Beech Ovens Pty Ltd v Style Global Pty Ltd [2015] QDC 153

DISTRICT COURT OF QUEENSLAND CITATION: Beech Ovens Pty Ltd v Style Global Pty Ltd [2015] QDC 153 PARTIES: BEECH OVENS PTY LTD (ACN 115 371 741) (applicant) v STYLE GLOBAL PTY LTD (ACN 164 074 962) (first respondent) v DAMIAN PISCOPO (second respondent) v RONALD JOHN PATTINSON (third respondent) FILE NO: 257/15 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 10 June 2015 DELIVERED AT: Brisbane HEARING DATE: 14 April 2015 JUDGE: Devereaux SC DCJ ORDER: 1. Each respondent is found to be guilty of contempt of court by failing to comply with orders of the court made on 18 February 2015, as set out in these reasons. 2. No punishment is imposed. 3. The defendant’s application to set aside or vary the orders made on 18 February 2015 is dismissed. 4. The respondents are to pay the applicant’s costs of these applications on the indemnity basis. 5. The parties have liberty to apply on two clear days’ notice. CATCHWORDS: CONTEMPT – where failure to comply with court orders CONTEMPT – punishment Corporations Act 2001 (Cth), s 9 District Court of Queensland Act 1967 (Qld), s 129 Uniform Civil Procedure Rules 1999 (Qld), r 667(2)(a), r 667(2)(c), r 898, r 904(1), r 904(2)(b), r 925(1), r 926, r 930 Lade & Co. Pty Ltd v Black [2006] 2 Qd R 531 Madeira v Roggette Pty Ltd [1990] 2 Qd R 357 -- 1 of 8 -- 2 COUNSEL: F Lubett for the applicant D de Jersey for the respondents SOLICITORS: Holman Webb Lawyers for the applicant Bennett & Philip Lawyers for the respondents [1] The plaintiff (Beech Ovens) applies for orders that the defendant (Style Global) and two individuals, Mr Piscopo and Mr Pattinson, be dealt with for contempt of court for failing to comply with orders made by Everson DCJ on 18 February 2015. The defendant applies under UCPR r 667 for the orders made by Everson DCJ to be set aside or varied. [2] Relevantly, the orders restrained Style Global from using photographs of any products manufactured under contract for Beech Ovens in its promotional material and required Style Global to remove such photographs from its website and from all print material by 27 February 2015. [3] The particulars of the contempt complaint are that each respondent took no steps to comply with the orders by 27 February 2015 and failed thereafter to have the images removed from the web-site until 23 March 2015. [4] The plaintiff sells commercial cooking appliances and boasts an international customer base which includes well known chefs and international hotels and resorts. It has been in the commercial cooking equipment business since 2005. [5] The defendant was incorporated in June 2013. Mr Piscopo is the sole director of the defendant. Mr Pattinson, who is Mr Piscopo’s father-in-law, was not a director or shareholder but was, I am satisfied, an officer of the company within the meaning of s. 9 of the Corporations Act 2001 (Cth). He provides the only substantive affidavit on behalf of the defendant and Mr Piscopo and it reveals that he was involved in setting up the defendant, was involved in its decisions and the management of its affairs and was the primary correspondent on behalf of the defendant. Both Mr Pattinson and Mr Piscopo are properly respondents to the application for contempt orders.1 [6] According to Mr Trood, the plaintiff’s director of international sales and engineering, the plaintiff consults with its clients to conceptualise the client’s needs into an appliance the plaintiff can create and contracts out the formal drawing of plans and the production of the appliance. [7] Mr Pattinson and Mr Piscopo have, before establishing the defendant, supplied cooking appliances to the plaintiff and JW Beech Pty Ltd (for present purposes, a predecessor of the plaintiff). For example, Mr Pattinson directed a company named Cookon Commercial Catering Pty Ltd which supplied JW Beech Pty Ltd. Other companies apparently involved in the manufacture of appliances delivered to the plaintiff or JW Beech Pty Ltd were Langford Metal Industries Pty Ltd and Custom Stainless Industries Pty Ltd (CSI). [8] The parties are in dispute because, upon starting its business in 2013, Style Global used images on its website of appliances created by these other entities and supplied 1 UCPR rr. 921 and 898 -- 2 of 8 -- 3 to Beech Ovens. Style Global also used ‘email testimonials’ that had passed between Beech Ovens and one of the other entities. [9] Beech Ovens commenced the proceeding on 22 January 2015 seeking an injunction restraining, among other things, the use of the images or testimonials or use of its name by Style Global on the ground that such conduct infringes the misleading and deceptive provisions of the Australian Consumer Law. The plaintiff also claims $20,000 for damage sustained to its commercial reputation. [10] On 22 January 2015, Beech Ovens also filed an application for interlocutory injunctive relief to restrain Style Global from continuing to display the disputed material on its website. [11] At the first return date, 30 January 2015, the parties attempted but failed to agree on the terms of an order. The application was adjourned by consent to 18 February 2015. Style Global undertook to provide any material it would rely on by 12 February 2015. [12] On or about 9 February 2015, Mr Pattinson directed the removal of certain material from the Style Global website. [13] On 12 February 2015, the solicitors then acting for Style Global gave notice they no longer held instructions. [14] On 13 February 2015, solicitors for Beech Ovens wrote to Style Global enclosing a draft of the orders to be sought on 18 February 2015. On the same day Mr Pattinson wrote, by email, on behalf of Mr Piscopo and Style Global, advising: (i) that instructions had been given to remove the offending material from the website; and (ii) that neither he nor Mr Piscopo would attend court on 18 February 2015 “as [they] dismiss many of the items put forward in Mr Trood’s” affidavit as false. [15] Mr Pattinson explained his position in an affidavit sworn on 8 April 2015: the images still on the website were of “standard products produced by Cookon and marketed by Style Global” that he did not think could be connected to Beech Ovens. He understood that Beech Ovens “did not want to be connected to Style Global” but he thought “it would be acceptable to leave on the website images of standard products as such products are always going to look the same” and had no exclusive connection to Beech Ovens. [16] Mr Trood swore another affidavit setting out what Beech Ovens complained of as infringing material still on Style Global’s website. That was sent to Style Global on 18 February 2015. It is clear Mr Pattinson comprehended the complaint from his email response of the same day. [17] On 18 February 2015, Everson DCJ made the following orders (my underlining): 1. The Defendant, either directly or by its directors, officers, employees, agents or otherwise be restrained by injunction until the trial of this action or further, other or earlier order from, in promoting or advertising or otherwise, in trade or commerce, dealing with the Defendant’s products: -- 3 of 8 -- 4 a) Using any photographs of any products, or photographs of part of products, manufactured by any other party under contract for the Plaintiff; b) Using the Plaintiff’s name or trademark or logo on any advertising, brochure or other promotional material, whether on its website at www.styleglobal.com.au or in print or otherwise; c) Representing that it or its products or services have the sponsorship or approval of or are otherwise affiliated with the Plaintiff; d) Referring to the Defendant or any of its directors, officers, employees, agents or otherwise as being responsible, in whole or in part for the design, manufacture, or engineering of the Plaintiff’s products. (the “Infringing Conduct”) 2. The Defendant remove all Infringing Conduct from its website at www.styleglobal.com.au and from all print material by 27 February 2015. 3. Costs of, and incidental to, the application be reserved. [18] After the hearing, the solicitors for Beech Ovens sent by registered post and by email the unsealed orders covered by a letter informing the recipients they were required to comply by no later than 27 February 2015. [19] The orders made differed from the draft sent to Style Global on 3 February 2015. The draft order, in paragraph (a), sought to restrain the use of “any photographs of products manufactured specifically for, and warranted by, the Plaintiff”.2 [20] Mr Pattinson obviously received the orders on 18 February 2015. His affidavit includes the following: “When I read the orders which were granted on 18 February 2015 (“18 February 2015 Orders”), I did not believe, given the dispute referenced Beech Ovens products only that the 18 February 2015 Orders could possibly extend to any or all products made for other parties that were also supplied to Beech Ovens.” [21] He did not, therefore, believe that the orders required the removal of photographs of appliances delivered to Beech Ovens where similar products were also supplied to other customers. He believed the orders were already satisfied by the removal of material from the website on 9 February 2015.3 [22] In fact, by the time of swearing his affidavit, Mr Pattinson believed the orders required the removal of images of ‘standard’ appliances whether or not the depicted item was the one supplied to Beech Ovens. This understanding may have been promoted by Beech Ovens’ objection to the image of a prototype circular grill – “That actual item was never provided to Beech Ovens but Beech Ovens did order a circular grill that looks the same as the one in the image.”4 [23] In any case, he did nothing until, after receiving the sealed orders on 11 March 2015, he apparently sought advice from QPILCH5. He wrote by email to the 2 This was different from the expression used in the application, which was “images of the Plaintiff’s products” 3 Court Document No. 22 - Affidavit of Ron Pattinson at paragraph 62 4 Court Document No. 22 - Affidavit of Ron Pattinson at paragraph 62 5 The Queensland Public Interest Law Clearing House -- 4 of 8 -- 5 solicitors for Beech Ovens, on 17 March 2015, seeking clarification of the orders. While not offering legal advice, the solicitors replied the next day complaining, “photographs of our client’s products remain on the Style Global website”. The solicitors also warned of the potentially serious consequences of failing to comply with the order and suggested he seek legal advice. [24] The contempt application was filed on 24 March 2015. It was served personally on Style Global and Mr Piscopo on 25 March 2015 and on Mr Pattinson on 26 March 2015. [25] Section 129 of the District Court of Queensland Act 1967 relevantly provides that a person is in contempt of the District Court if the person, without lawful excuse, fails to comply with an order of the court. Judge Everson’s order, for the purposes of the enforcement provisions of the Uniform Civil Procedure Rules 1999, was a non- money order. When such an order requires a person to do an act within a specified time, and there is failure to comply, the order may be enforced by punishing the person for contempt. Where, as here, the person was a corporation, punishment may be directed to ‘any officer of the corporation’: UCPR r. 898. First, the order must be served on the person required to perform the act a reasonable time before the end of the time specified in the order (UCPR r. 904(1)) unless the person was notified of the terms of the order ‘by telephone or in another way’ a reasonable time before the end of the time for performing the act: UCPR r. 904(2)(b). [26] The specific procedures for an application for contempt constituted by failure to comply with an order of the court (r. 925(1)) are set out in r. 926. These have been satisfied: an application has been filed in the proceeding and was served on the respondents personally. [27] I have already expressed satisfaction that Mr Pattinson and Mr Piscopo are properly named respondents to the application. The latter was the sole director of Style Global. The material shows he and Mr Pattinson were aware of the orders sought. It is inconceivable, given the personal and business relationship between the two men, the continuing nature of the dispute and the size of the corporation, that Mr Piscopo was ignorant of the orders once they were made and communicated to Style Global and that he did not direct or knowingly approve of the manner in which Mr Pattinson responded to the orders. There is no affidavit from Mr Piscopo contradicting such an inference. If this inference is not, as I think it is, available to be drawn beyond reasonable doubt, then I accept the applicant’s submission that, at least, Mr Piscopo failed to adequately inform himself of the terms of the orders when he knew his company’s actions might affect the efficacy of a possible court order.6 [28] I have set out above the evidence which demonstrates Mr Pattinson was notified on 18 February 2015. The respondents make the point that the orders made – and delivered unsealed on 18 February 2015 – differed from the draft orders sent before the application. The respondents argue that Mr Pattinson’s confusion upon reading the unsealed orders “underscores why the requirement for personal service exists”.7 That might be so, but there is obvious practical utility in sub-rule 904(2)(b). It is not for a respondent to do nothing pending personal service of a sealed order. In the circumstances, I am satisfied all respondents received notice under r. 904. 6 Madeira v Roggette Pty Ltd [1990] 2 Qd R 357 at 365-366 7 Respondents’ written submissions at paragraph 54 -- 5 of 8 -- 6 [29] Although Mr Pattinson expressed confusion as to the meaning of the orders, I think they were plain enough to be easily complied with. Relevantly, the orders restrained Style Global from using any photographs of products manufactured by any other party (e.g. Style Global or Cookon or CSI) under contract for Beech Ovens. If the item was made for Beech, a photograph of it was not to be on the website, even if it looked like items available to anyone. On the other hand, a photograph of an item available to anyone could be used so long as it was not the one supplied to Beech. [30] Indeed, as I have set out, Style Global did not fail to comply with the orders because Mr Pattinson was confused. It failed to comply because it, by his actions, chose not to comply with orders he thought were unreasonable. In Lade & Co. Pty Ltd v Black [2006] 2 Qd R 531, Jerrard JA at [24] said, “It is no defence if a party wrongly believes the party’s inadequate steps are reasonable ones, if there is a deliberate choice made not to do more.” [31] On the above analysis, each respondent was aware of the court’s orders on or about 18 February 2015 and failed to comply with them. If it is necessary to find that the failure was ‘wilful’ and not just ‘casual, or accidental or unintentional’ then I do.8 Even if Mr Pattinson were unsure of the meaning of the orders, his request of the solicitors for Beech Ovens for “Specific Details” of the court’s orders, on 17 March 2015 (i.e. one month after notice of the orders), makes no less deliberate Style Global’s failure to comply with the orders. [32] I see no reason to limit, as the respondents submit I should, the respondents’ failure to comply with the orders to the period commencing 11 March 2015, that is, from the time of personal service of the sealed orders. I have already expressed satisfaction notice of the orders was given. [33] At the hearing of the contempt application, Beech Ovens did not rely on all of the photographs originally particularised as ‘infringing conduct’. I have already mentioned Mr Pattinson’s reference to the circular grill prototype. Beech Ovens now concedes that the prototype shown in the image is not the item delivered to it for installation at “11 Times Square” in New York, USA, as Mr Trood asserted in his affidavits. [34] As to the “photograph of a custom made Beech product in situ at the Park Hyatt, Dubai”9, Mr Pattinson explains that the appliance was built for and supplied to JW Beech Pty Ltd, not Beech Ovens.10 Mr Trood answers11 by confirming the product was built by Cookon for JW Beech Pty Ltd but asserts Beech Ovens has permission to use the image on its website. I am not satisfied the use of this image infringed Judge Everson’s orders. [35] Photographs of three items constituted the infringing conduct. Beech Ovens relied on Mr Pattinson’s affidavit for admissions that the products depicted on the website were supplied to Beech Ovens. In each case, Mr Pattinson explains that product supplied to Beech Ovens was a standard item made by Cookon or another 8 Lade & Co. Pty Ltd v Black [2006] 2 Qd R 531 Jerrard JA at [26] 9 Affidavits of Stephen Phillip Trood – Court File Document 5 at paragraph 9 and Document 11 at paragraphs 9 - 11 10 Court Document No. 22 - Affidavit of Ron Pattinson at paragraphs 74 - 77 11 Affidavit filed by leave at hearing -- 6 of 8 -- 7 predecessor of Style Global.12 Nonetheless, his evidence confirms Mr Trood’s assertions and proves the failure to comply with the court’s orders. [36] I am satisfied the contempt has been proven against all three respondents. [37] UCPR r. 930 provides: Punishment (1) This rule applies if the court decides that the respondent has committed a contempt. (2) If the respondent is an individual, the court may punish the individual by making an order that may be made under the Penalties and Sentences Act 1992. (3) If the respondent is a corporation, the court may punish the respondent by seizing corporation property or a fine or both. (4) The court may make an order for punishment on conditions, including, for example, a suspension of punishment during good behaviour, with or without the respondent giving security satisfactory to the court for good behaviour. [38] Before the contempt hearing, all offending material had been removed from Style Global’s website. Beech Ovens no longer seeks the punishment of the respondents called for in the application – a fine for Style Global and the imprisonment of Mr Pattinson and Mr Piscopo. Instead, Beech Ovens seeks that its costs of the application be paid on the indemnity basis. I agree that, in all the circumstances of this case, I should exercise the discretion implicit in UCPR r. 930 to impose no punishment. I am satisfied costs should be paid on the indemnity basis because, although it is tolerably clear Mr Pattinson proceeded on a misunderstanding of the court’s orders – one which seems to have endured to the time of the hearing – nothing was done until well after the date by which the material was to be removed from the website. It was not incumbent on the solicitors for Beech Ovens to provide him with their advice as to the meaning of the orders. Indeed it was not for the parties to agree on the meaning of orders. The respondents were deliberately absent when the orders were made. If there was uncertainty in the mind of the respondents, they were to address the court. That was the time for the application now brought to set vary or aside the orders. [39] I see no reason to set aside or amend Judge Everson’s orders. The respondents relied on UCPR sub-rules 667(2)(a) and (c) – the court may set aside an order at any time if it was made in the absence of a party or the order is for an injunction.13 None of the respondents was present when the orders were made but I have set out the evidence which shows that was an informed choice made by Mr Pattinson and Mr Piscopo. The orders enjoin Style Global from certain actions but, properly understood, I do not think the orders are unreasonable. They preserve each party’s position pending trial. [40] Orders: 12 Court Document 22 at paragraphs 81,88 and 93 13 In fact, the orders are expressed to have effect until further order, suggesting no recourse need be had to any rule to authorise setting aside or changing them. -- 7 of 8 -- 8 (1) I find each respondent guilty of contempt of court by failing to comply with orders of the court made on 18 February 2015, as set out in these reasons. (2) No punishment is imposed. (3) The defendant’s application to set aside or vary the order made on 18 February 2015 is dismissed. (4) The respondents are to pay the applicant’s costs of these applications on the indemnity basis. (5) The parties have liberty to apply on 2 clear days’ notice. -- 8 of 8 --