GEORGE WESTON FOODS LTD V GOODMAN FIELDER NZ LTD HC AK CIV-2006-404-3347

GEORGE WESTON FOODS LTD V GOODMAN FIELDER NZ LTD HC AK CIV-2006-404-3347 27 March 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2006-404-3347BETWEEN GEORGE WESTON FOODS LIMITED Appellant AND GOODMAN FIELDER NZ LIMITED Respondent Appearances: E C Gray and R C Watts for Appellant M J Gavin and E M Beadle for Respondent Judgment: 27 March 2007 at 12:00 pmRESERVED JUDGMENT OF COURTNEY J AS TO COSTSThis judgment was delivered by Justice Courtney on 27 March 2007 at 12:00 pm pursuant to Rule 540(4) of the High Court Rules Registrar/Deputy Registrar DateSolicitors: Simpson Grierson, Private Bag 92518, Auckland Fax: (09) 307-0331 Russell McVeagh, P O Box 8, Auckland Fax: (09) 367-8163Introduction[1] In August 2003 the respondent (Goodman Fielder) applied to register "Sunny Crust" trademarks. The appellant (George Weston Foods) opposed the registration. The Intellectual Property Office of New Zealand (IPONZ) refused to allow George Weston Foods' opposition and permitted the applications to proceed to registration. George Weston Foods appealed against that decision to this Court. [2] The parties subsequently entered into settlement negotiations to try and resolve the outstanding issues between them. However, the negotiations were unsuccessful. In December 2006, apparently without consulting George Weston Foods or reaching any agreement as to costs, Goodman Fielder withdrew its application to register the Sunny Crust trademarks. This, of course, rendered George Weston Foods' appeal nugatory. [3] George Weston Foods seeks to have the costs award by IPONZ reversed and seeks costs on the appeal.Reversal of IPONZ costs award[4] There is an issue between the parties as to whether this Court has the power to reverse a costs award given by IPONZ. Goodman Fielder argues that there has been no stay of the costs award, George Weston Foods' appeal does not in itself operate as a stay (Issue 31 of IPONZ Information for Clients) and that the IPONZ decision accordingly remains in force with Goodman Fielder entitled to its costs. [5] George Weston Foods relies on s 173 Trademarks Act 2002 which provides:In determining an appeal, the Court may do any of the following things: (a) Confirm, modify or reverse the Commissioner's decision or any part of it; (b) Exercise any of the powers that could have been exercised by the Commissioner in relation to the matter to which the appeal relates.[6] George Weston Foods maintains that s 173 confers the jurisdiction of this Court to reverse the IPONZ costs decision and notes that this has been the practice in this Court: see for example Austin Nichols & Co Inc v Stitching Lodestar (2005) 11 TCLR 265. [7] I accept George Weston Foods' submissions on this point. Notwithstanding Goodman Fielder's abandonment of its appeal, this Court is now tasked with determining one aspect of it, namely the costs. In doing so it is entitled to take any of the steps identified in s 173 Trademarks Act 2002. [8] It is obviously beyond the scope of this judgment to make any attempt at enquiring into the merits of George Weston Foods' original opposition to the registration of the Sunny Crust trademarks. I do not know what the grounds were for IPONZ disallowing George Weston Foods' opposition. I cannot judge whether Goodman Fielder subsequent abandonment of its appeal reflects the fact that the opposition had merit (contrary to the IPONZ assessment) or whether there is some other reason for its abandonment of the appeal. In those circumstances, there is no basis on which I could interfere with the IPONZ decision on costs.Costs on appeal[9] George Weston Foods submits that Goodman Fielder's withdrawal of the Sunny Crust applications effectively prevented it from succeeding on the appeal, in which case it would undoubtedly have been entitled to costs. It says that it should be considered to be the successful party nevertheless and entitled to costs. It relies on the IPONZ practice guidelines - Costs Award and Proceedings Before the Commissioner, which provides that where a party withdraws from a proceeding without having reached an agreement as to costs the IPONZ practice is to regard the other party as the successful party for the purposes of costs. George Weston Foods asserts that this practice ought to be applied in the present case. [10] However, it must be self-evident that, whatever the practice of IPONZ in relation to costs, that will not necessarily reflect the practice in the High Court, which must be governed by the High Court Rules. Goodman Fielder submits thatthe position is governed by R 712 High Court Rules which provides that where an appeal is abandoned the appeal is taken to have been dismissed, "subject to the right of the respondent to apply for an order for costs". Goodman Fielder submits that the general presumption upon abandonment is that the appellant will pay costs to the respondent, reflecting the presumption that costs will generally remain with the appellant because it is that party that has elected the course of action that has put the respondent to cost. [11] Rather than costs being payable to George Weston Foods, Goodman Fielder asserts that it is entitled to costs because it is the party put to expense through the appeal and that there is nothing that it has done to support an award of costs against it. It asserts that there is a genuine commercial rationale for withdrawing the Sunny Crust applications and that it acted reasonably in doing so. Alternatively, it seeks to have the costs lie where they fall. [12] I do not accept that R 712(2) precludes George Weston Foods from applying for costs. The reality is in this case that George Weston Foods should be regarded as the successful party. While Goodman Fielder asserts that it had genuine commercial reasons for abandoning its trademark applications, there is no evidence to that effect and I cannot reach any conclusion as to its reasons. I am bound to act only on the bare facts that I have. I therefore award costs to George Weston Foods on a 2B basis. There did not seem to be any objection to its calculation of those costs at $2,720 and I make that order accordingly. ____________________ P Courtney J