FEDERAL COURT OF AUSTRALIA

Bob Jane Corporation Pty Ltd v Webtyre.net Pty Ltd

[2012] FCA 168

UPON THE APPLICANT BY ITS COUNSEL UNDERTAKING:

1.    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof; and

2.    to pay the compensation referred to in (a) to the person there referred to,

THE COURT ORDERS THAT:

1.    The Judgement and orders of this Court made 3 November 2011 be set aside, except as to paragraphs 1 and 12 thereof.

2.    The Respondents (and each of them) be restrained from, whether by themselves or by their servants or agents or howsoever otherwise, selling, supplying or offering for sale or supply or advertising or promoting for sale or supply in Australia:

(a)    tyres for motor vehicles;

(b)    wheels for motor vehicles;

(c)    batteries for motor vehicles;

(d)    accessories for auto motive vehicle parts (including tyres and wheels);

(e)    services relating to the installation and fitting of vehicle wheels, tyres, batteries and other vehicle parts and fittings;

    bearing or under or by reference to the following marks (or any of them):

(a)    the mark “BOB JANE”;

(b)    the mark “BOB JANE GLOBAL”;

(c)    the BOB JANE device as depicted in Section 1 of Attachment "A" of the amended statement of claim filed 15 July 2011 or further and alternatively a mark substantially identical with or deceptively similar to the BOB JANE device,

or bearing or under or by reference to any other trade mark that is substantially identical with or deceptively similar to either of the Applicant’s trade marks, being:

(a)    trade mark No. 929097 for the mark “BOB JANE”;

(b)    trade mark No. 919561 for the mark “BOB JANE T-MARTS” and device;

until the hearing and determination of the proceeding or until further order of the Court.

THE COURT DIRECTS THAT:

3.    The Respondents file and serve Affidavits of Documents by 16 February 2012; and the Respondents make available for inspection the documents recorded therein by 23 February 2012.

4.    The Applicant file and serve any affidavits on which it intends to rely at trial in respect of the application, and the Cross-Claimants file and serve any affidavits on which they intend to rely in respect of the cross-claim, by 4.00 pm on 13 April 2012.

5.    The Respondents file and serve any affidavits on which they intend to rely at trial in respect of the application, and the Cross-Respondent file and serve any affidavits on which it intends to rely in respect of the cross-claim, by 4.00 pm on 25 May 2012.

6.    The Applicant and Cross-Claimants file and serve any affidavits in reply by 4.00 pm on 9 June 2012.

7.    The Respondents pay the Applicant’s costs of the Respondents' Application filed on 11 November 2011 including the costs of the hearing on 15 December 2011 and 2 February 2012 (but excluding the costs of the hearing on 5 December 2011) on a party-party basis and that such costs be taxed and paid forthwith by the Respondents after the said taxation thereof.

8.    The proceeding be listed for further directions on 25 June 2012.

9.    The parties have liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules.

REASONS FOR JUDGMENT

Introduction

1    On 3 November 2011, judgment was entered against the respondents in default of compliance with orders of the Court requiring the respondents to file and serve an affidavit of documents (Bob Jane Corporation Pty Ltd v Bob Jane Global Tyres Corporation (Australia) Pty Ltd (No 2) [2011] FCA 1363). The circumstances in which the judgment was entered are set out in [2] of the reasons for judgment as follows:

The default upon which primary reliance is placed is the failure of the respondents to provide an affidavit of documents and inspection in compliance with orders made by the Court. The Court ordered by consent on 12 July 2011 that the parties file and serve affidavits of documents by 7 September 2011, and make available for inspection the documents recorded therein by 14 September 2011. On 13 October 2011, a directions hearing was convened. The respondents did not appear on that occasion. The Court amended the orders made on 12 July 2011, by extending the time for the filing and serving of affidavits of documents to 20 October 2011, and for inspection to 27 October 2011. It appears that the respondents’ solicitors, Raj Lawyers, ceased to act on their behalf on 3 October 2011.

The Application to set aside judgment

2    Before the Court is an application by the respondents filed on 11 November 2011 to set aside that judgment. The application and the affidavit in support sworn on the same date by the fourth respondent, Robert Frederick Jane (Mr Jane), indicate that they were prepared by one Malcolm McClure.

3    The grounds of the application were set out in the interlocutory application filed by the respondents on 11 November 2011 as follows:

1.    The proceedings of 3 November 2011 were heard ex-parte and accordingly the Respondents were not represented at the proceedings on that day.

2.    Prior to the commencement of the 3 November proceedings the respondents filed with the court an Application for the 3 November proceedings to be adjourned to 8 December or as soon as the court and the Applicant may provide for thereafter.

3.    It is the right of the Respondents to be heard and their expressed will is to be so heard.

4.    The Respondents dispute all the claims as made by the Applicants.

5.    The Respondents have a defence to all the claims as made by the Applicants.

6.    Notwithstanding, certain of the orders as made are an abuse of process by the Applicant and arise from the Applicants’ misleading of the court.

7.    Substantial unlawful and unjust damage will be occasioned to the respondents in the case that the orders as sought are not granted.

8.    The Respondents do not consent to the orders as made except the first order.

the 5 december 2011 hearing

4    The application came on for hearing on 5 December 2011. Mr McClure sought leave to represent the respondents. He acknowledged he was not a lawyer but said he was a director of the corporate respondents. That leave was not opposed and was granted.

5    It soon became obvious that Mr McClure was unable to represent the respondents competently. He was not aware of the matters necessary to be satisfied to have the judgment set aside or the procedures to be used to bring facts before the Court. To the extent that the respondents sought to explain the failure to appear on 3 November 2011, the explanation was contained [3] to [7] of the two-page affidavit sworn by Mr Jane on 11 November 2011 as follows:

3.    On 3 November 2011, legal representation had not yet been found. It has been a difficult process for the respondents to discover trustworthy and competent representation.

4.    On 3 November 2011, I spoke with his honour’s associate, whom I believe to be by the name of Anna, and spoke to her of the difficulties that I was faced with on that day. I was not aware of any difficulties for the court or procedural restrictions of the court that would stop the court from contacting me via telephone, if needed. I gave a limited consent to the Applicant for the changes of names of the first and second Respondents as sought and spoken to in the first order of his Honour.

5.    I have a defence to the claims of the Applicant. Further, I dispute the claims of the Applicant.

6.    The orders sought by the Applicant amount to an abuse by the Applicant of the court’s processes and/or are not sustainable in the face of the true facts.

7.    In the time available it was not possible to fully brief any prospective representative with regards to this matter.

6    In view of the failure of the respondents to address the questions of whether they had any defences to the claim and whether there was an explanation for not appearing on 3 November 2011, the Court proposed an adjournment to allow the respondents to obtain competent representation.

7    This course was opposed by the applicant. An affidavit sworn by the solicitor for the applicant, Richard Alan Mereine, on 2 December 2011, was relied upon by the applicant to show that the respondents were involved in other proceedings in the Supreme Court and the Victorian Civil and Administrative Tribunal for which they had obtained legal representation. In this proceeding, it was said, the respondents had deliberately elected not to obtain lawyers.

8    In the circumstances, the respondents’ application was adjourned until 15 December 2011 and the respondents were ordered to pay the costs of the day, fixed at $6000.

the 15 december 2011 heaRING

9    By 15 December 2011, the respondents had engaged Hall & Wilcox Lawyers and were represented at the adjourned hearing by Mr Panna SC. Affidavits sworn on 14 December 2011 by Mr Jane, Dennis Peter Rigon, the fifth respondent, and Mr Thomas McMahon, a solicitor employed by Hall & Wilcox, were before the Court. The affidavits of Mr Jane and Mr Rigon sought to further explain why they did not attend Court on 3 November 2011. In essence, they said that they acted on the advice of Mr McClure and Mr Harkness, who worked with him. In his affidavit Mr Rigon said the following:

14.    At about 9.20 am on the morning of 3 November 2011, I arrived at work and went into Mr Jane’s office. He was there with Mr McClure and Mr Harkness and was on the telephone to the Associate to His Honour Justice North seeking an adjournment.

15.    Mr Jane told me that the Associate said words to the effect that we should appear before his Honour or that orders may go against us. I said that we should go to the court. However Mr McClure and Mr Harkness advised us that, in the circumstances, it was not necessary to go.

16.    It appeared to me that Mr Jane was quite confused about what to do. I recall that Mr Jane and I felt uncomfortable about not going, even though Mr McClure and Mr Harkness had advised us that we did not need to go. I felt uncertain about whether that advice was correct. I recall that at about 9.40 am, at my insistence, Mr Jane and I decided we should attend and explain our situation, even though we believed we had not adequately prepared to do so.

17.    However, in Mr Jane’s confused state, and after further discussion about what to do, we concluded that, as the hearing was to commence at 10.15 am, it was too late for us to travel to Court from Calder Park and arrive by 10.15 am at the court. As a result, we did not attend the hearing.

18.    After the conversation with the Associate, Mr McClure and Mr Harkness quickly drafted for the Respondents a notice/application to adjourn and draft minute of order and then a notice of appearance. At about 10.27 am and 10.46 am on 3 November 2011, I believe Mr Jane emailed each of those documents to the Associate to his Honour Justice North.

10    Mr McMahon outlined the steps he had taken in the short time since 5 December 2011 to acquire the documents and information necessary to address the application.

11    The explanation proffered by Mr Jane did not satisfy the Court. In particular, Mr Jane relied on Mr McClure’s advice, but there was no explanation of what motivated Mr McClure. Mr Panna SC sought to argue that the existence of an explanation was not paramount, particularly as here where the respondents had an arguable defence. As the Court was unpersuaded by this approach and unsatisfied with the explanation, the respondents sought and were granted a further adjournment until today, 2 February 2012. The applicant’s costs were reserved.

12    Since 15 December 2011, the respondents have filed the following further affidavits, of Mr Rigon, sworn on 27 January 2012, Mr Jane, sworn on 30 January 2012, Mr McClure, sworn on 31 January 2012 and Ms Kornacki, solicitor for the respondents, affirmed on 31 January 2012. These affidavits sought to further explain the respondents’ failure to attend on 13 October 2011 and also to substantiate the defences available to the respondents.

the 2 february 2012 hearing

13    This brings us to the hearing today. The discretion to set aside a default judgment is a wide one to be exercised judicially and in the interests of justice. The circumstances relevant to the exercise of the discretion depend on the facts of the case.

14    The present proceeding is a good example of the variety of circumstances which might face the Court on such applications. In this case, the matters relevant to the exercise of discretion are whether the respondents have an acceptable explanation for their failure to attend on 13 October 2011 and whether they have an arguable case which justifies the matter going to trial.

Explanation for non-attendance

15    Dealing first with the explanation for non-attendance, the recently filed affidavits of Mr McClure and Ms Kornacki clarify the circumstances and motivations of the respondents. Mr Jane is 82 years old and has serious health issues, some of which stem from a massive stroke he suffered in June 2006, which required many months of rehabilitation. In his affidavit, he explains that as a result of the stroke, he experienced paralysis on the right-hand side of his body, a drooping face, inability to speak, use his hands, eat, sleep, shower or go to the bathroom and that he was extremely confused. Then in April 2009, he underwent an operation to insert stents near his heart and he says that he continues to suffer from issues with his heart. He summarises his position in [38] of his affidavit sworn on 14 December 2011, as follows:

I continue to receive treatment for the above conditions and my health and wellbeing fluctuates on a regular basis. Sometimes I feel very poorly, particularly due to my heart condition, which sometimes, in turn, effects (sic) my cognitive ability.

16    Most unwisely, Mr Jane chose Mr McClure as his close adviser. Mr McClure, in his affidavit, describes his background as follows:

1.    My primary interests are physics, mathematics and chemistry, subjects that I have previously taught and tutored to secondary and tertiary students. However, I also have a keen interest in health and medicine and competencies in various healing modalities, such as naturopathy and shiatsu. My studies of biochemistry, genetics, haematology are ongoing, as are my studies of law and religion. My ongoing works in progress include a thesis regarding the ‘Fractal mathematics of genetic codes’, which explores fractal symmetries within genome sequences. This work follows from my initial intrigue and fascination into the carbon chemistry of our bodies as a fundamental conduit for the expression of consciousness and its constituent dynamics. I am moved to explore and investigate the mysteries of consciousness and our physical existence and the relationship between the same.

2.    I have been involved and interested in many different religious faiths. I am currently involved in the Church of SOCIA and Buddhism but I have also previously been involved with, the Church of England, Catholic Church, and churches of unity, such as the Baha’i Faith, which I was first introduced to at university. I often speak with Mr Jane about his Church of the Great God, and support the good work that he does in his benevolence.

3.    I find the study of religion and the law, and the interaction between them, fascinating and important. It is through this interest and study, particularly in relation to the development of the common law and the Australian Constitution, that I have acquired an understanding of the law and legal process.

4.    I am not a qualified lawyer but have appeared on behalf of parties and myself in most jurisdictions in proceedings, including criminal, civil, divorce, probate and contract matters. This proceeding, however, is the first time I have appeared or been involved in a matter in the Federal Court that is concerned with commerce.

5.    I have never represented that I am a lawyer. The parties I have appeared for have sought my assistance as a result of ‘word of mouth’ recommendations or by reading about me on the internet and online forums. Usually I only provide assistance to parties in legal matters when they have had difficulties with their solicitors, have no money or just want somebody to help them that is not a lawyer.

6.    Mr Zenaan Harkness is my friend and assistant who I have known for many years and whom I maintain an office in Glenburn in north-east Victoria near Yea and work in a variety of different matters that include quasi political/legal and human rights matters that affect our greater community, such as fluoridation and vaccination.

17    Ms Kornacki accessed websites operated by Mr McClure which indicate that he regards himself as a law unto himself. On one of these websites entitled ‘U.P.M.A.R.T. Brought to you by Malcolm McClure’ it appears that Mr McClure has offered the public common law driving licences, common law vehicle registration, common law birth certificates, common law marriage certificates, and protective notices for victims of insane care. His website proclaims as follows:

Malcolm McClure has been proclaimed genius by many. We are fortunate that his creativity and unique perceptions of the laws of physics and chemistry were channelled into the laws of man and the quest to, as he puts it ‘remove bad laws’ There can be no doubt that his skills, insights and pioneering work have laid the foundation for the contemporary common law ‘freedom’ movement in Australia.

18    In the documents he has drawn, and his advocacy in the Court, Mr McClure has demonstrated a complete lack of understanding matched only by his self-confidence. By his incompetence, he has caused the respondents, as well as the applicants, to incur tens of thousands of dollars of unnecessary costs. His activities in representing the respondents, as well as other people in the courts, appear, on the face of it, to contravene the laws which prohibit unqualified legal practice. It is hoped that the relevant authorities will investigate these activities before further people are harmed by his conduct.

19    Mr Jane, who is the sole shareholder of the corporate respondents, is elderly and, by reason of his health, vulnerable to unscrupulous attention of charlatans such as Mr McClure. Mr McClure orchestrated the respondent’s action on 13 October 2011. He appeared to have chosen not to appear in the Court, essentially because he decreed for himself that the respondents should not conform to the requirements of the legal system. The respondents were under his spell, and went along with his bizarre approach.

20    Mr Ryan SC, who appeared with Mr Nash for the applicant, submitted that the respondents did not provide a satisfactory explanation for their non-attendance. He said that a default judgment will only be set aside if the reason for the default was by accident and through no fault on the part of the respondents. In the present case, it was argued, the respondents had chosen not to attend. I do not accept this submission. The circumstances are unusual. I am satisfied that Mr Jane, and through him, the corporate respondents, were under the influence of a persuasive charlatan. Mr Jane’s capacity to choose an independent course was restricted by his age and medical conditions. Mr Rigon, who resisted Mr McClure’s advice, ultimately gave way to Mr Jane, who was primarily interested as the sole shareholder in the corporate respondents.

Arguable Defence

21    Turning now to the question of arguable defences, the applicant’s claim is that the respondents have used the name “Bob Jane” and a logo in breach of trademarks held by the applicant. It also claims that the respondents have used the name “Bob Jane” in an online tyre and accessory business in a way which is likely to mislead consumers into believing that they are dealing with the applicant. An interlocutory injunction was granted on 9 June 2011 to prevent the respondents from continuing to use the marks, “Bob Jane”, “Bob Jane Global”, and a logo with the words “Bob Jane” or any other trade mark that is substantially identical and deceptively similar to either of the applicant’s trade marks.

22    Mr Panna SC, who appeared for the respondents, contended that the respondents have an arguable case for trial on these causes of action. He said that following the grant of the interlocutory injunction, the respondents took steps to clearly disassociate themselves from the applicant. The website, through which the respondents operate the online business, no longer refers to the words “Bob” or “Jane”, but is entitled webtyre.net. The website contains a notice in the following terms:

NOTICE TO OUR www.webtyre.net CUSTOMERS: Bob Jane, founder of the Bob Jane T-Marts, is not in any way associated with the Bob Jane T-Marts organization. Furthermore, WebTyre.Net Pty Ltd is also not in any way associated with the ‘Bob Jane T-Marts’ or the Bob Jane Corporation Pty Ltd.

23    Consequently, the respondents wish to argue that no permanent injunction should be granted at trial because the respondents are not now engaged in any unlawful conduct. Such use of the name “Bob Jane”, as appears, for instance, in the notice, falls within the defence under s 122(1)(a)(i) of the Trade Marks Act 1995 (Cth). Also, that notice prevents any confusion in the minds of consumers that they are dealing with the applicant. In response, Mr Ryan SC contended that there was no answer to a permanent injunction without a commitment by the respondents to behave lawfully in the future, and that the evidence of changed present behaviour does not suffice.

24    I accept that the respondents have by the evidence of changed conduct established a platform from which they may launch an argument that the Court would not grant a discretionary remedy in view of the evident unlikelihood of future unlawful conduct.

25    Then, the respondents contended that it was arguable that [8] of the orders of the judgment of 3 November 2011, was too wide. It provides that:

The Respondents transfer to the Applicant registration of the:

(a)    bobjaneglobal.com domain name; and

(b)    janetyres.com domain name,

and any other domain name that is substantially identical with or deceptively similar to the Applicant’s trade marks or the applicant’s JANE FLEET trade marks.

This order, it was said, went beyond the protection of the applicant’s rights, because it prevented the respondents from using the domain names for trade outside Australia. The applicant responded by arguing that the respondents had not shown any practical mechanism by which the domain name could exclude trade in Australia, but be otherwise useable. In my view, the respondents have demonstrated a sufficiently arguable case on this issue. It is a matter for trial to elaborate the practical matters upon which the applicant relied.

26    The respondents also complained about the width of the restraint in [4] of the orders made on 3 November 2011, which, unlike [2], was not limited to actions in Australia. The applicant accepted that [4] should be limited to actions in Australia.

27    In the result, the respondents have explained their failure to attend on 13 October 2011, and that, as to the central issues addressed by the judgment, they have arguable defences. The judgment of 3 November 2011 therefore should be set aside.

costs

28    As the respondents seek an indulgence from the Court, they must pay the costs of the hearing of 15 December 2011, and of today. I do not accept the respondents’ submission that the applicant should have withdrawn its opposition on 15 December 2011, and that consequently the costs should follow the event, or there be no order as to costs.

29    The costs of 5 December 2011 hearing have already been dealt with, and there is no need for any further order in relation to them. Paragraph 12 of the orders made on 3 November 2011, deal with the applicant’s costs of seeking judgment. This order should not be disturbed.

30    The applicant sought the costs of the hearing of 15 December 2011, and of today, on an indemnity basis. Although the circumstances of Mr McClure’s role in the events of this case are out of the ordinary, the overall circumstances are not so unusual as to justify indemnity costs. The applicant’s costs of resisting the application to set aside judgment, including the costs of 15 December 2011 and today should be taxed and paid by the respondents. That payment should be made immediately after taxation, and should not await the outcome of the trial.

Associate:

Dated:    1 March 2012