FEDERAL COURT OF AUSTRALIA

STIHL Pty Ltd v Reggie Bowman Pty Ltd [2023] FCA 1347

ORDERS

PENAL NOTICE

THE COURT ORDERS THAT:

A.    Registered Trade Mark Infringement

1.    Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the Court declares that the First Respondent has infringed the “STIHL Trade Marks” (being Australian trade mark registration numbers 859547, 806691 and 962755) by advertising, offering for supply and supplying goods and services in respect of which one or more of the STIHL Trade Marks are registered (being the goods and services set out in Annexure A to these orders [Annexures are omitted from this record of the orders made]) (Relevant Goods and Services) by:

(a)    using the name and mark “STIHL SHOP BERWICK”; and

(b)    displaying the STIHL Trade Marks at the “Premises” (being 21–23 Enterprise Avenue, Berwick, Victoria, 3806).

2.    Pursuant to s 126(1)(a) of the Trade Marks Act 1995 (Cth) (TM Act) and/or ss 22 and/or 23 of the FCA Act, the First Respondent, whether by itself or by its servants or agents, or howsoever otherwise, be permanently restrained from infringing the STIHL Trade Marks by engaging in the following acts without the authority of the Applicant or the Third Respondent:

(a)    distributing, advertising, promoting, marketing, offering for sale, supplying or selling in Australia or to Australian customers (including through any website directed or targeted to Australian customers) any of the Relevant Goods and Services under or by reference to the STIHL Trade Marks and/or the name “STIHL SHOP BERWICK”;

(b)    displaying the STIHL Trade Marks at the Premises; and

(c)    authorising any other person to engage in any of the acts described above.

3.    Pursuant to s 126(1)(a) of the TM Act and/or ss 22 and/or 23 of the FCA Act, within 21 days of the date of this order, the First Respondent is to:

(a)    cause to be removed from the Premises, and any vehicle used in the business conducted from the Premises (Business), all signage displaying the STIHL Trade Marks;

(b)    amend all social media accounts and online business listings used in relation to the Business so as to remove the STIHL Trade Marks (and to remove any other signs that are substantially identical with, or deceptively similar to, the STIHL Trade Marks);

(c)    deregister the domain name “stihlshopberwick.com.au”; and

(d)    decommission and cease using all email addresses that include the word “STIHL”.

4.    Pursuant to s 126(1)(b) of the TM Act, the First Respondent pay the Applicant nominal damages in the amount of $5,000.

5.    Pursuant to s 126(2) of the TM Act, the First Respondent pay the Applicant additional damages in the amount of $50,000.

B.     STIHL Dealer Agreement and Bowman Guarantee

6.    Pursuant to s 21 of the FCA Act, the Court declares that the agreement entered into between the Applicant and the First Respondent dated 17 April 2013 and titled “STIHL Dealer Agreement” was terminated by the Applicant by the “Notice of Termination” given on 3 February 2022, such termination taking effect on 5 April 2022.

7.    Pursuant to s 21 of the FCA Act, the Court declares that the amounts demanded by the Applicant in respect of the invoices set out in Annexure B to these orders (Supplied Products) constitute a “Debt” within the meaning of the agreement entered into between the Applicant and the Second Respondent dated 17 April 2013 and titled “Director’s Guarantee and Indemnity”.

8.    Pursuant to s 21 of the FCA Act, the Court declares that the First Respondent and Second Respondent are jointly and severally liable to pay to the Applicant the sum of $39,592.06 in respect of the Supplied Products.

9.    The First Respondent or Second Respondent pay to the Applicant the sum of $39,592.06 in respect of the Supplied Products.

10.    Pursuant to s 51A of the FCA Act, the First Respondent or Second Respondent pay interest on the sum in paragraph 9 above from 5 April 2022 to 3 November 2023 (being the date of judgment) calculated in accordance with the Interest on Judgments Practice Note (GPN-INT) and at the rates published by the Federal Court of Australia on its website page titled “Pre-judgment & Post-judgment Interest Rates”.

C.     Australian Consumer Law

11.    Pursuant to s 21 of the FCA Act, the Court declares that by representing, after 5 April 2022, that the First Respondent is an authorised STIHL dealer and/or that the Business is a business authorised by the Applicant, the First Respondent has contravened ss 18, 29(1)(g), and 29(1)(h) of the Australian Consumer Law (that is Sch 2 to the Competition and Consumer Act 2010 (Cth)) (ACL).

12.    Pursuant to s 21 of the FCA Act, the Court declares that the Second Respondent was involved in the First Respondent’s contravention of the ACL set out in paragraph 11 above, within the meaning of s 75B of the Competition and Consumer Act 2010 (Cth).

13.    Pursuant to s 232 of the ACL and/or s 22 and/or 23 of the FCA Act, the First Respondent and Second Respondent, whether by themselves or by their servants or agents, or howsoever otherwise, be permanently restrained from, without the authority of the Applicant or the Third Respondent, representing that:

(a)    the First Respondent is an authorised STIHL dealer; and/or

(b)    the Business is a business authorised by the Applicant.

D.    Costs of the proceeding

14.    The First and Second Respondents pay the Applicant’s costs of the proceeding (including all reserved costs) on an indemnity basis as agreed or, if not agreed, in an amount to be determined by a Registrar of this Court on a lump sum basis.

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

REASONS FOR JUDGMENT

BUTTON J:

INTRODUCTION

1    The proceeding was commenced by an originating application and statement of claim on 30 March 2023. Since the proceeding was commenced, the first and second respondents have been given ample time in which to file and serve a defence. The last of these extensive opportunities was constituted by an order made on 28 August 2023 for the first and second respondents to file and serve a defence (and any cross claim or third-party claim) by 25 September 2023. They have failed to do so. Consequently, the applicant (STIHL) brought an interlocutory application seeking judgment in default pursuant to r 5.23(2) of the Federal Court Rules 2011 (Cth) (the Rules). It is clear that the first and second respondents are in default within the terms of r 5.22.

2    A more detailed procedural chronology is set out below. Suffice it to say that, since it was commenced, the proceeding has been vexed by a lack of engagement by the first and second respondents, as well as issues concerning whether or not the first and second respondents could be represented by Drew Scott. Mr Scott styles himself “Drew Scott Esq” and is an ethics consultant. He has a law degree, but no practising certificate. The proceeding has also been bogged down by prolix and argumentative correspondence issued by Mr Scott (including to the Court’s Registry staff), some of which was virtually incomprehensible.

3    At one point, it appeared that Mr Scott purported to be entitled to represent the first and second respondents as a “lawyer” despite not having a practising certificate, but Mr Scott resiled from this position when the applicant brought an application to restrain him from acting. Mr Scott subsequently filed a notice of ceasing to act and, since then, no notice of address for service for the first and second respondents has been filed. Nevertheless, Mr Scott re-emerged with an email on the morning of the day fixed for the hearing of the application for judgment in default, despite there having been no engagement by the first or second respondent with the application for judgment in default to that point. As Mr Bowman wished for Mr Scott to address the Court on that application, I permitted him to do so.

4    I should be clear that, despite there being no current notice of address for service on the Court file in respect of the first or second respondents, the applicant has assiduously served the first and second respondents with material in this proceeding. That includes orders made and transcripts of interlocutory hearings. Importantly, the material served on the first and second respondents included the interlocutory application for judgment in default, affidavits in support and the applicant’s comprehensive written submissions. The first and second respondents were also advised of the hearing date.

5    The factual context is as follows (taking the pleaded facts as admitted on this application: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513 at [42] (Moore, Dowsett and Greenwood JJ); Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 at [14] (Yates J)).

6    The third respondent is the registered owner of certain trade marks (STIHL Trade Marks). The applicant is an “authorised user” of those marks within the meaning of ss 6 and 26 of the Trade Marks Act 1995 (Cth) (TM Act). It has the consent of the third respondent to bring an action for infringement of the STIHL Trade Marks for the purposes of s 26(b)(i) of the TM Act.

7    The second respondent, Mr Bowman, has been the sole director of the first respondent since December 2019. The first respondent operates a business in Berwick, Victoria, called “STIHL Shop Berwick”. As well as its name, the business operated by the first respondent uses the STIHL name and the STIHL Trade Marks in its signage and in other facets of its business (including its website and email addresses).

8    The first respondent used the STIHL name and STIHL Trade Marks pursuant to a contract with the applicant, entered into on 17 April 2013 (Dealer Agreement). That agreement included clauses:

(a)    requiring the first respondent to pay the applicant for products it supplied, within 30 days of the end of the month of the relevant invoice (Product Payment Clause);

(b)    obliging the first respondent to remove (and if so required) deliver to STIHL all signage incorporating the “STIHL Shop” name, or the STIHL Trade Marks (Notification and Removal Clause);

(c)    obliging the first respondent to pay STIHL’s costs on a solicitor and own client or full indemnity basis if STIHL obtains a declaration, injunction or other order for specific performance to enforce cl 17, which includes the Notification and Removal Clause (Legal Costs Clause);

(d)    entitling STIHL to terminate on various terms, which included terminating on 60 days’ notice;

(e)    obliging the first respondent, in the event of termination, to immediately pay all amounts owing, cease to use or display the STIHL Trade Marks or any words suggesting it is an authorised dealer and to remove all signs and other identification indicating an association with STIHL (Post-Termination Obligations Clause); and

(f)    by which the first respondent indemnified STIHL against all damages, losses, claims, liabilities and other costs incurred in connection with any non-performance by the first respondent of its obligations (Indemnity Clause).

9    Mr Bowman signed a broad guarantee and indemnity in favour of the applicant in April 2013 (Bowman Guarantee).

10    On 3 February 2022, the applicant gave notice of termination of the STIHL Dealer Agreement, effective 5 April 2022. However, notwithstanding that termination, and despite a demand being issued on 6 September 2022, the first respondent has continued to operate its business under the style and name “STIHL Shop Berwick” and to display and otherwise use the STIHL Trade Marks in the business.

11    STIHL previously supplied products to the first respondent, but it has not paid STIHL for products supplied between about 8 February 2022 and 25 March 2022 (Supplied Products). The total unpaid amount is $39,592.06. In September 2022, a demand was made for payment from Mr Bowman, under the Bowman Guarantee. The amount outstanding was not paid.

12    Following an unsuccessful mediation in December 2022, STIHL made an open offer to the first and second respondents by letter dated 23 December 2022 (Calderbank Offer). The letter set out, in detail, the claims made in the proceeding, STIHL’s asserted rights, and STIHL’s demands (essentially no longer using the STIHL name and the STIHL Trade Marks and removing signage, etc). The offer made was for STIHL to forgive amounts due in relation to the Supplied Products and pay the first respondent a sum of $12,000, if the first and second respondents agreed to stop using the STIHL Trade Marks. Terms of a proposed deed were provided. The Calderbank Offer was open for acceptance until 23 January 2023. The letter also foreshadowed commencement of proceedings and an application for indemnity costs if the offer was not accepted.

13    The Calderbank Offer was not accepted and proceedings were commenced in March 2023. The statement of claim pleads, clearly and with detailed particulars, the causes of action advanced for:

(a)    breaches of the Notification and Removal Clause, and the Post-Termination Obligations Clause in the Dealer Agreement;

(b)    infringement of the STIHL Trade Marks contrary to ss 120(1), 120(2)(a), 120(2)(b) and/or 120(2)(c) of the TM Act, which infringements are pleaded to be flagrant and enlivening the Court’s power to award additional damages under s 126(2) of the TM Act;

(c)    passing off and contravention of ss 18, 29(1)(g) and 29(1)(h) of the Australian Consumer Law (ACL), with Mr Bowman pleaded to be involved in those contraventions within the meaning of s 75B of the Competition and Consumer Act 2010 (Cth);

(d)    failure to pay for the Supplied Products both pursuant to the Product Payment Clause and the Bowman Guarantee; and

(e)    payment of its costs by the first respondent on an indemnity basis pursuant to the Legal Costs Clause and/or the Indemnity Clause, and by Mr Bowman in the same amounts pursuant to the Bowman Guarantee.

14    The applicant’s written submissions comprehensively set out the manner in which the pleaded facts establish the causes of action advanced, and the relief sought. I accept STIHL’s submissions. While I return to a few discrete matters (noted below), I am otherwise satisfied that the pleaded facts entitle STIHL to the relief it sought on this application and enliven the Court’s discretion to grant judgment in default on the terms sought at the hearing. I note that some paragraphs of the interlocutory application were not pressed at the hearing. After the hearing, the applicant provided a revised form of order that omitted paragraphs of the interlocutory application that were not pressed, and made other changes so that the terms of the orders are “self-contained” and do not require reference to terms defined in the statement of claim.

15    The discrete matters to which I refer are as follows:

(a)    a point raised by the first and second respondents concerning “standing”;

(b)    the significance (in the exercise of discretion) of:

(i)    evidence regarding the asserted mental condition of Mr Bowman, and difficulties said to have been experienced in retaining a barrister and/or solicitors;

(ii)    complaints made about the conduct of STIHL’s solicitors and the Court’s Registry staff; and

(iii)    various practice notes and guides;

(c)    the award of damages and additional damages under the TM Act; and

(d)    whether costs should be ordered on an indemnity basis.

16    As the procedural chronology is relevant to the costs issue, I will first set out some aspects of the procedural chronology, before returning to the other matters referred to above.

THE PROCEDURAL CHRONOLOGY

17    Mr Bowman was personally served with copies of the originating application and statement of claim on 5 April 2023. On 6 April 2023, the first respondent was served at its registered office. On 9 May 2023, the parties were advised by my chambers that the matter had been listed for a first case management hearing on 19 May 2023.

18    The first case management hearing proceeded on 19 May 2023. Mr Scott arrived to that hearing approximately 35 minutes late. In between the scheduled commencement of the hearing and the time of Mr Scott’s arrival, Mr Scott directed an email to the Court advising he was “heading to court now” and attaching a medical certificate from December 2018 stating that Mr Scott suffers from a medical condition, the symptoms of which “can mimic forgetfulness and laziness”.

19    Despite Mr Scott confirming that he does not hold a practising certificate, I granted leave for him to appear on behalf of the first and second respondents for the purpose of that case management hearing. During the hearing, Mr Scott explained that the first and second respondents had been trying to secure legal representation but had so far been unsuccessful, but would keep trying. Mr Scott also foreshadowed that the first and second respondents intended to seek further and better particulars of the statement of claim, were contemplating an application to strike out parts of the statement of claim and intended to bring a cross-claim joining two former directors of the first respondent to the proceeding. Accordingly, and with the agreement of the applicant, I made orders that the first and second respondents file their defence, cross-claim and any third-party claims by 30 June 2023, being a period of six weeks from the date of the hearing, and three months from the date of commencement of the proceeding. In ordering that the first and second respondents put on their defence, I did not accede to a submission of the first and second respondents that they ought not be required to file a defence before further and better particulars of the statement of claim were provided. The statement of claim was adequately particularised. No complaint was made about the period of time allowed for the defence. On the contrary, Mr Scott accepted it was a generous period of time.

20    On 28 June 2023, Mr Scott directed another, lengthy email to the Court. The email was sent on an ex parte basis, ostensibly due to containing “information of a sensitive nature about [Mr Scott’s] client”. That email raised a number of substantive matters which were not properly raised with the Court without being copied to the applicant. The next day, Mr Scott was advised by email from my chambers that communications with the Court were required to be open and uncontroversial and was referred to the Court’s Guide to Communications with Chambers Staff.

21    The first and second respondents did not file and serve their defence on 30 June 2023, being the date on which they were ordered to file and serve their defence by the orders made on 19 May 2023. Nor did they apply to vary the orders.

22    On 30 June 2023, a Notice of Address for Service was filed on behalf of the first and second respondents. The notice stated that it was prepared by “Drew Scott, Esq” and included a note beneath the signature block which read “under extreme duress under protest FCAA s 59(2)(b) — all rights reserved” and described Mr Scott as “Lawyer for the First & Second Respondents (within the Definition of Part 1, Section 4 FCAA 1976)” (emphasis in original). On 3 July 2023, prompted by receipt of the notice, the Court emailed Mr Scott asking him to clarify whether he holds a practising certificate, explaining that if he does not, he could not represent the first and second respondents without leave, and advising that any application for him to do so should be made prior to the case management hearing listed on 4 August 2023.

23    Later that day, Mr Scott sent an email in reply. In that email, Mr Scott asserted that there had been “unlawful discrimination and other abuses of human rights protections, and court process abuses being utilised against Mr Bowman who is a member of a protected class”, and asserted that Mr Bowman suffered from a “cognitive neurological disability” which rendered him unable to “speak or advocate for himself”. The email embedded images of two documents, each headed “Limited Agency Authority” and executed by the first and second respondents respectively appointing Mr Scott as their agent (despite the claimed incapacity of Mr Bowman).

24    Mr Scott’s email also set out the basis on which he claimed to be entitled to represent the first and second respondents as their “lawyer” (emphasis in original):

… “lawyer means a person enrolled as a legal practitioner of a federal court… 

OR the Supreme Court of a State or Territory.”

I thought that I should at least fall within the first half of the definition, since I am enrolled as a sworn officer of the high court (barrister & solicitor) and there are no such things as a federal PCs as far as I am aware, and the second part of the definition is preceded by “OR” meaning I can ignore the second half. More specifically, it implies that I do not have to be enrolled in my state or territory Supreme Court, to be a lawyer under the Act, just a federal court. So if a state PC was required to become enrolled at the federal level, which 12 years ago I believe it was, implicit in the definition appears to me to be no requirement to maintain that enrolment (even though I have and am a current LIV member also).

I am also enrolled as a barrister & solicitor of the Supreme Court of Victoria, and a member of the LIV. The reference to practitioner in the first and second halves are confusing, because I didn’t know that practitioners could be enrolled. I thought lawyers (barristers and solicitors) or sworn officers of the court are enrolled, and conversely, are struck off the roll. Whereas PCs can be suspended, cancelled, renewed, granted, but not on any roll that I am aware of. The definition reference I referred specifically to on the form 10, knowing that I could not apply for leave on that form, nor until that form was submitted, which is why I wrote to Chambers last week to try and determine how I can make an application under division 1.2 FCR without putting in the Form 10 …

25    On 5 July 2023, the Court’s Registry staff sent an email noting that the respondents’ defence and any cross-claim, including any third party claim had been due by 4:00pm on 30 June 2023. The email invited any party who considered that the matter should be listed for case management prior to the scheduled 4 August 2023 case management hearing, to make that request by open email. It was also requested that all future correspondence in the proceeding be directed to the Registry in the first instance.

26    On 7 July 2023, despite the request that all future correspondence be directed to the Registry, Mr Scott emailed my chambers requesting an “urgent listing prior to the next case management hearing on 4 August 2023, in order to address timetabling and other interlocutory matters” and seeking “a renewed grant of leave of [the] Court to formally act as the [first and second respondents’] interim lawyer, under extreme duress & under protest”. Following that email, the applicant’s solicitors wrote to the Registry proposing timetabling orders and that the matter be listed for a case management hearing on 21 July 2023. On 10 July 2023, the Registry emailed the parties and asked for a response to the orders proposed by the applicant.

27    No response was received from Mr Scott until an email on 13 July 2023 (directed to my chambers), which did not copy the applicant’s solicitors and did not address the applicant’s proposed orders. Instead, the 13 July 2023 email referred to “an ex parte application which is on foot, under r 3.04 of [the Rules] which permits it to be made ‘without notice’”. That rule provides that a person may apply to the Court without notice for an order that a Registrar do any act or thing that the Registrar is required or entitled to do but has refused to do. No application pursuant to r 3.04 was filed. Also on 13 July 2023, Mr Scott sent a series of text messages to one of the solicitors for the applicant. Amongst other things, he said that he had not read her emails and had called to avoid reading and replying to more emails. Later the same day, the applicant’s solicitors wrote to Mr Scott seeking the response of the first and second respondents to its proposed timetabling orders and raising their concern that he was engaging in unqualified legal practice, contrary to s 10 of the Legal Profession Uniform Law.

28    On 14 July 2023, my chambers responded to Mr Scott’s email of 13 July 2023, reiterating the request that all correspondence in the proceeding be directed to the Registry. That same day, the Registry informed Mr Scott and the applicant that the Court would list the matter for a case management hearing on 21 July 2023 and directed the parties to file proposed orders, submissions and any affidavit material by 18 July 2023, and responsive materials by 20 July 2023.

29    The applicant filed its materials on 18 July 2023. That material foreshadowed an application to restrain Mr Scott from acting for the first and second respondents in the proceeding. No submissions or affidavit material was filed by the respondents; however, also on 18 July 2023, Mr Scott directed an email to the Court’s Registry which raised multiple issues, directed parts of the email to various of the applicant’s solicitors personally, and attached proposed orders. The contents of the proposed orders varied from allegations of bias and discrimination against Registry staff members, to orders seeking to compel the applicant’s solicitors to partake in oral (cf written) communications with Mr Scott, to the joinder of four additional respondents to the proceeding (including ASIC and the ACCC), and an extension to the time for the first and second respondents to file and serve a defence and any cross-claims, including any third party claims. The proposed orders also sought that:

Pursuant to rr 1.34 and 4.01 of the Federal Court Rules 2011 (Cth), leave is granted to Drew Scott, Esq. of Drew Scott, Esquire Consulting to act on behalf of the first and second respondents as their federal lawyer under duress.

30    The following day, Mr Scott directed yet another email to chambers, which did not copy the applicant’s solicitors. The email set out three enquiries relating to Mr Scott’s proposed application under r 3.04 which was foreshadowed in his 13 July 2023 email (described above).

31    The case management hearing proceeded on 21 July 2023. There was no appearance by Mr Scott or the first or second respondents. No advice had been received prior to the hearing that the first and second respondents (or Mr Scott) were unavailable.

32    On 21 July 2023, orders were made timetabling the filing and hearing of the applicant’s foreshadowed application to restrain Mr Scott from continuing to act (Restraint Application). During the hearing, I requested that the applicant provide the first and second respondents with copies of the transcript of the hearing and the orders made so that they would have notice of the matters discussed at the hearing, including the future listing, and timetabling of the Restraint Application. The orders made provided for the Restraint Application to be heard on 16 August 2023.

33    After the hearing on 21 July 2023 had concluded, the Court received an email from Mr Scott attaching a medical certificate from Plaza Medical Centre dated 20 July 2023, which stated that Mr Scott would be unfit to continue his usual occupation on 20 July 2023. Mr Scott’s email also claimed that he had no notice of the hearing. In fact, the hearing had been advised by Registry on 14 July 2023 and a further confirmation of the hearing had been sent to the parties by email on 20 July 2023.

34    STIHL filed and served its Restraint Application on 28 July 2023. The first and second respondents did not file any responsive materials. Its submissions noted (amongst other matters) ss 55A and 55B(1) of the Judiciary Act 1903 (Cth), and relevant authorities including De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575 at [50], Little v Registrar of High Court of Australia (1991) 29 FCR 544 at 552 and Oil Basins Limited v Watson [2017] 252 FCR 420 at [61]–[62].

35    On 16 August 2023, another hearing was conducted. The hearing was scheduled to commence at 9:30am. However, at the commencement of the hearing there was no sign of Mr Scott. At approximately 9:36am, the Court received an email from Mr Scott with the subject line “Today’s hearings VID198/2023”. Amongst other things, the email stated that Mr Scott had only received notice of the hearing from the first and second respondents at 6:30pm the day prior and requested that the Court wait to conduct the hearing until his arrival. The matter was stood down for one hour to allow Mr Scott time to arrive in Court.

36    When the hearing resumed at 10:40am, Mr Scott was given the opportunity to comment on the Restraint Application. Despite his earlier representations to the contrary, when asked to clarify whether he claimed to represent the first and second respondents as a “lawyer”, Mr Scott responded, “I don’t represent them as their lawyer because I haven’t received … the court’s leave” and confirmed that he took the position that he would need a practising certificate to represent them as a lawyer (ie, without leave). Mr Scott proceeded to explain that he was able to speak for the first and second respondents in his capacity as their authorised agent. I explained to Mr Scott that, given he no longer purported to be able to represent the first and second respondents as a lawyer, if he wished to represent them on an ad hoc basis (ie, as a lay advocate), he would be required to make an application to do so, which application would need to be supported by evidence.

37    During the hearing, Mr Scott again described Mr Bowman as having an “incapacity” or “incompetency” that rendered him in need of a litigation representative for the purposes of this proceeding. I explained to Mr Scott that where questions of medical incapacity arise, the Court requires medical evidence in the form of doctors’ or specialists’ reports. I also directed Mr Scott to the division in the Rules which sets out the procedure for appointment of litigation representatives in this Court. Mr Scott also raised other matters including the respondents’ continued difficulty in securing legal representation and their resultant inability to comply with the Court timetable.

38    At the conclusion of the hearing, I made orders adjourning STIHL’s Restraint Application to 28 August 2023 and directing that Mr Bowman personally attend the hearing on that day. I also ordered that any application seeking leave for a person other than a lawyer to represent the first and second respondents be made in advance of, and be heard at, the 28 August 2023 hearing.

39    After the hearing, the applicant’s solicitors emailed a copy of the 16 August 2023 orders and transcript of the hearing to Mr Bowman personally, and sent copies of the same by express post to the business address of the first respondent.

40    Late in the afternoon on the Friday prior to the 28 August hearing (which was a Monday), the Registry received an email from Mr Scott. That email attached a medical certificate signed by a doctor from Casey SuperClinic which stated that Mr Bowman had consulted with the doctor on 23 August 2023 and that he would be unable to attend his usual duties from 23 August 2023 to 25 August 2023, inclusive. In the body of the email, Mr Scott explained that he was uncertain whether he or Mr Bowman would be well enough to attend the hearing on Monday, explaining that he was himself suffering from an infection, though no evidence was attached in support of Mr Scott’s condition.

41    On the morning of the 28 August hearing, Mr Scott again emailed the Registry with the subject line “FW: CRITICALLY URGENT ADJOURNEMNT REQUESTED ON MEDICAL GRNDS:1&2 RSPs/AGENT UNABLE TO ATTEND TODAY’S HEARINGS VID198/2023”. This was another lengthy email raising various matters but, in summary, Mr Scott stated that both he and Mr Bowman remained too ill to attend the hearing that morning. A medical certificate was attached in support of Mr Scott’s condition which stated that he was suffering from “a medical condition” and would be unfit for work from 26 August to 30 August 2023, inclusive. As no evidence was provided concerning Mr Bowman’s condition, I directed the Registry to email the parties a Microsoft Teams link and advise that Mr Bowman was expected to attend the hearing remotely.

42    Despite the provision of a Microsoft Teams link, both Mr Scott and Mr Bowman failed to appear at the hearing on 28 August 2023. After hearing from counsel for STIHL, I made orders which provided the first and second respondents with four additional weeks (to 25 September 2023) to file a defence and any cross-claims, including any third party claims. During the hearing I conveyed to STIHL that such orders were made “on the basis that STIHL, having stayed its hand in respect of any application in default … pending determination of the [Restraint Application] has run its course when that date expires”. The matter was adjourned to 6 October 2023 and STIHL was ordered to serve a copy of the orders and the transcript of the hearing directly on the first and second respondents.

43    Following the hearing, STIHL filed an affidavit dated 28 August 2023 which detailed the enquiries which its solicitors had made as to Mr Bowman’s fitness to attend Court. In particular, the affidavit annexed photographs taken by a private investigator hired by STIHL’s solicitors, which established that Mr Bowman had attended and was working at the STIHL Shop Berwick on 26 and 28 August 2023 (PI Affidavit).

44    In compliance with my 28 August orders, a copy of the transcript of the hearing and the orders made were provided to Mr Bowman by email from the applicant’s solicitors after the hearing. STIHL also filed an affidavit dated 29 August 2023 confirming personal service of the orders, the transcript, and the PI Affidavit on Mr Bowman.

45    On 4 September 2023, the Registry received an email from Mr Scott (which was not copied to the applicant’s solicitors) in which he made various assertions about the conduct of the proceeding and made allegations against the Court Registry staff. Most relevantly, the email attached a document titled “FCA_form008_20130509”, being a Notice of Ceasing to Act. The notice confirmed that Mr Scott had ceased to act for the first and second respondents, stated that it was prepared by “Drew Scott, Esq” and included a note beneath the signature block which read “under extreme duress under protest — reserving all rights” and was signed by Mr Scott as “Drew Scott, Esq. (of DSEC) interim limited federal lawyer-advocate (under extreme duress and protest via Form 10 only due to disability discrimination and subject to grants of leave to appear)”.

46    The Registry subsequently sent an email to the parties that attached a copy of the Notice of Ceasing to Act and advised that the notice would be placed on the Court’s file. The email further advised that, in respect of other matters raised in Mr Scott’s email of 4 September 2023, my chambers had advised that correspondence was required to be copied to the other side, even if it included medical or personal information. The first and second respondents did not subsequently seek to re-enliven the other matters raised in Mr Scott’s 4 September 2023 correspondence by proceeding on an open basis.

47    No Notice of Acting or Notice of Address for Service for the first or second respondents has been subsequently filed in this proceeding.

48    25 September 2023 was the further extended date on which the first and second respondents’ defence was due, pursuant to orders made on 28 August 2023. That date came and went without any defence being filed, and without any application having been made to vary the order.

49    On 3 October 2023, being seven business days after the further extended date by which the first and second respondents were to file and serve a defence and any cross-claims, including any third party claims, STIHL filed and served its default judgment application. Considering the absence of any communication from the first or second respondents, the 6 October 2023 hearing was adjourned, and the default judgment application was listed for hearing on 27 October 2023. I caused a copy of the orders adjourning the hearing and listing both the Restraint Application and the default judgment application for hearing on 27 October 2023 to be emailed to the parties (including Mr Bowman) on 6 October 2023.

50    Mr Scott re-emerged on the morning of 27 October 2023, being the date fixed for the hearing of STIHL’s application for default judgment. Mr Scott directed a long email to my chambers, which communication was described as given in his “capacity as Federal Court Rules 2011 (FCR) Schedule 1 Guardian pursuant to an Act of the Commonwealth, namely the Disability Discrimination Act 1994[sic]” (emphasis in original). At this point, Mr Scott had already filed his Notice of Ceasing to Act close to two months earlier, and no further Notice of Address for Service had been filed in respect of the first and second respondents. Mr Scott’s email foreshadowed Mr Scott bringing an application pursuant to Div 9.6 of the Rules, for his appointment as the litigation representative of Mr Bowman for the purposes of this proceeding. My chambers acknowledged receipt of the email and advised Mr Scott that if the first and second respondents intended to oppose the default judgment application, Mr Bowman would be required to attend the hearing personally. I have outlined the events which took place at the hearing of this application below.

RELEVANT PROVISIONS AND APPLICABLE PRINCIPLES

51    Rule 5.23(2) of the Rules relevantly provides that, if a respondent is in default, an applicant may apply to the Court for:

(a)     an order that a step in the proceeding be taken within a specified time; or

(b)     if the claim against the respondent is for a debt or liquidated damages—an order giving judgment against the respondent for:

(i)    the debt or liquidated damages; and

(ii)     if appropriate, interest and costs in a sum fixed by the Court or to be taxed; or

(c)    if the proceeding was started by an originating application supported by a statement of claim or an alternative accompanying document referred to in rule 8.05, or if the Court has ordered that the proceeding continue of pleadings—an order giving judgment against the respondent for the relief claimed in the statement of claim or alternative accompanying document to which the Court is satisfied that the applicant is entitled; or

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

(e)     an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time specified in the order.

52    Rule 5.22 provides, for the purposes of r 5.23, that a party is in default if the party fails to:

(a)    do an act required to be done, or to do an act in the time required, by the Rules; or

(b)    comply with an order of the Court; or

(c)    attend a hearing in the proceeding; or

(d)    prosecute or defend the proceeding with due diligence.

53    As STIHL set out in its submissions, the principles relevant to exercise of the discretion to award judgment in default are well-established. These principles were recently set out in GCTR Investments Pty Ltd v DJD Family Holdings [2023] FCA 260 at [19]–[20] (Cheeseman J, citing Deputy Commissioner of Taxation v Sibai [2015] FCA 1465 at [7]–[8] (Gleeson J) and Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [20]–[25] (Flick J)) and were summarised by STIHL in its submissions as follows.

54    First, the power to enter a default judgment is enlivened when an applicant applies to the Court for an order. Rule 5.23(2) provides that where a respondent is in default “an applicant may apply to the court”.

55    Second, the power is discretionary. Just as the discretion must be exercised cautiously where it is the applicant that is in default, the same caution must be exercised where it is the applicant who is seeking orders against a defaulting respondent.

56    Third, an applicant is not required to prove by way of evidence the claim sought to be advanced; the requirement is that the Court needs to be “satisfied” on the face of the statement of claim that the applicant is entitled to the “relief” claimed. The facts as alleged in the statement of claim are deemed to have been admitted by a respondent. In that regard, in Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606 (at [13]–[14]) Yates J observed as follows:

[13] The power to give judgment against a defaulting party is undoubtedly discretionary. The discretion must be exercised cautiously. Where the defaulting party is a respondent to a pleaded claim, the giving of judgment for final relief on the application will deliver complete success to the applicant without investigation of the merits of the pleaded claim: ACOHS Pty Ltd v Ucorp Pty Ltd [2009] FCA 577 at [27]. There is no requirement that the act or acts of default be intentional or amount to contumelious conduct. There is no requirement that the act or acts of default result in inordinate or inexcusable delay. That said, such features, if present, will be relevant to the exercise of the Court’s discretion. So too will conduct that persuades the Court that the defaulting party is manifesting an inability or unwillingness to cooperate with the Court and the other party or parties to the proceeding.

[14] Rule 5.23(2)(c) requires the Court to be satisfied that the applicant is entitled to the relief claimed in the statement of claim. This requirement has been interpreted as meaning that the Court must be satisfied that “on the face of the statement of claim” the applicant is entitled to the relief that is claimed. It is not a requirement that the applicant prove its claim by way of evidence. Put another way, the facts alleged in the statement of claim are taken to have been admitted: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; (2007) 161 FCR 513 at [42]. If, on inspection of the statement of claim, the Court is satisfied that the applicant would be entitled to the relief sought then this requirement of r 5.23(2)(c) will be met: CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170 at [18]–[19]; Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227 at [23]. The Court may permit further evidence to be adduced, but not evidence that would alter the pleaded case: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; 236 ALR 665 at [45], [48]–[50]; United Broadcasting International Pty Ltd v Turkplus Pty Ltd (No 2) [2010] FCA 1413 at [42]–[44]; Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352; 195 FCR 1 at [62]–[63].

57    Fourth, to be satisfied that the applicant “is entitled” to the relief claimed in the statement of claim, the Court needs to be satisfied that “each element of the relevant civil wrong involved is properly and discretely pleaded in the statement of claim”.

58    Fifth, in addition to the facts alleged in a statement of claim, the Court may permit recourse to further evidence (but not evidence that would alter the case as pleaded).

THE FIRST AND SECOND RESPONDENTS’ SUBMISSIONS ON THE APPLICATION

59    As set out in the procedural chronology above, the application for judgment in default was served on 3 October 2023, and, on 6 October 2023, the first and second respondents were advised of the hearing date. There was no indication they intended to appear and oppose the relief sought until the morning of the hearing, when Mr Scott’s email landed, advising that he intended to apply for an order appointing him the litigation representative of Mr Bowman under Div 9.6 of the Rules, and to effectively take over the conduct of the proceeding for the first respondent on Mr Bowman’s behalf. Neither Mr Bowman nor Mr Scott were present in Court when the hearing commenced at 2:15pm on 27 October 2023. Mr Bowman arrived at approximately 2:20pm and Mr Scott then arrived at about 2:45pm, at which time counsel for STIHL was still making his submissions on the application for judgment in default.

60    After counsel for STIHL concluded his submissions on the application for judgment in default, Mr Scott proceeded with his application to be appointed litigation representative. Despite the application only being finalised and filed in Court that afternoon, STIHL consented to the application being heard. I heard it before inviting responsive submissions on the default judgment application, as the application to appoint Mr Scott litigation representative had an obvious bearing on who might make those submissions. I dismissed the application and gave ex tempore reasons. I nevertheless permitted Mr Scott to make responsive submissions for the first and second respondents as Mr Bowman stated he wanted Mr Scott to make the responsive submissions, and STIHL did not object.

61    It was somewhat difficult to discern how the submissions being advanced by Mr Scott were said to bear on issues before the Court on STIHL’s application for judgment in default. I sought, on various occasions, to encourage Mr Scott to focus on any matters he wished to raise concerning whether or not the pleaded facts supported the relief sought and any matters he might submit would bear on the Court’s discretion to grant the relief sought by STIHL. In large part, the submissions advanced for the first and second respondents involved a litany of complaints about the conduct of the proceeding to date, and in particular the conduct of STIHL’s legal representatives and the Court’s Registry staff.

62    The complaints concerning the Court’s Registry staff extended to the timetabling of a case management hearing (which the first and second respondents did not attend) on a day that was “a special day” based on numerology practices (although I note it was also claimed that Mr Bowman and Mr Scott were unwell on that particular day). Another complaint concerned Registry staff requiring that, in order to be acted upon, correspondence to the Court needed to be copied to the other side, which the first and second respondents elected not to do (apparently given the sensitive personal nature of some information concerning Mr Scott). Yet another complaint concerned the timing of advice that the Court’s Registry would not be able to send correspondence to Mr Scott via fax (as he demanded, and despite correspondence from Mr Scott coming via email). These complaints have been taken into account.

63    Doing the best I can to distil submissions that might have a comprehensible relationship to the relevant issues, it appeared points raised by the first and second respondents were to the effect that the relief sought should not be granted because:

(a)    STIHL had not established that it had standing to bring the proceeding;

(b)    there was evidence concerning the mental condition of Mr Bowman and difficulties that had been experienced in retaining a barrister and/or solicitors;

(c)    procedurally, there had been unfair treatment of the first and second respondents by STIHL’s solicitors and the Court’s Registry staff; and

(d)    the Case Management Handbook (published by the Law Council of Australia) and the Court’s Central Practice Note: National Court Framework and Case Management (CPN-1) contain exhortations to narrow the issues and focus on the real issues in dispute, when the first and second respondents considered that had not been done in the present case.

64    While the first point raised goes to whether or not the facts pleaded would entitle STIHL to the relief sought under the TM Act, the remaining three points may be regarded as submissions going to the exercise of the Court’s discretion. With the exception of the standing point, no submissions were made that raised a substantive defence that may be advanced, such that the Court might decline to exercise the discretion so as not to give judgment and thereby preclude a respondent from pursuing a defence that may have merit.

THE “STANDING” CONTENTION

65    It was submitted that the statement of claim failed to plead standing. I reject that contention. As set out above, the statement of claim specifically pleaded that the third respondent was the owner of the STIHL Trade Marks and that STIHL was bringing the proceeding on the basis that it was an “authorised user” of those trade marks within the meaning of ss 8 and 26 of the TM Act. Pursuant to s 26(1)(b)(i) of the TM Act, an “authorised user” may bring an action for infringement of a trade mark at any time with the consent of the registered owner. Section 26(2) requires that the registered owner be made a defendant in the action. The owner of the trade marks in question was joined to the proceeding as the third respondent. The statement of claim also referred, in particulars of the plea of authorisation, to the consent of the third respondent having been given in a letter dated 15 March 2023 and signed on 20 March 2023.

DISCRETIONARY CONSIDERATIONS

66    The first and second respondents relied on the affidavit of Mr Scott that was prepared in support of Mr Scott’s application to be appointed a litigation guardian. In that affidavit, Mr Scott deposed to his experience of Mr Bowman’s asserted “impairment”, and provided a list of barristers and solicitors said to have been approached to act and who had either declined or not responded. No details were provided of the dates on which these practitioners were approached, or the terms on which they were asked to accept instructions (eg, whether they would be required to work through Mr Scott as an intermediary between them and Mr Bowman).

67    Mr Scott’s affidavit annexed a letter from “Empowering Lives”, said to be “an initiative of Teen Challenge Queensland”. The letter was signed by “Kylie Ransley”, “Director” and stated:

To whom it may concern,

On the 26th of October, I conducted an Arrowsmith Symbol Relations Assessment with Ashley Bowman. The Arrowsmith Program is a brain cognition program based on neuroplasticity that helps students to strengthen neural pathways that hinder learning or their ability in the workplace and life.

The Symbol Relations cognitive function is responsible for understanding and connecting ideas and processing complex relationships and concepts necessary for comprehension. This cognitive function is involved in

•    cause and effect reasoning

•    understanding the ‘why’ of things

•    grasping concepts across all academic disciplines

•    comprehension of what is read or heard

•    making rational and considered decisions

•    understanding the world, oneself, and others

•    fluid reasoning and flexibility of thought

•    logical grasp of mathematical concepts

•    understanding jokes, irony, metaphor, analogies

•    processing speed

•    semantic grasp of language necessary for comprehension and vocabulary development

•    perspective taking which involves considering other points of view

•    Reading comprehension

•    Mathematical reasoning

•    Decision making

•    Negotiation

After conducting the assessment, Ashley’s results showed that he has a rating of severe in this area and the Symbol Relations Program is recommended.

68    There was no indication that the author of that letter has any medical qualifications. Nor did the letter proffer any diagnosis of Mr Bowman. Mr Scott’s affidavit also attached an “Initial Learning Profile” for the “Arrowsmith Program”. That document listed a long series of testing modules, only one of which — “Symbol Relations” — had been undertaken by Mr Bowman, and for which he was graded “severe”.

69    I do not consider this evidence to be credible evidence of any impairment on the part of Mr Bowman. It does not establish the existence of sufficient excuse for the failure of the first and second respondents to engage with the litigation and file a defence, so as to weigh in the exercise of the Court’s discretion to grant judgment in default.

70    Further, the evidence concerning attempts to retain lawyers is so scant that I am not satisfied the failure of such efforts to be a factor explaining non-compliance with the Court’s orders. Moreover, at the first case management hearing on 19 May 2023, reference was made to difficulties said to be being experienced in retaining lawyers. Appropriate accommodation was made by granting a period of until 30 June 2023 for the first and second respondents to file their defence and any cross-claims or third party claims. That was a period well in excess of the time set by the Rules and was, in addition, a period of approximately three months from the commencement of the proceeding. This deadline was not observed. Nor was any application made to vary it for any reason. Nevertheless, the first and second respondents were given a further opportunity to file a defence and any cross-claims or third party claims. On 28 August 2023, there was a case management hearing at which the Court made a further order extending the time for the first and second respondents to file and serve their defences and any cross claim or third-party claim to 25 September 2023. Again, that deadline was not observed, and no application was made to vary the order in question.

71    In those circumstances, in my view, the first and second respondents have not put forward any credible explanation for their failure to comply with two distinct orders for the filing of their defence.

72    I do not accept that the first and second respondents have been the subject of any unfair treatment by STIHL’s solicitors. In the course of submissions, some quite scandalous allegations were levelled against STIHL’s solicitors, which extended to impugning their motives and conduct. I will not detail those allegations here as they were baseless and should not have been made. When I raised with Mr Scott that he was making very serious, even scandalous, allegations against practitioners of this Court, and that there did not appear to be a proper basis for such allegations, Mr Scott’s response was that he objected to “that insult and disparaging remark”. In any event, much of that which appeared to vex Mr Scott was a product of there being a substantial volume of material associated with the application (much of which confirmed service of various materials and exhibited correspondence of which the first and second respondents were already aware) and the proximity to the hearing date of when Mr Scott was instructed to review that material by Mr Bowman.

73    Further, and critically, none of the matters that were the subject of complaint — including interactions with the Court’s Registry staff — presented an excuse or explanation for the failure to do the one thing that two separate orders of the Court required the first and second respondents to do: namely file a defence.

74    The other matter raised that might be said to go to the exercise of the Court’s discretion are aspects of the Case Management Handbook (published by the Law Council of Australia) and the Court’s Central Practice Note CPN-1 regarding the need for litigants and courts to focus on the real issues in dispute and adopt efficient procedures to focus on those issues. The complaint appeared to be that no steps had been taken to focus on the standing issue that the first and second respondents regarded as the central issue in dispute. While they may well have so regarded that issue, the statement of claim advanced a number of causes of action and the basis upon which STIHL advanced its ability to bring the proceedings (so far as it concerned infringement of the STIHL Trade Marks) was perfectly clear. There was nothing inappropriate, oppressive, or inefficient in the first and second respondents being required to put on a defence. They failed to do so.

DAMAGES AND ADDITIONAL DAMAGES UNDER THE TM ACT

75    STIHL sought nominal damages in the amount of $5,000, and additional damages in the amount of $50,000 in respect of the infringement of the STIHL Trade Marks. While STIHL considers it has suffered actual loss or damage by reason of the infringements, it seeks only nominal damages. In Nasib Baik Pty Ltd v Sydney Ridelender Pty Ltd [2022] FCA 301 (Nasib) at [62], Markovic J confirmed that nominal damages are available pursuant to s 126 of the TM Act. In Nasib, Markovic J also observed that nominal damages in the amount of $5,000 have been awarded in other cases such as Hells Angels Motorcycle Corporation (Australia) Pty Ltd v Redbubble Ltd (2019) 369 ALR 408; [2019] FCA 355 at [537]–[540] (Greenwood J); see also Pinnacle Runway Pty Ltd v Triangl Limited (2019) 375 ALR 251; [2019] FCA 1662 at [224] (Murphy J) where the award of nominal damages was $2,500. I accept that $5,000 is an appropriate amount to award by way of nominal damages in the circumstances of this case.

76    The Court’s power to order additional damages under s 126(2) of the TM Act is enlivened where there is an award of damages under s 126(1): Facton Ltd v Rafai Fashions Pty Ltd (2012) 199 FCR 569 at [32] (Lander and Gordon JJ).

77    An award of nominal damages is sufficient to enliven the power to award additional damages: Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564 at [54] (Black CJ and Jacobson J). As STIHL set out in its submissions, in Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Ltd (No 5) (2022) 407 ALR 370; [2022] FCA 837 (Hells Angels) at [211], Greenwood J identified the following considerations as relevant to determining an award of additional damages:

(a)    s 126(2) does not require there to be proportionality between the assessment of damages under s 126(1)(b) and the amount (if any) included under s 126(2);

(b)    an amount considered appropriate to be included under s 126(2) in any assessment may reflect an element of penalty (even if only as a function of s 126(2)(b));

(c)    the assessment may reflect an element of judicial disapproval of the conduct;

(d)    the statutory provisions include giving consideration to all relevant matters not just those at s 126(2)(a)–(d);

(e)    the Court is to have regard to the flagrancy of the infringement. The notion of flagrancy involves that which is “deliberate and calculated to injure” the rights of the party, or a “cynical pursuit of a benefit”;

(f)    the assessment of any additional amount takes into account the need to deter similar infringements of registered trade marks, and in this context, general deterrence is relevant. So too is specific deterrence;

(g)    post‑infringement conduct on the part of the respondent is to be taken into account;

(h)    s 126(2)(c)(i) asks, what did the respondent do after the acts constituting the infringing conduct occurred, or after it had been told of the allegedly infringing conduct; and

(i)    s 126(2)(d) asks what benefits has the respondent derived because of the infringement.

78    Determination of an appropriate amount of additional damages involves an “instinctive synthesis” of relevant considerations: Hells Angels at [232] (Greenwood J).

79    In this matter, the pleaded facts show that the infringing conduct is flagrant. The first respondent has continued to operate the “STIHL Shop Berwick” and display the STIHL Trade Marks, despite the Dealer Agreement having been terminated in April 2022, which is a substantial period of time. The first respondent has also persisted in its conduct despite clear and repeated correspondence from STIHL. The first respondent also persisted in its conduct notwithstanding evidently acknowledging, in an email from Mr Bowman, on 5 April 2023 that it was aware it had obligations to remove STIHL signage. By its conduct, the first respondent has exploited the STIHL Trade Marks for its own commercial benefit, despite its contractual permission to do so having been withdrawn upon the termination of the Dealer Agreement. Consumers visiting the first respondent’s business since April 2022 may well have gained the false impression that the business had some authorisation by, or relationship with, STIHL. It is appropriate that an award of additional damages takes into account general and specific deterrence. I also take into account the conduct of the first respondent in failing to engage with the litigation, which conduct has seen no defence filed in the six months since the proceeding was commenced.

80    Having regard to all these matters, I consider the sum sought by STIHL ($50,000) to be an appropriate sum to award by way of additional damages.

INDEMNITY COSTS

81    In my view, it is appropriate that the first and second respondents pay STIHL’s costs on a solicitor and own client, or indemnity basis (whichever is the higher, to the extent there is any difference).

82    First, it is entitled to its costs on that basis against the first respondent pursuant to the Legal Costs Clause and the Indemnity Clause, and against Mr Bowman under the Bowman Guarantee.

83    Secondly, it was unreasonable for the first and second respondents to reject the Calderbank Offer. The offer was clear and specific in its terms, it set out the claims made and the basis for them, in sufficient detail, and was open for acceptance for a reasonable time. The offer itself also presented a genuine compromise, going so far as to forgive the amounts owed for the Supplied Goods and offering to pay a generous sum to the first respondent.

84    Thirdly, as the procedural chronology has detailed, the first and second respondents’ conduct has been the cause of substantial wasted court time and resources, and has caused substantial wasted expense and time to STIHL. STIHL has, by contrast, conducted the litigation responsibly and has extended accommodations and courtesy to the first and second respondents throughout. Since the proceeding was commenced in March 2023, absolutely no progress was made toward the resolution of the issues in dispute because the first and second respondents failed and refused to engage. They neither filed a defence, nor sought to vary the timetable ordered for them to do so. This case is a prime example of cases in which it is appropriate that the Court signify its disapproval of a litigant’s conduct by the award of indemnity costs: MCCA Asset Management Ltd v Kamata Homes Pty Ltd (No 2) [2019] VSC 842 at [22]–[23] (McDonald J); see also Watson v Kriticos (Costs of Summary Judgment Application) [2021] FCA 917 at [14]–[15] (Perram J).

85    Given that I consider it appropriate to award STIHL indemnity costs in respect of the proceeding generally, I have not made a separate order in respect of the costs of STIHL’s application for judgment in default.

Associate:

Dated:    3 November 2023