Federal Court of Australia

Paco Nominees Pty Ltd v Ella Secret Australia Pty Ltd (Default Judgment) [2025] FCA 366

ORDERS

THE COURT DECLARES THAT:

1.    By offering for sale, selling and supplying Counterfeit Goods, the First Respondent has infringed the Geedup Trade Marks.

2.    The Second Respondent has procured or been a party to the First Respondent’s infringement of the Geedup Trade Marks.

The Court Orders That:

1.    Pursuant to s 126(1) of the Trade Marks Act 1995 (Cth), the First Respondent, whether by itself or by its servants or agents or otherwise, be permanently restrained from offering for sale, selling and supplying Counterfeit Goods.

2.    Pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth), the Second Respondent be permanently restrained from procuring, or being knowingly concerned in, or a party to, any trade mark infringement, by the First Respondent of the kind described in order 1.

3.    Pursuant to section 126(1) of the TM Act, the Respondents jointly and severally pay to the First Applicant damages in sum of $20,000 for trade mark infringement.

4.    The Respondents jointly and severally pay the Applicants’ costs of the proceeding on a party-party basis in the sum of $33,025.15.

IN THESE ORDERS:

A.    Counterfeit Goods means clothing not manufactured by or with the licence of the Applicants that incorporate or display (including on labels and tags attached to the clothing) the Geedup Trade Marks.

B.    Geedup Trade Marks means the following Australian registered trade marks:

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

REASONS FOR JUDGMENT

RAPER J:

1    The applicants have sued the respondents, amongst other things, for trade mark infringement. They seek default judgment against the first and second respondent in accordance with r 5.23(2)(c) and (d) of the Federal Court Rules 2011 (Cth). The first applicant, Paco Nominees Pty Ltd, is the registered owner of certain trademarks which the second applicant, Geedup Online Pty Ltd, is authorised to use (the Geedup Trade Marks). The Geedup Trade Marks form Annexure A to their statement of claim, and include:

2    The applicants allege that since at least 25 August 2024, the first respondent, Ella Secret Australia Pty Ltd, has promoted, offered for sale, sold and supplied clothing not manufactured by or with the licence of either applicant. Two trap purchases, on 25 August and 8 September 2024, were made at Ella Secret’s stall at Paddy’s Markets in Flemington, New South Wales. The second respondent, Mr Ali Matar Briman (Ella Secret’s sole director and shareholder) is alleged to have sold the counterfeit goods. The applicants allege Mr Briman is accessorily liable for Ella Secret’s conduct, given he is its sole director, shareholder and controlling mind.

3    By operation of r 5.22 of the Rules, a party will be in default where that party fails to do any of the following:

5.22 When a party is in default

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 these 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.

4    Despite being served with the applicants’ statement of claim in October 2024, the respondents have not attended any case management hearing nor complied with any of the Court’s orders, including filing an address for service or a defence. The respondents did not appear at the case management hearing on 9 December 2024 when the application for default judgment was timetabled for hearing nor attended the hearing of the present application.

5    If the Court is satisfied that the respondents are in default, the Court has powers to make certain orders, including, giving judgment against the respondent for the relief claimed in the statement of claim (r 5.23(2)(c)) and giving judgment against the respondent for damages to be assessed or any other order (r 5.23(2)(d) of the Rules).

6    Accordingly, the issue requiring resolution is whether the Court ought exercise its discretionary power and grant the relief claimed. This requires the Court to be satisfied on the face of the pleading that the applicants are entitled to the relief claimed and to thereafter be satisfied that it is appropriate to grant each kind of the claimed relief.

Evidence

7    The applicants relied upon the following evidence:

(a)    the affidavits of service of Ms Raechelle Tran dated 4 October 2024 and 17 February 2025;

(b)    the affidavit of service of Ms Amy Elliot dated 29 October 2024;

(c)    the affidavit of Mr Trevene Kneumann dated 14 February 2025; and

(d)    the affidavits of Mr Victor Ng (of Cooper Mills) dated 1 November 2024, 5 December 2024, 14 February 2025, 6 March 2025, and 7 April 2025.

8    The affidavits of service (of Ms Tran, Ms Elliot) and Mr Ng depose to the respondents being served with material relating to these proceedings in accordance with the Court’s orders.

9    Mr Kneumann has occupied the position of Global General Manager of the Geedup Group (of which the applicants form part) since September 2019. Mr Kneumann deposed to the general background and business of the Geedup Group of entities in the following terms:

4. The Geedup Group owns and operates the Australian premium streetwear label GEEDUP (Geedup or the Geedup label).

5. Paco Nominees, as trustee for the HVRC Discretionary Trust, is the owner of all intellectual property rights, including all trade marks, relating to the Geedup label.

6. Geedup Online:

(a)     is a wholly-owned subsidiary of the Paco Nominees; and

(b)     operates the Geedup retail business, including the website and online store at (Geedup Website).

7. The Geedup label was founded by Jake Catley in Western Sydney in 2010. Mr Catley is currently the label’s Creative Director. The label originally operated a single physical store in the Westfield Shopping Centre in Parramatta, New South Wales. In 2019, the label relaunched as an online-only brand, with all sales being made through the Geedup Website.

8. Since its relaunch in 2019, Geedup has experienced significant growth and is now a well-known Australian streetwear brand with a substantial and highly loyal customer base in Australia and New Zealand. The label is also expanding globally, with a growing following in North America and the United Kingdom. In 2023, the Geedup Group established offices in London, New York and Los Angeles to support the label’s international expansion.

10    In relation to the applicants’ claimed infringement of the Geedup Marks, Mr Kneumann deposes to the following facts:

19. In around April 2023, Geedup’s customer care team started receiving emails from customers reporting that counterfeit products featuring the Geedup Trade Marks were being offered for sale online at Paddy’s Market in Haymarket and Flemington, New South Wales. …

20. Since April 2023, I have instructed Geedup Group’s lawyers and investigators to undertake anti-counterfeiting measures, including (among other things) filing Notices of Objection and liaising with Australian Border Force, conducting market surveillance and trap purchases of counterfeits, conducting investigations into the identity of sellers and importers of counterfeits, sending cease and desist letters to sellers and importers of counterfeits, and liaising with market operators to try to obtain their assistance and cooperation.

21. I refer to Annexures VWN-3 and VWN-6 to the affidavit of Victor Wei-Cho Ng dated 14 February 2025 filed in this proceeding. I am aware that on 25 August 2024 and 8 September 2024, investigators acting on behalf of the Geedup Group:

(a)     observed the Respondents offering for sale a substantial number of counterfeits at Paddy’s Market Flemington; and

(b)     conducted trap purchases of a pair of counterfeit Geedup trackpants and a counterfeit Geedup hoodie from the Respondents.

22. I have examined the counterfeit products purchased from the Respondents. Based on my knowledge of Geedup Products, I observed that the counterfeits:

(a)     replicate the design of genuine Geedup Products which, at the time of purchase, were no longer available for purchase from the Geedup Website;

(b)     replicate swing tags used on genuine Geedup Products; but

(c)     do not have Certilogo authentication tags which are used by the Geedup Group on genuine Geedup Products; and

(d)     are significantly inferior in quality and workmanship compared to genuine Geedup Products.

Consideration

11    The power to give judgment against a defaulting party is discretionary and must be exercised cautiously. There is no requirement of intentional default or contumelious conduct (although these may be relevant to the exercise of the discretion), the Court must be satisfied on the face of the pleading that the applicant is entitled to the “relief” claimed; and, it need not prove its claim by way of evidence: Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [19] and [21] per Flick J citing ACOHS Pty Ltd v Ucorp Pty Ltd [2009] FCA 577 where Jessup J there referred to Wilcox and Gummow JJ in Lenijamar Pty Ltd v AGC (Advances) Ltd [1990] FCA 388; 27 FCR 388; Chamberlain Group Inc v Giant Alarm System Co Ltd [2019] FCA 1606 per Yates J at [13].

The respondents are in default

12    The applicants submitted that, since the respondents were served with the applicants’ originating application, statement of claim, and genuine steps statement in October 2024, they have engaged in four acts of default under r 5.22 of the Rules:

(a)    they failed to comply with the Court’s orders and file a notice of address for service by 25 November 2024 as ordered to do so (Order 1 of the orders made on 4 November 2024);

(b)    they failed to comply with the Court’s orders and file defences by 25 November 2024 (Order 3 of the orders made on 4 November 2024);

(c)    they failed to attend the case management hearing on 9 December 2024; and,

(d)    they failed to appear at the hearing of this interlocutory application on 9 April 2025.

13    I am satisfied, on the basis of the applicants’ evidence, that the respondents were served with the pleadings and notified of the orders made by the Court on 4 November 2024. The evidence establishes that the respondents have committed the claimed defaults and that they fall within the meaning of r 5.22(b), (c) and/or (d) of the Rules.

The applicants are entitled to relief claimed on the face of the pleadings

14    For the purpose of this application, the applicants submit, that in order to be entitled to the relief claimed, they need only satisfy the Court that they are so entitled, on the basis of their claim of trade mark infringement. I am satisfied that this is the case.

15    I am satisfied that the statement of claim pleads, as against Ella Secret, the necessary elements to establish that Ella Secret has infringed the Geedup Trade Marks and the applicants are entitled to the injunctions they seek as well as an award of costs.

16    The applicants claim that Ella Secret is liable for trade mark infringement under ss 120(1) of the Trade Marks Act 1995 (Cth):

120  When is a registered trade mark infringed?

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

17    Section 6 of the TM Act defines a “registered trade mark” to mean a trade mark whose particulars are entered in the Register under the Act. Section 10 of the TM Act defines “deceptively similar” as:

For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

18    The meaning of the term “uses as a trade mark” was described in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; 277 CLR 186, (at [23]–[25]):

23 Use of a trade mark in relation to goods means use of a trade mark upon, or in physical or other relation to, those goods, and so can include use of the mark on product packaging or marketing such as on a website. There is a distinction, although not always easy to apply, between the use of a sign in relation to goods and the use of a sign as a trade mark. A trade mark is a sign used, or intended to be used, to distinguish goods dealt with by one trader from goods dealt with by other traders; that is, as a badge of origin to indicate a connection between the goods and the user of the mark.

24 Whether a sign has been “use[d] as a trade mark” is assessed objectively without reference to the subjective trading intentions of the user. As the meaning of a sign, such as a word, varies with the context in which the sign is used, the objective purpose and nature of use are assessed by reference to context. That context includes the relevant trade, the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote. A well known example where the use was not “as a trade mark” was in Irving’s Yeast-Vite Ltd v Horsenail, where the phrase “Yeast tablets a substitute for ‘Yeast-Vite’” was held to be merely descriptive and not a use of “Yeast-Vite” as a trade mark. Therefore, it did not contravene the YEAST-VITE mark.

25 The existence of a descriptive element or purpose does not necessarily preclude the sign being used as a trade mark. Where there are several purposes for the use of the sign, if one purpose is to distinguish the goods provided in the course of trade that will be sufficient to establish use as a trade mark. Where there are several words or signs used in combination, the existence of a clear dominant “brand” is relevant to the assessment of what would be taken to be the effect of the balance of the label, but does not mean another part of the label cannot also act to distinguish the goods.

(Footnotes omitted).

19    The respondents are taken to have admitted the pleaded allegations in the statement of claim, namely:

(a)    Paco’s ownership and validity of the Geedup Trade Marks at Appendix A of the statement of claim (SOC[5]);

(b)    to using the Geedup Trade Marks (as defined at [5] of the Statement of Claim) as trade marks (SOC [12]) and where the counterfeit goods are goods in respect of which the Geedup Trade Marks are registered (SOC [13]); and

(c)    promoting, offering for sale, having sold and supplied counterfeit goods bearing the Geedup Trade Marks without authority (SOC[11], [12], [15], [18], [23]).

20    Therefore, the applicants have established by admission, that Ella Secret used a sign that would be objectively viewed in context as indicating a “badge of origin” on apparel, which establishes its “use as a trade mark”.

21    In addition, Mr Briman admitted, by default, that:

(a)    he has since 20 June 2024 been the sole director, secretary and shareholder of Ella Secret;

(b)    he is in control of, the controlling mind of and has full knowledge of Ella Secret’s infringing conduct; and

(c)    he is involved in and knowingly concerned in the business and operations of Ella Secret.

22    Therefore, I am satisfied that it has been established, consistent with principles that establish liability as a joint tortfeasor, that Mr Briman was acting concurrently with the primary infringer, Ella Secret, and there was a common design during the relevant period in which the impugned conduct took place: Playgro Pty Ltd v Playgo Art & Craft Manufactory Ltd [2016] FCA 280; 335 ALR 144 at [150]–[154].

Entitlement to declaratory and injunctive relief

23    The power to grant declaratory relief, under s 21 of the Federal Court of Australia Act 1976 (Cth), is a very wide one only limited by its discretion: Seven Network Ltd v News Ltd [2009] FCAFC 166; 182 FCR 160 at [1016], citing Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 435. Addressing the three requirements which need to be satisfied in order to make declarations: (1) I am satisfied that the question, as to whether the respondents are liable for trade mark infringement, is real and not hypothetical or theoretical; (2) the applicants have established that they have a real interest in raising the question; and (3) there is a contravenor, in the sense that there is a joined party (Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [30]). In this case there is no impediment to granting declaratory relief where I am satisfied that the respondents have chosen not to oppose the grant of declaratory relief. Here, the contravening conduct calls for the marking of the Court’s disapproval which is achieved, in part, by making of the declarations sought.

24    In addition, I am satisfied that it is appropriate to make injunctive orders. The respondents were put on notice by the applicants as to their infringing conduct in September 2024, have provided none of the undertakings sought nor delivered up the counterfeit goods. The respondents have also chosen not to participate in these proceedings. It is therefore appropriate in the circumstances to grant the injunctions, in the form they are sought.

Entitlement to pecuniary relief

25    By the applicants’ statement of claim and in its application for default judgment, the applicants both sought pecuniary and non-pecuniary relief. However, neither the pleaded claim nor the additional evidence relied upon, clearly distinguished their claims. When this issue was raised with Counsel at the beginning of the hearing, Counsel only pressed the claims for damages, on behalf of Paco, the owner of the trade marks. This position appeared consistent with the evidence.

26    Paco claims the sum of $20,000 for the diminution of its reputation pursuant to s 126(1) of the TM Act. It does so on the basis of the deemed admission that, both Paco and Geedup Online, have generated substantial goodwill in the Australian market with respect to the Geedup Trade Marks (SOC [9]), such that there is consumer expectation that apparel, including hoodies, promoted and sold under, by reference to and bearing the Geedup Trade Marks are the applicants’ goods, goods that have their sponsorship or approval and/or have been designed and manufactured to the quality standards authorised or approved by them (SOC [10]). As adverted to above, the evidence of Mr Kneumann confirms, but does not alter the pleaded case.

27    The respondents admit that by reason of their wrongful conduct that the applicants have suffered loss and damage. The pleading, save for in particulars, does not identify or specify the source of that loss. There is no evidence of any quantified lost sales, business and licence payments. There is evidence of the fact of sales on the occasion of the two trap purchases. There is evidence as to the amount the counterfeit goods were sold for: Track pants sold for $90.00 on 25 August 2024 (where the authentic product sells for $130.00 to $170.00) and a hooded jumper sold on 8 September 2024 for $93.00 (compared to the authentic product retailing for $170.00 to $220.00). Paco has established that it is likely to have suffered loss or damage from lost sales but where the amount is not calculable.

28    As to Paco’s claim of diminution of reputation, the applicants have established they have generated goodwill and have a reputation to protect. Damages for reputational loss are insusceptible to any precise calculation: Madden v Seafolly Pty Ltd [2014] FCAFC 30; 313 ALR 1 at [116].

29    Here the unchallenged evidence establishes that Paco has created a successful streetwear apparel business (initially grossing an annual turnover in 2020 of $2.68 million to $17.24 million in 2024) with distinctive designs, stemming from collaborations with well-known local and international musicians and athletes sold by “one-off, limited edition releases” where they sell out, often within minutes of the online drop. The products are sold exclusively through Geedup’s (the second applicant’s) website. The applicants have taken technological steps to limit the ability of third parties to purchase and resell their genuine products online. The applicants became aware of counterfeit sales in 2023 and engaged investigators. The respondents’ counterfeit goods, replicate the design of genuine Geedup products which, at the time of purchase, are no longer available for sale, replicate the swing tags but do not have the Certilogo authentication tags used by the genuine articles and are significantly inferior in quality and workmanship.

30    I am satisfied, by the admissions and on the evidence, that Paco’s reputation has been diminished by the counterfeit selling, despite the respondents being commercial minnows. Paco’s business markets on exclusive limited release drops, sold from one source. Whilst, the nature of the “serious attack” of the kind made by the competitor in Madden at [116], was of a different nature, I note that, ten years ago, the Full Court awarded the sum of $20,000. In all the circumstances, I consider an award in the amount of $20,000 for Paco’s reputational loss is appropriate.

Entitlement to non-pecuniary relief

31    In addition, Paco seeks an award of $50,000 in additional damages for the trade mark infringement, pursuant to s 126(2) of the TM Act.

32    The Court must first decide whether additional damages should be awarded and if so, what those damages should be: Redbubble Ltd v Hells Angels Motorcycle Corporation (Australia) Pty Limited [2024] FCAFC 15; 303 FCR 100 at [132]. In determining whether additional damages should be awarded, the Court must consider each of the five matters prescribed in s 126(2), namely: (a) the flagrancy of the infringement, (b) the need to deter similar infringements of registered trade marks; (c) the conduct of the party that infringed the registered trade mark that occurred: (i) after the act constituting the infringement; or (ii) after that party was informed that it had allegedly infringed the registered trade mark; (d) any benefit shown to have accrued to that party because of the infringement; and (e) all other relevant matters.

33    In Truong Giang Corporation v Quach [2015] FCA 1097; 114 IPR 498, (at [133]–[140]), Justice Wigney helpfully assembled the relevant organising principles which inform the discretion:

133 First, it is not necessary that any amount of additional damages be proportionate to any award of compensatory damages: Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763 (Futuretronics) at [17].

134 Second, an award of additional damages involves an element of penalty: Facton Ltd v Rifai Fashions Pty Ltd (2012) 199 FCR 569 (Facton) at [33], [89].

135 Third, part of the function of an award of additional damages is to mark the Court’s disapproval or opprobrium of the infringing conduct: Facton at [36].

136 Fourth, the matters set out in s 126(2)(a)-(d) of the TM Act are not preconditions to an award of additional damages: Futuretronics at [17].

137 Fifth, conduct which may properly be seen as flagrant includes conduct which involves a deliberate and calculated infringement, a calculated disregard of the applicant’s rights, or a cynical pursuit of benefit: Futuretronics at [19]; Facton at [92].

138 Sixth, post-infringement conduct within s 126(2)(c) of the TM Act is unlikely to include the respondent’s conduct of the infringement proceedings. Such conduct is more relevant to the appropriate order as to costs: Futuretronics at [17]; Flags 2000 Pty Ltd v Smith (2003) 59 IPR 191 at [31]-[34]. That said, it is difficult to see why some aspects of the conduct, by a respondent, in defence of infringement proceedings, might not be relevant to the award of additional damages: cf. Facton at [44], [69]. Conduct of the proceedings which involved high-handedness, dishonesty, recalcitrance, or flagrant disregard of, or deficiencies in compliance with, discovery orders or notices to produce, might, at the very least, suggest a greater need for an award of additional damages that would deter future infringing conduct by the respondent.

139 Seventh, an award of additional damages can encompass damages which, at common law, would be aggravated or exemplary damages: Futuretronics at [17]. The matters specified in s 126(2) of the TM Act are of a kind which are taken into account in determining whether a party is entitled to aggravated or exemplary damages at common law, but in the end result the damages to be awarded are not aggravated or exemplary damages, but additional damages, being of a type sui generis: Facton at [33]-[36], [91].

140 In Halal Certification Authority Pty Ltd v Scadilone Pty Ltd (2014) 107 IPR 23 at [111], Perram J considered that if additional damages are appropriate, the damages to be awarded must operate as a sufficient deterrent to ensure that the conduct will not occur again.

34    Paco submitted that additional damages should be awarded first, by reference to the pleaded admissions as to liability. Secondly, reliance was placed on the basis that the deemed admissions in the pleading that the infringement was “flagrant” and in “complete disregard of Ella Secret’s legal obligations”. This was said to be supported by the hearsay evidence of the private investigators (in reports annexed to a solicitor affidavit) who made two trap purchases on two different occasions. The alleged flagrancy is said to have arisen because Mr Briman appeared to represent that the counterfeit goods were genuine when purportedly by the deemed admissions, he and his company are taken to have known that the goods were counterfeits.

35    As a consequence it was submitted that there was a need for both specific and general deterrence. Reliance was placed on the award of additional damages of $91,015 in Halal Certification Authority Pty Ltd v Scadilone Pty Ltd [2014] FCA 614; 107 IPR 23 and of $50,000 in Truong.

36    The determination of whether to award additional damages, in circumstances of default, is not without difficulty. Whilst there is no preclusion from doing so, the two main authorities relied upon where such damages were considered appropriate and awarded involved contested hearings arising from different circumstances.

37    An instructive recent survey of the circumstances in which awards of additional damages have been ordered by this Court, was undertaken by Justice Anderson in Rock Solid Industries International (Pty) Ltd v Ozi 4X4 Pty Ltd [2025] FCA 334 at [32]. The following list supplements that survey:

(a)    Review Australia Pty Ltd v New Cover Group Pty Ltd [2008] FCA 1589; 79 IPR 236 at [58]–[62]: Justice Kenny made an award for additional damages for design infringement in the sum of $50,000 on the basis that the respondent failed to make proper discovery, and that the respondent failed to include evidence of the commercial benefit which it obtained;

(b)    Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd [2009] FCA 633; 81 IPR 378 at [35]–[41]: Justice Gordon awarded additional damages in the sum of $150,000 in light of the flagrancy of infringement, the fact that the respondent continued to sell the infringing items after being put on notice of the applicant's copyright rights and the need to deter similar infringements;

(c)    Seafolly Pty Limited v Fewstone Pty Ltd [2014] FCA 321; 313 ALR 41 at [621]–[643]: Justice Dodds-Streeton awarded $150,000 in additional damages, based on a number of factors including general deterrence, the benefit received by the infringing respondent and the fact that the respondent continued to sell the infringing garments after being put on notice of the applicant's copyright claim;

(d)    Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63; 122 IPR 279: Justice Bromwich awarded $212,500 for trade mark and copyright infringement and passing off;

(e)    Vitaco Health IP v AFI Cosmetic Pty Ltd (No 3) [2024] FCA 598 at [97]–[113]: Justice Rofe made an award of additional damages for trade mark and copyright infringement in the sum of $250,000 on the basis that the respondents set up a sophisticated replica version of the applicant's website including copyright, trade marks and artistic works in order to mislead potential customers and divert them from the applicant's website and there was a need to deter further infringing conduct by the respondent or others; and

(f)    Rock Solid: Justice Anderson awarded $200,000 by way of additional damages, by reason of the following: it was the second time that the applicant had brought proceedings against the respondent, the respondent was continuing to engage in the infringing conduct, the respondent had chosen not to engage in the proceedings, it was impossible to calculate its damages for lost sales, the respondent had accrued a substantial benefit from the infringing conduct and there was a strong need to deter the respondent and other traders generally engaging in similar conduct.

38    Account must be taken of the fact that the Court will award more than nominal damages: s 126(2)(e); Redbubble at [145]. In this case, the award of $20,000 is not insubstantial in the circumstances and represents that Paco has been compensated to some extent such that there is not a pressing need to provide additional damages, to compensate for what could not be awarded as nominal damages.  

39    As to the first of the five prescribed matters to be taken into account under s 126(2), an admission to the adjectival description of the conduct in the pleading of being “fragrant” only goes so far as to there is admission as to the underlying facts which inform that descriptor. There is a clear necessity for pleading with precision. The pleaded conduct establishes, as the applicants conceded, that the respondents must be operating on a very small scale. There was evidence of two occasions when the counterfeit goods were being sold at a stall at Paddy’s Markets in Flemington, by the respondents. Whilst, it is accepted that there is an admission as to an infringement, “since at least 25 August 2024” (SOC [11]), there is only evidence of infringement on one occasion thereafter, 8 September 2024.

40    An obvious purpose of the TM Act is to ensure that the sale of counterfeit goods does not occur, it is in a essence the most flagrant form of infringement. The Explanatory Memorandum to the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (Cth) at page 113, concerning the inclusion of the discretion to award additional damages in the trade mark legislation, provided a strong indication that it was Parliament’s intention, this discretionary award could be directed to counterfeiting circumstances, given many counterfeiters do not maintain sufficient business records to enable a satisfactory calculation of ordinary damages or an account of profits.

41    However, to establish the same, by default, requires keen attention be given to what is made out on the pleaded case. Here, the allegation was that the respondents promoted, offered for sale, sold and supplied clothing not manufactured by or with the licence of [the applicants] that incorporates or displays (including on labels and tags attached to the clothing) the Geedup Trade Marks or signs which are substantially identical with or deceptively similar to the Geedup Trade Marks. There was no pleaded allegation (said to be admitted) that they well knew that the counterfeit product was counterfeit and infringed Paco’s mark. None of the hearsay evidence relied upon by the applicants proved the same. The extent to which the infringing conduct was said to be “flagrant” was by an admission, that Ella Secret’s conduct was “with complete disregard of Ella Secret’s legal obligations” (SOC [23(b)]). As adverted to above, “flagrancy” involves deliberate and calculated infringement with a calculated disregard of the owner’s or authorised user’s rights, or a cynical pursuit of benefit: Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) [2008] FCA 746; 76 IPR 763 at [19]; Facton Ltd v Rifai Fashions Pty Ltd [2012] FCAFC 9; 199 FCR 569 at [92]. I do not accept, on the pleaded case, that the allegation of flagrancy has been made out.

42    As to the second of the five prescribed matters, there was no pleaded basis to suggest that there was a specific need to deter similar infringements of registered trade marks (by the respondents) (s 126(2)(b)), save for the allegation, supportive of injunctive relief, that the respondents “will either continue to engage in the wrongful conduct … or will engage in such conduct in the future” (SOC [21]). As to the need for general deterrence in this case, I accept a party is able to rely on further affidavit material in relation to the relief claimed: Australian Competition and Consumer Commission v Dateline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 at [50]; United Broadcasting International Pty Ltd v Turkplus Pty Ltd (No 2) [2010] FCA 1413 at [42]–[44]. In this case, there was some evidence of the need to deter other traders generally from engaging in similar conduct.

43    There is no pleaded allegation, admitted on default, that the respondents: (i) after the act constituting the infringement; or (ii) after the respondents were informed that they had allegedly infringed the registered trade mark (s 126(2)(c)), save for the generalised assertion that unless restrained, it is likely that the respondents will either continue to engage in like wrongful conduct. This imprecise pleading is insufficient to prove this factor.

44    Accordingly, whilst it can be inferred that the respondents have benefited from the infringement, the Court is not persuaded, on the applicants’ pleaded case, that additional damages ought be awarded in this case.

Costs

45    The applicants seek an order for the payment of their costs in the proceeding and that those costs should be paid on a lump sum basis in the amount of $33,025.15. Such an order is contemplated by the rules (r 40.02(b)) and identified as the Court’s preference in the Court’s Costs Practice Note (GPN-COSTS) (at [4.1]–[4.2]). As Sackville J opined in Seven Network News Ltd v News Ltd [2007] FCA 2059 at [25], the purpose of such an order is to avoid expense, delay and aggravation involved in protracted litigation arising out of taxation but where the assessment does not envisage a process similar to that involved in taxation, but rather a broad bush approach, where the Court is confident that the estimate of costs is logical, fair and reasonable. That said, as the Full Court has observed, the Court is not precluded from undertaking a close inquiry and is able to adopt its own procedures when inquiring into the costs: Paciocco v Australia and New Zealand Banking Group Limited (No 2) [2017] FCAFC 146; 253 FCR 403 at [18].

46    In this case, it is appropriate to make an order that the respondents pay the applicants’ costs on a lump sum basis: Such an order will avoid further expense and delay. In support of the order, the applicants relied upon the evidence of Mr Ng, the applicants’ solicitor. That evidence reveals that the applicants have claimed 70% of their solicitors’ fees and the whole of their disbursements and Counsel’s fees.

47    The respondents have been on notice since the inception of the proceedings that the applicants would be seeking their costs. The same is claimed in the applicants’ originating application. Weighing up the evidence, I am satisfied that I should accept Mr Ng’s evidence without qualification and order the respondents pay the applicants’ costs, on a lump sum basis, in the amount of $33,025.15.

Conclusion

48    For these reasons, I am satisfied that the applicants are entitled to certain of the relief they seek and will make orders to give effect to their application.

Associate:

Dated:    16 April 2025