure from the Harcourts WA group; (vi) Roy Weston trade mark applications; (vii) Roy Weston successful application to remove Harcourts WA 'Roy Weston' business names for non-use; and (viii) Roy Weston continued dealings with Strand Settlements that are relevant to [8], [9], [17], [18], [22] and [32] of the further amended statement of claim and [14] of the cross-claim statement of claim (e) Documents dealing with the departure of other franchisees in 2006/2007, including those dealing with their Franchise Agreements, which are relevant to [8], [9], [17], [18], [22] and [32] of the further amended statement of claim and [14] of the cross-claim statement of claim CONSIDERATION 12 With the trial being imminent, I indicated to counsel that I considered the applications were very ambitious and that, while there may be merit in the applications or parts of them had they been brought earlier in time, I would be unlikely to allow the applications with trial commencing on Monday and with each of the applications firmly opposed by the responding party. This is not just a matter of form but also one of substance. Each application would involve, at the last minute, substantial cost and prejudice in attempted compliance to the opponent for reasons that follow. Further discovery 13 Various discovery orders have already been made in relation to specified categories negotiated and agreed between the parties. The date of the provision of standard discovery was extended to 18 October 2013. 14 Roy Weston relies upon relatively recent affidavit material said to come 'from the Harcourts' camp' showing that documents would have been created or were created in relation to a rebranding exercise. As Harcourts point out, the events the subject of the proceedings and the discovery application occurred over seven years ago and the search for such documents between now and the commencement of trial next Monday would pose a burden far exceeding the immediately apparent benefit. 15 The indications on the face of it, subject to that issue, are that discovery has been complied with. 16 The discovery sought is also at too general a level relating to all internal documents relevant to the decision-making process to rebrand from 'Roy Weston' to 'Harcourts'. Given that there is no direct issue about the existence of a decision by Harcourts to rebrand (this being common ground) the actual extent of the internal documentation on rebranding would need to be more confined. 17 Also the suggestion that there should be discovery in respect of all dealings with other franchisees in respect of the rebrand is manifestly too wide. It is not apparent on its face exactly to what issue these putative documents relate but there is certainly insufficient time between now and next Monday to provide such discovery. 18 As against all of this, Roy Weston has to deal with the assumption that discovery has been given. The mere fact that certain documents on certain topics were thought to exist seven years ago is not, without more, a proper foundation for a conclusion that all such documents still exist or that their subsequent whereabouts can be identified. 19 Similar observations may be made in respect of all of the heads of documents but above all, while there has been some correspondence exchanged on the topics of discovery, the prejudice involved from Harcourts' perspective in attempting to find this late discovery immediately prior to trial is too significant in all the circumstances to permit the application. As I have indicated in argument, I would reconsider some specifics of the application if there were more time before commencement of trial. Hearing the proceedings as one 20 On its face, the very late Harcourts application appears more innocuous and conventional, but on closer examination similar difficulties arise. 21 In the Weston Proceeding, Roy Weston has applied pursuant to s 92(4)(B) of the Trade Marks Act 1995 (Cth) (TMA) to remove the Harcourts Trade Marks from the Register on the basis that it has not used its trade marks for the period of three years identified in that section. The Harcourts Trade Marks have been identified above. 22 By order made on 16 September 2013 in the Weston Proceeding, Gilmour J ordered that the statutory declaration of Adrienne Denise Musca of 24 October 2012 be admitted as the respondents evidence in chief. 23 The effect of s 100 TMA is that Harcourts bears the onus of proof in connection with the non-use application. Its onus is to 'rebut' the allegation that the trade mark had not been used as a trade mark. 24 Roy Weston makes the point that this will be a very easy task because Harcourts does not trade and has not traded by reference to the name 'Roy Weston' or the 'House Sold Word in Real Estate' since early in 2007 and specifically for the three year period ending one month before the application was filed on 22 July 2011. 25 Roy Weston's point is that if it is successful in the Register being corrected to 'reflect the true position', removal of the Harcourts Trade Marks will 'confine the relief available' to Harcourts in its infringement action. 26 Roy Weston points to the fact that Harcourts did not at any time seek leave to tender any other evidence as its evidence in chief discharging its s 100 TMA onus. It did not at the time of the September 2013 order by Gilmour J and has not since informed the Court that there is other evidence that it will seek to rely upon in the non-use proceedings. Further, it has not identified whether there is any evidence filed in the infringement proceedings that it would seek to rely on for the purpose of s 100 TMA in the non-use proceedings. 27 Shortly put, Roy Weston has proceeded on the basis that the only evidence it has to deal with in the non-use proceeding is the evidence of Ms Musca. The orders sought by Harcourts to have the evidence in one matter treated as evidence in the other would undermine the foundation and correctness of this assumption. 28 Roy Weston make the point that the statutory declaration of Ms Musca was accepted as Harcourts' only evidence in these proceedings by IP Australia who retained the conduct of the matter at the time. It was filed over 15 months after the commencement of the proceedings at IP Australia. 29 Roy Weston's case is that the evidence on the statutory declaration of Ms Musca is extremely limited as providing only a mixture of copies and original documents going to: (a) the giving of the Roy Weston Medal annually at internal Harcourts' events; (b) the existence of a Roy Weston Medallist Wall of Fame at an unspecified location; (c) and a domain name that redirects to a Harcourts branded website. 30 Roy Weston stresses that as the case presently stands none of the evidence from Ms Musca purports to show any use of trade mark 921677 ('the House Sold Word in Real Estate'). There is no evidence, it is said, to support Harcourts opposition to removal of this trade mark. On the state of the evidence as it presently is and without the orders which Harcourts seeks in its application, there is ample evidence, Roy Weston argues, that the Registrar of Trade Marks should remove that trade mark from the Register forthwith. Nor, Roy Weston says, does any of the evidence show a use that supports the opposition to the removal of the trade mark. This submission was not fully developed but may be understood as a contention that the minimal reliance on the Roy Weston name pointed to by Harcourts would not be sufficient to satisfy the onus under s 100 TMA. 31 For those reasons Roy Weston opposes any order under r 30.25 FCR that the evidence in each proceeding be given in the other. 32 Specifically, if Harcourts does seek to adduce additional evidence, its application should be confined to specific evidence by reference to the affidavit and paragraph number of the affidavit it would rely upon in the infringement proceeding to be used in the non-use proceeding. 33 I accept the submission from Roy Weston that, given that Harcourts bears the onus of proof on all these matters, such an application should have been made long before the Monday commencement of the trial. 34 The same observation may be made in relation to the application that the matters be heard together but, in my view, that may be an appropriate and functional way of proceeding provided that proper notice is given before the commencement of trial and there are adequate opportunities to respond to any evidence beyond the evidence of Ms Musca on the non-use issue. I have an open mind on that proposal. CONCLUSION 35 For those reasons, both applications will be dismissed. They should have been brought a considerable time ago. The capacity at this late stage for each of the applications to cause considerable prejudice with the trial commencing in a few business days is obvious. 36 The following orders are made: 1. The application of each party heard on 17 February 2014 be dismissed. 2. Costs be reserved. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate: Dated: 19 February 2014