Yooralla Sponsors Club v. JABI Nominees Pty Ltd

(1980) 49 FLR 86

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(Judgment by: Smithers J)

Between: Yooralla Sponsors Club
And: JABI Nominees Pty Ltd

Court:

Judge:
Smithers J

Subject References:
Practice

Judgment date: 21 August 1980

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Judgment by:
Smithers J

This is a motion in which the respondents in an action in this Court are the applicants seeking an order against the applicant in that action, namely, Yooralla Sponsors Club, staying the action until the hearing and determination of an action in the Supreme Court of Victoria (No. 4333 of 1980). (at p87)

On 17th December, 1979, application was made in this Court by Yooralla Sponsors Club that the respondents, J.A.B.I. Nominees Pty. Ltd., John C. Ingleton and John Anthony Bickford Ingleton be restrained from engaging in the course of the business of "Entertainment 80", in conduct that is misleading or deceptive of likely to mislead or deceive, also from representing in the course of that business that that business had the sponsorship or approval of the applicant, or that it was affiliated with the applicant; and also from advertising, or conducting its business so as to confuse or deceive members of the public into believing that that business was associated with the business of the applicant. (at p87)

The application sought orders for delivery up of documents and materials whose contents are deceptively similar to those of the applicant. It claims damages and other relief. The application was accompanied by a statement of claim. (at p87)

On 18th December, 1979, appearances were entered for all the respondents. On 20th December an order was made by C.A. Sweeney J. in this Court restraining the respondents from certain activities in the conduct of their business. On 8th February, 1980, an order was made by me continuing that injunction and giving certain directions. On 28th February, 1980, a defence was delivered and on 1st August, 1980, this motion was taken out. It was based upon the fact that on 20th May, 1980, the applicant, Yooralla Sponsors Club, issued a writ in the Supreme Court of Victoria in which the same persons who are the respondents in the proceedings in this Court are the defendants in that Supreme Court action, together with one other defendant, namely, one Beverley Smith. (at p87)

According to the statement of claim in the Supreme Court, par. 3 asserts the business of Yooralla Sponsors Club; par. 4 asserts that John Chapman Ingleton at all material times had been a member and director of the plaintiff; par. 5 asserts that John Anthony Bickford Ingleton was a member and vice-president of the plaintiff; par. 6 asserts that the defendant, Beverley Smith, had been manageress of the plaintiff's business; par. 7 asserts that the defendants owed a duty to the plaintiff arising out of their association with the plaintiff; in particular not to use or disclose confidential information obtained both in their various capacities whilst associated with the plaintiff. Paragraph 10 asserts that the plaintiff has developed a distinctive reputation in what are called its promotional materials which are associated by members of the public with the plaintiff. Paragraph 11 asserts that the plaintiff is the owner of copyright in those promotional materials. Paragraph 13 alleges that the defendants have (a) published and distributed promotional and membership material; (b) used and disclosed the plaintiff's mailing list; (c) reproduced the promotional materials and the mailing list. Paragraph 14 alleges that the defendants' promotional materials closely resemble those of the plaintiff and are calculated to deceive and confuse the public to believe that the defendants' business is the plaintiff's business and have thus passed off the defendants' business as the plaintiff's business. Paragraph 15 alleges that the defendants conspired together to act in the manner aforesaid and agreed and conspired together with the intention of injuring the plaintiff. (at p88)

It is apparent that this statement of claim seeks the following relief:

1.

relief under s. 115 and s. 116 of the Copyright Act 1912 (Cth);

2.

relief for breaches of confidence, namely breaches of the duty to maintain the confidence;

3.

relief in respect of the alleged passing off; and

4.

relief in respect of the conspiracy, and it is clear, of course, that the Supreme Court action is against one party, not a party to the proceedings in this Court. (at p88)

It is acknowledged that a decision on the present motion must be arrived at on a balance of all relevant considerations. The dominating consideration appears to me to be that to vex a party simultaneously in two courts in respect of conduct alleged to give rise to substantially the same, and possibly adequate relief in either court, and on substantially the same evidence should not be permitted save for special reasons. (at p88)

In this case, if one action is to be stayed pending the completion of the other, I think it must be the action in this Court. The respondent to this motion desires to proceed in the Supreme Court on evidence including substantially that necessary to support its case in this Court, to use it to sustain causes of action in respect of which relief beyond that obtainable, in this Court is claimed. There is, therefore, little chance that if the action were completed in this Court, that would be an end of the litigation. (at p88)

The principles enunciated by the Chief Judge of this Court in Hughes Motor Services Pty. Ltd. v. Wang Computer Pty. Ltd. (1978) 35 FLR 346 appear to me appropriate in this case. As indicated in the judgment in that case, there may be many matters to be considered in exercising the court's discretion in a matter of this kind. The learned Chief Judge said:

"In my opinion there are many matters to be considered in exercising this Court's discretion besides weighing the advantage to the plaintiff against the disadvantage to the defendant. Some might be comprised in the principle of forum non conveniens if that were adopted. This would involve consideration of circumstances relating to the witnesses. In cases where, as in the present case, many of the issues of fact and the relief claimed were the same, it would involve consideration of the fact that the work done on pleadings, particulars, discovery, interrogatories and preparation generally might be found, when the hearing of the second case came on, to have been wholly or partly thrown away. This would be due to the creation of an issue estoppel in respect of the making of the representations and their falsity (Blair v. Curran (1939) 62 CLR 464, at pp 531-532 and Brewer v. Brewer (1953) 88 CLR 1, at p 14 et seq cf. "The Collateral Estoppel Effect of Prior State Court Findings in Cases within Exclusive Federal Jurisdiction' (1978) 91 Harvard Law Review p 1281) and to the fact that the Hire Car Group, if they were successful against Wang, could not recover the same damages twice (cf. Hills v. Co-operative Wholesale Society Ltd. [1940] 2 KB 435, at pp 438-440 ). In addition, the court might have to consider other matters. Thus in some sense the public interest may be involved in deciding whether two cases claiming the same damages and involving substantial issues of fact, which are the same in each case, should be allowed to proceed simultaneously in the State and federal systems of justice.

This would certainly open the way to tactical manoeuvres in which the appearance might well be presented to the public of two court systems competing to see who determined the common facts first. It would be unfortunate if we adopted practices and procedures which facilitated this. In MacShannon v. Rockware Glass Ltd. (1978) 2 WLR 362 Lord Diplock thought it relevant to consider the substantial waste of time and effort if it became a common practice to bring in England actions arising out of industrial injuries in Scotland when the matters were referred by trade unions to English solicitors for them" (1978) 35 FLR, at p 353. (at p89)

In this motion Mr. Chernov relied generally on the main submission that his clients should not be vexed twice on the same facts. It is said that the action in this Court should not be stayed because:

1.

The action of passing off is directed to the protection of the respondent's property rights whereas there is a public interest involved in the proceedings in this Court.

2.

The respondent should be permitted to proceed to obtain the relatively less complicated relief obtainable in this Court.

3.

There is an interstate aspect in proceedings in this Court not present in the Supreme Court proceedings.

4.

The applicants are not prejudiced by the proceedings in this Court proceeding at the same time as those in the Supreme Court because there will not be an estoppel in respect of issues decided in this Court.

5.

The respondent to this motion will undertake not to proceed to execution on a judgment obtained in these proceedings without leave or until the proceedings in the Supreme Court are concluded. (at p90)

I have to take note of the fact that evidence which the respondent will use in the Supreme Court action to support the passing off will clearly include all that will be presented by it to support its action in this Court. The respondent must be seen in relation to these proceedings as fully intending to pursue its action in the Supreme Court even if it succeeds in this Court. Emphasis is placed on the feature that in the Supreme Court relief is claimed in respect of different causes of action and different relief. It is said that, even in the passing off action aspect of the matter, relief is obtainable in the Supreme Court which is not obtainable in this Court, such as an account of profits. Clearly damages for breach of duties in relation to the alleged breaches of confidence and in relation to the alleged breaches of copyright are in this category. (at p90)

It is also relevant that if the respondent succeeds in the Supreme Court on the cause of action for passing off, it will obtain relief in the Supreme Court for practical purposes as ample as that available to it in this Court in respect of the misleading conduct alleged. To obtain such relief in the Supreme Court it will need to prove one element which it may not be necessary to prove in this Court, or to prove in the same sense, or to the same degree, namely that the respondent's promotional materials used and distributed by the applicants were, according to the reputation established by the respondent in the public mind, distinctive of the respondent's business. However, the respondent, in its action in the Supreme Court, pleads the affirmative in this matter and exhibits no lack of confidence that it will succeed on the point, and indeed, of all the points on which it may not succeed this may well be thought to be the one least likely to be in that category. (at p90)

As to the specific matters raised on behalf of the respondent, first, I do not think that the public interest in the litigation is of such a nature that it should be the decisive consideration, particularly as an injunction has already been obtained and, even though it is suggested that it has already done its work, I propose to leave that injunction in operation. Secondly, I am responsive to the view that there is much to be said for pursuing the swift and relatively less complicated relief in this Court but I think that there are other more weighty considerations. As to the third matter, the interstate aspect is in my opinion quite minor and relatively unimportant. Fourthly, I am certainly not sure that estoppels may not arise in whatever court the proceedings are taken at first instance. However, for current purposes, I consider it unimportant whether they will or not. Fifthly, the offer of the undertaking does not relieve the general state of oppressiveness of proceedings in two courts. Generally I consider that the respondent's determination to proceed in the Supreme Court on the claims which would not be determined in this Court is a very important consideration. (at p91)

Finally, I would repeat what the learned Chief Judge said in Hughes' case:

"It appears to me that justice and good sense require that there should so far as practicable be an end to litigation and that the law should strive against permitting multiplicity of proceedings in relation to similar issues. The considerations pointing to the exercise of a discretion in granting a limited stay in the present case are very strong" (1978) 35 FLR, at p 355. (at p91)

I think those words are applicable to this case. Accordingly subject to the continuance of the existing injunction, I stay the proceedings in this Court until further order and I reserve costs of and incidental to this application. Orders accordingly.