Federal Court of Australia

Krishnan v Estee Lauder Pty Ltd [2022] FCA 273

ORDERS

ON THE UNDERTAKING OF THE RESPONDENT made to the Court to pay to the applicant the sum of $6,866.40 within seven days of the respondent being notified by the applicant of the manner in which payment for her benefit is to be effected:

THE COURT ORDERS THAT:

1.    Judgment is entered in favour of the respondent against the applicant pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth).

2.    The applicant pay the respondent's costs of and incidental to the interlocutory application dated 3 December 2021, such costs to be assessed by a registrar of this Court on a lump sum basis if not agreed.

3.    If the parties seek any other costs order with respect to the proceedings, a minute of any proposed orders should be provided to chambers within 14 days.

4.    There be liberty to apply with respect to any issue that arises relating to the manner of payment of the sum referred to in the above undertaking.

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

REASONS FOR JUDGMENT

BANKS-SMITH J:

1    Ms Krishnan is a holistic health practitioner and counsellor. According to her statement of claim, she has tertiary qualifications in nursing and law. Ms Krishnan pleads that she has been a loyal customer of the brand known as Estee Lauder for many years.

2    The respondent, Estee Lauder Pty Ltd, is responsible for importing, distributing, marketing and selling Clinique products in Australia. Clinique Laboratories LLC is a subsidiary of The Estee Lauder Companies Inc (ELC).

3    Ms Krishnan's complaint in this matter relates to the advertising of ingredients in a product line known as Clinique Anti-Blemish Solutions products (CABS products).

4    By this application the respondent relevantly seeks summary judgment in its favour or that Ms Krishnan's pleadings be struck out.

Introduction

5    According to the respondent's evidence, Clinique's Australian product range includes the CABS products. In Australia, the CABS products include Anti-Blemish All Over Clearing Treatment, Anti-Blemish Solutions Cleansing Gel, Anti-Blemish Solutions Cleansing Foam, Anti-Blemish Solutions Liquid Makeup, Anti-Blemish Solutions Cleansing Bar for Face and Body, Anti-Blemish Solutions Oil-Control Cleansing Mask and Anti-Blemish Solutions Clarifying Lotion. These products are available on the website 'www.clinique.com.au' (Clinique Australia website).

6    In the United States, Clinique markets and sells a range of products similar to the CABS products, which are marketed as an 'Acne Solutions' range (US CABS products). These products are available on the website 'www.clinique.com'.

7    Ms Krishnan's complaint centres on her purchases for personal use of the CABS product All Over Clearing Treatment. Ms Krishnan pleads that she purchased the product because she saw on the Clinique Australia website that it contained the ingredients salicylic acid and benzoyl peroxide. She was particularly interested in the inclusion of the ingredient benzoyl peroxide, an ingredient said to be anti-bacterial. Ms Krishnan asserts in her pleading that the efficacy and safety of topical benzoyl peroxide has not been clearly evaluated.

8    Ms Krishnan claims to have purchased the product (variously described by her as CABS All Over Clearing Moisturiser and CABS All Over Clearing Treatment) on eight occasions, by in-store purchase, from the Clinique Australia website and from third party retailer websites, as follows:

(1)    on 31 May 2020 by purchase in store at Myer Galleria, Morley, for $32;

(2)    on 7 July 2020 via the website www.adore.com,au, for $35;

(3)    on 7 July 2020 via the website www.davidjones.com for $35;

(4)    on 7 July 2020 via the website www.www.myer.com.au for $35;

(5)    on 7 July 2020 via the website www.sephora.com.au for $35;

(6)    on 8 July 2020 via the website www.mecca.com.au for $35;

(7)    on 20 July 2020 via the website www.clinique.com.au for $35; and

(8)    on 16 December 2020 via the website www.clinique.com.au for $35.

9    However, the product she received by way of those purchases, according to the product box, relevantly contained salicylic acid, but not benzoyl peroxide.

10    In her amended originating application and amended statement of claim, Ms Krishnan appears to plead that the respondent has contravened s 18(1), s 29(1)(a), (g), (h) and (m), s 33, s 34 and s 54(1)(a), (b), (2)(a), (c) and (3)(d) of the Australian Consumer Law (ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)). Those provisions are all listed by number in the pleading although there is no stated connection between any particular conduct and any particular provision.

11    In general terms s 18 establishes that a person must not in trade or commerce engage in misleading or deceptive conduct, or conduct likely to mislead or deceive. Failure to observe that requirement has consequences. For example, a person who suffers loss or damage may seek compensation, and in some circumstances injunctive relief may be granted. No pecuniary penalty is payable for such a contravention.

12    Section 29 supports s 18, in that it enumerates specific types of conduct which, if engaged in in trade or commerce in connection with the supply or possible supply of goods or services will give rise to a breach of the Competition and Consumer Act. For example, s 29(1)(a) provides that a person must not in that context make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model.

13    Section 33 provides that a person must not engage in conduct that is liable to mislead the public as to (for example) the characteristics of any goods, and requires proof of an actual probability that the public would be misled.

14    Section 34 provides that a person must not engage in conduct that is liable to mislead the public as to (for example) the characteristics or suitability of services.

15    Section 54 provides a statutory guarantee that goods supplied to a consumer in trade or commerce are of acceptable quality.

16    Ms Krishnan seeks the following relief:

(1)    an 'intellectual property payout' of $10 million;

(2)    aggravated damages of $6,744.95; and

(3)    'the orders stated in Part A', being a range of orders by way of injunctive relief, for example, to compel the respondent to 'provide accurate information' about its products and to provide a refund to other customers.

17    As noted, the respondent has applied for summary judgment, or, in the alternative that the amended statement of claim be struck out. If the application succeeds only in part and Ms Krishnan is permitted to continue with any part of the claim, the respondent seeks security for costs in the sum of $50,000. The respondent has not as yet pleaded its defence to the amended statement of claim. The application has been brought shortly after the provision of the amended statement of claim and no issue of delay on the part of the respondent arises.

The evidence

18    The respondent relies on three affidavits in support of its application.

19    Two of the affidavits were sworn by Ms Corrine Duffy. Since 1 July 2021 Ms Duffy has been the Brand General Manager for Clinique, Aveda and Lab Series, Australia and New Zealand, for ELC. Prior to this, from April 2009 to October 2013, she held the role of Product Manager, Treatment & Makeup, Clinique. From October 2013 to November 2018, Ms Duffy was a National Marketing Manager, Clinique. From November 2018 to June 2021 Ms Duffy was the National Marketing and Communications Manager, Clinique. At all relevant times Ms Duffy was employed by the respondent. Her roles have related to the marketing and promotion of Clinique products including the CABS products. In her current role, Ms Duffy is responsible for the Clinique brand and marketing in Australia and New Zealand, including advertising and marketing of the CABS products.

20    This description of Ms Duffy's roles is important, as it indicates that she is well placed to provide reliable evidence as to the concerns raised by Ms Krishnan. Her evidence is addressed in detail below.

21    The third affidavit was sworn by Ms Elisabeth White, a partner of the firm Baker McKenzie, which represents the respondent in these proceedings. Ms White annexes various communications with Ms Krishnan, records the procedural history and also addresses matters relevant to security for costs.

22    Ms Krishnan relies on an affidavit sworn by her on 16 January 2022.

23    The following matters are extracted from the evidence.

Ms Krishnan writes to the respondent and institutes proceedings

24    On 5 February 2021 Ms Krishnan wrote a letter of complaint to the respondent with respect to the CABS products. The letter was apparently marked 'without prejudice' and is not in evidence. However, I infer that from at least that time, the respondent investigated the substance of the complaint made by Ms Krishnan as to the manner in which the CABS products were advertised and made available for sale, and in particular the descriptions of ingredients and references to salicylic acid and benzoyl peroxide.

25    After communications between the parties, Ms Krishnan commenced these proceedings in June 2021, initially seeking damages in the sum of $6 billion for 'extensive mental harm, personal and professional damage'. After various case management hearings, the application and statement of claim were amended in October 2021. In that process Ms Krishnan corrected the identity of the respondent (following information provided by the respondent). She also removed and recast some of her claims. I will deal only with the claims that remain in her amended application and statement of claim.

The different ingredients in US and Australian products

26    Ms Duffy said that it is unusual for Clinique products to vary in formulation, product packaging and product descriptions as between Australia and elsewhere, including the United States. However, there are differences between the US CABS products and the Australian CABS products.

27    In particular, the US CABS products' ingredients include salicylic acid and benzoyl peroxide, while the Australian CABS products contain salicylic acid but not benzoyl peroxide.

28    Further, the US CABS products are described as 'medicated' and suitable for the treatment of acne, as they qualify as over-the-counter acne medications under the U.S. Food and Drug Administration regime. However, these descriptions do not apply in relation to the CABS products in Australia.

The errors identified and rectified

29    Ms Duffy explained that for an unknown period of time, but to the best of her knowledge during the period from approximately July 2020 to July 2021, the Clinique Australia website inadvertently included some product images and descriptions which related to the US CABS products, rather than the Australian CABS products.

30    During the period from February 2021 to July 2021, various steps were taken by the respondent to ensure that all product images and descriptions on the Clinique Australia website are accurate and relate to the Australian CABS products. The respondent made amendments to the product images and descriptions of the CABS products on the Clinique Australia website in February 2021 and March 2021.

31    During the period from April 2021 to July 2021 some residual matters were identified (relating to webpage headings and URLs) which were also rectified during this period.

32    Ms Duffy annexed to her affidavit screenshots which show the relevant contents of the Clinique Australia website as it has appeared since 29 July 2021.

33    Ms Duffy also explained how the errors had occurred. For that purpose she obtained information from Stephen Zanatta, the Senior Web Designer at ELC, who informed her of the following:

(a)    the errors on the Clinique Australia website in relation to the CABS products likely arose as a result of a 'back end' update to multiple Clinique websites in July 2020, undertaken by a website engineer employed by a third party to undertake certain global website updates. The third party was not based in Australia. This update was not managed by the Clinique Australia team; and

(b)    the errors resulted when the engineer mistakenly adopted content intended for the Clinique US website and applied it to the Clinique Australia website. This update inadvertently changed some product descriptions and some product images on the Clinique Australia website to reflect the US CABS products.

Compliance regime

34    Ms Duffy explained that the Clinique Australia website is reviewed for local legal and regulatory compliance in Australia, including where appropriate by John Koppl, the respondent's Regulatory Affairs, Product Safety and Sustainability Manager, and by members of Ms Duffy's team to ensure the accuracy of website content on the Clinique Australia website. Prior to 30 June 2021 the website content was reviewed by a separate online team. However, since 1 July 2021 the team reports to Ms Duffy. The errors on the Clinique Australia website resulted from global website content updates occurring outside of these usual Australian review processes.

Risk management

35    Ms Duffy deposed to steps that have been put in place to ensure that errors of the nature that occurred with respect to the content of the Clinique Australia website do not occur again. For example:

(a)    on 30 July 2021 the US-based team which oversaw the original execution of the July 2020 'back end' website updates was instructed that going forward the Clinique Australia website will not be subject to any 'back end' updates without the updates first being reviewed by a suitable member of the respondent's Australian team to prevent any incorrect content from inadvertently being uploaded; and

(b)    on 7 August 2021 a process was established by which any updates of content intended for use on the Clinique Australia website would be flagged for review by a suitable member of the respondent's Australian team.

Lack of control over third party websites

36    Ms Krishnan complains about the content of a number of third party retail websites, including:

(a)    www.mecca.com.au;

(b)    www.sephora.com.au;

(c)    www.adorebeauty.com.au;

(d)    www.davidjones.com;

(e)    www.myer.com.au;

(f)    www.au.carethy.net;

(g)    www.au.biuky.com;

(h)    www.cosmeticsnow.au;

(i)    www.ebay.au;

(j)    www.mydeal.com.au; and

(k)    www.store.sweetcare.pt.

37    Ms Duffy deposed to the fact that the websites at (a) to (e) are operated by retail customers of the respondent (Retail Customer Websites). Whilst the respondent is not responsible for those websites, Ms Duffy took steps to communicate with each of those retail customers. Those communications were in evidence. The communications, which were marked 'urgent', indicate that Ms Duffy wrote to representatives requiring amendments to the CABS product images and descriptions so that they accorded with the content of an attached document provided by Ms Duffy that contained the correct images and descriptions for the packaging and formulations carried in Australia. For example, with respect to David Jones, Ms Duffy referred to the web pages on the David Jones website for the 'All Over Clearing Treatment', 'Liquid Makeup' and '3-Step System' and provided substitute content for each. Ms Duffy asked for confirmation that her request was actioned, and the responses confirming such action were also in evidence. With respect to Myer, the incorrect product description (which referred to medicated ingredients) that required amendment was identified as being for the 'Anti-Blemish Solutions Liquid Makeup'.

38    Ms Duffy subsequently revisited each of the Retail Customer Websites to ensure the requested changes had been made.

39    Ms Duffy said that the respondent does not have any relationship with the operators of the websites listed at (f) to (k) of [36] above, and that those retailers might source, market and sell CABS products outside the respondent's authorised distribution channels.

40    Ms Duffy also addressed Ms Krishnan's contention that the respondent advertises or sells the CABS All Over Clearing Treatment, CABS 3-Step System (also referred to by Ms Krishnan as the 3-Set System) and 'Acne Solutions treatment' products on certain identified 'Australian websites'. I note that it is not clear from the URL descriptions that all of those websites are Australian websites, but that can be put to the side. The point is that the websites to which Ms Krishnan refers are either the Retail Customer Websites (as previously identified by Ms Duffy) or are third party websites as to which the respondent has no relationship (Other Websites). Ms Duffy refers to the categories of Retail Customer Websites and Other Websites together as the Identified Websites.

41    Ms Duffy explained that the respondent does not sell or advertise any products on the Identified Websites. Rather, the retail customers operating the Retail Customer Websites buy the products from the respondent on a wholesale basis (other than the 'Acne Solutions treatment' product, which the respondent does not sell in Australia) and then advertise and sell the products themselves on the Retail Customer Websites.

42    Where the products are advertised or sold on the Other Websites, the retailers operating them acquire the products other than through the respondent and then advertise and sell the products themselves on their websites.

43    Ms Duffy deposed to having been informed by Emma Chan, Online Executive ANZ for Clinique, Aveda, Lab Series at ELC that:

(a)    the respondent does not control how the products are advertised on the Identified Websites;

(b)    the respondent does not approve content regarding the products before it is uploaded on the Identified Websites; and

(c)    while the respondent can make requests to retail customers to amend retail customer website content concerning the products or other Clinique products (as Ms Duffy did), the respondent cannot control whether such amendments are made.

The respondent's letter to Ms Krishnan and Calderbank offer

44    The amended originating application and amended statement of claim were filed by Ms Krishnan on 7 October 2021.

45    Ms White deposed to the fact that on 10 November 2021, Baker McKenzie sent a letter to Ms Krishnan in relation to the amended originating application and amended statement of claim. A copy of the letter was in evidence. The November 2021 letter states that the respondent does not consider there to be any matters disclosed in Ms Krishnan's claims which require determination by this Court. The November 2021 letter states to the effect that the respondent has consistently communicated to Ms Krishnan that:

(a)    all CABS products sold in Australia are fully compliant with Australian laws and regulations;

(b)    the respondent has never sold CABS products in Australia containing benzoyl peroxide; and

(c)    historically there were some inadvertent statements and product images on the Clinique Australia website referring to CABS products containing benzoyl peroxide, which were swiftly removed once the errors were identified. These corrections were made well in advance of Ms Krishnan's commencement of these proceedings.

46    The 10 November 2021 letter contains an open Calderbank offer on a without admissions basis on terms that the respondent would pay to Ms Krishnan $15,000 in full and final resolution of the dispute and the proceedings would be dismissed by consent with no order as to costs.

47    On 17 November 2021 (although the letter appears to be inadvertently dated 17 October 2021) Ms Krishnan wrote to the respondent, stating that she maintains her claims, and:

(a)    rejecting the offer set out in the 10 November 2021 letter;

(b)    stating that the claims she removed from her amended statement of claim have not been abandoned, and that those claims remain 'an integral part of the existing claim and will be relevant at the time of trial and are likely to lead to Criminal Proceedings'; and

(c)    stating that Ms Krishnan is 'extremely conscious not to waste [the] Court's time and misuse the resources of the Court'.

Some comments on Ms Krishnan's evidence

48    Ms Krishnan's affidavit annexed a number of screen shots from websites (in all about 160 pages). Generally those screenshots were curiously undated. In fact, the years appeared to have been redacted, so that, for example, a purchase date on one page was shown as '7 July 20' and there were many similar entries.

49    There were some examples that were dated in full: a screenshot bearing the date 20 September 2021 from a website dfs.com; the 16 December 2020 receipt for the in-store purchase referred to at [8(1)] above; a screenshot from the www.mecca.com.au website apparently dated 23 March 2021 that contains an image of the CAB 3-Step System with the note that 'This product is no longer stocked at MECCA'; a screenshot from a google advertisement apparently dated 9 January 2020 that contains an image of a Clinique Anti-Blemish Solution 3-Step System; a 'stock search enquiry' dated 11 February 2021 for David Jones for the 3-Step Intro Kit; and three screenshots that allegedly indicate pick up addresses in Western Australia, South Australia and New South Wales for 'davidjones.com', said to refer to the 3-Step System, with the year redacted or undisclosed (Ms Krishnan writes in the index to her affidavit that the dates are April 2021 and May 2021, but the years are not verified by the screen shots, and one is undated).

50    The screenshots have been marked up by Ms Krishnan to highlight descriptions of products, including percentages of some ingredients. The screenshots are from a large number of different websites, including the Retail Customer Websites and the Other Websites, and additional websites such as dfs.com, caretobeauty.com and google.com.

51    It should be noted that with respect to the Clinique Australia website, where an extract indicates ingredients, the screenshot generally includes the statement, 'Please be aware that ingredient lists may change or vary from time to time. Please refer to the ingredient list on the product package you receive for the most up to date list of ingredients'.

52    The screenshots indicate that different website owners took different approaches as to the level of detail provided on websites about the CABS products: sometimes ingredients were listed with or without content percentages; sometimes there were descriptions of the active ingredients; sometimes there was a description of product (such as 'helps to control blemishes').

53    Acknowledging that the respondent bears the onus on this application, it is important to note the limits of Ms Krishnan's evidence, and the absence of rebutting evidence.

54    For example:

(a)    none of the screen shots in evidence indicate that the respondent by the Clinique Australia website or any of the Retail Customer Websites purported to offer the US CABS products after the period during which Ms Duffy said that errors had been rectified;

(b)    apart from a dfs.com website screenshot, which I infer is a third party website, there are no dated screenshots that indicate whether US CABS products were being offered for sale after that time;

(c)    the stock search enquiries pre-date the rectification of the Clinique Australia website and in any event do not establish that any product in stock in Australia and available to purchase contained benzoyl peroxide;

(d)    there is no evidence that any product purchased and received by Ms Krishnan contained benzoyl peroxide - and to the contrary, Ms Krishnan accepted that the products she received did not contain benzoyl peroxide;

(e)    there is no evidence that contradicts or undermines the respondent's evidence that it does not control the content of third party websites that refer to its products;

(f)    there is no evidence that the products available in Australia do not perform in the manner described for the particular product;

(g)    there is no evidence that the contents of the products purchased in Australia did not align with the description on the packaging or container in which it was provided;

(h)    there is no evidence that the product descriptions are 'unacceptable, unrealistic and bogus';

(i)    there is no evidence of any ongoing issue with the content intended for the US market being wrongly adopted for the Australian market; and

(j)    there is no evidence that information currently available on the respondent's website is inaccurate.

Principles - summary judgment

55    Section 31A of the Federal Court of Australia Act 1976 (Cth) includes the following:

31A    Summary judgment

(1)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is prosecuting the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is defending the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)    hopeless; or

(b)    bound to fail;

for it to have no reasonable prospect of success.

(4)    This section does not limit any powers that the Court has apart from this section.

56    It is s 31A(2), rather than s 31A(1), which is of present relevance. Rule 26.01 of the Federal Court Rules 2011 (Cth) also sets out circumstances in which a party may apply to the Court for an order for summary judgment:

(1)    A party may apply to the Court for an order that judgment be given against another party because:

(a)    the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)    the proceeding is frivolous or vexatious; or

(c)    no reasonable cause of action is disclosed; or

(d)    the proceeding is an abuse of the process of the Court; or

(e)    the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.

…

(4)    If an order is made under subrule (1) dismissing part of the proceeding, the proceeding may be continued for that part of the proceeding not disposed of by the order.

57    The principles relating to these powers are well settled. The principles are set out in cases such as Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118; Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955; Rana v Google Australia Pty Ltd [2013] FCA 60; and C v Commonwealth of Australia [2015] FCAFC 113; (2015) 234 FCR 81.

58    The party seeking summary judgment bears the onus: Windsor v Sydney Medical Service Co-operative Ltd (No 2) [2009] FCA 704 at [38] (Edmonds J).

59    In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60; (2008) 167 FCR 372 at [124], Gordon J noted that s 31A was introduced in order to extend 'the power of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases' (citing the Minister's Second Reading Speech of the relevant bill). Even so, the power to give judgment for one party against another is not to be exercised lightly: Spencer at [24] (French CJ and Gummow J), [60] (Hayne, Crennan, Kiefel and Bell JJ); and Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Limited [2011] FCAFC 145 at [31] (Edmonds, Jessup and Robertson JJ).

60    As French CJ and Gummow J continued in Spencer:

[25]    Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a 'fanciful' prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue.

61    It is important to be mindful of the fact that a self-represented litigant may find it more difficult to identify a claim: Dowling v Commonwealth Bank of Australia [2008] FCA 59 at [57] (Reeves J). However, there are 'obvious limitations to this consideration most obviously fairness to the … respondent parties': Keenan v Bundaberg Port Authority [2016] FCA 134 at [45(e)] (Reeves J). As Reeves J continued:

… experience shows that for every self-represented litigant who has a valid claim, there are many, many, more who do not. And, in the process of defending the claims lodged by the large latter group, the unfortunate respondents concerned very often devote considerable time and resources to that exercise without, in the vast majority of cases, being able to rely upon a costs order to compensate them. That is so because one concomitant of self-representation is almost invariably impecuniosity.

62    Further, as the Full Court observed in Manolakis v Carter [2008] FCAFC 183 at [10], 'Courts do not exist to allow self-represented litigants to make scatter-gun claims'.

63    The Court may also order that judgment be given against another party because the proceeding is frivolous or vexatious or an abuse of the process of the Court.

64    The expressions 'scandalous', 'vexatious' and 'frivolous' can be used either separately, or in conjunction, or interchangeably, with the expression 'abuse of process of the court': Crocker v Toys 'R' Us (Australia) Pty Ltd (No 3) [2015] FCA 728 at [9] (Reeves J).

65    The principles were collected by McKerracher J in Prior v South West Aboriginal Land and Sea Council Aboriginal Corporation [2020] FCA 808 as follows:

[37]    In relation to the term 'frivolous':

(a)    a matter that is 'frivolous' may be described as one that is 'without substance or groundless or fanciful': Crocker [Crocker v Toys 'R' Us (Australia) Pty Ltd (No 3) [2015] FCA 728] per Reeves J (at [9]), citing Pickering v Centrelink [2008] FCA 561 per McKerracher J (at [27]); MCG Quarries Pty Ltd v Beach [2017] FCA 1601 per Davies J (at [4]);

(b)    a proceeding will be 'frivolous' where, despite whatever attempts are made to discern a cause of action in the case, it is still not arguable: Pickering per McKerracher J (at [27]), referring to NBGZ v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 143 FCR 434 (at [16]-[22]); and

(c)    'frivolous' may also describe a situation where a party is trifling with the Court or wasting the Court's time: Crocker per Reeves J (at [9]), citing Chaffers v Goldsmid [1894] 1 QB 186.

[38]    In relation to the term 'vexatious':

(a)    a 'vexatious' proceeding is one without foundation, which cannot succeed, or is brought for an ulterior and collateral purpose. 'Vexatious' might also describe proceedings that are seriously and unfairly burdensome, prejudicial or damaging: Crocker per Reeves J (at [9]);

(b)    proceedings may also be described as 'vexatious' where they impose on a respondent party an unnecessary injustice in the form of a burden other than, and additional to, the burden necessarily imposed on a party to litigation instituted on reasonable grounds for the purpose of obtaining relief within the scope of the available remedy: Dowling v John Fairfax Publications Pty Ltd (2007) 169 IR 201 per Cameron FM (at [83]);

(c)    a proceeding is to be regarded as 'vexatious' where:

(i)    it is instituted with the intention of annoying or embarrassing the person against whom the proceeding is brought; or

(ii)    it is brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which it gives rise; or

(iii)    irrespective of the motive of the litigant, the proceeding is so obviously untenable or manifestly groundless as to be utterly hopeless: Singh v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2011) 282 ALR 56 per Bromberg J (at [14]-[15]), applying Von Reisner v Commonwealth (2009) 177 FCR 531 per Siopis, Cowdroy and Reeves JJ (at [27]); and

(d)    'vexatiousness' is a quality of the proceeding rather than a litigant's intention, so that the question is not whether the proceedings have been instituted vexatiously but whether the legal proceedings are in fact vexatious: Rana v Commonwealth [2013] FCA 189 per Mansfield J (at [43]).

66    The making of exaggerated claims in the pleadings may also provide support for a finding of vexatiousness: Herbert v American Express Australia Limited [2018] FCA 1790 at [45].

The pleaded case

The relief sought in the application

67    It is appropriate to list the relief sought in Part A of the amended application in full (utilising Ms Krishnan's numbering and without corrections):

3.    The plaintiff requests the Honourable Court to make an order that the defendant provide accurate information about the product 'CABS clearing Moisturiser' and 'CABS - All over clearing Treatment' in regard with its composition and benefits so that the customers can distinguish between these two products.

5.    The applicant requests the Honourable Court to make an orders that the defendant discloses the percentage of the ingredients of the CABS products that contain active ingredients either SA or BP, so that the applicant would know how much quantity to be used and how many products to be used at a time.

8.    The plaintiff requests the Honourable Court of Australia to make an order that the defendant put a system in place so that it can check and cross-check that the product information is accurate on all the advertising platforms.

9.    The plaintiff requests the Honourable Court to make an order that the defendant check that the information provided is relevant (matching) to that particular product and is circulated uniformly on all the marketing platforms.

11.    The applicants requests the Honourable Court to make an orders that the defendant desist from selling CABS products until alerting Australian customers about the facts of the product's composition and benefits that were advertised on the number of Australian websites.

Thus the people of Australia will have complete knowledge about the products they would have/had bought, the products particularly:

a)    CABS Anti Blemish All over clearing Treatment

b)    CABS All over clearing Moisturiser

c)    CABS anti blemish set of 3 system

d)    Clinique Acne solutions set of three (Products are meant to be sold in US and Canada only)

12    The Plaintiff is seeking an order to publish research evidence to support the claim that improvement of blemishes that occurs in:

a)    3 days 36%

b)    3 days 37%

c)    1 week 48%

d)    4 weeks 55%

e)    6 weeks 73%

f)    12 weeks 81%

13.    The plaintiff requests the Honourable Court to make an order that the defendant apologise in public if the product is not sold as it was advertised.

a)    The public apology will create awareness in public to get the product checked by a qualified person before using.

b)    Also, an apology may assist in rectifying a plaintiff's feelings of anxiety and distress which has caused by the defendant's irresponsible conduct since many months.

14.    The plaintiff requests the Honourable Court to make an order that the defendant to refund the money to customers who have/had bought these products.

15.    The plaintiff requests the Honourable Court to make an order that the defendant give free sunscreen (Australian made) to Australian customers with each CABS product.

16.    The plaintiff requests the Honourable Court to make an order that the defendant give the amount of product sell to Australian Skin Cancer foundation.

17.    The grant of these orders would help the Plaintiff to bring comfort and ultimately help her to restore the personal, emotional and social status as it was before.

68    It can be seen that the orders that are sought are by way of prohibitory or mandatory injunctive relief.

The intellectual property payout claim

69    In Part B of the amended application Ms Krishnan refers to what she labels valuable suggestions that she made to the respondent, asserts that her conduct alerted the respondent 'to look into multiple medico-legal aspects of the product's composition' and contends that her suggestions comprise an intangible asset and intellectual property. She also contends that in making those suggestions she utilised 'her exclusive medico-legal knowledge'. It appears that Ms Krishnan contends that having brought to the respondent's attention an issue with the misdescription of the products available on various websites, she should be rewarded by a payout of $10 million. Ms Krishnan states that she will feel appreciated if the Court grants such a payout to reflect her exclusive knowledge.

The damages claim

70    In her general prayer for relief, Ms Krishnan also seeks aggravated damages in the sum of $6744.95, as set out in the following schedule:

The respondent's offer

71    I interpose to add that the respondent has offered to pay the sum of $6,866.40 to Ms Krishnan. That offer remains open and the respondent has undertaken to the Court that it will make that payment. The offer and undertaking are made without any admission that Ms Krishnan is entitled to damages in that amount or any admission of liability under the ACL.

The amended statement of claim

72    It is then appropriate to consider the amended statement of claim to ascertain whether it pleads a case that might support the grant of any of the relief claimed.

73    The pleading commences with the allegation that the respondent is responsible for marketing, distributing and selling Clinique products, among other brands, through various shops, including online shops.

74    It is apparent from Ms Duffy's evidence that the allegation is not accurate. The evidence is clear that the respondent is only responsible for its own website. It is not responsible for, and cannot control, sales and advertising undertaken on third party websites. To the extent it is able to request corrections on such third party websites, it has done so.

75    There is then a generalised allegation that the respondent is 'carrying out dishonest business in Australia'.

76    I accept the respondent's submission that this pleading is inflammatory. The error on the Clinique Australia website has been acknowledged and corrected. If Ms Krishnan by use of the term 'dishonesty' contends that there was misadvertising with knowledge of the error or that there was fraudulent conduct, then no such allegation has been properly particularised and the assertion has no reasonable foundation, having regard to Ms Duffy's evidence.

77    There is then a general reference to 'misleading and deceptive advertisement' and Ms Krishnan lists the statutory provisions s 18(1), s 29(1)(a), (g), (h) and (m), s 33, s 34 and s 54(1)(a), (b), (2)(a), (c) and (3)(d) of the ACL. Ms Krishnan does not descend into any of the elements of those provisions.

78    Ms Krishnan then pleads that she decided to purchase the CABS All Over Clearing Treatment for personal use and she pleads that she did this because it appeared to combine salicylic acid and benzyl peroxide. She also refers to 'claimed promising results' in improving active blemishes. She then provides 'particular of products purchased'.

79    At A to D of the particulars, Ms Krishnan complains that when she purchased a CABS All Over Clearing Treatment at Myer Galleria over the counter the receipt did not match the product.

80    It is unclear how this assertion assists Ms Krishnan. It is not suggested that the product in fact contained salicylic acid and benzoyl peroxide. Construed generously, it might be that Ms Krishnan asserts that she read about the product online (without limiting her knowledge to any particular website) and then went to Myer Galleria to purchase the product, expecting the product to contain those ingredients and to be described as a 'treatment', but that was not the case.

81    At E of the particulars Ms Krishnan pleads that she bought CABS All Over Clearing Treatment/Moisturiser online from six Australian websites. Four of the six websites (including the Clinique Australia webiste) stated that the product contained both salicylic acid and benzoyl peroxide. The fifth described it as 'medicated' without stipulating that it contained either salicylic acid or benzoyl peroxide, and the sixth referred only to salicylic acid.

82    Although the pleading is opaque, it can reasonably be discerned, having regard also to her damages schedule, that Ms Krishnan asserts she bought the eight items of product set out in the schedule because they were described as containing salicylic acid and benzoyl peroxide and that she otherwise would not have purchased them. Again, it is to be noted that the respondent was only responsible for advertising on its own website and is connected in that manner to only two of the purchases.

83    Having regard to s 236, I am satisfied that Ms Krishnan has an arguable case that, but for the fact that payment has been offered to compensate fully for such losses, she would have been entitled to relief by way of an order that the respondent compensate her for the price spent acquiring the products from the Clinique Australia website and from Myer Galleria, on the basis that she was misled into buying them by advertising on the Clinique Australia website and would not have bought them if she knew that the product did not contain benzoyl peroxide. There is, however, nothing for this Court to determine in this regard, as the respondent has undertaken to the Court to pay an amount to her that more than compensates her for any such loss. I will return to this.

84    At F of the particulars, Ms Krishnan refers to the 'CABS 3 set system' advertised on eight Australian websites, one of which the Clinique Australia website. The other websites are third party sites. She states that the www.clinique.com.au website refers to ingredients that include salicylic acid and benzoyl peroxide. One website relevantly listed the ingredient salicylic acid only. The other websites did not list the ingredients on the website. This assertion appears to be part of a broader assertion made in a number of places in the statement of claim as to inconsistent marketing across different websites. However, there is no allegation that Clinique was obliged to disclose all ingredients of a product on its website and no allegation that it was responsible for and so liable for the marketing decisions made by third parties about its products on their websites.

85    At G of the particulars, Ms Krishnan alleges that the respondent has 'advertised/sold/selling' the products 'Acne Solutions treatment' that contain salicylic acid and benzoyl peroxide on five Australian websites, when such products are 'meant to be sold in United States of America and Canada only'. One of the listed websites is www.clinique.com.au, and the others are third party websites. There is no evidence the products were in fact sold in Australia.

86    At H of the particulars Ms Krishnan states that she was shocked to find that only the key ingredient salicylic acid was mentioned on the product box.

87    This is consistent with the respondent's case that products containing benzoyl peroxide were not sold by it in the Australian market. It also suggests that the product packaging was accurate insofar as its ingredients were concerned. To the extent Ms Krishnan asserts she would not have bought it if she understood that it did not contain benzoyl peroxide, her loss is addressed by the comments at [83] above.

88    At I Ms Krishnan says she then checked against the websites and found them to be 'highly misleading, inaccurate, false, deceptive and factually incorrect'. Following from the particulars with respect to the packaging, this appears to be a re-statement of the complaint that products were advertised by the respondent as containing salicylic acid and benzoyl peroxide when in fact for those products available in Australia that was not the case. This has been dealt with at [82]-[83] above. Furthermore, there is no assertion in the pleadings that the product ingredients were not clear from the packaging of the products received.

89    At J Ms Krishnan states that she bought the CAB products trusting claims that the respondent 'never compromises on safety' and that they 'tap into the deep expertise of our scientist'.

90    However, there is no allegation in the pleading that explains how or where any therapeutic claims were made by the respondent or why they were inaccurate or misleading in any manner.

91    At K it is asserted that the respondent 'has been making misleading advertisements of CABS products on all main Australian websites' in regard to its composition and its benefits.

92    At L Ms Krishnan asserts that 'there are multiple inconsistencies providing incomplete and inaccurate information on the websites in regard to the product's composition and benefits' and that the images on the websites are conflicting.

93    The assertions at K and L again overlook the limitation on the respondent's control of third party advertising. Nor does the pleading disclose why it is the case (if it is in fact what Ms Krishnan contends) that any or all ingredients must be included on any relevant website advertising in order to prevent there being a contravention of the ACL.

94    At N it is alleged that the respondent 'has advertised, labelled offered for sale, sold and distributed CABS misbranded and counterfeit products across Australia by misleading information', and that she has reason to believe that the respondent has 'misled [her] and Australian customers [on] various platforms of selling', and 'thus violated the provisions of the ACL.

95    There is no evidence of any counterfeit products being sold in Australia. There is no evidence that the products acquired by Ms Krishnan were counterfeit. To the extent the products she acquired did not contain benzoyl peroxide when she expected they would do so, that allegation has already been addressed.

96    Ms Krishnan then lists various 'therapeutic claims' of various products, and asserts that the 'unacceptable, unrealistic and bogus claims' demonstrate 'the outrageous conduct of the defendant'.

97    Again, there is no allegation in the pleading that explains how or where any therapeutic claims were made by the respondent or why they were inaccurate or misleading in any manner. To the extent the products she acquired did not contain benzoyl peroxide or were not 'medicated' when she expected the contrary, that allegation has already been addressed.

98    Ms Krishnan then introduces what may best be described as submissions (under the heading 'Hence'). She asserts that she is concerned and profoundly worried about innocent customers buying the products not knowing about the presence or absence of ingredients as described on a number of websites, asserting that if the ingredients are present then they could be harmful or, if they are not present then the product might not perform as effectively as claimed. She refers to the vulnerability of acne sufferers. She says that the respondent's conduct has caused her to develop suspicion 'for everything' and caused an adverse impact on her personal professional and social life; that she feels traumatised; and she speculates as to persons who might have deliberately bought the product advertised as containing both salicylic acid and benzoyl peroxide.

99    These allegations are not supported by material facts.

100    She further states that the respondent has continued to advertise a US acne medication product with salicylic acid and benzoyl peroxide, 'using other crafty marketing tactics' on the website www.davidjones.com.

101    Again, the respondent does not control the contents of a third party website such as that referred to, and Ms Duffy's evidence is that she wrote to, relevantly, representatives of David Jones to ensure such websites were updated with correct information.

102    There is also an allegation made in the written submissions that the respondent used Australia as a dumping ground for 'faulty products'. Again the allegations are not supported by material facts and there is no evidence to support them.

103    It is then necessary to return to the statutory provisions in order to ascertain how it is said that the various allegations engage those provisions.

104    For example, as to s 18 of the ACL, leaving aside the limited conclusion I have reached at [83] above, it is not possible to discern what conduct or particular representations Ms Krishnan asserts are misleading or deceptive, as opposed to generalised complaints about inconsistent alternative advertising, or generalised requests for evidence as to research or therapeutic benefit without any link to a contravention.

105    This same issue arises with respect to claims that might rely on s 29 (save for an overlap with the conclusion referred to at [83] above) and s 33. No material facts tied to those provisions are otherwise pleaded. Section 34 would appear to have no application on the facts.

106    The applicant also refers to s 54 of the ACL. However, the pleading does not allege that the goods were not of an acceptable quality because they were not fit for purpose. Nor are there material facts pleaded in support of such a contravention.

Limitations on the relief claimed

107    There are considerable difficulties with the relief claimed.

Injunctive relief

108    As to the Part A claims, Ms Krishnan in effect seeks injunctive relief, but in circumstances where I consider the prospect of such relief being granted to be highly unlikely or, in some respects, beyond the power of the Court in this type of proceeding.

109    The Court has the power to grant injunctions in appropriate circumstances under s 232 of the ACL. In Australian Competition and Consumer Commission v MSY Technologies Pty Ltd [2017] FCA 1251, Markovic J said the following:

[65]    Section 232 of the ACL empowers the Court to grant an injunction in such terms as it considers appropriate if the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute, relevantly, a contravention of a provision of Ch 2, which includes s 18, or Ch 3, which includes s 29, of the ACL.

[66]    In ACCC v REIWA at [26] French J noted that there are practical issues to be considered in the formulation of, relevantly, consent injunctions. His Honour said that orders must be 'formulated with precision so that they are capable of being readily obeyed' and that orders that are 'likely to involve vague evaluative judgments or significant debates on their interpretation are not likely to be given the court's sanction'. Similarly, orders that are likely to require the Court's ongoing supervision of the conduct of the parties to them will 'raise serious questions as to their appropriateness'.

[67]    In Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 203-204 Merkel J identified at least three limitations on the Court's power in determining whether an injunction under s 80 of the Trade Practices Act was appropriate. Those limitations also inform whether it is appropriate to make an injunction pursuant to s 232 of the CCA as follows:

(1)    the power is confined by reference to the scope and purpose of the ACL, in particular s 232, and the relief should be designed to prevent a repetition of the conduct for which the relief is sought;

(2)    because the jurisdiction to grant an injunction is enlivened by an alleged or actual contravention of Ch 2, 3 or 4 of the ACL, among other things, there must be a sufficient nexus or relationship between the contravention and the injunction granted; and

(3)    there is the constitutional limitation that requires that the injunction granted be related to the case or controversy the subject of the proceeding.

110    Further, whilst acknowledging the breadth of the statutory power to grant injunctive relief, the power must be exercised judicially and sensibly: ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 256 (Lockhart J, French J generally agreeing); cited by the Full Court in Ethicon Sàrl v Gill [2021] FCAFC 29 at [914].

111    I acknowledge that even where there is no threat of repetition of a contravention, the Court may exercise the discretion to grant injunctive relief, but in this case, it seems to me doubtful that the Court would do so in the terms sought by Ms Krishnan. Even assuming Ms Krishnan were able to establish a contravention of s 18 based on the error in the Clinique Australia website as to the content of the product available in Australia, this is not a case where declaratory relief is sought as a marker of the Court's disapproval of the respondent's conduct. Further, the respondent has given evidence as to the cause of the error (inadvertence by persons overseas) and the steps taken to minimise the risk of the error being repeated, including Ms Duffy taking responsibility for ensuring the accuracy of the website content on the Clinique Australia website going forward. The respondent also has a regulatory and compliance team in place.

112    Ms Krishnan has not engaged with the evidence provided by the respondent as to the correction of the errors and steps taken to minimise the prospect of any repetition, but rather has sought injunctive relief in this application as if the respondent had simply failed to recognise the error, failed to correct it and failed to put in place any steps to avoid repetition (save for in the context of the intellectual property payout claim, where Ms Krishnan seeks to take credit for the fact that the respondent has 'edited partially' the website).

113    I also take into account Ms Duffy's evidence that it is unusual for Clinique product properties to vary in formulation, product packaging and product description as between Australia and elsewhere, including the United States. This again suggests any prospect of repetition of the error is low.

114    Addressing the particular injunctive relief sought, I make the following comments as to the proposed relief listed at [67] above:

(a)    as to item 3, there is no evidence that the information currently appearing on the Clinique Australia website is inaccurate. Nor is it pleaded that the information is currently incorrect. Further, the product packaging is said to contain the list of current ingredients from time to time;

(b)    as to item 5, there is no pleading that asserts or discloses any obligation on the part of the respondent to disclose the percentages of the ingredients in the CABS products;

(c)    as to items 8 and 9, Ms Duffy's uncontradicted evidence is to the effect that there is already a system in place to check advertised content against actual content for the purpose of the Clinique Australia website. Further, the Court would not order injunctive relief that purports to bind third party website operators who make their own decisions as to website content and who are not parties to these proceedings. Nor would the Court order far-reaching injunctive relief that is not capable of being readily obeyed;

(d)    as to items 11 and 12, no issue is raised on the pleadings as to research or to the effect that claims as to the efficacy of Clinique products are false. In any event, the evidence is to the effect that steps have already been taken to correct errors as to the ingredients of the CABS products available in Australia and there is no evidence that any misinformation is currently included on the website that the respondent is able to control;

(e)    as to item 13, there is limited value in any apology ordered by the Court, a course which has been described as a contradiction in terms: Jones v Scully [2002] FCA 1080; (2002) 120 FCR 243 at [245]. Furthermore, the evidence indicates the conduct was inadvertent rather than deliberate, and the respondent has already acknowledged the error. To the extent Ms Krishnan seeks to publicise the fact that there was an error on the Clinique Australia website, then these reasons will have that result and, for completeness, I will make a formal finding to that effect in the concluding remarks that follow;

(f)    as to item 14, the relief sought is a form of non-party consumer redress, and the Court is empowered to make such orders under s 239 of the ACL but only on the application of the Australian Competition and Consumer Commission or another regulator: see Australian Competition & Consumer Commission v Danoz Direct Pty Ltd [2003] FCA 881 at [269]-[275] (Dowsett J); and

(g)    as to items 15, 16 and 17, there is no basis upon which the Court would sensibly exercise its powers to make such orders. Nor is it the purpose of injunctive relief to help restore 'personal, emotional and social status'.

Intellectual property payout claim

115    As to the intellectual property payout claim, none of the pleaded facts support any claim by Ms Krishnan that she has any intellectual property rights with respect to the respondent's products or business.

116    Bearing in mind that the proceeding is brought under the ACL, the respondent contends that the relevant provision with respect to any loss and damage is s 236. Ms Krishnan did not suggest otherwise.

117    Section 236 provides that a claimant who suffers loss or damage because of the conduct of another person may recover the amount of loss or damage. In Parker trading as On Grid Off Grid Solar v Switchee Pty Ltd trading as Australian Solar Quotes [2018] FCA 479, Gleeson J said the following (citing Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 525-526):

[99]    Recovery is confined to the 'amount of the loss or damage', assessed via comparison between the position in which the person suffered loss or damage is in and the position that person would have been in had there been no contravention; neither nominal nor punitive damages can be awarded under s 235 of the ACL.

118    It follows that there is no basis under the ACL for Ms Krishnan to seek the $10 million payout that she asserts she is entitled to. The fact that she raised an issue with the respondent does not of itself accord her any intellectual property interest or compensable entitlement.

Damages

119    As to the 'aggravated damages', in Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63 at [79(1)], Bromwich J said (citing Musca v Astle Corporation Pty Ltd (1988) 80 ALR 251 at 262) that 'neither exemplary nor aggravated damages can be awarded in relation to the misleading or deceptive conduct'. It should also be noted that $6,189.15 of the damages claimed relates to a 'barrister's opinion', which is a claim for legal costs rather than for any head of damages. Nor are damages for personal injury available under s 236 of the ACL (subject to exceptions that are not here relevant) and there is no other basis upon which Ms Krishnan has pointed to an entitlement to have counselling or doctor's fees reimbursed.

120    But regardless, the respondent has offered to pay the amount of damages sought in full. That is highly relevant to the question of whether this proceeding should continue, a point to which I will return.

Determination - summary judgment

121    I accept for the purpose of this application that Ms Krishnan bought the products because she understood from internet searches that they contained benzoyl peroxide. Ms Krishnan relies on apparently conflicting arguments - she wanted to buy the products for personal use because they apparently contained benzoyl peroxide, she was surprised that the packaging on the products that she bought did not refer to benzoyl peroxide, but she is also concerned that benzoyl peroxide might be harmful. I am prepared to accept that Ms Krishnan was concerned about the discrepancy between the ingredients as advertised on certain websites and the actual ingredients in the products supplied in Australia.

122    I find that, having regard to the admission properly volunteered by Ms Duffy on behalf of the respondent, the respondent's Clinique Australia website contained errors during some or all of the period July 2020 to July 2021. The evidence is to the effect that the errors were inadvertent and limited to product images and descriptions of the CABS products. Content for the US market was wrongly applied to products for the Australian market. Ms Krishnan purchased two products directly from the respondent during this period, having seen the misdescription on the Clinique Australia website. Were Ms Krishnan not compensated for that loss, I accept that as to this aspect of her case only she would have a reasonable prospect of establishing a claim for misleading or deceptive conduct within the meaning of s 18 of the ACL (identified claim) and the respondent's summary judgment application in regard to the identified claim would be dismissed. I have taken care to identify this claim from the many obtuse and generalised allegations and claims made by Ms Krishnan, bearing in mind that she is a self-represented litigant.

123    However, Ms Krishnan has received an open offer to compensate her, not only for the purchase price she paid for those products, but for all of the damages claims she seeks. The respondent's offer has also been made by way of an undertaking to the Court that it will pay such amount to Ms Krishnan. The Court will accept such undertaking from the respondent. In those circumstances, there is no part of that claim which requires or justifies that the Court's resources, or those of the parties, be utilised in permitting Ms Krishnan to proceed to trial.

124    Had the respondent not taken steps to remedy the position, there may have been scope for the grant of some limited injunctive relief (for example, to correct its website) had a case otherwise been established, but the respondent has already undertaken a number of remedial steps and put in place systems to reduce the risk of such error being repeated. I am not persuaded there is any need for a Court to intervene and grant injunctive relief as requested.

125    For the reasons I have given above, I am not satisfied that any other parts of Ms Krishnan's claims should be permitted to proceed to trial. I consider she has no reasonable prospect of successfully prosecuting those claims or obtaining any relief as claimed. I am cognisant of the effect of such outcome for Ms Krishnan. However, I do not consider as a matter of practical judgment that her other allegations disclose a reasonable cause of action or have any reasonable prospect of succeeding.

126    Further, leaving aside the identified claim, I consider Ms Krishnan's claims to be frivolous or vexatious, within the meaning of r 26.01(1)(b) of the Federal Court Rules.

127    The frivolous or vexatious nature of the proceeding is underscored by the fact that the amount of $277 paid for the products by Ms Krishnan (or even $6,866.40 taking the aggravated damages sought at their highest) is plainly disproportionate to the Court time and resources that would be occupied by a trial: Prior at [37(c)]. It is also substantially less than the $15,000 sum the subject of the Calderbank offer.

128    The amended statement of claim also contains various pejorative allegations, including that ELA 'is carrying out dishonest business in Australia', has 'sold counterfeit products' and has engaged in 'unacceptable, unrealistic and bogus claims which demonstrate [its] outrageous conduct'. Such unjustified hyperbole is apt to obscure, rather than enhance, a litigant's claims.

129    Proceedings may be found to be vexatious if instituted with the intention of annoying or embarrassing the respondent: Prior at [38(c)(i)], [38(a)], and similarly see the definition of 'vexatious proceeding' in s 37AM(1) of the Federal Court of Australia Act.

130    The making of exaggerated claims in the pleadings provides further support for a finding of vexatiousness: Herbert at [45], [51]. Ms Krishnan's exaggerated claims include the seeking of the intellectual property payout in the significant and unfounded sum of $10 million, and the allegations in her amended statement of claim that, having purchased the eight Clinique products, she has been 'held…back in life', has 'develop[ed] suspicion for everything' and 'is unlikely to be healed for a long period of time'.

131    In all of those circumstances, and acknowledging the respondent's undertaking to the Court, the discretion to enter summary judgment in favour of the respondent is accordingly enlivened.

Principles - strike out

132    Had I decided against exercising the discretion to enter summary judgment, I would in any event have struck out the pleadings under r 16.21(1) of the Federal Court Rules.

133    Although there is some overlap in the principles applying to summary dismissal and striking out of pleadings, there is also a central difference between the two concepts. As Wigney J said in Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 at [96]:

Where the evidence shows that a person may have a reasonable cause of action or reasonable prospects of success, but the person's pleading does not disclose that to be the case, the Court may be empowered to strike out the pleading under r 16.21, but is not empowered to summarily dismiss the proceeding under s 31A of the FCA Act: see White Industries Australia Ltd v FCT (2007) 160 FCR 298 at [47], referred to in Spencer at [23]. That said, a 'failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success': White Industries at [47].

134    Save for the identified claim, Ms Krishnan's pleading does not disclose a reasonable cause of action (r 16.21(1)(e) of the Federal Court Rules), and in that regard I refer to the reasons above at [121]-[125]. Rule 16.21(1)(b) and (f) would also have been enlivened. But for the undertaking offered by the respondent, I would have permitted Ms Krishnan to re-plead, but only with respect to the identified claim.

Application for security for costs

135    In the circumstances it is not necessary to consider the respondent's alternative application for security for costs.

Orders

136    There will be orders accordingly. Ms Krishnan should pay the respondent's costs of this application. However, I have not otherwise heard the parties as to the costs of the proceedings. I will make orders that facilitate the making of any application for costs other than those relating to this application. I will also grant liberty to apply in case any issue arises as to the timing or making of payment by the respondent to Ms Krishnan in accordance with its undertaking to the Court.

Associate:

Dated:    24 March 2022