FEDERAL COURT OF AUSTRALIA Steam Vac Cleaning Systems Pty Ltd v SV Equipment Pty Ltd [2024] FCA 68 File number(s): VID 670 of 2021 Judgment of: WHEELAHAN J Date of judgment: 8 February 2024 Catchwords: INTELLECTUAL PROPERTY — trade marks – where the applicant was the registered owner of seven trade marks relating to steam cleaning equipment and apparatuses – where the applicant alleged that the respondents had infringed its trade marks – where the first and second respondents, and separately the third respondent, filed cross-claims – where the first respondent was placed in liquidation and the second respondent was deregistered – where the solicitors for the third respondent filed a notice of ceasing to act – where the third respondent failed to prosecute its cross-claims – the trial in the matter proceeded against the third respondent undefended – the applicant established that the third respondent had infringed seven of its trade marks – injunction and order for obliteration or removal of marks and delivery up of goods granted. Legislation: Corporations Act 2001 (Cth) s 471B Trade Marks Act 1995 (Cth) ss 120, 126(1)(a) Cases cited: Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 Re Diesels & Components Pty Ltd (recs & mgrs apptd) [1985] 2 Qd R 456 Hodgson v Druce (1856) 2 Jur (NS) 1014 Proctor v Bayley (1889) 42 Ch D 390 at 398 (Court of Appeal) Heydon JD, Leeming MJ and Turner PG, Meagher, Gummow and Lehane's Equity: Doctrines & Remedies (5th edition, LexisNexis Butterworths, 2015) Division: General Division Registry: Victoria National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 21 Date of hearing: 8 February 2024 Counsel for the Applicant: Mr M O'Connor Solicitor for the Applicant: Aughtersons Lawyers Pty Ltd Counsel for the Respondents: The Respondents did not appear ORDERS VID 670 of 2021 BETWEEN: STEAM VAC CLEANING SYSTEMS PTY LTD Applicant AND: SV EQUIPMENT PTY LTD First Respondent PRESSURE PRO PTY LTD Second Respondent order made by: WHEELAHAN J DATE OF ORDER: 8 february 2024 PENAL NOTICE TO: STEAMVAC AUSTRALIA PTY LTD (ACN 658 744 122) IF YOU (BEING THE PERSON BOUND BY THIS ORDER): (A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR (B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO, YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED. OTHER MATTERS: The applicant's registered trade marks are those listed in the schedule hereto. In relation to orders 8, 9, and 10 below, the parties' attention is directed to the Court's Costs Practice Note (GPN-COSTS) and Part 4 concerning costs obtained via a lump sum costs order. THE COURT ORDERS THAT: 1. The cross-claim of the first and second respondents be dismissed. 2. The cross-claim of the third respondent be dismissed. 3. Pursuant to s 126(1)(a) of the Trade Marks Act 1995 (Cth), the third respondent, whether by itself, its directors, employees, servants or agents, is permanently restrained from manufacturing, advertising, marketing, promoting, exhibiting in public, offering for sale and selling, carpet cleaning machines and apparatuses in Australia, using the applicant's registered trade marks or any marks substantially identical or deceptively similar thereto. 4. By 4.00 pm on 1 March 2024, the third respondent remove or obliterate any marks on goods in its possession, power, custody or control which are substantially identical or deceptively similar to the applicant's registered trade marks, and if removal or obliteration is not reasonably practicable, the third respondent must by 4.00 pm on 1 March 2024 deliver up the goods to the applicant. 5. By 4.00 pm on 1 March 2024, the third respondent destroy all catalogues, price lists, brochures and other documents and materials in its possession, power, custody or control to which the applicant's registered trade marks or any marks substantially identical or deceptively similar thereto have been applied. 6. By 4.00 pm on 8 March 2024, the third respondent by its director Callan Mark Warren file with the Court and serve on the applicant's solicitors an affidavit deposing to compliance with orders 4 and 5 above. 7. The third respondent pay the applicant's costs of its claim against the third respondent, and the applicant's costs of the third respondent's cross-claim. 8. The applicant may apply to the Court to have its costs fixed in a lump sum by filing submissions and a supporting affidavit by 4.00 pm on 15 February 2024. Any such submissions and affidavit are to be served on the third respondent by 4.00 pm on 16 February 2024. 9. The third respondent by a legal practitioner may, by 4.00 pm on 1 March 2024, file and serve any submissions and a supporting affidavit in response. 10. Subject to further order, any application that the applicant's costs be fixed in a lump sum be determined on the papers. 11. By 4.00 pm on 15 February 2024, the applicant serve a copy of these orders on the third respondent. Date that entry is stamped: 8 February 2024. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ANNEXURE A No Date Applicant's Trade Mark Class Goods and/or services 1. 1747267 19/01/16 HP APOLLO 7 Carpet cleaning machines (electric); Industrial carpet cleaning machines. 2. 1747268 19/01/16 HP ADVENGER 7 Carpet cleaning machines (electric); Industrial carpet cleaning machines. 3. 1747269 19/01/16 RD6 7 Carpet cleaning machines (electric); Industrial carpet cleaning machines. 4. 1747270 19/01/16 RD5 7 Carpet cleaning machines (electric); Industrial carpet cleaning machines. 5. 1750616 04/02/16 Vapourtech 7 Carpet cleaning apparatus (electric). 6. 2071062 23/02/20 SIZZLER 7 Carpet cleaning apparatus (electric); Carpet cleaning machines (electric); Electric carpet cleaning (shampooing) machines; Electric carpet cleaning (vacuuming) machines; Industrial carpet cleaning machines; Machines for carpet cleaning; Machines for carpet cleaning (vacuuming) 7. 1768183 20/05/19 (Kangaroo Logo) 7 Carpet cleaning machines (electric); Industrial carpet cleaning machines. REASONS FOR JUDGMENT Ex tempore, revised WHEELAHAN J: Background and evidence 1 The applicant is the owner of a business that manufactures, sells, markets, and distributes carpet cleaning equipment and apparatuses in Australia. It is the registered owner of the seven trade marks set out in the schedule to this judgment. The applicant claims that the respondents have, and the third respondent continues, to market and sell steam cleaning equipment using the applicant's marks. The applicant seeks remedies for infringement of its seven trade marks. A claim by the applicant in relation to an eighth trade mark was abandoned at the final hearing, as were claims for any monetary relief save as to costs, and claims in passing off and misleading and deceptive conduct. 2 The proceeding was commenced initially against the first and second respondents. Since then, on 12 September 2023 the first respondent was placed in liquidation by order of this Court upon the petition of the Deputy Commissioner of Taxation, and on 11 December 2022 the second respondent was deregistered. The effect of s 471B of the Corporations Act 2001 (Cth) is that the applicant cannot proceed against the first respondent without leave, and no leave has been sought. The second respondent has ceased to exist, and no application has been made to have its registration restored. The proceeding remains on foot against the third respondent, which was joined to the proceeding by order made 31 January 2023. However, on 27 June 2023, the solicitors who had been acting for the third respondent filed a notice of ceasing to act. All three respondents filed cross-claims in the proceeding impugning the validity of the applicant's trade marks and seeking their cancellation. 3 In the above circumstances, at the final hearing of the proceeding there was no appearance for any respondent. The hearing proceeded with the applicant's claims undefended and without the cross-claims being prosecuted. The Court received into evidence two affidavits: an affidavit of Rohan Paul Oakes sworn 3 August 2023, and an affidavit of Liam Brendan O'Brien sworn 7 February 2024. I also heard some brief oral evidence from Mr Oakes which clarified one aspect of the applicant's claim. 4 The three respondent companies are, or were, associated with the family of a Mr Mark Warren. ASIC records show that Mark Warren is currently a director and secretary of the first respondent, and has been so since 14 January 2020. ASIC records show that Mark Warren was a director and secretary of the second respondent from 14 January 2020 until 11 December 2022, which was the date of its deregistration. ASIC records also show that the current director and secretary of the third respondent is Callan Mark Warren. The evidence is that Callan Warren is Mark Warren's son. A webpage of the site "svequipment.com" that was generated on 6 February 2024 states, "Pioneers of SteamVac Machines since 1977 by the Warren Family!!". The website states the address of the business as Factory B6, Scoresby Industrial Park, Janine St, Scoresby. 5 In evidence is a report to creditors of the liquidator of the first respondent dated 8 December 2023. A list of creditors attached to the report identifies the Deputy Commissioner of Taxation as the largest creditor, being owed $662,013.42. Other creditors include the first respondent's former solicitors in this proceeding. The liquidator stated that preliminary investigations indicated that the first respondent ceased trading in or around April 2022. The report noted the incorporation of the third respondent on 12 April 2022, with the liquidator stating that it operated a similar business from the Scoresby premises from which the first respondent had previously conducted business. The liquidator stated that the third respondent had been utilising the premises and the first respondent's assets to operate the business for no consideration since inception, and that he was investigating potential phoenix activity. 6 The webpages in evidence include a printout dated 6 April 2023 from the site "svequipment.com" showing use of the following marks in relation to items of steam cleaning equipment which are pictured – (a) Steamvac Apollo HP; (b) Steamvac Apollo; (c) Steamvac Avenger HP; (d) Steamvac Avenger; (e) Steamvac RD6; (f) Steamvac RD5; (g) Steamvac SV 220 Sizzler; (h) Steamvac Sizzler; and (i) Steamvac VapourTech. 7 Screenshots of the website "svequipment.com" generated on 6 and 7 February 2023 that were also in evidence do not show use of the above marks. 8 A screenshot from a website "steamvac.com.au" which the evidence shows was taken on 9 May 2023 shows the display of a caricature of a kangaroo wearing sunglasses bearing many of the elements of the applicant's registered trade mark, including substantial resemblance to the kangaroo itself, and the overlaid words "Australian made". The evidence is that the website "steamvac.com.au" operated as a landing site for "www.svequipment.com", but that on 29 June 2023 the website "steamvac.com.au" could not be opened. 9 Other documents that are in evidence include an invoice from the third respondent dated 7 November 2022 for a "Steamvac Apollo portable", and quotations from the third respondent dated 17 November 2022 for a "Steamvac Apollo HP+" and a "Steamvac RD6 Portable". 10 The applicant also tendered an amended defence of the third respondent dated 29 May 2023 by which the third respondent admitted it used the trade mark "Steamvac Apollo Portable" in November 2022, in relation to the sale of a carpet cleaning machine, but alleged that this use was in error. The third respondent otherwise denied uses of the marks that had been alleged by the applicant. 11 The above evidence, together with web pages generated as recently as 6 and 7 February 2024 and copy invoices sent to the third respondent's customers, supports a finding that since its incorporation in April 2022, the third respondent has conducted, and continues to conduct, a business involving the marketing and sale of steam cleaning equipment and products both online and from the Scoresby premises. I also find for present purposes that this business is essentially the same business that had been conducted by the first respondent until it ceased trading in April 2022. Infringement 12 I am satisfied that the evidence demonstrates that the third respondent has used in its business trade marks as signs that are substantially identical with, or deceptively similar to, each of the applicant's seven trade marks in relation to goods or services in respect of which the trade mark is registered. I am satisfied that the use of these marks by the third respondent is in relation to goods or services in respect of which the trade marks are registered. I therefore conclude that the third respondent has infringed the applicant's seven trade marks within the meaning of s 120 of the Trade Marks Act 1995 (Cth). Relief 13 By its amended originating application, the applicant sought various forms of relief in relation to the third respondent's infringement of its trade marks. These remedies included a declaration of infringement, an injunction restraining the third respondent from infringing in the future, damages or an account of profits at the election of the applicant, and delivery up to the applicant of various articles that were said to infringe the applicant's marks. As I have noted at [1] above, counsel for the applicant abandoned any claim to monetary relief, other than a costs order, at the hearing. Further, counsel for the applicant abandoned any claim for delivery up of goods, such as moulds and parts, which were used by the third respondent for producing machines onto which infringing marks were affixed, but which themselves did not infringe the applicant's trade marks. Similarly, in proposed orders that were provided by the applicant's solicitors to my chambers on the day of the hearing, no claim was pressed for the declaration that was sought in the applicant's amended originating application. Putting costs to one side, the claims for relief that were maintained on the final hearing of the proceeding were therefore limited to a permanent injunction, and an order for delivery up of articles to which marks have been applied that infringe the applicant's trade marks. 14 Section 126(1)(a) of the Trade Marks Act confers on this Court the power to grant an injunction in an action for an infringement of a registered trade mark. The content of the Court's power to grant an injunction under s 126(1)(a) must be derived from the terms of the Trade Marks Act itself: Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at [29]. However, it is appropriate to apply the general equitable principles relating to injunctions where, as under s 126(1)(a), they are not displaced by the governing statute: see Heydon JD, Leeming MJ and Turner PG, Meagher, Gummow and Lehane's Equity: Doctrines & Remedies (5th edition, LexisNexis Butterworths, 2015) at [21-525]. 15 Those principles are well established. Adapting them to the present statutory context, and noting the infringement of the applicant's trade marks which I have found at [13] above, it is necessary for the applicant to establish that there is a likelihood that the third respondent will either continue or repeat its infringement, and that damages would not be sufficient recompense to the applicant for that future infringement: see Meagher, Gummow and Lehane at [21-035]. 16 With respect to the requirement that there be a likelihood that the infringement of the applicant's trade marks will continue or be repeated, the statement of Cotton LJ in Proctor v Bayley (1889) 42 Ch D 390 at 398 (Court of Appeal), which is cited in Meagher, Gummow and Lehane at [21-040], is instructive – Where a patent is infringed the patentee has a prima facie case for an injunction, for it is to be presumed that an infringer intends to go on infringing, and that the patentee has a right to an injunction to prevent his doing so. 17 This prima facie case can be displaced by positive evidence that the infringer does not intend to go on infringing: Proctor v Bayley at 398. In my view, it is appropriate to apply these principles to the assessment required by s 126(1)(a) of the Trade Marks Act. In this case, there is no suggestion in the evidence that the third respondent has undertaken not to continue its infringement of the applicant's marks. To the contrary, I have found that the third respondent continued to infringe the applicant's marks after it was joined to this proceeding, and I am satisfied on this basis that the applicant has established the requisite likelihood of infringement in the future. 18 With respect to the inadequacy of damages, it is sufficient for the applicant to show that there is little realistic prospect of the third respondent satisfying a monetary judgment: Re Diesels & Components Pty Ltd (recs & mgrs apptd) [1985] 2 Qd R 456; Hodgson v Druce (1856) 2 Jur (NS) 1014, cited in Meagher, Gummow and Lehane at [21-040]. In my view, in light of the whole of the evidence, and in particular the liquidator's report identified earlier, I consider that there is a sufficient basis to conclude that the third respondent may not satisfy any money judgment that the applicant may obtain in relation to any future infringement. 19 For these reasons, an injunction should issue restraining the third respondent from infringing the applicant's seven trade marks, substantially in the form sought by the applicant in the updated proposed orders provided to the Court on the day of the final hearing. 20 In light of my conclusion that the third respondent continued to infringe the applicant's trade marks after it was joined to this proceeding, and in the absence of any evidence adduced on behalf of the third respondent, I also consider it appropriate to make orders for delivery up of any catalogues or articles in the possession, power, custody or control of the third respondent which deploy marks which are substantially identical with, or deceptively similar to, the applicant's marks, and orders for the obliteration of marks on any goods in the possession, power, custody or control of the third respondent, and if this is not reasonably possible, then delivery up of the goods to the applicant. 21 The cross-claims will be dismissed. The applicant should have its costs against the third respondent. I will hear counsel for the applicant on the form of orders. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan. Associate: Dated: 9 February 2024 SCHEDULE (a) HP APOLLO; (b) HP ADVENGER; (c) RD6; (d) RD5; (e) Vapourtech; (f) SIZZLER; and (g) the following mark – Each of the trade marks HP APOLLO, HP ADVENGER, RD6 and RD5 is registered for – Carpet cleaning machines (electric) and industrial carpet cleaning machines being goods/services in Class 7. The trade mark Vapourtech is registered for – Carpet cleaning apparatus (electric) being goods/services in Class 7. The trade mark SIZZLER is registered for – Carpet cleaning apparatus (electric); Carpet cleaning machines (electric); Electric carpet cleaning (shampooing) machines; Electric carpet cleaning (vacuuming) machines; Industrial carpet cleaning machines; Machines for carpet cleaning; Machines for carpet cleaning (vacuuming). The kangaroo mark is registered for the following good in Class 7 – Carpet cleaning machines (electric); Industrial carpet cleaning machines.