Federal Court of Australia Laminar Air Flow Pty Ltd v Vokes Ltd [2021] FCA 296 File number: NSD 1364 of 2017 Judgment of: STEWART J Date of judgment: 29 March 2021 Catchwords: PRACTICE & PROCEDURE – application for leave to amend pleadings to join a further respondent – four months to trial – detailed programme leading up to trial – whether trial dates might be imperilled and pre-trial programme disrupted – whether proposed new respondent and an existing respondent are commonly owned – whether they are likely to be commonly represented and share the same defence – procedural rights of the new party once joined – likely prejudice – interests of other litigants before the Court – leave refused Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) Federal Court of Australia Act 1976 (Cth) s 37M Trade Marks Act 1995 (Cth) s 81 Cases cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 Laminar Air Flow Pty Ltd v Registrar of Trade Marks [2017] FCA 1447 Vokes Ltd v Laminar Air Flow Pty Ltd [2018] FCAFC 109 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 37 Date of hearing: 26 March 2021 Counsel for the Applicant: W H Wu and M T Keene (written submissions also by M Green) Solicitor for the Applicant: John Fasha Solicitors Counsel for the Respondents: I P Horak Solicitor for the Respondents: Wrays Lawyers Pty Ltd ORDERS NSD 1364 of 2017 BETWEEN: LAMINAR AIR FLOW PTY LTD (ACN 106 677 329) Applicant AND: VOKES LTD (CRN 00671542) First Respondent TRANSFORMER FILTRATION SYSTEMS PTY LTD (ACN 119 553 767) Second Respondent DOLLINGER FILTRATION LTD Third Respondent order made by: STEWART J DATE OF ORDER: 29 MARCH 2021 THE COURT ORDERS THAT: 1. The applicant have leave to amend its further amended originating application and its further amended statement of claim limited to the following amendments: (1) the correction of a date; (2) the insertion of additional particulars to existing substantive paragraphs; and (3) the correction of the name of the third respondent, by filing and serving a second further amended originating application and a second further amended statement of claim on or before 6 April 2021. 2. The applicant pay any costs thrown away by the amendments. 3. The applicant's interlocutory application filed on 17 March 2021 is otherwise dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT STEWART J: Introduction 1 The applicant, Laminar Air Flow Pty Ltd, applies by interlocutory application filed on 17 March 2021 for leave to amend its further amended originating application and further amended statement of claim to add a fourth respondent. The amendments plead essentially the same causes of action as are already pleaded against the existing respondents against the prospective new respondent. Some other minor amendments are also sought. 2 Laminar is the registered owner of two Australian registered trade marks which are referred to in the pleadings as the VOKES Marks or the VOKES trade marks. The VOKES Marks are used in respect of filtration products in Australia. 3 The first respondent, Vokes Ltd (referred to in the pleadings and hence also hereinafter as Vokes UK), is a company incorporated in the United Kingdom. The second respondent is Transformer Filtration Systems Pty Ltd (TFS), an Australian registered company. The third respondent is cited as SPX Flow Technology Kerry Ltd, a company registered in the Republic of Ireland, although its name is now Dollinger Filtration Ltd. Although an order changing the name of the third respondent in the proceeding was made on 3 September 2020, the existing pleadings still reflect the third respondent's previous name. 4 The three respondents are commonly represented in the proceeding and raise essentially the same defences. 5 It is pleaded that in October 2005, Laminar acquired the VOKES Marks by assignment. 6 In May 2017, a delegate of the Registrar of Trade Marks issued a decision purporting to correct the Register pursuant to s 81 of the Trade Marks Act 1995 (Cth) by removing Laminar as the registered owner of the VOKES Marks. 7 In June 2017, Laminar commenced a proceeding in this Court against the Registrar and Vokes UK seeking judicial review of the delegate's decision under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the first instance proceeding). 8 In December 2017, Robertson J set aside the decision of the delegate in Laminar Air Flow Pty Ltd v Registrar of Trade Marks [2017] FCA 1447. His Honour's decision was upheld by the Full Court in Vokes Ltd v Laminar Air Flow Pty Ltd [2018] FCAFC 109 per Nicholas, Davies and Burley JJ (the Full Court proceeding). 9 In this proceeding, Laminar claims that it is the owner of the VOKES Marks free from any prior rights or interests of Vokes UK or any other entity. It seeks declarations that by using the mark VOKES, the respondents have infringed the VOKES Marks, contravened the Australian Consumer Law (ACL) and engaged in passing off. Laminar also seeks an order restraining the respondents from using the mark VOKES and damages (or alternatively, an account of profits). 10 Material allegations underlying Laminar's claims of trade mark infringement, ACL infringement and passing off include that Dollinger, or in the alternative, SPX Vokes Ltd, a company incorporated in the United Kingdom, or in the further alternative, Vokes UK, appointed TFS as the purported exclusive agent for VOKES branded liquid filtration equipment and products in Australia. It is alleged that TFS, as the exclusive agent of Dollinger or SPX Votes Ltd or Vokes UK used the mark VOKES in Australia without the permission or authority of Laminar. The interlocutory application 11 The applicant seeks by interlocutory application the joinder of a fourth respondent, SPX Flow Technology Australia Pty Ltd (SPX Aus), an Australian company, to the proceeding on the basis that it has only recently come to appreciate that SPX Aus has also been, or been used as, an intermediary in Australia for the sale and distribution in Australia of VOKES branded products. 12 The interlocutory application was brought on the stated basis that the evidence available to Laminar indicates that the ultimate holding company of SPX Aus is SPX Flow Inc, a company registered in Delaware, USA, and that Dollinger is also ultimately owned by SPX Flow Inc. The evidence relied on by Laminar is also that two of the three directors of SPX Aus are also two of three directors of Dollinger. On that basis it was said that if SPX Aus is joined as the fourth respondent, it is overwhelmingly likely to be represented in common with the existing respondents and to raise the same defences. On that basis, it was submitted that the joinder of SPX Aus is not likely to have a particularly significant impact on the programme towards the final hearing in this matter, or imperil the dates of the final hearing, which is listed for seven days commencing on 19 July 2021. 13 Further, Laminar seeks leave to join SPX Aus on two conditions that it will submit to. The first is that it will seek only very confined discovery from SPX Aus, the details of which are not necessary to go into for present purposes, and it will neither seek a vacation of the trial dates nor support any application for a vacation of the trial dates that might be sought by SPX Aus. 14 The respondents oppose the amendments and the joinder of SPX Aus on the bases that: (1) the proceeding has been ongoing for almost four years and the addition of a new party approximately four months before trial has a real potential to result in the loss of the trial dates; (2) the proposed new party is not a member of the same corporate group as the existing respondents, therefore the interlocutory application proceeds on a mistaken basis; (3) there is no explanation why the interlocutory application is only being made now, shortly prior to trial; (4) the allegation of infringement seeks to insert a reference to SPX Aus into paragraphs alleging infringement without properly identifying material facts or particulars that give rise to the allegations; and (5) the applicant has not shown that it would suffer any substantial prejudice if the application were refused. Procedural history 15 The proceeding was commenced in August 2017 but was stood over in September 2017 and again in February 2018 until the determination of the first instance and Full Court proceedings referred to above. 16 Laminar was directed to serve any evidence in chief by 26 February 2019. That date was subsequently pushed out to 17 June 2019, then 21 October 2019, then 8 November 2019, and ultimately 12 November 2019. Evidence in answer was to be filed by 13 March 2020, and in reply by 17 April 2020. The latter date was subsequently pushed out to 20 July 2020 because of the filing by Laminar, with leave, of a further amended originating application and further amended statement of claim. That in turn required amended defences. 17 Laminar filed and served affidavits as its evidence in chief in August, September and November 2019. One of those was an affidavit of Brian Allan Young dated 11 November 2019, to which I will return. 18 The respondents filed and served affidavits as their evidence for trial in March and July 2020. One of those affidavits is of Scott Lindsay Bailey dated 22 July 2020, to which I will return. 19 Orders for discovery were made in September 2020. 20 On 29 October 2020, the matter was listed for trial on 19 July 2021 with an estimate of seven days. Detailed pre-trial directions were also made which include the production of a court book by 5 April 2021, the notification of objections by 21 June 2021 and opening submissions by 25 June 2021, by the applicant, and 5 July 2021, by the respondents. 21 On 24 December 2020, Dollinger served a list of documents pursuant to the orders for discovery. On 21 January 2021, Dollinger produced copies of documents in its list of documents to Laminar. Three documents produced at that time are referred to again below. Applicable principles 22 In considering an application for an amendment in the present circumstances, it is necessary to take account of a number of factors. Drawing on Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at [5], [30], [71], [90], [93], [94], [98] and [102], these include: (1) prejudice to other parties that cannot be adequately compensated by an award of costs, which would include the inevitable prejudice of unnecessary delay where that exists; (2) inefficiencies in the use of the court as a publicly funded resource arising from the vacation or adjournment of trials; (3) the need to maintain public confidence in the judicial system, which has a potential to be lost where a court is seen to accede to applications made without adequate explanation or justification; (4) the objective of doing justice between the parties; (5) the objective that the pleadings identify the "real" issues between the parties; (6) the overriding purpose of the civil practice and procedure provisions in s 37M of the Federal Court of Australia Act 1976 (Cth), namely to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible; and (7) the nature and the importance of the amendment to the party that is seeking it. 23 Particularly significant in the present case is the adequacy or otherwise of Laminar's explanation for seeking to join SPX Aus only now, some four months before trial, and whether or not the joinder of SPX Aus is liable to result in the trial dates being imperilled. The evidence 24 Laminar relies on the affidavit of its solicitor, John Fasha, who, relevantly, stated the following: (1) On the basis of documentary evidence referred to by Mr Fasha, it would appear that SPX Aus and Dollinger are related companies, ultimately controlled by SPX Flow Inc and have two out of three common directors. For reasons that will become apparent, it is not necessary to go into the documentary evidence referred to by Mr Fasha. (2) Three documents produced by Dollinger on 21 January 2021 show sales of VOKES branded products by Dollinger to Australian customers in the period 2011 to 2014, and sales by Dollinger in 2013 of VOKES branded products to SPX Aus for delivery to TFS and the sale of the same products by SPX Aus to TFS. That is to say, the documents demonstrate the insertion of SPX Aus as an intermediary purchaser/seller of VOKES branded products between Dollinger and TFS. (3) After receiving the three documents referred to, Mr Fasha caused a further review of the evidence served at that time for references to SPX Aus. The further review revealed that SPX Aus's supply of VOKES branded filtration goods to TFS continued after December 2014. In that regard, the affidavit of Mr Bailey on behalf of TFS in July 2020 stated that: (a) from about 2014 until early 2020, TFS obtained all of certain VOKES branded spare parts from SPX Aus; and (b) from about 2014 until early 2020, TFS placed its orders for VOKES products with SPX Aus. 25 There is no explanation by Mr Fasha why the July 2020 affidavit of Mr Bailey did not cause him at that stage to appreciate the role of SPX Aus such as to enable the application for joinder to have been brought then, or at least to make further enquiries at that time which may have enabled the application for joinder to have been brought a lot sooner than ultimately occurred. On behalf of Laminar, I was in effect asked to draw the inference that the role of SPX Aus had not occurred to Laminar or its legal representatives before the documents were produced in January this year. 26 The respondents rely on the affidavit of their solicitor, Jennifer McEwan, who, relevantly, stated the following: (1) Although the evidence indicates that SPX Flow Inc is the ultimate parent company of SPX Aus as stated by Mr Fasha, a company search of Dollinger shows that there are no directors in common between SPX Aus and Dollinger. It appears from the company search that the present directors of Dollinger were appointed with effect from 30 March 2020. (2) Also, effective from March 2020, SPX Flow Inc sold its power and energy business to Celeros Flow Technology LLC as a result of which the "ownership of Dollinger" passed from SPX Flow Inc to Celeros. Annexed extracts from Celeros's website confirm the sale and also indicate that various brands including DOLLINGER and VOKES are now controlled by Celeros. (3) In a telephone call to SPX Aus on 24 March 2021, Ms McEwan was told by the person who answered the phone that SPX Aus no longer sells VOKES branded products as they were part of "our power and energy division which got sold off last year". (4) Mr Young's affidavit on behalf of Laminar in November 2019 stated that TFS has since about May 2020 had a dedicated website for the VOKES Streamline product range and sells VOKES branded merchandise along with SPX Aus. Mr Young's affidavit states that he is the director and founder of Laminar. Consideration 27 It appears from Mr Young's affidavit which he deposed to in November 2019, some 15 months before the application to join SPX Aus was filed, that he was well aware that SPX Aus held out that it sold VOKES branded products with TFS in Australia. There is no explanation why Mr Young's knowledge at that stage was not sufficient to justify the joinder of SPX Aus then, or at least to lead to further enquiries which could have led to an application to join SPX Aus a lot sooner than what has been done. 28 Similar observations then apply to the knowledge of Laminar through service on it of Mr Bailey's affidavit in July 2020. That affidavit made SPX Aus's role in supplying VOKES branded products to TFS in Australia explicit. 29 The short point is that there is no explanation on behalf of Laminar why the application is being brought only now. It is not stated on affidavit on behalf of Laminar that Laminar or its representatives did not appreciate the role of SPX Aus at the earlier times referred to, i.e., November 2019 and July 2020, and no basis is laid to support a finding that any such lack of appreciation that might be inferred was reasonable or justified. 30 The absence of such an explanation is the first factor that weighs heavily against leave being granted. 31 The second factor that weighs against leave being granted is that granting of leave is liable to result in the trial dates being imperilled, and in any event in significant disruption to the programme leading up to the trial. I accept that if SPX Aus and Dollinger were commonly owned then the likelihood would be that they would be commonly represented and would share a common defence. If those had been the facts, then there would be a proper basis to infer that the joinder at this stage of SPX Aus would not have a significant detrimental effect on the programme towards trial, and the trial dates would not be imperilled. 32 However, the facts are that SPX Aus and Dollinger are no longer commonly owned. The result is that there is no basis to infer that they will be commonly represented, or that SPX Aus and Dollinger will in effect share a common defence. Moreover, once joined SPX Aus would have various procedural rights available to it including seeking discovery from the other parties to the proceeding and bringing cross-claims. Whilst it is not known at this stage whether it would do either of those things, or what impact they might have, there is certainly the prospect that it would. For example, there may be indemnities to be invoked under the relevant contracts for the sale of SPX Flow Inc's power and energy business to Celeros. These are all matters for speculation. The short point is that there can be no confidence that in order for SPX Aus to be given procedural fairness, once joined, it will not be necessary to vacate the trial dates. 33 The third factor weighing against leave being granted is that the prejudice to Laminar in refusing leave is not particularly significant. Insofar as Laminar intends by the amendments to rely also in its claims against the existing respondents on the conduct of SPX Aus in the chain of supplying VOKES branded products in Australia, it can still seek to do that without joining SPX Aus. Insofar as Laminar intends to claim relief against SPX Aus, it can still do that by commencing a separate proceeding against SPX Aus. Indeed, if it does that it might even be possible to have that proceeding heard at the same time as the present proceeding, but if that is not possible at least the present proceeding will not be derailed from its present programme. 34 Of course, there is something to be said for Laminar's submissions that joinder would enable determination together of related disputes and avoid a multiplicity of proceedings, and it would avoid the prospect of conflicting findings in separate proceedings. However, those considerations do not outweigh the considerations I have identified above. 35 In short, this proceeding has been on foot for a long time, even discounting the early delays on account of this proceeding waiting for the outcome of other related proceedings. Moreover, it has been listed for trial since October 2020. Disruption of the trial date would prejudice not only the parties to this proceeding, but it would also have a deleterious effect for other litigants on the orderly scheduling of the work of the Court. It is no small matter to schedule a multi-day trial long in advance and to then have to later vacate that listing. Allowance has been made not only for the trial itself but also to commence the preparation of reasons for judgment. In the meantime other cases that could have been heard in that period have been listed for later dates. Doubtless the Court would not be idle if the trial dates were vacated as there is always much work to be done, but other parties would have been prejudiced by losing out on the reserved dates, and other parties will be prejudiced by losing out on the future reserved dates for this proceeding if the present trial dates are vacated. Conclusion 36 For the reasons identified above, Laminar's application for leave to amend its further amended originating application and its further amended statement of claim so as to join SPX Aus should be dismissed. There is no reason why it should not also bear the costs of that application. 37 That said, there are minor respects in which Laminar's intended amendments, which do not involve the joinder of SPX Aus, are justified. These are to amend an incorrect date and, if it still wishes to, to furnish additional particulars to certain existing paragraphs. Also, Laminar should amend the name of the third respondent from its previous name to its present name, i.e., Dollinger, where it appears in the pleadings. Laminar should accordingly have leave to file and serve the relevant documents showing those limited amendments. It should also bear any costs thrown away by those amendments. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart. Associate: Dated: 29 March 2021