Federal Court of Australia

Chapter 4 Corp. DBA Supreme v Shenzhen Supbro Fashion Sports Co., Ltd [2023] FCA 78

ORDERS

THE COURT ORDERS:

1.    Judgment in default against the Respondent pursuant to r 5.23(2)(d) of the Federal Court Rules 2011 (Cth).

2.    That the decision of the Registrar of Trade Marks (Registrar) given by a delegate of the Registrar, Blake Knowles, on 19 May 2022 at Canberra (Chapter 4 Corp DBA Supreme v Shenzhen Supbro Fashion Sports Co., Ltd [2022] ATMO 80) be set aside.

3.    That the registration of Australian trade mark application numbers 2045183 for in class 20 and 2045199 for in class 25 be refused.

4.    That the Respondent pay the Appellant’s costs of the appeal and of the hearing before the delegate.

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

REASONS FOR JUDGMENT

Ex tempore

(Revised from transcript)

O’CALLAGHAN J

1    I have before me an interlocutory application dated 30 January 2023 brought by the applicant in this proceeding, Chapter 4 Corp. DBA Supreme (DBA Supreme or the applicant). The applicant applies for judgment in default against the respondent, Shenzen Supbro Fashion Sports Co., Ltd (Shenzhen SFS or the respondent). The orders sought are as follows:

1    An order for judgment in default against the Respondent pursuant to r 5.23(2)(d) of the Federal Court Rules (Cth) 2011.

2     An order that the decision of the Registrar of Trade Marks (Registrar) given by a delegate of the Registrar, Blake Knowles, on 19 May 2022 at Canberra (Chapter 4 Corp DBA Supreme v Shenzhen Supbro Fashion Sports Co., Ltd [2022] ATMO 80) be set aside.

3    An order that the registration of Australian trade mark application numbers 2045183 for in class 20 and 2045199 for in class 25 (Applications) be refused.

4    An order that the Respondent pay the Appellant’s costs of the application, the appeal and of the hearing before the delegate.

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

2    At the hearing this morning, I have had the advantage of oral submissions from Mr DB Larish of counsel together with his written outline of submissions. The evidence relied upon by the applicant in respect of the application comprises the following: an affidavit of Ms Sarah Goddard affirmed 30 January 2023 together with various correspondence contained in exhibits A1, A2, A3 and A4, which were tendered by counsel this morning. The effect of those exhibits includes evidence establishing that Ms Goddard’s affidavit, the interlocutory application and Mr Larish’s written submissions have been served on Shenzhen SFS’s foreign legal representatives together with correspondence with IP Australia to the effect that the Registrar of Trade Marks does not intend to be heard in relation to this application or the court proceedings generally.

3    I shall now outline some of the relevant factual background which is set out in Ms Goddard’s affidavit and also conveniently summarised in Mr Larish’s helpful written submissions.

4    On 21 October 2019, Zhyq Iot Pty Ltd, filed Australian trade mark application numbers 2045183 and 2045199, both for the mark in classes 20 and 25, respectively. The evidence establishes that those applications were later assigned to Shenzhen SFS on 2 December 2021. DBA Supreme opposed those applications on 19 May 2022. A delegate of the Registrar of Trade Marks issued a decision rejecting the oppositions. See Chapter 4 Corp DBA Supreme v Shenzen Supbro Fashion Sports Co., Ltd [2022] ATMO 80.

5    Shortly thereafter, DBA Supreme commenced this proceeding by filing a notice of appeal pursuant to r 34.24(1) of the Federal Court Rules 2011 (Cth). The cases make it clear that such an appeal is a proceeding that is heard de novo. Pursuant to ss 197(d), (e) and (f) of the Trade Marks Act 1995 (Cth), on hearing an appeal against a decision or direction of the Registrar, this court may do one or more of the following:

…

(d)     affirm, reverse or vary the Registrar’s decision or direction;

(e)     give any judgment, or make any order, that, in all the circumstances, it thinks fit;

(f)     order a party to pay costs to another party.

6    Not long after the commencement of the proceeding, Griffith Hack (a firm of solicitors) filed a notice of acting on behalf of Shenzhen SFS. On 17 August 2022, I made consent orders listing the matter for case management on 11 November 2022. Three days beforehand, Griffith Hack informed the applicant’s lawyers, King & Wood Mallesons (KWM), that it had served a notice of intention to cease to act. The email in which that fact was made apparent also stated:

We intend to send an email to Justice O’Callaghan’s Associate advising them of the same, and that our firm will not appear at the Case Management Hearing. Please let us know if you have any concerns with that approach.

7    On 9 November 2022, KWM emailed the legal representative of Griffith Hack, including as follows:

In the event that your firm files a notice of ceasing to act, given that your client is based overseas in China, we are concerned that our client will have difficulty communicating with, and serving material on, the Respondent should it fail to appoint Australian legal representatives and that this will impede the efficient progress of the proceeding. To avoid that impediment, can you please provide us with a physical and email address at which we may communicate with and serve any material on the Respondent?

8    On 9 November 2022 at 3.29 pm, Ms Mitchell at Griffith Hack emailed Ms Goddard at KWM as follows (omitting formal parts):

We have received instructions thus far from an attorney firm based in China, which I understand still represents the client. The contact details for that firm are:

Firm: Shenzhen Talent Trademark Service (STS)

Contact: Bella Chen / Kivi Zeng

Email: ip@sts426.com

Address: 20/F, Building B, Lyjing Square (NEO), 6009 Shennan Middle Road, Futian District, Shenzhen City, Guangdong, China

We do not have a direct email address for the Respondent, however their physical address is as per the records at IP Australia:

Room 511

Building A17, Taoyuan Zhigu, Jiyue City, Tangxing Road, Taoyuan Street, Nanshan District

Shenzhen, Guangdong, 518000 China

Please let me know if you need anything further.

9    On 10 November 2022, consent orders were made vacating the case management hearing listed for 11 November 2022. The case management hearing was listed instead on 9 December 2022.

10    On 18 November 2022, Griffith Hack emailed KWM a filed copy of a notice of ceasing to act. It is relevant to note that r 4.05(2) of the Federal Court Rules provides that a party whose lawyer has filed a notice of ceasing to act: “[M]ust file a notice of address for service within 5 days after the notice is filed”.

11    The evidence established in this case that no such notice of address for service was ever filed. The failure to file such a notice was an act of default pursuant to r 5.22(a) of the Federal Court Rules.

12    On 28 November 2022, KWM emailed STS in the following terms (omitting formal parts):

We act for [the applicant] in relation to the subject Proceedings in the Federal Court of Australia.

We understand that your firm acts for [the respondent] in these Proceedings and that you have been instructing Australian lawyers Griffith Hack in these Proceedings (which is the address for service listed on the Australian Trade Marks Register) in respect of your client's Australian trade mark application numbers 2045813 and 2045199 for the [SupB] mark, the subject of this dispute.

Griffith Hack is no longer representing the respondent in these proceedings, having lodged a notice of ceasing to act with the court (copy attached). However, your client has not filed a notice of address for service within the required deadline in accordance with the Federal Court Rules 2011 (Cth).

Given your client is based overseas, we are concerned that our client would have difficulty communicating with, and serving material on, the [r]espondent should it fail to appoint new Australian legal representatives and file a notice of address for service and that this would impede the efficient progress of the proceedings.

The Proceedings are currently listed for a case management hearing before Justice O’Callaghan J at 9.30 am (AEST) [sic] on Friday 9 December 2022.

We would be grateful if you could please advise by 1 December 2022 whether your client intends to obtain new Australian legal representatives to appear at the case management hearing, and if it intends to file a notice of address for service, as required by the Federal Court Rules 2011 (Cth).

In the absence of receiving this information, we anticipate seeking orders that the case management hearing currently scheduled be adjourned to allow further time for the parties to communicate regarding the next stages of the Proceedings.

We look forward to hearing from you.

13    A little over an hour later, STS on behalf of the respondent, Shenzhen SFS, emailed Ms Goddard at KWM as follows (errors in original):

I thank you for your email below.

The client decided not to take any action on captioned trademark because the negotiation would be a long process.

14    The case management hearing scheduled for 9 December 2022 duly occurred. Shenzhen SFS did not appear. That failure to appear is also relied upon as a further act of default, in particular under r 5.22(c) of the Federal Court Rules which provides that a party is in default if it fails to attend a hearing in the proceeding.

15    By virtue of the orders that I made on 9 December 2022, the interlocutory application was listed for hearing today. On 9 December 2022, KWM emailed a copy of the orders made that date to STS at the email address (ip@sts426.com) and drew particular attention to the fact that the interlocutory application would be heard commencing at 10.15 am today. The respondent did not appear at the hearing today and that the failure to appear was also relied upon as an additional relevant act of default under r 5.22(c) of the Federal Court Rules. Mr Larish also relied upon the failure of the respondent to defend this proceeding with due diligence, or at all, and in that regard, sought to invoke rule 5.22(d) of the Federal Court Rules.

16    Rule 5.23(2)(d) of the Federal Court Rules is as follows:

5.23 Orders on default

…

(2)    If a respondent is in default, an applicant may apply to the Court for:

...

(d)    an order giving judgment against the respondent for damages to be assessed, or any other order; or …

17    The discretion conferred upon the court by rule 5.23(2)(d) is unconfined and the words “or any other order” have been broadly interpreted. Counsel relied, in particular, on this observation of Flick J in BJ International Limited v Asghar (No 2) [2013] FCA 580 at [14]:

Without being exhaustive, an order may be made entering judgment against a respondent pursuant to r 5.23(2)(d) in those circumstances where the default which has occurred is such as to manifest an intention on the part of a respondent not to comply with orders which have been made with a view to preparing a case for hearing. A single act of default may be sufficient; in other circumstances a single act of default may not warrant an order being made. Much may also depend upon whether a respondent has been given adequate notice of an intention to make an application for judgment to be given and an opportunity for the respondent to remedy a past act of default.

18    In my view, as Mr Larish submitted, it is appropriate for judgment to be entered in favour of his client, together with the other orders sought in the interlocutory application for the following reasons. First, Shenzhen SFS’s defaults indicate that it does not intend to comply with any orders made with a view to preparing the case for hearing. Secondly, as the correspondence proves, Shenzhen SFS, by virtue of the email sent by KWM to STS, has been informed of the interlocutory application, the terms of that application and when it was to be heard. And, obviously, it was therefore given an opportunity to appear. Thirdly, and most particularly, the email sent by STS on behalf of the respondent on 28 November 2022 makes it apparent that according to its Chinese attorneys, the respondent has decided not to take any action in relation to the trade marks, because as it was put in that email: “[T]he negotiation would be a long process”.

19    Fourthly, it is relevant to the exercise of discretion as to whether to grant the orders sought that the Registrar of Trade Marks has indicated that she does not intend to be heard in this proceeding. It follows that the Registrar does not oppose the orders sought in the interlocutory application. As to the relevance of that fact, see Autumnpaper Ltd v Metropolitan Investment Group Pty Ltd [2017] FCA 1578 at [11] (Lee J).

20    It was also submitted that it is relevant to the question of whether I should make the orders sought, that I should infer that there was no intention to use the trade marks in Australia because the respondent, being the trade mark applicant, has been put on notice by virtue of the terms of the notice of appeal, that its intention to use the marks is in issue under s 59 of the Trade Marks Act, and a failure to respond is evidence that there was no intention to use the marks as at the date of the filing. There is no doubt as to the correctness of that proposition and it may well be the case here, but in my view, it is not necessary to express any view about it in light of the fact that the multiple defaults referred to above provide more than a sufficient basis for the granting of summary judgment against the respondent.

21    For those reasons, I will make orders along the lines sought by the applicant.

Associate:

Dated:    8 February 2023