Federal Court refuses to vary Quality Kebabs’ additional damages

Federal Court refuses to vary Quality Kebabs’ additional damages

Federal Court refuses to vary Quality Kebabs’ additional damages

On 13 June 2014, Quality Kebabs Wholesalers Pty Limited (Quality Kebabs) was found liable for infringing the registered trade mark of Halal Certification Authority Pty Limited (HCA) by issuing false certificates bearing the mark to two kebab shops.  Justice Perram awarded only nominal compensatory damages for infringement, but also ordered additional damages in the amount of $91,015 against Quality Kebabs pursuant to section 126(2) of the Trade Marks Act (the Act).  Read the full report here.

In a decision handed down on 11 August 2014, Justice Perram refused Quality Kebabs’ application to reduce the sum of additional damages.  Quality Kebabs argued that because  section 126(2) came into effect on 15 April 2013, additional damages could not be awarded for conduct occurring prior to that date. Quality Kebabs had been found liable for infringements occurring between August 2012 and September 2013.

However Perram J found that section 126(2) of the Act is procedural in nature, and procedural statutes can have retrospective effect.  His Honour therefore refused to exercise his discretion to vary the order for additional damages.

Court had power to vary the interlocutory orders

HCA had taken out the orders made on 13 June 2014 before Quality Kebabs applied to have them varied, and therefore Quality Kebabs could not rely on the Court’s unfettered discretion to set aside orders that have not been entered. 

Quality Kebabs had to rely on Rule 39.05 of the Federal Court Rules which sets out an exhaustive list of circumstances in which the Court can, in its discretion, vary or set aside an order that has been entered.  It submitted that the order:

(i)      was interlocutory (Rule 39.05(c));
(ii)     did not reflect the intention of the Court (Rule 39.05(e)); or
(iii)    was an accidental slip or omission (Rule 39.05(h)).

Justice Perram rejected (ii) and (iii) above, but found that the orders were interlocutory (i).  His Honour noted that a judgment or order is interlocutory if not all the rights of the parties that are in issue in the proceeding have been resolved. 

In this case, one of the orders made on 13 June 2014 required the parties to file an agreed form of corrective advertisement, otherwise the matter would be relisted to determine the form of the order for corrective advertising.

The parties did not agree on the form of the corrective advertising and so the order for  advertising had not been made.  His Honour therefore found that the orders were interlocutory in nature, and the Court had the power to vary the orders under Rule 39.05(c).

The additional damages provision can have retrospective effect

In deciding whether to exercise his discretion, the question for the judge was whether s126(2) authorised an award of damages for the period prior to its commencement on 15 April 2013.  His Honour referred to the general rule that unless a statute otherwise suggests, it is not construed to have retrospective operation. However, there is an exception for procedural statutes in that they will often apply to events in the past.

Justice Perram found that section 126(2) of the Act was procedural rather than substantive in that the right of the trade mark owner to sue for infringement and claim damages already existed, and section 126(2) varied the kind of damages which could be awarded.  His Honour referred to authority for the principle that the addition by statute of a fresh remedy to facts which were already actionable is purely procedural.

Judge refused to vary the order against Quality Kebab Wholesalers

Having found that section 126(2) was a procedural provision, which could apply to infringements which occurred prior to its commencement, his Honour refused to vary the order and Quality Kebabs remains liable to pay $91,015 in additional damages for trade mark infringement to HCA.

Comment – orders for relief usually final

The circumstances in this case were unusual in that the order for additional damages was still interlocutory because the order for corrective advertising had not yet been finalised.  It is more commonly the case that all orders for relief in a proceeding are made at the same time and then taken out by the party obtaining relief (such that the orders are final and cannot be varied under Rule 39.05).