NQ Group Pty Ltd v CQ Group Australia Pty Ltd [2014] FCA 317

FEDERAL COURT OF AUSTRALIA

NQ Group Pty Ltd v CQ Group Australia Pty Ltd [2014] FCA 317 Citation: NQ Group Pty Ltd v CQ Group Australia Pty Ltd [2014] FCA 317

Parties: NQ GROUP PTY LTD (ACN 089 193 493) v CQ GROUP AUSTRALIA PTY LTD (ACN 130 013 124) and JASON COX

File number: QUD 797 of 2013

Judge: LOGAN J

Date of judgment: 14 March 2014

Catchwords: INTELLECTUAL PROPERTY – disputed categories of discovery – commercially sensitive disclosure – discovery prior to mediation – consideration of Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354

Cases cited: Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 cited Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 considered

Date of hearing: 14 March 2014

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 12

Counsel for the Applicant: Mr B Gardiner

Solicitor for the Applicant: MDP McDonalds Partners

Counsel for the Respondents: Ms C Heyworth-Smith

Solicitor for the Respondents: Macrossan & Amiet

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 797 of 2013

BETWEEN: NQ GROUP PTY LTD (ACN 089 193 493)

Applicant

AND: CQ GROUP AUSTRALIA PTY LTD (ACN 130 013 124)

First Respondent

JASON COX

Second Respondent

JUDGE: LOGAN J DATE OF ORDER: 14 MARCH 2014 WHERE MADE: BRISBANE

THE COURT ORDERS THAT:

1. Pursuant to r 28.02 of the Federal Court Rules 2011 (Cth), the proceeding is referred to mediation by a Registrar of the Court in Brisbane. The mediation shall be conducted on 14 May 2014. In the event that the matter does not settle at the conclusion of the mediation, the Registrar conduct a case management conference immediately following the mediation to consider the most economic and efficient means of bringing the proceedings to trial and of conducting the trial, at which conference the Registrar may give further directions. The mediator is to report the result of the mediation/case management conference to the Court by 15 May 2014. 2. The respondents' application for further and better particulars of the applicant's reply dated 13 March 2014 is dismissed. 3. The matter be listed for further directions on 19 May 2014 at 9.30am. 4. Liberty to apply. 5. Costs reserved. THE COURT DIRECTS THAT: 6. Subject to paragraph 7, not later than five business days prior to the date fixed for the mediation: (a) the applicant is to furnish the respondents with a short statement detailing particular losses it alleges it has suffered in relation to its claim including particular business lost by virtue of the conduct alleged in the statement of claim; (b) the respondents are to furnish the applicant with: (i) Balance Sheets and Profit and Loss Statements of the first respondent for each completed income year on and from 1 July 2010 to date; and (ii) In relation to the current financial year, the most current Profit and Loss Statement, or quarterly revenue figures, of the first respondent. 7. The documents referred to in paragraph 6 are to be provided for the purposes of the mediation only and on a without prejudice basis. The receipt of these documents is attended by the same implied obligations as to their use as attends documents provided in this Court pursuant to orders for discovery. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 797 of 2013

BETWEEN: NQ GROUP PTY LTD (ACN 089 193 493)

Applicant

AND: CQ GROUP AUSTRALIA PTY LTD (ACN 130 013 124)

First Respondent

JASON COX

Second Respondent

JUDGE: LOGAN J DATE: 14 MARCH 2014 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 NQ Group Pty Ltd (NQ Group) has instituted proceedings against CQ Group Australia Pty Ltd (CQ Group) (formerly known as Central Queensland Heavy Haulage Pty Ltd) and others for alleged infringement of trademarks, misleading or deceptive conduct and passing off. Mr Cox, who is the second respondent and admitted to be the sole director of CQ Group is said to be both a joint tort feasor, as well as a person involved in the contraventions of the Australian Consumer Law alleged. Pleadings in the case have closed. There is substantial agreement between the parties as to the directions for the further conduct of the proceeding up to the point of discovery and inspection. 2 The agreement is not complete in that there are two categories of documents for discovery which are not agreed. One category, in respect of discovery by the respondents, is: all documents recording or relevant to the decision by the First Respondent to: 1. incorporate in March 2008 under the name "Central Queensland Heavy Haulage Pty Ltd"; and 2. change its name in November 2012 to "CQ Group Australia Pty Ltd". The other category which is in dispute concerns discovery by the applicant and is this: Documents relevant to the loss and damage: (a) said to have been suffered by the Applicant; (b) the Applicant claims it will continue to suffer, including but not limited to requests for quotes, business records, accounts, invoices, ledgers, contracts, potential contracts, emails and other correspondence and financial statements. 3 The parties are at one that there ought to be mediation. That consensus is in exact accord with a view firmly held by me. The parties desire that mediation be undertaken by a registrar of the court in May. A registrar is available for that purpose. 4 There are two questions for immediate decision. One is whether discovery ought to include the disputed categories; the other is whether the discovery ought to occur prior to the mediation. 5 Having regard to the pleadings with respect to a liability which include examples of the trademark and also the livery used by CQ Group, I am extremely concerned in this case that, to order discovery prior to mediation, would visit upon the parties costs and, potentially thereafter, an opportunity cost which may be antithetical to a prudent commercial resolution of the case at an early juncture. There is though, as was apparent from the submissions of the parties, a need for the mediation to be conducted against a background which is at least generally informative as to the loss apprehended by NQ Group and also as to profits being made by CQ Group. That, in my view, can be addressed by particular directions with respect to material to be provided for the purposes of mediation and otherwise without prejudice. That material will, at least as to CQ Group, also include a disclosure of documents which one might apprehend would, in any event and irrespective of the merits of its case, be of interest to a commercial competitor, namely, NQ Group. The material will therefore be the subject of an order which provides that the disclosure pursuant to direction will be attended with the same implied undertaking as attends documents which are furnished on discovery. 6 A consideration quite rightly raised was, whether some of the apprehended commercial sensitivity might be addressed by ordering that the documents be disclosed only to the lawyers for a party. A difficulty about that, which I apprehend is likely to be a real difficulty in this case, is that it could embarrass the lawyers in advising clients with respect to the conduct of the case or its compromise. 7 So far as the question of the disputed categories of document are concerned, attention has been drawn, albeit without the desirable advance disclosure of the authority to the respondent, to a judgment of the Full Court in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 (Red Bull case). NQ Group draws attention to this case so as to support its claim to the category of documents concerning their adoption of CQ Group's original corporate name and the change of name. 8 It does seem to me, having regard to paragraph 45 of the Red Bull case and to the reference in that paragraph to a passage in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 657, as well as to the passages under the heading "The appellant's intentions" at paragraph 117 and following, that documents recording or relevant to the decision by CQ Group (as it is now known) to change its name in November 2012 would be admissible in the proceeding insofar as they may disclose a particular intention on the part of CQ Group. I am not persuaded that documents concerning the incorporation under the name "Central Queensland Heavy Haulage Pty Ltd" would have that same relevance. 9 The other disputed category is really something of a crie de coeur on the part of NQ Group, having regard to the present want of particularity in the statement of claim and particulars. Of course, CQ Group's position in that regard is that it cannot give greater particularity until discovery and so the debate goes around and around. For all that, there is a need, sooner or later, insofar as NQ Group claims damages as opposed to an account, to give some precision to particular losses. It may be that it is not able to identify particular jobs or potential jobs which have been lost, in which case there will be no documents, but at least CQ Group will then know that the damages are rather more at large. 10 The discovery, in my view, should therefore include what is presently category D2 in annexure A in NQ Group's proposed order, as well as category 12 in CQ Group's proposed order but, for reasons which I have earlier indicated, I am firmly of the view that discovery should not occur until after mediation. 11 I am not minded to order further and better particulars of the reply for the reason that the reply seems to me sufficient, having regard to the particular paragraphs of the defence with which it engages. Neither am I minded presently to order particulars as sought in respect of loss and damage until after discovery has occurred. It would be premature, given that the case might not proceed to that stage, to order those particulars. 12 I will defer the making of formal orders with respect to discovery until after the result of mediation is known. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

Associate: Dated: 1 April 2014