FEDERAL COURT OF AUSTRALIA
Chhabra v McPherson as Trustee for the McPherson Practice Trust [2018] FCA 1755
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The originating application, as amended on 27 February 2017, be dismissed.
2. The applicants pay the respondents’ costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
YATES J:
Introduction
1 This proceeding is concerned with whether the respondents have infringed the first applicant’s asserted copyright in two artistic works depicted in the Schedule to these reasons (the Kaden Boriss Logos) and used, without permission, the Kaden Boriss name. The applicants say they have, with the consequence that the respondents have not only infringed the first applicant’s copyright, but engaged in passing off and misleading or deceptive conduct, or conduct that is likely to mislead or deceive, and made false representations of approval or affiliation, in contravention of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)).
2 The applicants claim injunctive relief, orders for delivery up of infringing material, and pecuniary relief by way of damages (including additional damages under s 115(4) of the Copyright Act 1968 (Cth) (the Copyright Act)) or an account of profits.
3 At a relatively early stage in the proceeding, orders were made that issues of liability, including the claim for additional damages for copyright infringement, be determined separately from, and prior to, issues concerning the quantum of pecuniary relief as raised in [39]–[41] of the further amended statement of claim (the statement of claim). These reasons concern that question.
4 The respondents admit that copyright subsists in the Kaden Boriss Logos, but they dispute the first applicant’s ownership—or at least his sole ownership—of that copyright. In any event, they contend that their use of the Kaden Boriss Logos and the Kaden Boriss name was permitted, and that they have not engaged in passing off or conduct that is misleading or deceptive or likely to mislead or deceive, or made false representations.
Evidence
5 The applicants read the following affidavits:
Sunil Lal Chhabra, sworn 24 November 2017 and 13 February 2018;
Kiran Chandra Ramrakha, affirmed 24 November 2017;
Jay Swamy Chander, affirmed 15 November 2017;
Simone Mitchell, sworn 15 November 2017; and
Nicholas John Wright, sworn 14 November 2017.
6 Sunil Lal Chhabra is the first applicant. He is also known by the surname Lal and was referred to as Mr Lal throughout the hearing.
7 Mr Ramrakha is the second applicant. In late 2009, Mr Lal, Mr Ramrakha and Ms Marina Belin established a legal firm called LBR Legal.
8 Mr Chander is a Chartered Accountant. He is a partner of Mr Lal and Mr Ramrakha in a multidisciplinary practice providing legal and business services in Sydney under the name Barkley Henley. In about February 2016, he became a partner in the firm I later describe as Kaden Boriss Sydney.
9 Mr Lal, Mr Ramrakha and Mr Chander were cross-examined.
10 The respondents read the following affidavits:
Damien Ignatius Arnold Lambert van Brunschot (two affidavits affirmed on 22 December 2017);
Jamie Angus John McPherson, affirmed 22 December 2017; and
Andrew Robert Mackenzie Bautovich, affirmed 26 April 2018.
11 Mr McPherson and Mr van Brunschot are, respectively, the first and second respondents. Each was cross-examined.
Findings of fact
12 In early 2010, Mr Lal and Hemant Batra (Mr Batra) held discussions about establishing an international network of law firms. Mr Batra was then the managing partner of a law firm based in New Delhi, known as Kaden Boriss Legal LLP. These discussions were held with Mr Ramrakha’s knowledge and consent. Mr Ramrakha agreed that Mr Lal would take the lead in these discussions, with his (Mr Ramrakha’s) full support.
13 Shortly after commencing these discussions, Mr Lal and Mr Batra approached Chee Chun Woei (Mr Chee), the managing partner of a law firm based in Singapore called Intelleigen Legal LLC (Intelleigen), and Fayez Al Dosari (Mr Dosari), the senior partner in a law firm based in Kuwait called Al Oula, to see whether they would be interested in joining the proposed network. Discussions progressed between Mr Batra, Mr Lal and Mr Chee. The evidence suggests that Mr Dosari did not participate in any significant way, if at all, in these discussions. Mr Batra, Mr Lal and Mr Chee agreed that they would establish an alliance of law firms called Kaden Boriss Legal or Kaden Boriss (the evidence is not clear) and that the name would be “owned” by a Singaporean company they intended to call Kaden Boriss Pte Ltd, which Mr Chee would register and which would provide services to the network. Even though the name would be “owned” by the company, the evidence is that each participant in the network would “own” the name in that participant’s home jurisdiction. How this arrangement was to work legally is not clear. A draft Memorandum of Understanding was circulated, but not executed.
14 On 10 August 2010, the Singaporean company, called Kaden Boriss Services Pte Ltd (Kaden Boriss Services), was registered. On 6 December 2010, Mr Chee circulated a draft constitution and membership agreement. These documents were never finalised.
15 Around this time, Kaden Boriss Services engaged Pulse Creative Group Pte Ltd (Pulse), another Singaporean company, to provide design, branding, art direction and corporate communications services for the network. This included the creation of logos. Mr Lal’s evidence is that Pulse and Kaden Boriss Services entered into an agreement dated 30 August 2010 (the Agreement). The copy of the Agreement in evidence is not executed. Mr Lal’s evidence is that Mr Chee informed him that he had executed the Agreement on behalf of Kaden Boriss Services. The applicants rely on the Agreement as a contract between Pulse and Kaden Boriss Services, and the respondents do not demur. Indeed, as I later explain, the respondents advance the Agreement as an impediment to the applicants’ pleaded claim that they are the owners of the copyright subsisting in the Kaden Boriss Logos.
16 In January 2011, Mr Batra and Mr Lal discussed the continuing involvement of Intelleigen in the network. According to Mr Lal, there was concern about whether Intelleigen was “the right fit”. The upshot of these discussions was that Mr Batra and Mr Lal resolved that Intelleigen should not join the network. This decision was communicated to Mr Chee on 23 January 2011. As the proposed network would no longer have a connection with Singapore, the decision was made to wind up Kaden Boriss Services. The company was struck off the Singapore Accounting and Corporate Regulatory Authority Register on 14 October 2011.
17 Prior to this happening, Pulse was asked to continue its work for the network, with invoices to be issued to Mr Lal. Mr Lal’s evidence is that, from January 2011, he regularly communicated with Pulse about branding, to obtain assistance with preparing event invitations and newsletters, and with the network’s ongoing marketing efforts. His contact was Ms Lani Fried.
18 On 4 February 2011, Pulse delivered the final version of the Kaden Boriss Logos to Mr Lal and Mr Batra. Pulse issued a final invoice for this work on 23 September 2011 (Invoice #2192f). Invoice #2192f was paid by the applicants’ firm, but overall the payment of Pulse’s fees was shared by Mr Lal and Mr Batra. Mr Lal accepted in cross examination that Mr Chee also paid some invoices. In other words, Pulse was never paid by Kaden Boriss Services. It was only paid by stakeholders in the Kaden Boriss network. At the time of final payment, the only stakeholders were Mr Lal (or his firm) and Mr Batra (or his firm).
19 On 3 August 2011, the applicants registered the name Kaden Boriss as a business name in New South Wales. On 1 September 2011, LBR Legal rebranded to Kaden Boriss and commenced providing services under that name and the Kaden Boriss Logos. For convenience, I refer to this firm as Kaden Boriss Sydney to distinguish it from the respondents’ firm, referred to below.
20 On 10 February 2012, the applicants registered Kaden Boriss as a business name in the Australian Capital Territory. By that time, they had commenced providing services in the Australian Capital Territory and had opened an office in Canberra, which had one full-time employee. The applicants’ firm now has a serviced office in Canberra. The firm also has serviced offices in Perth (since around 2012), Melbourne (since around October 2016) and Adelaide (since around October 2016), although the firm no longer uses the Kaden Boriss name or other indicia.
21 Between September 2011 and December 2016, the applicants’ firm engaged in promotional and public relations activities with a view to raising the profile and reputation of the Kaden Boriss brand in Australia.
22 In 2013, the applicants decided to expand the presence of Kaden Boriss in Australia and internationally. They identified a number of potential target firms based in Adelaide, Dubai, Fiji and Copenhagen.
23 At this time, Mr Lal came into contact with the respondents, through a mutual acquaintance. The respondents were partners in a law firm called MVM Legal, which specialised in insurance law (particularly, workers compensation law) and had a niche practice in safety work. He wanted to gauge their interest in becoming part of the Kaden Boriss network.
24 On 15 February 2013, Mr Lal and the second respondent, Mr van Brunschot, met in Brisbane at MVM Legal’s office to discuss the potential alliance. This was followed by a meeting at Kaden Boriss Sydney’s office on 19 April 2013 attended by the respondents, the applicants, and two of the applicants’ then partners, Ms Kikinis and Ms Chandler. Mr Lal’s evidence is that one purpose of the meeting was to explain “the vision” of the Kaden Boriss network. Mr Lal informed Mr Batra of the discussions.
25 Following the meeting, Mr Lal sent the following email to Mr van Brunschot (formal parts omitted) on 25 April 2013:
It was good to meet you and Jamie last week. Following on from our discussions regarding the inclusion of MVM Legal to Kaden Boriss, I have had detailed teleconferences with Hemant Batra who as I explained is the managing partner of our Delhi office and founder of Kaden Boriss.
I have copied Hemant in this email.
As explained we have great plans of expansion for Kaden Boriss globally and we are quite excited about this. Unfortunately time has restricted us in this regard over the past 12 months however there is real determination over the course of the year to have new firms join us. We are delighted about our discussions with you and feel you will enjoy being part of our Kaden Boriss. Our experience shows, the association will lift your profile in the local market and expose the office internationally to benefit from.
Our association with Delhi for example was an added advantage for us to secure a client in litigation over the Christchurch earthquake.
I can personally vouch that our office profile has been taken to another level and with larger client base. We are fortunate of seeing synergies between all offices although our Delhi office specialises in non insurance work.
At Kaden Boriss we are very proud of our growing brand and that has come through hard work.
We welcome your firm to the Kaden Boriss team and after further consideration, we request the following terms:
1. You may retain MVM Legal and adopt the name Kaden Boriss. For example and not limited to, it could be MVM Kaden Boriss. If things work out over the next 12 months, we would request removal of MVM.
2. Adopt a common style website at your expense through our nominated marketing firm in Singapore for consistency.
3. Consistent stationary [sic] and marketing material.
4. As a goodwill gesture we shall waive US $5,000 to join the firm which I deliberately did not touch upon with you. I can advise that I paid this fee upon merging.
5. You maintain autonomy in how you run your office as there is no sharing of financial information etc.
6. We request agreement to share 20% of fees received from any referral of work for life of that client. This works both ways and is on mutual trust.
7. We would like to commence the association from 1 July 2013. Prior to that, I can give you some ideas on transitioning as we have gone through this process and did not loose [sic] any corporate clients like Allianz, QBE and CGU to name a few.
Please give this some thought and should you have any questions or wish to discuss further, please do not hesitate to contact me.
On another issue, as mentioned, I am taking 13 people from the office to Singapore on 7 June. Hemant is looking to join with a couple of his partners. If things proceed between us, we welcome you to join in the meet and greet in Singapore which will be low key on this occasion but will give you the opportunity to meet some of the partners from Delhi. Something for you to just consider.
Hemant is also close to finalising an association with a Middle East firm in coming weeks and we will have good news to share.
We look forward to your reply.
26 After some negotiation on matters that are peripheral to this proceeding, the respondents agreed to be part of the network, but no formal agreement between the parties was executed or proposed. The parties accept that the email of 25 April 2013 encapsulates the terms of their relationship.
27 From 3 July 2013, the signature template on correspondence from MVM Legal was amended to include the statement: Part of the Kaden Boriss Group. From 22 August 2013, this statement was removed. Instead, all out-going email messages from MVM Legal announced that, from 1 October 2013, MVM Legal would be known as Kaden Boriss Brisbane.
28 On 1 October 2013, MVM Legal officially rebranded to Kaden Boriss. On that day, Mr Lal forwarded email correspondence to Mr Batra that had passed between Mr Lal and Mr van Brunschot, welcoming the respondents to the Kaden Boriss network. At that time, and later, respondents engaged in their own marketing activities to promote their legal practice using the Kaden Boriss name, the Kaden Boriss Logos and other Kaden Boriss indicia. The evidence shows that the respondents used Kaden Boriss simpliciter. They also used the name and style Kaden Boriss Legal and Kaden Boriss Brisbane. No matter what iteration was used, the dominant element comprised the words Kaden Boriss. It is convenient to refer to the respondents’ firm from this time on as Kaden Boriss Brisbane to distinguish it from the applicants’ firm.
29 By that time, there were three firms in the network—Kaden Boriss Sydney, Kaden Boriss Brisbane, and Kaden Boriss Legal LLP in New Delhi. Firms in other countries joined at later times.
30 In early August 2016, Mr Lal and Mr Batra met in India. At this meeting, Mr Batra gave Mr Lal a draft Code of Conduct he had prepared for Mr Lal’s consideration. Mr Lal reviewed the draft Code of Conduct during the meeting and noticed that it included, according to him, “some unusual terms”, including that ownership of the Kaden Boriss brand be divided between Mr Batra (as to 50%), Mr Batra’s wife (Preeti Batra) (as to 15%) and Mr Lal (as to 35%), and that these rights could only be transferred to their respective children. Further, the draft Code of Conduct required all firms within the network to use a company in Bangalore—called Webenza—for all website and social media activities.
31 In a later telephone conversation, Mr Lal informed Mr Batra that he (Mr Lal) did not agree with Mr Batra’s proposed ownership or succession plans.
32 On 23 September 2016, Mr Batra sent Mr Lal the proposed Code of Conduct in final form. On 30 September 2016, the proposed Code of Conduct was discussed at a partners’ meeting of Kaden Boriss Sydney (by this time, Mr Chander was a partner).
33 On 6 October 2016, Mr Lal communicated with Mr Batra using WhatsApp. Certainly by this time, Mr Lal’s relationship with Mr Batra had soured. From Mr Lal’s point of view, Mr Batra had paid little interest in the network for some time, while he pursued a political career in India. Mr Batra had recently rekindled his involvement in the network and, in Mr Lal’s eyes, was seeking to change the basis on which he and Mr Lal had started it, and how Mr Lal had conducted it. Mr Lal informed Mr Batra that Kaden Boriss Sydney would not agree to the Code of Conduct or to engage Webenza in relation to the network’s website. The exchange appears to have become quite heated. It escalated to the stage of Mr Lal stating that if Mr Batra wanted Kaden Boriss Sydney “out” of the network, he should say so. The exchange terminated inconclusively. However, on that day, Mr Lal sent Mr van Brunschot a WhatsApp message, stating:
Hi as a courtesy events have taken place extremely fast in the past few days and as a consequence Sydney and associated offices with us will be removing ourselves from Kaden Boriss
34 In that exchange, Mr Lal also said:
We are very nervous in Sydney of passing control to a Bangalore company any other issues and feel for longevity and future partners sake, it will be unfair
35 On 7 October 2016, Mr Lal informed his partners that, overnight, “the situation with Batra has escalated” and that he had informed Mr van Brunschot that “our offices will be leaving the Kaden Boriss network”. This is a reference to Kaden Boriss Sydney’s offices. Mr Ramrakha suggested that discussions should be held with the respondents to “get a feel for what their plans are and whether there is a way forward for all of us”. It was agreed that Mr Ramrakha and Mr Chander should hold discussions with the respondents.
36 On the same day, the applicants registered the business name Kaden Boriss Melbourne, notwithstanding the events I have just described. At the time, the respondents were not aware that the applicants had registered this business name.
37 On 11 October 2016, Mr Ramrakha and Mr Chander met the respondents in Brisbane. At the meeting, Mr Ramrakha said that he and Mr Chander wanted to discuss how Kaden Boriss Sydney and Kaden Boriss Brisbane could “continue to work together” given Kaden Boriss Sydney’s “exit from the network”.
38 According to Mr Ramrakha, Mr Chander said that “it would make business sense to consider a new structure and to have a brand that could be affiliated with the broader offering of a multidisciplinary practice” and that it was “attractive” to rebrand.
39 According to Mr Chander, it was Mr Ramrakha who raised the prospect of rebranding, saying that Kaden Boriss Sydney wanted to keep the Kaden Boriss name for “the Work Place Safety offering only” but that “the remainder of the business would be rebranded”. Further, according to Mr Chander, Mr McPherson raised the question whether, if Kaden Boriss Brisbane left the network, they (Kaden Boriss Brisbane) could continue to use the Kaden Boriss name. Mr Ramrakha’s response was that they could because “we own that brand in Australia”. It is not clear who “we” refers to in this evidence. Nonetheless, according to Mr Chander, Mr McPherson said that he would like to obtain legal advice on that matter.
40 Mr van Brunschot’s understanding of the meeting was that Kaden Boriss Sydney, and Mr Lal in particular, had “issues” with Mr Batra, that they were thinking of rebranding and starting their own network in Australia and Singapore, and that they wanted to know if the respondents would participate in such an arrangement with them. His evidence was that Mr Ramrakha did not say “we own that brand in Australia”. He said that, had such a statement been made, it would have been significant and noted by him. Further, his evidence was that he does not recall Mr Ramrakha suggesting that the Kaden Boriss name might be kept for use in relation to workplace safety work. Mr van Brunschot said that it was he (Mr van Brunschot) who asked about the “overall status of the Kaden Boriss name in Australia” and suggested that advice from an intellectual property lawyer should be obtained. He said that he had asked that question because he considered that the respondents would be at risk if they used the Kaden Boriss name without Mr Batra’s permission.
41 In his evidence, Mr McPherson expressed a similar understanding of the meeting. He recalled Mr Chander stating that “the Sydney office was thinking about starting their own network in Australia and Singapore under a new brand”. In this connection, he also recalled Mr Chander saying that he would prefer to devise a new brand but that “they might also try and make use of the name Kaden Boriss”. Mr McPherson said that neither Mr Ramrakha nor Mr Chander “asserted any ownership rights in the [Kaden Boriss] brand”; nor did they suggest in the course of the meeting that “they (the Sydney office, and Mr Lal in particular) owned the Kaden Boriss brand in Australia.” Further, Mr McPherson said that “Mr Ramrakha did not suggest that the intention of the Sydney office was to keep the Kaden Boriss brand and use it only for workplace safety work”. Mr McPherson’s state of mind was that Mr Batra was the “owner of all elements of the brand”. He recalled Mr van Brunschot suggesting that advice be obtained from an intellectual property lawyer concerning “the overall status of the Kaden Boriss name in Australia”. He went further and said that Mr Chander had agreed that this was an important issue and that “they needed to find a way to get around Mr Batra owning the name”.
42 The meeting concluded with the respondents expressing their desire to discuss options between themselves. They nevertheless indicated their preparedness to continue discussions with the applicants and Mr Chander even though the respondents had reached the provisional view that their firm would remain in the network.
43 On 12 October 2016, Mr van Brunschot sent an email to Mr Ramrakha and Mr Chander suggesting a meeting with the Sydney “team” on 24 October 2016. In the email, Mr van Brunschot said that, to ensure the meeting was “meaningful”:
We need to obtain advice on the IP issues re the name in Australia, so we know where we stand prior to this meeting. We will share in the costs of this advice and it should be an external advice is our view. Assuming we are on safe ground here, what do we need to do to protect our interests in the name in Australia? We need to know this and have a game plan prior to the meeting is our view.
44 In the email, Mr van Brunschot asked that an agenda for the proposed meeting be provided. He also suggested that the respondents be provided with “some proposal re an Australian entity”.
45 Mr Chander responded cordially by email the same day. The salient parts of his response are:
Some initial thoughts for consideration.
· We need to guard the confidentiality of our meetings and discussion until we choose to communicate more widely – in this regard, can we refer to these discussions and forums as “Project WIN”? (What’s in a Name). Happy for alternative suggestions.
· If we continue to use the name KB, we will always be presented with the threat (potential or real) of litigation, or in the least, some distraction. If we choose to abandon the name, this may be a fantastic opportunity for us to come together with our existing businesses and clients and to rebadge ourselves with a new name selected by all of us – this would give us ownership of the name and basis to venture forward cohesively. If we agree to this we may not have the need (or the costs) to obtain advice on the IP issues re the name in Australia.
· I am happy to draft an agenda, incorporating Damien’s points for consideration by all and to facilitate on the day
46 I am not persuaded that, at the meeting on 11 October 2016, Mr Ramrakha said words to the effect that “we own that brand in Australia”. Mr Ramrakha’s version of events does not include that statement, and both Mr van Brunschot and Mr McPherson deny that any such statement was made. Further, if such a statement had been made, it would have been a matter of significance for the respondents. In this connection, I am satisfied that both Mr van Brunschot and Mr McPherson held the belief that Mr Batra controlled the use of the Kaden Boriss name. This is why Mr van Brunschot wanted to obtain legal advice. The respondents wanted to know whether they would be able to continue to use the Kaden Boriss name if, contrary to their then disposition, they decided to collaborate with the “Sydney office” to form a new network. Their interest was not in a name change—which was the focus of Mr Ramrakha’s and Mr Chander’s presentation—but in maintaining their use of the Kaden Boriss “brand” in that event.
47 It does not seem that any legal advice on this topic was obtained. I infer that the need to obtain that advice was overtaken by events, to which I now turn.
48 On 17 October 2016, Mr Chander circulated an agenda for the meeting (an updated agenda circulated on 18 October 2016). The agenda identified the subject of the meeting as “Project WIN Workshop”—“WIN” meaning “What’s in a Name?” This is consistent with Mr Ramrakha’s and Mr Chander’s proposition at the meeting on 11 October 2016 that, ideally, the new network would have a different structure and operate under a new name.
49 The respondents considered their position with their then partners. On 18 October 2016, Mr van Brunschot sent the following email to Mr Lal, Mr Ramrakha and Mr Chander (although the salutation was only to Mr Lal and Mr Chander):
Hi Sunil and Jay,
Thanks for circulating the proposed agenda Jay.
We had a Partners meeting yesterday to discuss recent developments, and form some consensus on future direction for our office.
We thought it important to convey the decision we have reached, prior to our proposed trip to Sydney.
The decision of the Brisbane partnership is to remain in the network. We have all invested much in the brand, and from the perspective of the Brisbane office, we are not prepared to take on the risk and cost of re-branding, at a time when we are gaining significant momentum in the marketplace. This is a decision we have not taken lightly, but we wanted to inform you of it as soon as possible.
We acknowledge that the working relationship between our respective offices has at times been strained. If your decision is to remain in the network, we are very committed to doing what we can on our part to improve the relationship between the Australian offices and we consider appropriate overall governance within an otherwise autonomous network needs to be discussed. Jamie and I will participate in Monday’s meeting if the plan is to genuinely work together within the network, and we appreciate much work is required to genuinely improve where we are at.
We have more feedback in terms of the draft agenda, but thought at the outset we would convey our position.
Please let us know whether in your view the meeting should proceed, based on the decision we have made.
The purpose of this email is to communicate our position prior to the meeting to hopefully best ensure that any meeting can take place on a proper basis, and to therefore avoid any misunderstanding.
Look forward to hearing from you.
50 Mr Lal gave evidence that he was surprised to hear of the Brisbane firm’s intention to remain in the network, and that they were not prepared to take the risk and cost of re-branding at a time when they were gaining momentum in the marketplace.
51 At Mr Chander’s urgings, the meeting planned for 24 October 2016 nevertheless took place in Sydney at Kaden Boriss Sydney’s office, as arranged. The events at the meeting are in dispute.
52 Mr Lal’s evidence is that the meeting ran for about 20 minutes. It was chaired by Mr Chander. Mr Lal said that the following exchange took place:
Mr Chander: Thank you all for being here today. We have quite an extensive agenda to get through but we hope that it will give us a path to act on going forward.
Mr van Brunschot: Look, let’s be frank. I don’t want to waste time. You seem to want our support to isolate Hemant Batra and split the Kaden Boriss network. We are not prepared to do that. We intend to stay in the network.
Me: We are very nervous about control of our website being handed over to a Bangalore company and have concerns about Batra’s proposals in relation to the management of the network. We think it would be best to split from the network in order to maintain our independence and to retain value in the brand.
Mr McPherson: We are not interested in being a part of any fight between you and Batra.
Mr van Brunschot: We intend to remain part of the Kaden Boriss network. We do not have any issue with Batra’s proposals or with the website being managed out of India.
Me: Kaden Boriss is our name so, if that is the case, you can’t continue to use it.
53 Mr Ramrakha gave very similar evidence. He said that the meeting did not last longer than about 15 minutes (his affidavit originally said 30 minutes). He deposed to this exchange:
Mr Lal: We are very nervous about control of the website being handed over to a Bangalore company by Batra and have concerns about Batra’s proposals in relation to the management of the network. We think it would be best to split from the network in order to maintain our independence and to retain value in the brand.
Mr McPherson: We are not interested in being a part of any fight between you and Batra.
Mr van Brunschot: We intend to remain part of the Kaden Boriss network. We do not have any issue with Batra’s proposals or with the website being managed out of India.
Mr Lal: If you remain in the network, you will not be able to continue to use the name “Kaden Boriss”. It’s ours.
Mr McPherson: I think that concludes this meeting.
54 Mr Chander also gave similar evidence. According to him, the meeting, which lasted for less than an hour, included the following exchange:
Mr van Brunschot: We have decided that we do not want to rebrand. We are going to remain with the Kaden Boriss network.
Mr Lal: You will have to rebrand then because we intend to continue using that name and we have plans to use it. We have spent significant time and money building the goodwill in the brand for many years. You can stay within the Kaden Boriss network but you will need to change your name because that name is ours.
Mr van Brunschot: We don’t want to be part of your plans. We are going out on our own and we are going to remain with the network. I don’t think there is any point progressing the discussion items on the agenda.
55 Although in matters of detail this evidence differs, it is consistent with Mr Lal’s and Mr Ramrakha’s evidence that Mr Lal told the respondents that, if they remained in the Kaden Boriss network, they could not continue to use the Kaden Boriss name because the applicants “owned” it. The respondents’ evidence is markedly different.
56 Mr van Brunschot’s evidence is that he started the meeting by making opening remarks along the following lines:
• I confirmed that there had been difficulties in the relationship between our offices;
• I advised our Sydney colleagues that we (the Brisbane office) had enjoyed growth due to our hard work in the Queensland market as opposed to our membership of the Kaden Boriss network;
• I advised that we were keen on expanding our fee base outside of insurance which was a traditional area of strength in the Brisbane office;
• I advised that we had had discussions with the Brisbane partnership and we were committed to staying within the network;
• I said that the ‘premise’ of the network, to simply pay fees for work between the offices, was flawed. I said that a more concerted and fruitful approach would be to share client contacts, work together generally to promote and build the brand, as opposed to the emphasis on a one-off referral fee which was not producing the dividends that had been hoped for;
• I advised in terms of the Code of Conduct that we were somewhat disappointed that we did not get a ‘seat at the table’ in terms of the make up of the proposed Board, but we were otherwise happy with the Code of Conduct and we would adhere to it; and
• I also advised that the digital marketing firm Webenza which was based in Bangalore did not present any significant problems for the Brisbane office – I understood that Indian IT services were well recognised, and I said it was good that there was a concerted digital marketing campaign which should benefit all offices.
57 Mr van Brunschot recounted other aspects of the conversations at the meeting. He said that he had no recollection of Mr Lal saying that Kaden Boriss Brisbane would have to rebrand because “the Sydney office owned the name, intended to use the name or had plans to use it”. He said that “Mr Lal instead stated to us that they intended to rebrand altogether” and that there “was no specific suggestion by Mr Lal that the Sydney office intended to use the name Kaden Boriss for any of their service offerings”. Mr van Brunschot continued:
Neither Mr Lal nor any of his Sydney colleagues stated that we could not continue to use the Kaden Boriss brand. If this had been communicated to me by Mr Lal or anyone else it would have been something that I would definitely have remembered.
58 Mr McPherson’s evidence was substantially the same as Mr van Brunschot’s evidence—indeed, strikingly so in relation to the opening remarks which Mr van Brunschot said he had made. However, in this regard, Mr McPherson’s evidence is consistent with notes he took at the meeting. The notes indicate that Mr van Brunschot took on the “speaking” role for the respondents, while Mr McPherson was “note taker”. These notes are also consistent with Mr van Brunschot taking control of the meeting at the outset, by making the opening remarks he said he had made.
59 Mr McPherson “categorically” rejected Mr Lal’s, Mr Ramrakha’s and Mr Chander’s versions of the conversation. He said that Mr Lal did not say that “the Brisbane office” could not continue to use the Kaden Boriss name. He also expressed the view that any intention by the applicants to use the name would have required some reconciliation between them and Mr Batra, whom Mr McPherson considered to be “the ultimate owner of the brand”.
60 The applicants’ evidence is that the meeting on 24 October 2016 commenced at around 10.00 am (Mr Ramrakha; corrected in oral evidence from 11.00 am as stated in his affidavit), 11.00 am (Mr Lal) or after 11.00 am (Mr Chander). At all events, the evidence is clear that the meeting was relatively short. After the meeting had concluded, the respondents, and the applicants and Mr Chander, had lunch at Kaden Boriss Sydney’s office. Others may have been present. At 12.55 pm (possibly after the respondents had left the office), Mr McPherson sent the following email to Mr Batra:
Hemant we have concluded the meeting with the Sydney office.
It was quite clear that they were looking to us to join with them in an attempt to create a fracture in the network.
We told them we didn’t want to be part of it, and that the decision of whether they leave or not is one for them and not for us to be involved with. We also made it clear that if their decision was to stay, we would do what we could to ensure that we moved together smoothly. Likewise, if their decision was to leave, then we would properly decide on an exit strategy with them.
We would not otherwise engage with them about their issues.
The meeting was adjourned so they could properly decide which way they wished to move.
I suspect you will hear from them prior to them communicating anything to us.
I made no mention of any of our discussions or gave any inkling that we have spoken about matters.
61 It is clear from this contemporaneous record that, prior to the meeting, the respondents had been in discussions with Mr Batra. Notably, the email makes no mention that Mr Lal had informed the respondents at the meeting that they could not continue to use the Kaden Boriss name if they remained in the Kaden Boriss network. Similarly, Mr McPherson’s notes make no mention of any such statement having been made.
62 On 4 November 2016, Mr McPherson sent Mr Lal an email. He noted that he had not heard from Mr Lal since the meeting on 24 October 2016 in relation to “which way you have decided to proceed”. By this, I understand Mr McPherson to have been raising the issue of whether Kaden Boriss Sydney would remain in the network, despite everything that had happened. Mr McPherson asked Mr Lal to let him know his (Mr Lal’s) intentions as soon as possible. Mr Lal did not respond to this email.
63 On 22 November 2016, Mr McPherson sent a further email to Mr Lal, noting his (Mr Lal’s) failure to respond to communications, and suggesting that they meet when Mr McPherson was to be in Sydney on 25 November 2016. In the email, Mr McPherson said:
I am acutely aware of your position in the network, but your silence has meant that we have had no choice but to make decisions without your input.
I would prefer that if your desire was to remain within the network that you would engage with us so that these decisions can be made jointly. We continue to remain committed to work in a corroborative way.
If you don’t want to catch up that’s ok, but please don’t be upset when further decisions are made without seeking your input.
I look forward to hearing from you.
64 Mr Lal responded on 24 November 2016:
Thank you for your email. Apart from an email from Hemant about Webenza, I do not believe I have received any other emails informing me of the “number of decisions being made” in my absence. Please feel free to at least share by email, even if we are unable to connect by phone as it is a busy time of the year.
There is a lot that you have no idea about surrounding the origins of KB. I do not believe, with respect, there is anything you will achieve by meeting me at this stage. There are matters to sort about the brand and IP and this is between Sydney and Gurgaon office strictly. This will be managed in due course, that I am sure about.
I am heartened to hear you remain committed to work in a corroborative way. We have enjoyed promoting our presence in Brisbane and referring a number of clients/network to your office.
Enjoy Sydney tomorrow, we shall catch some other time.
65 On 25 November 2016, Mr Batra sent a letter to Mr Lal in which he accepted Mr Lal’s “notice to exit” conveyed in the WhatsApp messages on 6 October 2016. After referring to those communications, the letter continued:
Subsequently, you completely broke down communication channels with the undersigned being the founder & Chairman of the Kaden Boriss and its Law Firms’ network. It has also come to the knowledge of the undersigned with overwhelming evidence that you have expressed to other network office(s) about your departure from Kaden Boriss – attempted change of name – and at the same time advising them to join you in that endeavour, which the undersigned terms as fracturing Kaden Boriss IP. This has caused severe breach in trust and confidence thereby affecting the Kaden Boriss’ brand reputation and goodwill.
66 The letter went on to permit Mr Lal’s firm three months within which to discontinue using the Kaden Boriss name, or any similar name, including the initials “KB”. However, by that time Kaden Boriss Sydney had changed its name to Barker Henley.
67 On 14 December 2016, Mr McPherson sent an email to Mr Lal and Mr Ramrakha attaching a letter from Kaden Boriss Brisbane seeking transfer of the Kaden Boriss business names which the applicants had registered. By this time, the respondents knew that the applicants’ firm had changed its name to Barker Henley. Mr Ramrakha responded, stating (amongst other things) that “there are wider issues, moving forward, that need to be addressed quite apart from intellectual property and ownership of business names”.
68 On 23 December 2016, Mr McPherson sent a further email to the applicants. Mr McPherson said that, despite numerous attempts to resolve “the issue relating to the Kaden Boriss branding”, a proper response had not been received from the applicants, and that the respondents were filing a Claim and Statement of Claim in the Supreme Court of Queensland alleging that the applicants had contravened ss 18 and 29(1)(h) of the Australian Consumer Law and engaged in passing off. As events transpired, the Claim and Statement of Claim were only filed on 9 January 2017 (the Queensland Supreme Court proceeding). The filed Statement of Claim also included an allegation that the applicants had breached fiduciary obligations owed to the respondents.
69 In the meantime, the applicants responded in kind. On 3 January 2017, they filed a Statement of Claim in the Equity Division of the Supreme Court of New South Wales, alleging that the respondents had contravened ss 18 and 29(1)(h) of the Australian Consumer Law and engaged in passing off (the New South Wales Supreme Court proceeding). Paragraphs 9 and 10 of the Statement of Claim pleaded:
9 The Plaintiffs permitted the Defendants to use the Kaden Boriss brand when the Defendant Firm joined the Network.
10 As the Plaintiffs decided to pursue a multi-disciplinary practice in January 2017, the Plaintiffs in order to protect its goodwill in the Kaden Boriss brand and get-up, no longer permit the Defendants to use the Kaden Boriss brand and get-up.
70 The applicants verified the truthfulness of the pleaded allegations. The allegations pleaded in paragraphs 9 and 10 are inconsistent with Mr Lal having informed the respondents that they could not continue to use the Kaden Boriss name if they remained in the Kaden Boriss network.
71 On 6 January 2017, the applicants changed solicitors. They instructed their present solicitors to act for them in the New South Wales Supreme Court proceeding. In a letter addressed to the respondents, dated 9 January 2017, the applicants’ solicitors stated that, in addition to the matters pleaded in the Statement of Claim filed on 3 January 2017, the respondents had infringed the copyright in the Kaden Boriss Logos. The letter stated in part:
While our clients provided you with a limited license to use the Kaden Boriss logos from October 2013 to October 2016, it is clear based on what has transpired since October 2016 that you no longer have our clients’ consent or permission to use the copyright works, being the logos at Figure 1 and 2. If there has been any doubt, please take this letter as formal written notice that our clients no longer licenses or authorise use of the Kaden Boriss logos.
(emphasis added)
72 On 11 January 2017, the respondents invited the applicants to “withdraw” the Statement of Claim filed in the New South Wales Supreme Court proceeding in light of the commencement of the Queensland Supreme Court proceeding and the notice the respondents had given on 23 December 2016.
73 The New South Wales Supreme Court proceeding was discontinued on about 22 February 2017. On 8 February 2017, consent orders were signed discontinuing the Queensland Supreme Court proceeding.
74 On 11 January 2017, Mr Batra sent an email to Mr Lal, which was copied to the respondents, Mr Ramrakha and Preeti Batra. In this email, Mr Batra summarised his understanding of his relationship with Mr Lal and the establishment of the Kaden Boriss network. The email is long. It is nevertheless appropriate that I set out the following extract. The applicants place considerable reliance on it:
In 2010 – 2011, we started talking of joining hands in profession under brand ‘Kaden Boriss’ with Chee also being part of the discussion (Kuwait Firm was never inclined). We 3 individually decided to launch a Global Network in equal shares, with understanding that India will be exclusively mine and Singapore and Australia Chee’s and yours (individually), respectively. Global was to belong to 3 of us. A Singapore Co. was formed, accordingly and then terminated as Chee took an exit. Yes, then only we two were left and it was an understanding that India territory will be exclusively mine and Australia your’s (with no interference from each other). Other than these two countries, Globally we were required to take each other’s consent as we both co-owned the ‘Global’ outfit. You changed the name of your firm in September 2011 to Kaden Boriss.
Unquestionably, Australia territory was yours re: Kaden Boriss.
You and me started to contributed a lot in time, money and resources for its expansion. No denying.
Regarding (Copyright) Pulse payments or for that matter website development and stationery etc. expenditures were co-shared (including expenses for forming Singapore Co.), it is also a matter of record that we both paid equally. Pulse was actually introduced by Chee. Though termination of Singapore Co. expenses were exclusively paid by Chee and never claimed. Thereafter, everything did proceed on joint basis between two of us. If Pulse claims that I am stranger to them then I am sure that they need to be in the witness box with each document of theirs going through the forensic test.
As Australia was completely under your domain, control and prerogative, there is no denying of the fact that it was you who identified/authorized Brisbane on the above premise.
Misunderstanding amongst partners, friends and brothers are natural but these should not build walls and that is why I humbly request you to resolve the matter in the interest of all concerned.
I have resolved to assume eventually ‘founder – advisory role’ in the Group in an independent capacity with Preeti as the Managing Partner of India – Kaden Boriss for the time being. I have decided to take an exit from the management and even divest my rights (whatever, I have). In the legal premise, the basic legal principle is ‘nemo dat quod non habet’ literally meaning ‘no one gives what he doesn’t have’. I will pass on only what I have and if I pass anything more, it has no meaning.
In all honesty, I am a lawful owner by all means of India territory and Globally we are definitely entangled together. Australia territory was yours, which is now sadly subject matter of litigation.
75 An important plank in the applicant’s case is that, at the meeting on 24 October 2016, Mr Lal made a statement to the effect that, if the respondents remained in the Kaden Boriss network, they could not continue to use the Kaden Boriss name. I am not prepared to make that finding, notwithstanding the evidence given by Mr Lal, Mr Ramrakha and Mr Chander on this topic. I am not satisfied that a statement to that effect was made by Mr Lal or anyone else on behalf of the applicants. In fact, it is highly unlikely that a statement to that effect was made.
76 First, at that time, the use of the Kaden Boriss name was very important to the respondents. I refer to the findings I have made at [46] above on that score. Had Mr Lal stated that the respondents could not continue to use the Kaden Boriss name if they remained in the Kaden Boriss network—and, I would add, not join the “Sydney office” in a new network, presumably under a different name—then, in all likelihood, this would have provoked a very strong reaction indeed from the respondents. In all likelihood, they would have made immediate and strong protestations at the meeting about any asserted impediment to them continuing to use the name. I am satisfied that, at the very least, they would have regarded it as incongruous that, just because the “Sydney office” had elected to leave the network, and the “Brisbane office” had not, the “Brisbane office” could no longer use the Kaden Boriss name—and would have said so. Notably, there is no evidence of any protest or other similar reaction by the respondents at the meeting. Quite the contrary; the evidence is that the respondents then joined the applicants and their partners for lunch at the Kaden Boriss Sydney office, presumably on some tolerably amicable basis. This strongly suggests that no such statement was made by Mr Lal, and that the meeting on 24 October 2016 had proceeded just as the respondents say it had.
77 Secondly, I prefer the evidence provided by the contemporaneous records of the meeting, rather than Mr Lal’s, Mr Ramrakha’s and Mr Chander’s respective recollections. Mr McPherson’s notes record no such statement by Mr Lal. Had such a statement been made, it is incredible to think that it would not have been recorded by Mr McPherson, given the other matters recorded in the notes. I do not accept that, somehow, Mr McPherson would have missed recording such an important statement, if it had been made. Further, it is incredible to think that Mr McPherson would not also have informed Mr Batra of such a statement in his (Mr McPherson’s) email sent relatively shortly after the meeting, especially given Mr van Brunschot’s and Mr McPherson’s understanding that Mr Batra controlled the use of the Kaden Boriss name.
78 Thirdly, had such a statement been made, it is likely that the respondents would have proceeded to obtain the legal advice they suggested obtaining at the meeting on 11 October 2016 and in Mr van Brunschot’s email of 12 October 2016. No such advice was obtained at that time.
79 Fourthly, had such a statement been made, it is likely that it would have been repeated by Mr Lal in subsequent correspondence. It was not. I refer in particular to the email which Mr Lal sent to Mr McPherson on 24 November 2016. It is also likely that it would have been repeated by Mr Lal’s other partners, Mr Ramrakha in particular. Once again, it was not. When Mr McPherson sought transfer of the Kaden Boriss business names on 14 December 2016, Mr Ramrakha did not respond by asserting his or Mr Lal’s “ownership” of the Kaden Boriss name or by asserting that the respondents could not use it. Rather, he referred, Delphically, to “wider issues” that needed to be addressed “apart from intellectual property and ownership of business names”—effectively avoiding the issue.
80 Fifthly, no allegation is made in the Statement of Claim filed in the New South Wales Supreme Court proceeding to the effect that such a statement was made on 24 October 2016. Further, the verified allegations pleaded in paragraphs 9 and 10 of the Statement of Claim are inconsistent with Mr Lal having informed the respondents on 24 October 2016 that they could not continue to use the Kaden Boriss name if they remained in the Kaden Boriss network. A different allegation is made, namely that the permission which the respondents had to use the Kaden Boriss name was withdrawn in January 2017 (not 24 October 2016) because the applicants decided, at that time, to pursue a multi-disciplinary practice (not because Mr Lal informed the respondents that they could not use the name if they remained in the Kaden Boriss network).
81 The respondents ceased using the Kaden Boriss Logos and the Kaden Boriss name on 30 September 2017. Their firm now practises under the name DWF (Australia).
The Kaden Boriss Logos: Copyright ownership
Introduction
82 The applicants’ pleaded case is that Mr Lal has been the owner of the Australian copyright in the Kaden Boriss Logos since 29 September 2011 by virtue of s 196(3) of the Copyright Act: para 16 of the further amended statement of claim dated 18 April 2017 (the statement of claim). They also plead that, in or around December 2010, Mr Lal and Mr Batra agreed that all current and future rights to the Kaden Boriss name and logos in Australia, including the right to sub-license, would be exclusively exercised by Mr Lal. This agreement is alleged to have been made orally: para 18 of the statement of claim.
83 The case advanced by the applicants in final submissions is somewhat different. Whilst they maintain that Mr Lal is the sole owner of the Australian copyright in the logos, they submit, alternatively, that Mr Lal and Mr Batra are the copyright owners.
84 The respondents submit that the applicants have not established that Mr Lal is either the sole owner or a co-owner of the copyright. In their further amended defence dated 16 February 2018 (the defence), the respondents go further and plead that Mr Batra is the owner of the copyright. That said, they accept that copyright in the Kaden Boriss Logos subsists in Australia. They have made the following admissions:
1. Kaden Boriss Pte Ltd commissioned Pulse Creative Group Pte Ltd to create the Kaden Boriss Logos (as defined in the Statement of Claim dated 17 January 2017), under the terms of the agreement between Kaden Boriss Pte Ltd and Pulse Creative Group Pte Ltd dated 30 August 2010.
2. The Kaden Boriss Logos are each original “artistic works” within the meaning of the term defined under the Copyright Act, 1968 (Cth).
3. The joint authors of the Kaden Boriss Logos were Lani Fried and Manuel Lopes, each of whom were at all material times resident in Singapore and employees of Pulse Creative Group Pte Ltd.
4. The Kaden Boriss Logos were created by Lani Fried and Manuel Lopes in the course of their employment with Pulse Creative Group Pte Ltd, and specifically pursuant to the Agreement.
5. The Kaden Boriss Logos were created by Lani Fried and Manuel Lopes during the period of about August 2010 to February 2011 and were delivered as digital files.
6. Pursuant to the Agreement, Pulse Creative Group Pte Ltd issued invoice #2192f on 23 September 2011.
7. Invoice #2192f was the final invoice associated with the “Kaden Boriss corporate Identity and Branding project”, which includes the creation of Kaden Boriss Logos.
8. Lani Friend [sic] and Manuel Lopes executed a confirmatory deed on 12 January 2017 purporting to confirm the assignment of copyright in the Kaden Boriss Logos to the First Applicant and Hemant Batra on 29 September 2011.
85 As to the last admission concerning the Confirmatory Deed dated 12 January 2017 (the Confirmatory Deed), the respondents admit its authenticity but not its legal effect.
86 The Confirmatory Deed contains the following recitals:
A. In or around 2010, the Assignor agreed to, amongst other things, create a new Kaden Boriss corporate brand for the First and Second Assignees.
B. Pursuant to that agreement, the Assignor agreed to assign to the First and Second Assignees any present and future copyright in all materials and property produced pursuant to the agreement upon payment of all fees relating to the creation of such material.
C. The following Kaden Boriss corporate brands were delivered to the First and Second Assignees on or around 4 February 2011:
(Kaden Boriss Corporate Brand)
D. All fees relating to the creation of the Kaden Boriss Corporate Brands were paid on 29 September 2011.
E. This Confirmatory Deed, confirms the assignment of the intellectual property rights, including the copyright, in the Kaden Boriss Corporate Brand to the First and Second Assignees on 29 September 2011.
87 The operative clause of the Confirmatory Deed is:
1. Assignment
The Assignor, as legal and beneficial owner, assigned to the First and Second Assignees all its right, title and interest in and to the Kaden Boriss Corporate Brands, including
(a) all current and future copyright rights, and rights in the nature of copyright, throughout the world in the Kaden Boriss Corporate Brands; and
(b) all accrued rights of action involving the Kaden Boriss Corporate Brands,
throughout the world, with effect from 29 September 2011.
88 The source of the dispute on the question of copyright ownership is the Agreement which Mr Lal says was entered into by Pulse and Kaden Boriss Services on 30 August 2010. In the Agreement, Pulse is referred to as the “Agency”. It provides for Pulse to provide certain services to the “Client”. However, the definition of “Client” in the Agreement is obscure in its meaning:
“Client” means and incudes its member/alliance/affiliate offices,
89 The “its” in the definition can only sensibly mean Kaden Boriss Services. It is the only counterparty to Pulse in the Agreement. But nowhere in the Agreement is Kaden Boriss Services identified as the “Client”. In fact, the use of “means and includes” (emphasis added) in the definition points away from Kaden Boriss Services as the “Client”. Rather, it directs attention to its “member/alliance/affiliate offices” as the “Client”. Further, there is no evidence that Kaden Boriss Services gave any direction itself to Pulse or made payment to Pulse for the services it rendered. Indeed, the evidence is otherwise. Payment of Pulse’s fees were shared between Mr Lal, Mr Batra and, on some occasions, Mr Chee. There is also evidence (an email from Mr Batra to Mr Chee on 23 January 2011) that suggests that Kaden Boriss Services had never been “made operational”.
90 Further, the collocation “member/alliance/affiliate offices” is also obscure. It only compounds the lack of clarity—indeed, uncertainty—resulting from the definition.
91 Clause 8.1 of the Agreement provides:
All materials and property produced pursuant to this agreement including reports, recommendations, inventions, software, databases, systems, tools, designs, concepts, artwork, names, brands, logos, advertisements, images, layouts, proposals, storyboards, scripts, or works (‘Works’) created by the Agency for the Client pursuant to this Agreement resides in the Client. The Agency agrees to assign to the Client any present and future copyright, designs, inventions, trade marks and any other intellectual property in the Works upon payment of all Fees relating to the creation of such Works. The Agency agrees to execute all documents and do all things necessary to give effect to the assignment in this clause.
(emphasis added)
92 Neither the drafter of the Agreement nor the parties to it seem to have given any thought as to how clause 8.1 was to be implemented or given effect. Who, precisely, owned the “materials and property” and who, precisely, was to take the assignment, if called for?
93 A further curiosity is the fact that the Agreement was expressed to be for a term commencing on 31 August 2010 and terminating before 30 November 2010. It is not clear when the Kaden Boriss Logos were created. They were delivered in final form on 4 February 2011, suggesting that the copyright in them may not have come into existence before the Agreement expired by effluxion of time.
94 As I have recorded, on 14 October 2011, Kaden Boriss Services was struck off the Singapore Accounting and Corporate Regulatory Authority Register. This was pursuant to a resolution of the directors (Mr Lal, Mr Batra and Mr Chee) on 12 May 2011. When making the strike off application, the directors each certified that Kaden Boriss Services had no assets or liabilities (including contingent assets and liabilities). However, by that time, Kaden Boriss Logos had been created and delivered to Mr Lal and Mr Batra. The Australian copyright in them was subsisting. Pulse had not assigned the copyright. No assignment had been requested.
The applicants’ case on copyright ownership
95 The applicants’ case on copyright ownership, as finally advanced, is based substantially on the Agreement. In essence, the applicants submit that Pulse delivered the Kaden Boriss Logos and performed other work on behalf of Mr Lal and Mr Batra as its then clients, and that Mr Lal and Mr Batra fell within the definition of “Client” in the Agreement. Clause 8.1 of the Agreement (quoted above) was expressed in conditional terms. Pulse agreed to assign the copyright in the Kaden Boriss Logos only upon payment of all fees relating to the creation of the works. Consistently with that conditional obligation, clause 10.3 of the Agreement provided:
… The Agency will not be required to transfer to the Client property and materials for which the Client has not paid in full …
96 The applicants submit that when Pulse delivered the Kaden Boriss Logos, Mr Lal and Mr Batra were “the only extant parties” to the Agreement and the only persons for whose benefit the terms of the Agreement could operate. By virtue of the final payment on Invoice #2192f, which Mr Lal made on 29 September 2011 on behalf of himself and Mr Batra as part of a cost-sharing arrangement, copyright in the logos was assigned to Mr Lal and Mr Batra, who became the legal owners thereof. On this argument, the Agreement stands as the assignment in writing which fulfils the legal requirements of s 196(3) of the Copyright Act.
97 The applicants submit that the Confirmatory Deed must be seen in that light. They submit that to the extent there is any issue about “the imperfection of the original conveyance” (meaning, the Agreement), then the Confirmatory Deed “perfected that transfer”.
98 The applicants submit that acceptance of the respondents’ submissions (below) would require the Court to “construe an uncommercial arrangement, in circumstances where a commercial one is more readily ascertainable”.
99 Notwithstanding the terms of the Confirmatory Deed, the applicants also submit that the Court should accept that Mr Lal is the sole owner of the Australian copyright in the logos.
The respondents’ case on copyright ownership
100 As I have noted, the respondents submit that the applicants have not established that Mr Lal is either the sole owner or a co-owner of the copyright. They submit that the Confirmatory Deed has no effect because Pulse was not entitled to assign the copyright in the Kaden Boriss Logos to Mr Lal or Mr Batra. They submit that Kaden Boriss Services was still in existence when the Kaden Boriss Logos were delivered, and when final payment for Pulse’s work was made on 29 September 2011. They submit that there is no evidence of any separate agreement between Pulse and the individual law firms. Further, they submit that the fact that Pulse’s invoices were paid by Mr Lal and Mr Batra (and on some occasions Mr Chee) is without particular significance, because that is how the invoices were ordinarily paid.
101 The respondents also submit that the recitals in the Confirmatory Deed are inconsistent with the evidence. For example, according to the respondents, Recital B is simply incorrect when viewed against the terms of the Agreement. They submit that at no time were Mr Lal and Mr Batra the “Client”.
102 The respondents further submit that, because the Confirmatory Deed was only executed by the assignor (Pulse) and not the assignees (Mr Lal and Mr Batra) the question of Mr Batra’s repeated assertions, in some parts of the evidence, that he is the owner of all the intellectual property relating to the Kaden Boriss network is “left open”. Relatedly, the respondents submit that the applicants’ failure to call Mr Batra and/or the authors (Ms Fried and Mr Lopes) as witnesses supports the conclusion that their evidence would not have supported the applicants’ case.
103 Finally, the respondents submit that there is no evidence of any written assignment of the Australian copyright in the Kaden Boriss Logos to Mr Lal alone. Therefore, there is no basis for finding that he is the sole owner of that copyright.
Analysis
104 I commence this section of my reasons by noting that the applicants’ and the respondents’ submissions have a common starting point—namely, that Pulse was the original owner of the copyright in the Kaden Boriss Logos, with title and capacity to transfer that copyright. Although not articulated in submissions, the parties appear to accept that, in reaching this position, reg 4 of the Copyright (International Protection) Regulations 1969 (Cth) and s 35(6) of the Copyright Act apply to confer on Pulse the original ownership of the Australian copyright in the logos. It is from this point that the parties’ respective cases diverge.
105 The respondents’ case, in essence, is that, by virtue of clause 8.1 of the Agreement, Kaden Boriss Services became the owner of the copyright and that Mr Lal and Mr Batra could not become owners, notwithstanding the terms of the Confirmatory Deed. I do not accept this submission.
106 Under the Copyright Act, an assignment of copyright (whether total or partial) does not have effect unless it is in writing signed by or on behalf of the assignor: s 196(3). Here, both parties accept that the only relevant assignor could be (or could have been) Pulse. Pulse did not make or provide a written assignment of the copyright in the Kaden Boriss Logos to Kaden Boriss Services. Leaving to one side the obscurities in the definition of “Client” in the Agreement, and assuming (contrary to the difficulties I have noted) that Kaden Boriss Services is included in the definition of “Client”, the most that Kaden Boriss Services could have had was the benefit of an agreement to assign copyright, as clause 8.1 makes clear—in other words, an equitable interest in the copyright: Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 4 IPR 214 at 219-220; Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 138 ALR 107 at 111-112. On the evidence before me, that interest (if it existed) is no longer capable of being asserted as a matter of practical reality. Kaden Boriss Services has been struck off. There is no evidence as to what has become of its assets, if it had any assets. Certainly Mr Lal, Mr Batra and Mr Chee certified, at the time of making the strike off application, that the company had no assets, including contingent assets. If contrary to that certification, Kaden Boriss Services did have assets, which included an equitable interest in the Australian copyright in the Kaden Boriss Logos (despite the doubts that exist in that regard because the Agreement might have expired by effluxion of time before the logos were even created), there is no evidence before me as to what has become of those assets under Singaporean law. Perhaps of more importance is the fact that the respondents themselves do not have title or standing to assert that equitable interest (if it exists) in competition with Mr Lal and Mr Batra.
107 The applicants’ case is not without its own difficulties. It is based on the Agreement and the Confirmatory Deed. In so far as it is based on the Agreement, it proceeds on the footing that Mr Lal and Mr Batra were the “Client”, as purportedly defined. Had it been necessary for me to reach a view on that question, I would not accept the correctness of the applicants’ construction. However, I do not need to decide that question. There are other obvious difficulties in accepting that applicants’ submissions. Whatever effect the Agreement had, it did not assign the Australian copyright in the Kaden Boriss Logos to any person. It was not a conveyance, as the applicants submit, or, more relevantly, an assignment in writing fulfilling the legal requirements of s 196(3) of the Copyright Act. I also do not accept that, by making the final payment on Invoice #2192f on 29 September 2011, Mr Lal and Mr Batra became the legal owners of the Australian copyright in the logos.
108 However, the Confirmatory Deed does fulfil the requirements of s 196(3). Although expressed in “confirmatory” terms, the operative clause, properly construed, should be taken to be a present assignment of the copyright in the Kaden Boriss Logos made on 12 January 2017, with retrospective operation from 29 September 2011. On this basis, Mr Lal and Mr Batra are the co-owners of the Australian copyright in the logos with title to exercise those rights from 29 September 2011, as the Confirmatory Deed provides. This acquisition would have “fed” their title to grant a licence of the Australian copyright to the respondents in 2013: Patten v Thomas Motors Pty Ltd (1965) 66 SR (NSW) 458.
109 The applicants’ contention that Mr Lal is the sole owner of the Australian copyright is based on s 30 of the Copyright Act, which provides:
In the case of a copyright of which (whether as a result of a partial assignment or otherwise) different persons are the owners in respect of its application to:
(a) the doing of different acts or classes of acts; or
(b) the doing of one or more acts or classes of acts in different countries or at different times;
the owner of the copyright, for any purpose of this Act, shall be deemed to be the person who is the owner of the copyright in respect of its application to the doing of the particular act or class of acts, or to the doing of the particular act or class of acts in the particular country or at the particular time, as the case may be, that is relevant to that purpose, and a reference in this Act to the prospective owner of a future copyright of which different persons are the prospective owners has a corresponding meaning.
110 Section 30 recognises that there can be multiple owners of copyright in a work according to place, time and/or the acts involved. It does not, however, provide the machinery by which particular ownership arises. It proceeds on the basis that separate and distinct copyright ownership has been acquired and requires the Copyright Act to be applied accordingly. By referring to the doing of acts or classes of acts in different countries, the provision also recognises and accommodates the fact that, in respect of the relations between copyright owners, works and other copyright subject matter may have an international character.
111 As I understand it, the applicants’ submission is that Mr Lal and Mr Batra originally agreed that, so far as Australia is concerned, Mr Lal would have the exclusive right to use the Kaden Boriss “brand”. This agreement is reflected in the email of 11 January 2017. More relevantly, it is reflected in the correspondence passing between Mr Lal, Mr Batra and Mr Chee at the time they were seeking to establish a Singaporean company, and before Pulse was engaged to design and create the logos. In the course of oral closing submission, the applicants sought to argue that this email correspondence constituted an agreement in writing in relation to the ownership of future copyright in the Kaden Boriss Logos: see s 197(1) of the Copyright Act. However, the difficulty with this aspect of the applicants’ case is that it is not reflected in the Confirmatory Deed or (if it matters) the Agreement with Pulse. Further, general assertions about the exclusive right to use a “brand” say little about the ownership of copyright in an artistic work. Even further, the email correspondence does not meet the formal requirements of s 197(1). Whatever agreements Mr Lal and Mr Batra might have come to in that correspondence, it cannot be construed as “an agreement made in relation to a future copyright” and it is not “signed”, let alone signed by any person who would have been the owner of the Australian copyright in the Kaden Boriss Logos on its coming into existence (the parties agree that Pulse was the first owner).
112 Ultimately, the chain of title with respect to the Australian copyright in the Kaden Boriss Logos commences with Pulse and ends with the Confirmatory Deed under which Mr Lal and Mr Batra are, clearly, co-owners of the copyright that Pulse assigned. There is no further or subsequent assignment of the Australian copyright from Mr Batra to Mr Lal which meets the requirements of s 196(3) of the Copyright Act. I therefore reject the contention that Mr Lal is the sole owner of the Australian copyright in the Kaden Boriss Logos.
113 For completeness, I note that the applicants do not advance a case on copyright infringement (discussed in the next section of these reasons) based on Mr Lal being an exclusive licensee of the Australian copyright. Any such case would founder for want of a written licence meeting the requirements of the Copyright Act: see the definition of “exclusive licence” in s 10(1). Further, it would require Mr Batra, as the copyright co-owner, to be joined as a party to the proceeding: s 120(1) of the Copyright Act. This has not been done.
The Kaden Boriss logos: Copyright infringement
The applicants’ case on infringement
114 Paragraph 25 of the statement of claim pleads:
In or around May 2013, the Applicants agreed to license the Respondent Firm the Kaden Boriss Logos and “Kaden Boriss” name. The Respondent Firm commenced using the Kaden Boriss Logos and “Kaden Boriss” name in or around October 2013.
On or around 26 October 2016, the Applicants expressed their intention to leave the Kaden Boriss network. Consequently, the Applicant Firm no longer permit the Respondents to use the Kaden Boriss Logos or “Kaden Boriss” name.
116 In their written closing submissions, the applicants advance the case that Mr Lal alone granted the licence to the respondent’s to use the Kaden Boriss Logos (that is, not Mr Lal and Mr Ramrakha). Further, they submit that if Mr Batra had an interest in the Kaden Boriss Logos (as I have found), then Mr Batra consented to the grant of the licence.
117 As to the alleged revocation of the licence, the case advanced by the applicants in their written closing submissions is, unequivocally, that the licence was revoked on 24 October 2016 at the meeting between the applicants and the respondents. They argue that the date 24 October 2016 is sufficiently proximate to the “on or around 26 October 2016” pleaded in paragraph 27 of the statement of claim. They also submit that, if the licence was not revoked on 24 October 2016, I should nonetheless find that it was revoked on 3 January 2017 by the applicants filing their statement of claim in the New South Wales Supreme Court proceeding (because that act would be “inconsistent” with any continuing licence) or by dint of the applicants’ solicitors’ letter of 9 January 2017 (see [71] above). These alternatives were not pleaded in the statement of claim.
118 The applicants submit that the licence granted was a gratuitous or bare licence. No consideration was paid for its grant. They submit that the licence was, accordingly, revocable at will.
The respondents’ case on infringement
119 For their part, the respondents plead that Mr Batra granted them a licence to use the Kaden Boriss Logos, the Kaden Boriss name and other Kaden Boriss indicia for the purpose of providing legal services in Australia, primarily in Brisbane, with the “knowledge and co-operation of the applicants”. They plead that Mr Batra subsequently ratified the licence and extended it to various other locations in Australia: see paragraphs 17 and 18 of the defence.
120 The respondents admit that they have reproduced and communicated the Kaden Boriss Logos. They plead, however, that this use was permitted by the licence(s) granted by Mr Batra, and that their use ceased on 30 September 2017, other than in respect of use that was required by law or in order for them to describe their firm’s (now) former name: see paragraphs 18A, 18, 21 and 21A of the defence. They deny that, as a matter of law or fact, the applicants’ expression of an intention to leave the Kaden Boriss network gives rise to any basis to assert that, consequently, the respondents are no longer “permitted” to use the Kaden Boriss Logos, the Kaden Boriss name or other Kaden Boriss indicia: see paragraph 20 of the defence.
121 In their written closing submissions, the respondents advance a wider defence to accommodate the applicants’ closing submissions. They submit that their use of the Kaden Boriss Logos was at all times with the consent of the “owner”— whether that be Mr Lal, Mr Batra or some combination of individuals, which includes Mr Lal and Mr Batra or either of them. They submit that their use was within the terms of the 25 April 2013 email: see [25] above. They submit further that they were entitled to use the Kaden Boriss Logos as members of the Kaden Boriss network, along with other members of that network, and that their membership of the network was never terminated by the applicants or Mr Batra.
122 In making these submissions, the respondents continue to rely on what they say was Mr Batra’s consent and approval, and the extensions of their licence which, they say, he granted.
123 The respondents submit that the licence which they were granted is not a gratuitous or bare licence. Rather, it was a contractual licence supported by consideration, which included the obligation to pay a 20% referral fee (for the life of the client) for any clients referred to them by a participating firm in the network, such as Kaden Boriss Sydney. In any event, even if the licence were a gratuitous or bare licence, it could only be revoked on reasonable notice. No such notice was given.
Analysis
124 The period of alleged infringement is said to be from 24 October 2016 to 30 September 2017, when the respondents ceased using the logos.
125 In closing submissions, the applicants and the respondents departed from their pleaded cases but argued that each other should be held to their own pleadings. Whether one takes the applicants’ case as pleaded or as advanced in submissions, their case on copyright infringement fails.
126 The case as pleaded—in effect that, because the applicants expressed their intention to leave the Kaden Boriss network, the respondents were no longer permitted to use the logos—is not maintainable. That pleaded state of affairs could not stand as a revocation of the licence that had been granted. Understandably and sensibly, the applicants did not attempt to support that case in closing submissions.
127 The case advanced in closing submissions—in effect that the respondents’ licence was revoked by express words at the meeting on 24 October 2016—is not established. The revocation is said to have been brought about by Mr Lal stating that if the respondents remained in the Kaden Boriss network, they could not continue to use the Kaden Boriss name. For the reasons I have given, I am not satisfied that any such statement was made. This finding is fatal to the applicants’ primary case on infringement.
128 In deference to the other submissions made by the parties, I will briefly explain why, had I been satisfied that the statement attributed to Mr Lal at the meeting on 24 October 2016 was made, I would nonetheless have found that the applicants’ case on copyright infringement is not made out.
129 First, I accept that a licence to use the Kaden Boriss Logos was properly granted to the respondents. Although the logos are not expressly referred to in Mr Lal’s email of 25 April 2013, the applicants advance this email as the source of the copyright licence that was granted. I accept that submission. I do not accept the respondents’ submission that Mr Batra granted them a licence independently of Mr Lal or that Mr Batra could grant such a licence.
130 Ordinarily co-owners of copyright hold as tenants in common, not joint tenants. One co-owner cannot do an act comprised in the copyright or license a third party to do such an act, without the consent of the other co-owner(s). If a co-owner were to proceed otherwise, that co-owner and the putative licensee(s) would infringe the copyright and an injunction would lie at the suit of the other co-owner(s) to restrain continued infringement: see Seven Network (Operations) Ltd v TCN Channel Nine Pty Ltd [2005] FCAFC 144; (2005) 146 FCR 183 at [20] and the cases there cited.
131 As I have found, Mr Lal and Mr Batra were co-owners of the Australian copyright in the Kaden Boriss Logos. They held as tenants in common. Mr Lal could not grant a licence of the copyright without Mr Batra’s consent. Correspondingly, Mr Batra could not grant a licence of the copyright without Mr Lal’s consent.
132 Mr Lal did grant a licence of the Australian copyright in the Kaden Boriss Logos to the respondents. It was on the terms of the 25 April 2013 email. The licence was granted with Mr Batra’s consent. This is clear from the other email correspondence in evidence.
133 Secondly, the licence that was granted was not a gratuitous or bare licence. I accept the respondents’ submission that the licence was a contractual licence. This is apparent from the terms of the 25 April 2013 email. I accept, for example, that the financial obligation that was undertaken by the respondents to pay referral fees is sufficient and adequate consideration to give the licence contractual effect. It does not matter that such a fee was not incurred or not paid, as events transpired.
134 Thirdly, the licence was granted to the respondents to enable them to participate in the Kaden Boriss network. As the 25 April 2013 email makes clear, the respondents’ participation in the network obliged them to adopt and use the Kaden Boriss name, and to adopt and use stationery and marketing materials that were consistent with the materials that had been devised for the network as a whole. Mr Lal’s evidence was that, in January or February 2011, he and Mr Batra worked with Ms Fried from Pulse to develop strict brand guidelines that were to be applied to the Kaden Boriss website, email signatures, stationery and marketing materials. Undoubtedly, this included the Kaden Boriss Logos, which were (as the present case recognises) an important indicium of the network. They provided the stylistic representations of the Kaden Boriss name that were permitted to be used. It is to be recalled that the Kaden Boriss Logos were delivered to Mr Lal and Mr Batra, in final form, at this time (on 4 February 2011). Mr Lal said that it was important to him that the brand be used consistently by everyone in the network. He said that, on a number of occasions, he discussed the importance of consistent branding with the respondents.
135 The point of present significance is that the respondents’ participation in the network obliged them to use trade indicia that had been developed for, and approved for use in, the network rather than other indicia of their own design and creation.
136 The corollary of this obligation is that, for so long as they were participants in the network, the respondents were entitled to use that indicia, including the Kaden Boriss Logos, to signify their participation in the network, unless that right could be withdrawn for just cause. This is a case where a contractual term to that effect would be implied in fact. Such a term would be necessary for the reasonable or effective operation of the contract: Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 422 and 442. It is absurd to think that, absent just cause, the licence that the respondents were granted could be revoked simply because they expressed their intention to remain in the network and not to leave it. Any attempt to revoke the respondents’ licence in breach of that term—as suggested here—would have been ineffective, not merely a breach of contract sounding only in damages (as the applicants argued). An injunction would lie at the suit of the respondents restraining the applicants from taking steps to act on that purported revocation.
137 Fourthly, even if the licence were a gratuitous or bare licence, it does not follow from that fact that it was revocable at will, which is the assumption on which the applicants’ case proceeds: see Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd (1988) 20 FCR 46 at 49; Trumpet Software Pty Ltd v Ozemail Pty Ltd (1996) 34 IPR 481 at 498. Whether such a licence is revocable at will depends on the circumstances in which, and the purposes for which, the licence was granted.
138 In the present case, it would have been destructive of the purpose for which the respondents’ licence to use the Kaden Boriss Logos was granted, and unconscionable to permit the licensors to revoke the licence peremptorily, in the circumstances that existed as at 24 October 2016. The respondents entered into the Kaden Boriss network not only on the assumption that they were required to adhere to the obligations expressed in the email of 25 April 2013 but also on the assumption that they would have the right to use the Kaden Boriss name, including in the stylised form of the Kaden Boriss Logos. Their change of name from MVM Legal to Kaden Boriss Brisbane was not only central to their participation in the Kaden Boriss network but also a matter that required careful handling by the respondents at the time of the change. Indeed, they delayed the commencement of their participation in the network because an earlier change in name would have been disruptive to the conduct of their practice, particularly at a time when they were seeking to tender for work. The applicants knew this. Further, they accepted that the respondent’s change to the Kaden Boriss name would be disruptive for them. As the email of 25 April 2013 recognised, the respondents were allowed a period of transition in which they could continue to use MVM Legal as part the name and style of their professional practice.
139 Thus, if the licence to use the Kaden Boriss Logos was a gratuitous or bare licence, it was nevertheless a promise by Mr Lal, with Mr Batra’s consent, that the respondents could use the logos in and for the purpose of their participation in the network. It was also a promise, on which the respondents undoubtedly acted with Mr Lal’s and Mr Batra’s knowledge, that while that purpose was being fulfilled, their permission to use the Kaden Boriss Logos would not be withdrawn, at least not without just cause being established or, perhaps, reasonable notice being given: Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 at 406 per Mason CJ and Wilson J. Had Mr Lal made the peremptory statement attributed to him at the meeting on 24 October 2016, the respondents would have been entitled to restrain the licensors from departing from the assumed state of affairs on which they (the respondents) had acted. Put another way, the licensors would have been estopped from denying the continuing right of the respondents to use the logos as members of the Kaden Boriss network.
140 Fifthly, proceeding on the basis that co-owners of copyright can only grant a licence of the copyright with the consent of all co-owners, the respondents submit that a licence validly granted by co-owners can only be revoked with the consent of all co-owners. According to the respondents, it was not open to Mr Lal to unilaterally revoke the licence without Mr Batra’s consent. There is no evidence of Mr Batra’s consent. In fact, the evidence is to the contrary. Mr Batra purported to licence the respondents’ continuing use of the logos.
141 I was not taken to any authority on this point. The law of real property does not provide useful analogues: see, for example, the discussion in State of New South Wales v Koumdjiev [2005] NSWCA 247; (2005) 63 NSWLR 353 at [31]–[46] which recognises that one co-owner of real property may grant a licence of that owner’s interest which may or may not be revocable by another co-owner, depending on whether the licence is or is not reasonable and incidental to the grantor’s right to possession and use of the property.
142 Ultimately, in light of the factual conclusions I have reached, and the other considerations I have discussed which militate against acceptance of the applicants’ case on infringement, it is not necessary for me to express a concluded view on this question. However, given the fact that one co-owner of copyright cannot act independently of another co-owner (or at least independently of that co-owner’s consent) in granting a licence to use the copyright work, the better view must be that, similarly, one co-owner cannot act independently to revoke a licence that each or all have consented to grant. If the position were otherwise, then a valuable benefit enuring for all co-owners might be lost at the whim of one to the detriment of all. Take the present case: I can comfortably conclude from the evidence that Mr Batra considered it advantageous that the respondents remain in the Kaden Boriss network, using the Kaden Boriss name and indicia, including the Kaden Boriss Logos, regardless of the applicants’ desire to remove themselves from the network because of disagreements between Mr Lal and Mr Batra. I can think of no reason in principle why, in those circumstances, the licence granted to the respondents could be revoked simply on Mr Lal’s say-so without Mr Batra’s consent and apparently contrary to his wishes at the time.
143 Finally, as I have noted, the applicants’ case is grounded on the respondents’ licence having been revoked at the meeting on 24 October 2016. However, as I have noted, in their closing submissions they advanced the unpleaded case that, should I not accept that the licence was revoked on 24 October 2016, I should nonetheless find that the licence was revoked on 3 January 2017 or on 9 January 2017 (see [117] above). I reject these unpleaded alternatives. The considerations I have discussed at [129]–[142] above apply equally as reasons why the alternative case fails.
Passing off
The applicants’ case
144 The applicants’ pleaded case on passing off is that, on or around 1 September 2011, they commenced providing legal and business services under the Kaden Boriss name and commenced using the Kaden Boriss Logos. They extensively promoted their services under that name to members of the legal profession and the public: see paragraphs 21 and 22 of the statement of claim.
145 Paragraph 23 of the statement of claim pleads:
The “Kaden Boriss” name and Kaden Boriss Logos have come to signify to the profession and to the public in Australia the Applicant Firm’s services, such that persons acquiring or seeking to acquire legal services under or by reference to the name “Kaden Boriss” or any name closely similar thereto, expect and intend to acquire the legal services of the First and Second Applicant or lawyers closely associated with them.
146 The applicants further plead that they licensed the respondents to use the Kaden Boriss name and the Kaden Boriss Logos in or around May 2013 and that the respondents commenced to use them in or around October 2013: paragraph 25 of the statement of claim.
147 As I have already recorded (see [115] above), paragraph 27 of the statement of claim pleads that, on or around 26 October 2016, the applicants expressed their intention to leave the Kaden Boriss network. Paragraph 27 continues:
Consequently, the Applicant Firm no longer permits the Respondents to use the Kaden Boriss Logos or “Kaden Boriss” name.
148 The statement of claim pleads that, by using the Kaden Boriss name and the Kaden Boriss Logos after that date, the respondents represented that their services continue to have a connection in trade with the applicants and that they have thereby induced members of the legal profession and the public to believe that the respondents’ services are the applicants’ services, or that the respondents’ services have a connection in trade with the applicants or their “business”: see paragraphs 30 and 31 of the statement of claim.
149 The applicants’ closing submissions, both written and oral, closely followed their pleaded case.
The respondents’ case
150 I have already summarised the respondents’ pleaded defence as it relates to the applicants’ copyright infringement claim. This part of the respondents’ pleading also covers elements of the applicants’ passing off case, based as it is on both use of the Kaden Boriss name and the Kaden Boriss Logos: see [119]–[120] above. The respondents deny that they have engaged in passing off.
151 In their written closing submissions, the respondents submit that an immediate difficulty for the applicants is that, for the whole of the period in which it is said that the respondents engaged in passing off, the applicants traded under the name Barker Henley. The respondents argue that the applicants have not explained how the respondents’ continued use in the relevant period of the Kaden Boriss name (and I assume the Kaden Boriss Logos and other Kaden Boriss indicia) could be misleading in light of the applicants’ own name change.
152 Perhaps more importantly, the respondents submit that they developed a substantial goodwill in the Kaden Boriss name and the Kaden Boriss Logos from the time they joined the Kaden Boriss network. Further, they submit that their use of the Kaden Boriss name and the Kaden Boriss Logos and other indicia did not convey the representation that they were, or were associated with, the applicants but, rather, that they were part of the Kaden Boriss network. That representation was true. They submit that, to the extent that their impugned conduct conveyed a representation of some connection with the applicants, this was also true because the applicants were former members of the Kaden Boriss network.
153 The respondents further submit that, to the extent that their use of the Kaden Boriss name and the Kaden Boriss logos and other indicia has resulted in confusion or is misleading because it indicated, at the relevant time, a current commercial connection between the applicants and the respondents, that consequence was due to the applicants’ change of name, not conduct on the part of the respondents.
Analysis
154 The applicants’ case on passing off has strong parallels with their case on copyright infringement. It is based on the fact that, whilst the respondents had been granted a licence to use the Kaden Boriss name and the Kaden Boriss Logos, that licence was revoked at the meeting on 24 October 2016 or, if not then, on 3 January or 9 January 2017: see [143] above. There are, however, important differences between claims of copyright infringement and claims of passing off that were not always recognised by the parties in the present case. This is why the applicants’ passing off case requires separate treatment in these reasons.
155 It would be wrong in principle to deal with the passing off case as if there were property in the Kaden Boriss name itself. There is no property in a trade name that is separate from the goodwill of the business to which it belongs. In this way, trade names are no different from other indicia that are incidents or aspects of the goodwill of a business, such as unregistered trade marks, slogans and visual images, that are capable of giving the business a distinctive character: Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 at 857-858. When one speaks of a licence to use a trade name, one is really referring to a permission to use the name, and thus share in the goodwill to which it attaches, without claims of passing off or contravention of some cognate law (such as relevant provisions of the Australian Consumer Law) brought at the suit of the owner of the goodwill: Commissioner of Taxation v Just Jeans Pty Ltd (1987) 16 FCR 110 at 121-122.
156 In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 (ConAgra), Lockhart J (at 340) stated that it is now beyond argument that the plaintiff’s right which the law of passing off protects is a proprietary right in the goodwill or reputation of the business likely to be injured by the defendant’s conduct. Thus, it is important to distinguish between the property right that is protected—goodwill or reputation—and the indicia which give rise to that goodwill or reputation in which there may be no property as such. Further, as Lockhart J also observed in ConAgra, the basis of the cause of action lies squarely in misrepresentation.
157 In ConAgra, Gummow J observed that attempts to produce a definition of the tort which is both succinct and comprehensive have had mixed success. His Honour cautioned that the law of passing off contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form: see at 355-356. He nonetheless identified Nourse LJ’s “classical trinity” in Consorzio del Prosciutto di Parma v Marks & Spencer plc [1991] RPC 351—namely, (1) a reputation or goodwill acquired by the plaintiff; (2) a misrepresentation by the defendant leading to confusion or deception; and (3) damage to the plaintiff—as core concepts in this area of the law.
158 On the evidence before me, the applicants were the first to adopt and use the Kaden Boriss name and the Kaden Boriss Logos in Australia for the provision of what might be broadly described as legal services. Mr Lal and Mr Ramrakha gave evidence of the ways in which they promoted their services using the name and the Kaden Boriss Logos from 1 September 2011 to 1 October 2013.
159 I am satisfied that, by 1 October 2013, the applicants had acquired a reputation and valuable goodwill by their use of this indicia, such that, at that time, a not insubstantial number of persons in the market for legal services in Australia—including legal practitioners and clients—would understand the name Kaden Boriss and the Kaden Boriss Logos to denote the applicants’ firm and the legal services they provided. What is not clear is whether the reputation, at that time, included an awareness or recognition that Kaden Boriss was an international network of firms. This is certainly the image and reputation that Mr Batra, Mr Lal and Mr Chee were seeking to project for the network when they held their initial discussions in early 2010.
160 On 1 October 2013, the respondents officially joined the Kaden Boriss network. There is no doubt that they were licensed (in the sense of permitted) to use the Kaden Boriss name. Indeed, as I have said, they were required to do so. They were also licensed to use the Kaden Boriss Logos and other Kaden Boriss indicia. They did so and, through their own use and promotional activities over the ensuing three years, also acquired a reputation and valuable goodwill in the Kaden Boriss name, the Kaden Boriss Logos and the other Kaden Boriss indicia. The evidence shows that the respondents promoted their firm as part of a global network of full service law offices specialising in legal and business strategy, with locations in Brisbane, Sydney, and Melbourne as well as New Delhi, Dubai, Singapore and other identified foreign capital cities.
161 The consequence of these joint activities was that, by 24 October 2016, if not well before then, the reputation in the Kaden Boriss name and the Kaden Boriss Logos in Australia was a shared reputation that denoted the applicants’ firm and the legal services they provided, as well as the respondents’ firm and the legal services they provided, both as part of a global network of law firms operating under the Kaden Boriss name and style. This was the whole purpose of the alliance into which they had entered: to be identified under the one “brand”. This is precisely the reputation that Mr Batra and Mr Lal set out to achieve. I am satisfied that, by no later than 24 October 2016, this object had been achieved.
162 In October 2016, the applicants took the deliberate step of removing themselves from the network. That was their choice. It does not follow that, as a matter of law, the respondents were thereupon required to relinquish the reputation and goodwill they had acquired through their own lawful conduct. They were entitled to continue to use the Kaden Boriss name as an incident of their own reputation and goodwill which, so far as Australia was concerned, they shared with other member firms of the Kaden Boriss network. They did not need the applicants’ continuing permission to do so in the absence of the applicants remaining in the network. The original permission that had been granted to the respondents to use the Kaden Boriss name and the Kaden Boriss Logos enured for their benefit and had not been revoked, for the reasons I have discussed at [132] – [139] with respect to the respondents’ licence of the Kaden Boriss Logos.
163 More relevantly to the passing off case, no misrepresentation or deception was practised upon the legal profession or the public in Australia by the respondents continuing to use the Kaden Boriss name or the Kaden Boriss Logos after 24 October 2016 up to and including 30 September 2017. The respondents did not, by their use of the name or logos, represent that they had a continuing association with the applicants. They represented that they had a continuing association with the Kaden Boriss network. This was true. To the extent that, because of this conduct, members of the legal profession and the public might have believed that the respondents had a continuing association with the applicants, such belief would have been because those people did not know that the applicants had left the network. Any such erroneous belief was not induced by the respondents’ use of the name or logos.
164 Further, the respondents’ continued use of the name and logos caused no damage or injury—let alone unlawful damage or injury—to any subsisting reputation or goodwill the applicants retained with respect to the Kaden Boriss network after they (the applicants) had decided to leave it.
165 Once these matters are understood, the applicants’ case on passing off cannot succeed.
The Australian Consumer Law
166 The applicants’ pleaded case based on contravention of the Australian Consumer Law is that, by using the Kaden Boriss name and the Kaden Boriss Logos in the period from on or about 26 October 2016 up to and including 30 September 2017, the respondents engaged in conduct that was misleading or deceptive, or likely to mislead or deceive (in contravention of s 18) and made false or misleading representations of an approval or affiliation with the applicants (in contravention of s 29(1)(h)). Their case is on all fours with the case on passing off. As the case for passing off cannot succeed, so too the case on contravention of the Australian Consumer Law (as presented) cannot succeed.
Disposition
167 The applicants have failed to establish their case on copyright infringement, passing off and contravention of the Australian Consumer Law. It follows that their originating application, as amended, must be dismissed. Costs should follow the event.
I certify that the preceding one hundred and sixty-seven (167) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. |
Schedule
