Federal Court of Australia

Nagpal v Global Cars Aus Pty Ltd [2021] FCA 1226

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 13.01 Federal Court Rules 2011 (Cth), the Originating Application dated 11 August 2021, and which was accepted for filing on 12 August 2021, is set aside.

2.    The proceeding is dismissed.

3.    By 5.00pm (AEST) on 18 October 2021, the parties shall file and serve any written submissions (limited to five pages) which they wish to make on the subject of the appropriate costs order which should be made.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DOWNES J

INTRODUCTION

1    By an Originating Application dated 11 August 2021 (which was accepted for filing on 12 August 2021) (Originating Application), the Applicants sought certain declaratory and other relief which was, in substance, an application to the Federal Court of Australia to overturn orders made by the World Intellectual Property Organisation (WIPO) Arbitration and Mediation Centre dated 22 July 2021 in relation to a dispute in connection with the domain name cars24.com.au (Domain Name).

2    The jurisdiction of the Federal Court to grant the relief sought was challenged by the Respondents prior to the first case management hearing which was held on 9 September 2021, as well as at that hearing itself (and later in their Defence filed on 23 September 2021).

3    Following a Statement of Claim being filed on 17 September 2021 (SOC), the Respondents filed an Interlocutory Application dated 21 September 2021 which seeks orders including that the Originating Application be set aside pursuant to r 13.01 Federal Court Rules 2011 (Cth) (Federal Court Rules) and the proceeding be dismissed (application). The premise of the application is that the Federal Court’s jurisdiction has not been enlivened.

4    For the reasons which follow, the Originating Application should be set aside and the proceeding dismissed.

RELEVANT FACTS

The background facts leading to the WIPO Decision

5    The First Applicant, Mr Amandeep Nagpal, has been providing accounting services as a sole practitioner in Brisbane since 2015.

6    On 13 March 2018, Mr Nagpal registered the Second Applicant (Proven Associated Services Pty Ltd) to incorporate his accounting practice and (on the Applicants’ case) to expand his business ventures.

7    It is the Applicants’ case that Mr Nagpal has, since at least June 2018, operated, or caused the Second Applicant to operate, a website at www.provenaccountants.com.au. A screenshot of the website is in evidence. It is the website of an accounting firm which appears to have a dropdown box under the heading “Finance” and one of the options available is “Vehicle/Personal Loans”.

8    It is common ground that, on 25 December 2018, Mr Nagpal registered the Domain Name in his own name with GoDaddy Operating Company, LLC (GoDaddy).

9    The Domain Name Registration Agreement issued by GoDaddy is in evidence. Pursuant to that agreement, the owner of a domain name (such as Mr Nagpal) acknowledges that they are bound by, and must submit to, the .au Dispute Resolution Policy (.auDRP).

10    The .auDRP was also in evidence (being published on 15 April 2016 and which is still current).

11    It is common ground that the WIPO Decision was an .auDRP decision made within the meaning of clause 7 of the .auDRP, which relevantly provided that:

7.1    Panel decisions under the auDRP are binding on both parties. There is no appeals process.

7.2    If the unsuccessful party is not satisfied with the decision handed down by the panellist, they may decide to initiate legal proceedings against the other party. If the Panel decides that the domain name should be transferred or cancelled, the registrar is required to wait 10 business days before implementing the decision to allow for legal proceedings to be commenced.

The WIPO Decision

12    On 13 June 2021, the Respondents filed a complaint with the WIPO Arbitration and Mediation Centre in relation to the Domain Name in accordance with the procedures contained in the .auDRP.

13    On 22 July 2021, the appointed WIPO panellist handed down his decision (Case No. DAU2021-0022) (WIPO Decision).

14    The WIPO Decision included the following information about the Respondents:

The First Complainant is an e-commerce company established on April 13, 2015 that is engaged through its subsidiaries in buying and selling used cars and auto parts to businesses and consumers. The First Complainant holds Indian trademark registrations numbers 3004750, 3004751, 3004752, 3004753, 3004754, 3004755, 3004756, 3004757, 3004763, and 3004764, all for CARS24, all registered from July 8, 2015, specifying goods and services in classes 1, 9, 11, 12, 16, 35, 36, 37, 40, and 42, respectively. The Second Complainant was established on August 12, 2015 as a wholly-owned subsidiary of the First Complainant and conducts its business in India. The Second Complainant now operates more than 215 branches in 87 cities in India and its operating revenues in 2019-20 were worth approximately USD 406 million. The Complainants offer a CARS24 mobile application, which has been downloaded over 49 million times. The Complainants created Instagram and Facebook accounts and first posted from them in 2015. The Complainants hold many domain names that begin with "cars24". The First Complainant acquired the domain name <cars24.com> in 2015, which the Complainants have used since that time in connection with their main website. According to evidence provided by the Complainant from Google Analytics, there were over 42 million and 72 million user sessions on that website in 2019 and 2020, respectively, of which 27,000 and 68,000 visits in 2019 and 2020, respectively, emanated from Australia. The Third Complainant was registered with the Australian Securities and Investments Commission ("ASIC") on October 30, 2020 as a wholly owned subsidiary of the First Complainant and conducts its business in Australia. …

15    The WIPO Decision referred to the .auDRP and stated that, by reference to paragraph 4(a) of the .auDRP, the Complainants must prove that:

(i)     the disputed domain name is identical or confusingly similar to a name, trademark or service mark in which the Complainant has rights; and

(ii)     the Respondent has no rights or legitimate interests in respect of the disputed domain name; and

(iii)     the disputed domain name has been registered or subsequently used in bad faith.

16    As to the first element, the WIPO Decision found that the Domain Name is “confusingly similar to a trademark in which the Complainant has rights”.

17    At the date of the WIPO Decision, the Third Respondent had filed trade mark applications in Australia but none of these had proceeded to registration. That remains the position today.

18    The WIPO Decision stated that:

The Panel has taken note that the Complainant has no trademark registration in Australia. Nevertheless, having regard to the global nature of the Internet, among other things, it is sufficient for the purposes of the first element of paragraph 4(a) of the auDRP for the Complainant to have demonstrated its trademark rights in any jurisdiction, in this case, India. Accordingly, it is unnecessary to consider the Complainant's claim to common law rights in the CARS24 mark.

19    The finding that the Domain Name is “confusingly similar to a trademark in which the Complainant has rights” was therefore a reference to trade marks which were registered in India.

20    The WIPO Decision then addressed the other two elements which the Complainants were required to establish as set out above.

21    In the course of deciding that the further two elements were also established, additional findings were made as appear in these extracts including by reference to particular facts:

With respect to registration, the disputed domain name was registered in December 2018, three years after the registration of the CARS24 trademark in India and the establishment of the Complainant's global website associated with the domain name <cars24.com>, but two years prior to the establishment of the Complainant's business in Australia, where the Respondent is established. Although Mr. Nagpal is of Indian origin, he moved from India to Australia before the establishment of the Complainant's business in India.

…

The Panel takes note that the disputed domain name wholly incorporates the CARS24 mark, combining it with nothing more than a 2LD suffix, which is a technical requirement of registration. CARS24 is an invented mark, yet the operational element of the disputed domain name matches it exactly. While Proven Accountants' business has some marginal connection to cars, that does not provide a reason why the Respondent combined the word "cars" with "24" in the disputed domain name other than by reference to the Complainant. Shortly after it registered the disputed domain name, the Respondent registered two other domain names that also contain "24", namely <trucks24.com.au> and <business24.com.au> but there is no explanation as to why the Respondent chose to include "24" in any of them. The Panel does not consider the identity between the operational element of the disputed domain name and the CARS24 mark to be a coincidence. Rather, the most plausible explanation for the registration of the disputed domain name is that the Respondent had the Complainant's trademark in mind.

…

Furthermore, the evidence shows that the Respondent offered to sell the disputed domain name to the Complainant in April 2021 for a minimum price of AUD 250,000. The Respondent knew that it was dealing with an agent of the Complainant and stated so, despite the agent's denial, because an employee of the Complainant had previously identified it to the Respondent as an interested party in October 2020. Although the Respondent initially claimed that the disputed domain name was not for sale, it later stated a minimum asking price which was clearly an offer to sell. The Respondent submits that its offer was not serious but that is not reflected in the record of its conversation with the agent of the Complainant. The stated price was high and the Respondent has not substantiated any of its assertions regarding its alleged expenditure in relation to its alleged project for a website to be associated with the disputed domain name. The Panel finds that these circumstances indicate that the Respondent has registered the disputed domain name primarily for the purpose of selling, renting, or otherwise transferring the disputed domain name registration to another person for valuable consideration in excess of the Respondent's documented out-of-pocket costs directly related to the disputed domain name, as envisaged in paragraph 4(b)(i) of the auDRP.

Therefore, the Panel finds that the disputed domain name has been registered and is being used in bad faith. The Complainant has satisfied the third element in paragraph 4(a) of the auDRP.

22    The WIPO Decision did not refer to the Trade Marks Act 1995 (Cth) (Trade Marks Act) or the Australian Consumer Law (being schedule 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law). Further, paragraph 4(a) of the .auDRP involves consideration of different factors to those which would need to be considered under s 120 Trade Marks Act or ss 18 and 29(1)(g) of the Australian Consumer Law.

23    At the conclusion of the WIPO Decision, the WIPO panellist ordered that the Domain Name be transferred to the First Respondent (being the Third Complainant in the WIPO proceeding).

24    By the Originating Application, the Applicants sought the following relief:

1.     A declaration under section 21 of the Federal Court of Australia Act 1976 (the Act) that the First Applicant is the sole legal and beneficial owner of the domain name “cars24.com.au” which was registered by the First Applicant with GoDaddy.com, LLC on 22 December 2018; and

2.     An order that GoDaddy Operating Company, LLC ABN 53 063 126 220 and its subsidiaries and associates be prohibited from transferring the domain name “cars24.com.au” from the First Applicant to the Respondents.

(emphasis omitted)

25    By email dated 27 August 2021 sent to the Court by Mr Stephen Stern, the Respondents’ solicitor, the Respondents reserved their right to “apply to have the proceeding set aside” on the basis that the Federal Court lacked jurisdiction. The Applicants’ solicitor was copied to this email.

26    The issue of the Federal Court’s lack of jurisdiction was raised again by the Respondents’ counsel at the first case management hearing on 9 September 2021. At that hearing, the Respondents’ counsel sought an order that the Applicants file a statement of claim which identified an appropriate cause of action and a basis for the Court’s jurisdiction. An order that the Applicants file and serve a statement of claim was made at that hearing.

The Statement of Claim

27    On 17 September 2021, the Applicants filed and served the SOC.

28    Paragraphs 3 – 8 of the SOC plead facts concerning events in 2018 relating to the Applicants’ intention to expand their business ventures and steps alleged to have been taken by them with that intention. It is necessary to set these paragraphs out:

3.    In 2018, the Applicants intended to expand their business ventures to include car finance, home finance, asset finance (trucks), business finance, sales, purchases and hiring of motor vehicles.

4.    The matters alleged at paragraphs 5 to 15 below were undertaken for legitimate business purposes and in furtherance of the intention at paragraph 3 above (such intention being inferred from the pleaded facts).

5.    On or about 13 March 2018, the Second Applicant became a Credit Representative of Red Rock Brokers Group Pty Ltd ACN 149 728 030 (Red Rock Group) (representative number 506635).

6.    Since around 13 March 2018, the Second Applicant's business activities included the provision of motor vehicle loans, as a representative of the Red Rock Group.

7.    The Second Applicant has undertaken the following steps to satisfy the criteria to apply for an Australian Financial Services Licence (AFSL):

(a)    Meenakshi Nagpal (Mrs Nagpal), director of the Second Applicant has completed a diploma in finance broking on 2 February 2018 from AAMC Training Group RTO 51428; and

(b)    Mrs Nagpal has completed two years of experience working under the supervision of Red Rock Group from March 2018 to March 2020.

8.    The First Applicant and Mrs Nagpal are both currently completing the QLD Motor Sales/ Dealer Course from Fusion Business Solutions Pty Ltd RTO 40042 in order to apply for the Motor Vehicle Dealer's Licence.

29    Paragraph 9 of the SOC pleads the fact of the registration by the First Applicant of the Domain Name with GoDaddy. This fact is not controversial.

30    Paragraph 10 of the SOC pleads the Applicants’ intention to place a website on cars24.com.au (defined as the Cars Domain in the pleading) and that, in late 2019, it had engaged an identified company to develop the website which “is currently near completion”.

31    Paragraph 11 of the SOC pleads to the effect that from 25 December 2018 until 22 July 2021, the Cars Domain redirected to the website of the Second Applicant “which included information regarding motor vehicle loans”.

32    Paragraph 12 of the SOC pleads the registration by the Second Application of two other domain names being trucks24.com.au and business24.com.au.

33    Paragraphs 13, 14 and 15 of the SOC pleads facts relating to the Applicants either contacting or working with identified companies in or from 2019 including in relation to finance requirements of clients in the fields of car finance, truck finance and business loans as well as car servicing packages and car rental special packages.

34    Paragraphs 16 – 19 of the SOC set out (in summary) the background to, and the effect of, the WIPO Decision.

35    Paragraph 18 pleads that the WIPO Decision:

(a)    dealt with an allegation that the Cars Domain was identical and confusingly similar to the Respondents' CAR24 marks; and

(b)    dealt with an allegation that the Cars Domain was registered and being used in bad faith;

(c)    was made pursuant to the requirements of the “au DISPUTE RESOLUTION POLICY" (policy no. 2016-01 and publication date 15/04/2016) (which had at Schedule A the ".au Dispute Resolution Policy (auDRP)” and Schedule B the "Rules for .au Dispute Resolution Policy (au.DRP Rules)");

(d)    ordered that the disputed domain name (being the Cars Domain) be transferred to the First Respondent (which was the Third Complainant in the WIPO case); and

(e)    did not prevent the parties from submitting the dispute to a court of competent jurisdiction (item 4(k) of the auDRP, being Schedule A to the policy referred to at paragraph (c) above).

36    As stated above, the trade marks which were the subject of the WIPO Decision were the “CARS24” trade marks which were registered in India. Counsel for the Applicants submitted at the hearing of the application that the WIPO Decision distinguished between the Australian and Indian trade marks.

37    Notwithstanding that the WIPO Decision addressed whether the elements of paragraph 4(a) of the .auDRP were established and findings made by reference to the “CARS24” trade marks which were registered in India, paragraph 19 of the SOC pleads:

19.     The WIPO decision related to or raised complaints about the use and registration of the Cars Domain potentially amounting to:

(a)     a contravention of section 120 of the Trade Marks Act 1995 (Cth) (subject to confirmation of CAR24 marks); and

(b)     unlawful passing off and contraventions of sections 18 and 29(1)(g) of the Australian Consumer Law (being schedule 2 to the Competition and Consumer Act 2010 (Cth)).

(emphasis added)

38    Paragraph 22 of the Applicant’s Outline of Submissions submits that, “In effect, the SOC translates the dispute the subject of the WIPO Decision into Australian law”.

39    With this in mind, paragraph 19 of the SOC appears to be an attempt to plead that, if the complaints which resulted in the WIPO Decision were translated into Australian law (albeit by reference to the unregistered Australian trade marks), then the complaints would “potentially” amount to a contravention of s 120 Trade Marks Act, unlawful passing off and contraventions of sections 18 and 29(1)(g) of the Australian Consumer Law. That is, it pleads a hypothetical scenario.

40    Paragraph 20 pleads:

20.     The Applicants contend, as is the case, that in respect of the Cars Domain there was no unlawful passing off, no contraventions of sections 18 and 29(1)(g) of the Australian Consumer Law (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)), and no likely contravention of section 120 of the Trade Marks Act 1995 (Cth), in that:

   (a)    the elements of the causes of action are not present;

(b)     in its context, the Cars Domain is distinguishable from the business or “CAR24” marks of the Respondents and does not, or is not likely to, mislead or deceive;

(c)     in its context, the Cars Domain is distinguishable from the business or “CAR24” marks of the Respondents and does not give a false or misleading representation as to a connection between the Applicants and the Respondents; and

   (d)     the matters set out paragraph 4 above.

41    Paragraph 20 of the SOC therefore pleads, by reference to the hypothetical scenario pleaded in paragraph 19, a contention by the Applicants that “in respect of the Cars Domain” there was no unlawful passing off, no contraventions of ss 18 and 29(1)(g) of the Australian Consumer Law and no “likely” contravention of s 120 of the Trade Marks Act.

42    Presumably the word “likely” is pleaded in recognition of the fact that the CARS24 trade marks are not yet registered in Australia.

43    The pleaded premises of the contention that there have been no contraventions of the Australian Consumer Law or unlawful passing off are pleaded by reference to “the CAR24 marks of the Respondents”: see subparagraphs 20(b) and 20(c) of the SOC. As paragraph 20 also makes “contentions” concerning s 120 Trade Marks Act by reference to the same matters, “the CAR24 marks of the Respondents” in paragraph 20 of the SOC can only be a reference to the unregistered Australian trade marks.

44    This means that the plea that there have been no contraventions of the Australian Consumer Law or unlawful passing off are also pleaded in relation to circumstances that have not occurred and might never happen, being the registration of the trade marks in Australia.

45    Paragraph 21 of the SOC pleads:

In the premises, the First Applicant ought to be entitled to retain the registration of the Cars Domain in his name, contrary to the WIPO Decision.

46    The conclusion in paragraph 21 does not follow from the pleaded premises. The SOC therefore fails to disclose a reasonable cause of action in relation to the alleged entitlement of Mr Nagpal to retain the registration of the Domain Name.

47    Paragraph 22 of the SOC asserts that this Court has jurisdiction to resolve the issues raised by the Applicants, but does not state how this is said to be so. Rule 16.02(1)(e) Federal Court Rules requires that a pleading state the provisions of any statute relied upon. The only provisions stated in the SOC are those referred to in paragraphs 19 and 20 of the SOC.

48    A prayer for relief is contained at the conclusion of the SOC (prayer for relief) which differs from the relief claimed in the Originating Application. The application proceeded on the basis that the prayer for relief contains the relief which the Applicants would be permitted to seek at trial.

49    The following relief is claimed in the SOC:

1.     A declaration that, in relation to the registration and use of the domain “cars24.com.au” (the Cars Domain), the Applicants have not infringed, and are unlikely to infringe, any “CAR24” marks of the Respondents under sections 120(1), (2) or (3) of the Trade Marks Act 1995 (Cth).

2.     A declaration that, in relation to the registration and use of the Cars Domain, the Applicants:

(a)     have not committed the tort of passing off in respect of the business or activities of the Respondents; and

(b)     have not contravened sections 18 and 29(1)(g) of the Australian Consumer Law (being schedule 2 to the Competition and Consumer Act 2010 (Cth)) in respect of the business or activities of the Respondents.

3.     A declaration that the First Applicant is entitled to retain the registration of the Cars Domain name, which was granted to him on 25 December 2018.

4.     An order that the registration of the Cars Domain name not be transferred to or received by any of the Respondents (or their related entities).

 5.     Such further or other order as the Court deems fit.

 6.     Costs.

50    The breadth of the relief sought in paragraphs 1 and 2 of the prayer for relief becomes apparent on review of the legislation referred to in those paragraphs, as set out below.

51    Section 120 of the Trade Marks Act provides:

120     When is a registered trade mark infringed?

(1)     A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

…

(2)     A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:

(a)     goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or

   (b)     services that are closely related to registered goods; or

(c)     services of the same description as that of services (registered services) in respect of which the trade mark is registered; or

   (d)     goods that are closely related to registered services.

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

…

(3)     A person infringes a registered trade mark if:

  (a)     the trade mark is well known in Australia; and

(b)     the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:

(i)     goods (unrelated goods) that are not of the same description as that of the goods in respect of which the trade mark is registered (registered goods) or are not closely related to services in respect of which the trade mark is registered (registered services); or

(ii)     services (unrelated services) that are not of the same description as that of the registered services or are not closely related to registered goods; and

(c)     because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and

(d)      for that reason, the interests of the registered owner are likely to be adversely affected.

…

(4)     In deciding, for the purposes of paragraph (3)(a), whether a trade mark is well known in Australia, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.

52    Section 18 of the Australian Consumer Law provides:

18     Misleading or deceptive conduct

(1)     A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

…

53    Section 29(1)(g) of the Australian Consumer Law provides:

29     False or misleading representations about goods or services

(1)     A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(g)     make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

…

RELEVANT PRINCIPLES

54    Section 39B of the Judiciary Act 1903 (Cth) (Judiciary Act) provides:

39B     Original jurisdiction of Federal Court of Australia

Scope of original jurisdiction

…

(1A)    The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:

(a)     in which the Commonwealth is seeking an injunction or a declaration; or

(b)     arising under the Constitution, or involving its interpretation; or

(c)     arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.

Note:     Paragraph (c) does not prevent other laws of the Commonwealth conferring criminal jurisdiction on the Federal Court of Australia.

…

55    In DJ Builders & Son Pty Ltd (in liq), in the matter of DJ Builders & Son Pty Ltd (in liq) v Queensland Building and Construction Commission (No 3) [2021] FCA 1041 at [10] – [12], Derrington J observed that:

[10]    The Federal Court has such original jurisdiction as is vested in it by laws made by Commonwealth Parliament: Federal Court of Australia Act 1976 (Cth) (Federal Court Act), s 19. There is a general conferral of jurisdiction in s 39B(1A)(c) of the Judiciary Act which provides that the Court has jurisdiction in any “matter” arising under a law made by the Commonwealth Parliament.

[11]     The expression, “matter”, in s 39B(1A) is used in its Constitutional sense and has two elements. First, the “justiciability” requirement, meaning that there must be a justiciable controversy which is identifiable independently of the proceedings brought for its determination: Fencott v Muller (1983) 152 CLR 570 at 603. Second, the “subject matter” requirement, being that the subject matter, which encompasses all claims made within the scope of the controversy, must be within one of the sub-paragraphs of s 39B(1A) of the Judiciary Act: CGU Insurance Limited v Blakeley (2016) 259 CLR 339 (CGU v Blakeley) at 349 – 351 [24] – [27].

[12]     The justiciability requirement is to be distinguished from the legal proceeding brought to quell the dispute or to enforce the right, or the particular manner in which the cause or causes of action in the legal proceedings are framed: Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265. It is the controversy in which there exists some immediate right, duty or liability to be established by determination of the Court, and no such controversy exists where the parties are merely seeking an advisory opinion: Palmer v Ayres (2017) 259 CLR 478 at 490 – 493 [25] – [33]. …

(emphasis added)

56    In Rana v Google Inc (2017) 254 FCR 1; [2017] FCAFC 156 (Rana), the Full Court of the Federal Court (Allsop CJ, Besanko and White JJ) identified ways in which a matter may arise under a law of the Commonwealth Parliament as follows:

[18]     A matter will “arise under” a law of the Parliament in a number of ways. These include cases where a cause of action is created by a Commonwealth statute; where a Commonwealth statute is relied upon as establishing a right to be vindicated; where a Commonwealth statute is the source of a defence that is asserted; where the subject matter of the controversy owes its existence to Commonwealth legislation — that is where the claim is in respect of or over a right which owes its existence to federal law; where it is necessary to decide whether a right or duty based on a Commonwealth statute exists even where that has not been pleaded by the parties, or where a federal issue is raised on the pleadings but it is unnecessary to decide: … There is a difference, however, between a matter “arising under” a law of the Parliament and a matter that merely involves the interpretation of a federal law (and which will not on its own attract federal jurisdiction) …

…

[21]     Generally, non-colourable assertion of a federal issue is enough to attract federal jurisdiction …

[22]     The exception to this principle is where the federal claim that is made is “colourable” in the sense that it was “made for the improper purpose of fabricating jurisdiction” such that it was not made bona fide. In such a case, federal jurisdiction is not attracted …

(emphasis added)

57    The decision of Australia Bay Seafoods Pty Ltd v Northern Territory (2021) 389 ALR 486; [2021] FCA 414 concerned an application made under r 13.01 of the Federal Court Rules. In that case, White J found (at [13]) that the originating application should be set aside (with the effect that the proceeding was dismissed) on the basis that the claim made in the proceeding was premature and raised matters which were hypothetical. White J referred to the following matters of principle:

[69]     The requirement that there be a “matter” in order to found the jurisdiction of this Court was explained by French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (admin apptd) (2004) 211 ALR 231 … at [43]:

The jurisdiction of the Federal Court is entirely statutory and is conferred in relation to ‘matters’ whose content derives from the statute conferring the jurisdiction … The definition of ‘federal jurisdiction’ by reference to ‘matters’ is necessary because the Constitution, which gives authority to the Parliament to confer and define federal jurisdiction, requires it to be conferred and defined in those terms. That constraint means that when the jurisdiction of the Court is invoked the party invoking it must be seeking the determination of rights, duties, liabilities or obligations. That is ‘Central to the notion of a ‘matter”… Where declaratory relief is sought the question to be determined must be real, and not abstract or hypothetical. That is because the availability of declaratory relief is confined by the boundaries of judicial power … The fact that declaratory relief relates to the lawfulness of future conduct does not place it beyond the reach of judicial power nor thereby beyond the bounds of federal jurisdiction. A declaration sought upon the basis of an hypothetical situation or facts which are contingent or may never occur has the character of an advisory opinion which does not relate to a real question. Therefore it does not relate to a matter and is outside the jurisdiction of the Court.

        …

[73]     … A “matter” for the purposes of s 39B(1A) requires a real controversy between parties, as distinct from a circumstance which is abstract or hypothetical: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 …

(emphasis added)

58    In National Australia Bank Ltd v Nautilus Insurance Pte Ltd (No 2) (2019) 377 ALR 627; [2019] FCA 1543, Allsop CJ stated that:

[99]     It is appropriate to commence the analysis by recognising that, by s 21 of the Federal Court Act, the Court has power to grant a declaration, without other relief, and that before doing so it should be satisfied that the question to be resolved is real and not theoretical and that the person raising it has a real interest to do so: Forster v Jododex at CLR 437.

…

[101]      As with any expression of principle one needs to understand the context in which the principle was stated.  [Ainsworth v Criminal Justice Commission (1992) 175 CLR 564] concerned a breach of procedural fairness by the respondent towards Mr Ainsworth and another in the preparation and tabling in Parliament of a report. The High Court agreed with the Full Court of the Queensland Supreme Court that mandamus and certiorari did not lie. Mr Ainsworth and his company were, however, entitled to a declaration. In stating the entitlement to declaratory relief in terms restating the width of the relief as expressed by Gibbs J in Forster v Jododex at CLR 437, Mason CJ, Dawson, Toohey and Gaudron JJ ascribed the limits of the wide power as only the confines of the exercise of judicial power, saying at CLR 581–2; ALR 22:

It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which “[i]t is neither possible nor desirable to fetter … by laying down rules as to the manner of its exercise.” However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have “a real interest” and relief will not be granted if the question “is purely hypothetical”, if relief is “claimed in relation to circumstances that [have] not occurred and might never happen” or if “the Court’s declaration will produce no foreseeable consequences for the parties”.

(Footnotes omitted.)

…

(emphasis added)

ANALYSIS

59    In response to the challenge to the jurisdiction of the Federal Court by the Respondents, the Applicants filed the SOC which pleaded hypothetical facts, including by reference to contingent facts, for the purposes of seeking declarations under the Trade Marks Act and the Australian Consumer Law. It is obvious that this was done for the purposes of attempting to overcome the challenge to jurisdiction.

60    However, the SOC does not plead any reasonable cause of action, let alone a cause of action under a law made by the Commonwealth Parliament. This is apparent from the analysis of the SOC as set out above.

61    Further, the allegations made in the SOC in an attempt to found jurisdiction are, expressly, hypothetical (if not theoretical).

62    Paragraph 10 of the SOC refers to a proposed website which will use the Domain Name in connection with a business offering services relating to buying, selling, hiring and financing cars, which website is currently near completion. That is, the SOC pleads a fact relating to a proposed future event.

63    Paragraph 19 of the SOC asserts that the WIPO Decision addressed conduct by the Applicants “potentially amounting to” trade mark infringement, passing off and contraventions of the Australian Consumer Law. Paragraph 20 of the SOC purports to refute these hypothetical claims.

64    The SOC does not plead any material facts which would found any claim by the Respondents for trade mark infringement. In fact, no such claim could presently be made because the Respondents do not own any registered trade marks in Australia. Accordingly, any such claim is theoretical. The subject matter of such a claim does not presently exist.

65    Counsel for the Applicants appeared to accept this during the hearing when he submitted that:

…[As] there’s no Australian trademark, so there’s no present cause of action…[If] there is a filing of the marks and [they are] upheld, then possibly there could be – the applicant’s conduct could have been the subject of a contravention under the Trade Marks Act.

66    Further, the wording of the first declaration sought in the prayer for relief refers to unidentified future conduct, being a declaration that the Applicants “are unlikely to infringe” any “CAR24” (sic) marks of the Respondents under the Trade Marks Act. This is a reference to the Australian trade marks which have not yet been registered and may never be registered.

67    That is, a declaration is sought based upon facts which are contingent which means it has the character of an advisory opinion as it does not relate to a real question.

68    It follows from these matters that the first declaration in the prayer for relief is hypothetical and could not be made. It does not relate to a “matter” within the meaning of s 39B(1A) Judiciary Act and is outside the jurisdiction of the Federal Court.

69    Similarly, the SOC does not plead any material facts which would found allegations by the Respondents that the Applicants have contravened ss 18 and 29(1)(g) of the Australian Consumer Law. What is it that is said to be misleading or deceptive? What is the impugned representation?

70    Further, the pleaded premises of the contention that there have been no contraventions of the Australian Consumer Law or unlawful passing off are pleaded by reference to the unregistered trade marks in Australia.

71    This means that the second declaration sought by the Applicants suffers from same problems as the first declaration. That is because it is based upon facts which are contingent which means it has the character of an advisory opinion as it does not relate to a real question.

72    It follows from these matters that the second declaration in the prayer for relief is hypothetical and could not be made. It does not relate to a “matter” within the meaning of s 39B(1A) Judiciary Act and is outside the jurisdiction of the Federal Court.

73    It is no answer to submit, as the Applicants do, that a real controversy exists between the parties because paragraph 20 of the SOC was denied in the Defence: see subparagraphs 2(b) and 23 Applicants’ Outline of Submissions. The Defence was filed pursuant to an Order dated 9 September 2021. It commences with the words, “This Defence is filed on a conditional basis and subject to the Respondents’ objection to the jurisdiction of the Federal Court of Australia”. As to paragraph 20 of the SOC, the Defence pleads a denial in response and further states that, “paragraph [20] is concerned with theoretical or hypothetical claims which have not been made”.

74    For the reasons set out above, the claims for the declarations in paragraphs 1 and 2 of the prayer for relief are untenable, do not reflect any genuine controversy between the parties and were only introduced after the challenge to the Court’s jurisdiction was made by the Respondents.

75    These claims are therefore “colourable” in the sense that they were “made for the improper purpose of fabricating jurisdiction” such that they were not made bona fide: Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212, 219; [1987] FCA 686, 17; Rana, 7 [22].

76    This provides a further basis for a finding that the Federal Court does not have jurisdiction in relation to the relief sought in paragraphs 1 and 2 of the prayer for relief.

77    The next form of relief which is sought is contained in paragraphs 3 and 4 of the prayer for relief, which relief seeks to overcome the order made in the WIPO Decision.

78    Paragraph 3 of the prayer for relief seeks a declaration that the First Applicant is “entitled to retain the registration of the Cars Domain Name” and paragraph 4 of the prayer for relief seeks a form of injunction by reason of that entitlement.

79    The claimed entitlement in paragraph 3 of the prayer for relief stems from the pleaded conclusion in paragraph 21 of the SOC. That pleaded fact of the entitlement of the First Applicant is made “in the premises”, being the preceding material facts. These premises include paragraphs 19 and 20 which plead facts which are contingent or facts which may never occur.

80    The claims for the relief in paragraphs 3 and 4 therefore hinge upon success in demonstrating that, if the complaints leading to the WIPO Decision were translated into Australian law by reference to the (unregistered) Australian trade marks and a set of pleaded facts which is not the same as those considered in the WIPO Decision, then there would be certain legal consequences under Australian law and that this then somehow means that the WIPO Decision should be overturned. These claims are untenable.

81    Importantly and notwithstanding that the issue of jurisdiction was raised by the Respondents more than a month before the hearing of the application, the Applicants have not identified how the Federal Court has the jurisdiction to grant the relief in paragraphs 3 and 4 of the prayer for relief based upon the facts which are pleaded in the SOC.

82    The Applicants rely upon item 4(k) of the .auDRP. Item 4(k) states to the effect that the mandatory administrative proceeding requirements shall not prevent a party from submitting the dispute to a court of competent jurisdiction for independent resolution including after the proceeding is concluded: paragraphs 27 – 30 Applicants’ Outline of Submissions. However, that begs the question as to whether, by bringing a proceeding in this Court, the Applicants have submitted the dispute to a court of competent jurisdiction.

CONCLUSION

83    For the reasons set out above, the relief which is claimed in the prayer for relief is sought upon the basis of hypothetical facts which include contingent facts or facts which may never occur. Further, the declarations which are sought have the character of an advisory opinion which do not relate to a real question. Therefore, they do not relate to a “matter” within the meaning of s 39B(1A) Judiciary Act and are outside the jurisdiction of the Federal Court.

84    Further, for the reasons set out above, the claims for the declarations in paragraphs 1 and 2 of the prayer for relief are “colourable” in the sense that they were “made for the improper purpose of fabricating jurisdiction” such that they were not made bona fide.

85    The Applicants have not identified how the Federal Court has any power to grant the relief sought in paragraphs 3 and 4 of the prayer for relief based upon the facts which are pleaded in the SOC, which include contingent facts or facts which may never occur as well as a plea of facts which are not coextensive with the facts which were considered in the WIPO Decision.

86    It follows that the proceeding should be dismissed.

Associate:

Dated:    11 October 2021