FEDERAL COURT OF AUSTRALIA

Deckers Outdoor Corporation Inc. v Farley [2008] FCA 1514

PRACTICE AND PROCEDURE – application for default judgment

Federal Court Rules 1979 (Cth)O 35A, r 3(2)

Australian Competition and Consumer Commission v 1Cellnet LLC [2005] FCA 856 cited

DECKERS OUTDOOR CORPORATION INC. v LEAH JANE FARLEY, DUSIA PTY LTD ACN 119 500 186, LEONID MYKHALOVSKYI, HEPBOURNE PTY LTD ACN 080 453 247, VLADIMIR VAYSMAN, JOSEF VAYSMAN, POLINA VAYSMAN, MILLHOUSE PTY LTD ACN 111 765 505, DIANNE SOMMER, SANDY HAZENDONK, HGU PTY LTD ACN 121 922 754, FEDIA PTY LTD ACN 119 500 444, TASKINC PTY LTD ACN 121 919 926, OTK INTERNATIONAL PTY LTD ACN 119 498 001, GIHAN EZZAT, JOANNE STRICKLAND, VERNON PTY LTD ACN 123 047 138, RASTOV PTY LTD ACN 119 498 547, VICTORIA VAYSMAN, OLIVER DOEDERLEIN, MARGARIT PEDROTTI and SAMBA ENTERPRISES PTY LTD ACN 111 968 935

VID 1022 OF 2007

TRACEY J

10 OCTOBER 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                  The amount of $150,000, deposited by the Applicant in the trust account of Middletons, in accordance with the order of Ryan J on 3 January 2008 and by way of security for the undertaking given to the Court on that day, be released to the Applicant.

2.                  Pursuant to Order 35A, rule 3(2) of the Federal Court Rules 1979 (Cth):

(a)     it is declared that the Second, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth and Eighteenth Respondents have:

(i)                infringed or been joint tortfeasors in the infringement of registered trade mark number 785466  (the Trade Mark) in breach of section 120(1) of the Trade Marks Act 1995 (Cth);

(ii)                 infringed or authorised the infringement, in breach of sections 36, 37 and/or 38 of the Copyright Act 1968 (Cth), of the copyright in the works set out in exhibits CR-1, 2 and 3 to the affidavit of Constance Rishwain dated 6 May 2008, RAB-1 and RAB-2 to the affidavit of Robert Bergstrom dated 6 May 2008 and CT-1 to the affidavit of Cristina Trayfors dated 6 May 2008 (the Copyright Works);

(iii)             engaged in misleading and deceptive conduct in breach of sections 9 and/or 12 of the Fair Trading Act 1999 (Vic) and sections 52 and 53 of the Trade Practices Act 1974 (Cth); and

(iv)             committed the tort of passing off;

(b)                it is declared that the Third Respondent has:

(i)                  infringed or been a joint tortfeasor in the infringement of the Trade Mark  in breach of section 120(1) of the Trade Marks Act 1995 (Cth);

(ii)                infringed or authorised the infringement of the Copyright Works in breach of sections 36, 37 and/or 38 of the Copyright Act 1968 (Cth);

(iii)               engaged in misleading and deceptive conduct in breach of sections 9 and/or 12 of the Fair Trading Act 1999 (Vic) and section 75B of the Trade Practices Act 1974 (Cth); and

(iv)              committed the tort of passing off;

(c)                the Second, Third, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth, and Eighteenth Respondents and each of them, whether by themselves, their directors, servants, agents, employees or howsoever be restrained from:

(i)                  importing, exporting, manufacturing, promoting, advertising, distributing, offering for sale, selling or exhibiting in public, the Respondents' Products (as defined in paragraph 25 of the Further Amended Statement of Claim);

(ii)                disposing or dealing with the Respondents’ Products in any other way than in accordance with order 2(d) below;

(iii)               authorising, procuring or inducing any person to do any act which would be an infringement of the injunction referred to in paragraph 2(c)(i) above;

(iv)              representing that the Respondents' Products are imported, exported, manufactured, advertised, promoted, offered for sale and/or sold with the sponsorship or approval of the Applicant;

(v)                representing that the Respondents' Products are the Ugg Products (as defined in paragraph 20 of the Further Amended Statement of Claim);

(vi)              representing the Respondents' Products emanate from the same trade source as the Ugg Products;

(vii)             representing that the Respondents' Products are made by the Applicant;

(viii)           representing that the businesses of the Second, Third, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth and Eighteenth Respondents are licensed, authorised, sponsored, approved or endorsed by the Applicant;

(d)                the Second, Third, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth and Eighteenth Respondents and each of them, whether by themselves, their directors, servants, agents, employees or howsoever, deliver up to the Applicant's solicitors:

(i)                  all the Respondents' Products in their possession, custody or control;

(ii)                all advertising, promotional, point of sale material and/or signage which features the Trade Marks and/or the Copyright Works in their possession, custody or control; and

(iii)               all materials which are used by the Second, Third, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth and Eighteenth Respondents in the manufacture of the Respondents' Products.

3.                  The Second, Third, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth, and Eighteenth Respondents pay the Applicant's costs of and incidental to the Notice of Motion dated 6 August 2008 as amended by order of the Court on 1 October 2008.

4.                  The Second, Third, Eighth, Eleventh, Twelfth, Thirteenth, Fourteenth, Seventeenth and Eighteenth Respondents pay the Applicant’s costs of the proceeding including reserved costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The applicant has applied to the Court for summary judgment under Order 35A of the Federal Court Rules, against the second, third, eighth, eleventh, twelfth, thirteenth, fourteenth, seventeenth and eighteenth respondents.

2                     None of these respondents has filed a defence in the proceeding.  The eighth, eleventh and thirteenth respondents have filed an appearance.  The others have not. None has attended at directions hearings.

3                     The applicant is the owner of a registered trade mark and other intellectual property rights in relation to a form of footwear known as “Ugg boots”.  It discovered that such boots bearing the Ugg Australia Logo and its Sun Device were being manufactured and marketed in Melbourne.  Following inquiries and the execution of search orders it alleged that each of the respondents was, in one way or another, involved in the manufacture and/or marketing of counterfeit Ugg boots.

4                     The applicant commenced proceedings in this Court on 9 November 2007.  There were numerous interlocutory hearings.  The applicant ultimately relied on its sixth further amended application and further amended statement of claim which were filed on 14 March 2008. Directions hearings were held on 6 June 2008 and 28 August 2008. The second, third, eighth, eleventh, twelfth, thirteenth, fourteenth, seventeenth and eighteenth respondents (hereafter, “the respondents”) did not appear. By notice of motion dated 6 August 2008 (as amended by leave of the Court granted on 1 October 2008) the applicant seeks summary judgment against those respondents. The application’s motion was heard on 28 August 2008, 1 and 7 October 2008. The respondents did not appear at the hearing.

5                     After the proceeding was commenced a number of the respondent companies went into liquidation.  They included the second, eighth, eleventh, twelfth, thirteenth and fourteenth respondents. The same liquidator was appointed to each of these companies.  Relevant Court documents have been served on the liquidator but he has not appeared at any directions hearing.  The applicant obtained leave under s 471B of the Corporations Act 2001 (Cth), to continue the proceeding against each of these respondents.

6                     The applicant seeks various forms of relief against the respondents in its sixth further amended application.  This relief includes:

·                    Declarations;

·                    Injunctions;

·                    An order for delivery up of infringing property; and

·                    Costs.

7                     Order 35A r 3(2) provides for the entry of default judgments in the event that a respondent fails to do one of a number of things.  The applicant relies on the failure, by each of the respondents, to file a defence and the failure of those respondents to attend directions hearings.

8                     There is evidence before me by affidavit which satisfies me that each of the respondents has been served with the further amended statement of claim, the sixth further amended application and the various notice of motion regarding the summary judgment application.

9                     An applicant for an order under Order 35A does not have to prove its claim by way of evidence.  It is sufficient that, on the face of the statement of claim, there is a claim for the relief sought and that it appears that the Court has jurisdiction to grant that relief: see Australian Competition and Consumer Commission v 1Cellnet LLC [2005] FCA 856 at [14]. 

10                  I am satisfied that each of the respondents is in default by reason of his or its failure to file a defence and to attend directions hearings.  The orders sought should be made.

11                  On 3 January 2008 the applicant obtained orders from Ryan J against two other respondents (the twentieth and twenty-first respondents) which were conditioned by a requirement that the applicant provide security for an undertaking which it gave to his Honour on that day.  It was ordered that $150,000 be paid into and held in the trust account maintained by the applicant’s solicitors.  On 2 April 2008 the Court made orders by consent that the orders made by Ryan J on 3 January 2008 be vacated.  The proceeding, insofar as it involved the applicant and the twentieth and twenty-first respondents was discontinued.  In these circumstances the applicant applies to recover the $150,000 which remains in the solicitor’s trust account.  There being no further requirement for such security to be provided the order should be made.

Associate:

Dated:         10 October 2008