Court Rejects Suit Against Liquidator Over Trade Mark Dispute

The Court refused leave to sue a court-appointed liquidator for negligence and misleading conduct in the sale of trade marks during the winding-up process. The plaintiffs failed to cooperate with the liquidators, did not promptly raise their concerns, and waited years before bringing the matter to court.

OUTCOME: Refused

Supreme Court New South Wales

Medium Neutral Citation: [NAME] v [NAME] [2020] NSWSC 299 Hearing dates: 27 August 2019 Date of orders: 26 March 2020 Decision date: 26 March 2020 Jurisdiction: Equity - Corporations List Before: Rees J Decision: Refuse leave to sue [NAME]: CORPORATIONS — leave to sue Court appointed [NAME] — principles at [81]-[89] – unfunded [NAME] – directors initially uncooperative – directors said companies had no assets and dormant – directors through other corporate entities apply to [NAME] trade [NAME] of companies in liquidation – director signs letter on behalf of company in liquidation consenting to new corporate entity acquiring trade [NAME] rights – director accused of 'phoenixing' – director does not inform [NAME] that companies in liquidation abandoned trade [NAME] rights and other corporate entities acquired those rights through usage and oral assignment – [NAME] assigns trade [NAME] rights to petitioning creditor and [NAME]' competitor – international trade [NAME] war – [NAME] application for trade [NAME] initially unsuccessful – liquidation ends – [NAME] later establish abandonment in other proceedings - complaint made years after completion of liquidation and deregistration of companies – leave refused

INTELLECTUAL PROPERTY – trade [NAME] – abandonment – principles at [45]-[47]

[NAME]'s duty to third parties – principles at [97]-[103] – vulnerability – no vulnerability here

AUSTRALIAN CONSUMER LAW – whether [NAME] engaged 'in trade or commerce' – principles at [113]-[118] – [NAME] by third party – poor prospects Legislation Cited: Australian Consumer Law, ss 2, 18, 236 Civil Liability Act 2002 (NSW), s 5D(3)(b) Corporations Act 2001 (Cth), ss 472, 475, 477(2)(c), 530A, 530A(3), 530A(6A) [NAME] 1995 (Cth), ss 17, 20, 21, 27(1), 44(1), 44(3), 44(4), 45, 52(1), 58, 72(3), 76, 78, 79, 92(4)(b), 95(2), 106, 107, 113, 215 [NAME] 1995 (Cth), regs 9.6, 21.15(4) Cases Cited: [COMPANY] v [COMPANY], et al. (case no. CV 14-9556-GW(JEMx)) [COMPANY] v [NAME] [COMPANY] [2015] ATMO 55; (2015) 114 IPR 204 [COMPANY] v [NAME] J Ramsay and Associates [COMPANY] [2018] VSC 75 [COMPANY] v Greig [2011] FCA 941 [COMPANY] v [COMPANY] (2018) 143 IPR 358; [2018] ATMO 133 [NAME] v [COMPANY] [COMPANY] [2011] VSC 419 [COMPANY] (In Liq) v Zheng [2019] FCA 2162 Baxter v Hamilton (2005) 15 Tas R 59; [2005] TASSC 64 [COMPANY] v [COMPANY] (No 1) (2008) 79 IPR 454; [2008] FCA 1760 Cmr of Taxation v [NAME] (No 2) [2019] FCA 1818 [COMPANY] v Nelson [1990] HCA 17; (1990) 92 ALR 193; (1990) 169 CLR 594 [NAME] v Worrell [2009] QCA 63 [COMPANY] v Handberg [2014] VSC 665; (2014) 32 ACLC 14-081 [NAME] v [NAME] & [COMPANY] [2017] NSWSC 1546 [COMPANY] v [COMPANY] (1998) 42 IPR 277 [COMPANY] v [COMPANY] (2007) ANZ ConvR 93; [2006] FCAFC 177 [COMPANY] v Adams (2000) ATPR 41-737; [1999] NSWCA 455 [COMPANY] v [COMPANY] [1999] FCA 357; (1999) 43 IPR 545; (1999) ATPR 41-687 [NAME] v [COMPANY] (2006) 229 ALR 566; [2006] NSWSC 158 Houghton v Arms [2006] HCA 59; (2006) 225 CLR 553 In the matter of [COMPANY] (in liq) (receivers and managers appointed) (No 2) [2019] NSWSC 1682 [COMPANY] v [COMPANY] (1992) 109 ALR 638; (1992) 37 FCR 526 [NAME] v [NAME] [COMPANY] [2014] FCA 795; (2014) 106 IPR 457 [NAME] (2017) 130 SASR 1; (2017) 353 ALR 201; [2017] SASCFC 172 [COMPANY] v Catanese [2000] FCA 1141; (2000) 51 IPR 134, 146-7 Mamone v Pantzer [2001] NSWSC 26; (2001) 36 ACSR 743 [NAME] v [COMPANY] (1995) 30 IPR 261 [NAME] v [COMPANY] (1998) 196 CLR 494; [1998] HCA 69 [COMPANY] (in liq) (Trustee) v [NAME] (No 4) (2018) 124 ACSR 185; [2018] FCA 22 McCarthy v McIntyre [1999] FCA 784 McDonald v Dare [2001] QSC 405 [COMPANY] v [COMPANY] (1995) 17 ACSR 495; (1995) 122 FLR 294 [NAME] (2007) 99 SASR 357; (2007) 214 FLR 367; [2007] SASC 365 Mouson & Co v Boehm (1884) 26 Ch D 398 [NAME] v [NAME] [COMPANY] (2017) 130 IPR 209; [2017] ATMO 63 [COMPANY] v [NAME] (No 3) (2017) 317 FLR 227; (2017) 120 ACSR 32 Perpetual Trustee Company [COMPANY] v Ishak [2012] NSWSC 697 Perre v Apand (1999) 198 CLR 180 [NAME] v [COMPANY] (1997) 142 ALR 527; (1997) 72 FCR 203 [COMPANY] v [COMPANY] [2018] NSWSC 540 Re "GE" [NAME] [1972] 1 WLR 729; (1972) 1B IPR 543 Re [COMPANY]; Condon v Rodgers (1995) 13 ACLC 1271; (1995) 120 FLR 399 Re [COMPANY] (No 1) (1991) 9 ACLC 1580 Re [COMPANY] (in liq) [2012] NSWSC 1215; (2012) 92 ACSR 588 Riv-Oland Marble Co (Vic) [COMPANY] v [NAME] (1988) 19 FCR 569, 571-2; (1998) 12 IPR 321; (1988) AIPC 90-517 Seaman v Silvia [2018] FCA 97 [COMPANY] (in liq) v [COMPANY] (1996) 144 ALR 159; (1996) 65 FCR 234 [COMPANY] v [COMPANY] (2004) 216 CLR 515; (2004) 205 ALR 522; [2004] HCA 16 Texts Cited: [NAME] and [NAME] of [NAME] and Passing Off (5th ed, 2012 [NAME]) [NAME] and [NAME], [NAME] (2nd edition, 2016, Oxford University Press) Category: Principal judgment Parties: [COMPANY] (First Plaintiff) [COMPANY] (Second Plaintiff) [NAME] (First Defendant) [COUNSEL] [NAME] (Second Plaintiff) Representation: Counsel: [redacted] [NAME] [NAME] (Defendants)

Solicitors: [redacted] [NAME] (Defendants) File Number(s): 2019/205840

Judgment 1. HER HONOUR: This is an application by [NAME], [COMPANY] and [COMPANY], for leave nunc pro tunc to commence proceedings against the defendants, [NAME] [NAME] and [NAME], who were the [NAME] of two companies related to [NAME], [COMPANY] and [COMPANY]. [NAME]' directors are [NAME] and his son [NAME]. They were also the directors of [NAME]. Another son, [NAME[NAME], was also peripherally involved. 2. [NAME] wish to sue the [NAME] for damages for negligence and misleading and deceptive conduct arising out of the [NAME]' sale of [NAME]'s trade [NAME] to [NAME]' arch enemy, [NAME] [NAME], for $5,000. [NAME] wish to contend that [NAME] did not, in fact, have any right to the trade [NAME] and the sale caused no end of trouble to [NAME] in seeking to enforce their trade [NAME] internationally, with attendant legal costs. [NAME]' right to use the trade [NAME] is said to have been thereby seriously infringed, causing loss.

3. As to why it is said that [NAME] had no trade [NAME] to sell, [NAME] contend that: 1. in 2003, [NAME] abandoned a registered trade [NAME] and [NAME] used it instead; 2. in 2007, [NAME] abandoned its use of the registered trade [NAME] and its use of an unregistered logo and [NAME] used the trade [NAME] instead; and 3. in 2011, [NAME] assigned, by oral agreement, its common law right to use the trade [NAME] to [NAME]. [NAME] say that the [NAME] would have been aware of this if they had only asked, albeit in circumstances where the [NAME] were experiencing great difficulty extracting books and records and information from the directors of [NAME] and were concerned – with some justification may I add – that the directors were 'phoenixing' these assets of the companies, including to [NAME].

1. This application traverses the Corporations Act 2001 (Cth), the [NAME] 1995 (Cth), tort law and Australian Consumer Law. The facts are complex and the subject of judgments both here and abroad. Nonetheless, I will endeavour to be succinct.

Facts 1. In 1991, [NAME] was incorporated. In 1996, [NAME] was granted a patent for a lifting device for slab, panel or sheet materials, called "lifting clamps", which [NAME] [NAME] had invented.

2. In 1995, [NAME]) [COMPANY] was incorporated. Four brothers hailing from Vietnam, including [NAME] [NAME], were directors and shareholders. In 1999, [NAME] [NAME] also became a director of [NAME]. [NAME]' goods were promoted and sold under the "[NAME]" brand and trade [NAME].

3. By 2001, [NAME] [NAME] no longer wished to be in business with the [NAME[NAME] in [NAME]. On 2 July 2001, [COMPANY] was incorporated, with [NAME] [NAME] as sole director and shareholder. On 12 July 2001, [NAME] [NAME] ceased to be a director of [NAME] and sold his shares in the company to the [NAME[NAME]. [NAME] began to sell the patented lifting clamps under the name "[NAME]". In February 2002, [NAME] [NAME] became the sole director and shareholder of [NAME].

Creation of trade [NAME]

1. In January 2003, [NAME] [NAME] says he became aware that the [NAME[NAME] were attempting to [NAME] the name "[NAME]" in the United States (US) and he wished to differentiate his brand from theirs. To achieve this: 1. on 28 January 2003, [NAME] registered the business name "[NAME]" (the Name); 2. on 31 January 2003, [NAME[NAME] designed a logo for the Name (the Logo); 3. on 26 February 2003, [NAME] applied to [NAME] the Name as an Australian trade [NAME], which registration was accepted and became [NAME] 945207; 4. on 18 March 2003, [NAME] changed its name to [NAME]; 5. on 29 June 2003, [NAME] began to use the Logo in Australia (the date comes from a certificate of registration later issued by the US Copyright Office); 6. on 7 July 2003, [NAME] filed to [NAME] the Name as a trade [NAME] in the US, which registration was accepted and became US [NAME] 76530214; 7. on 5 August 2003, [NAME] filed to [NAME] the Name as a trade [NAME] in the European Union, which registration was accepted and became Community [NAME] [PHONE].

1. To pause briefly to consider the significance of [NAME]'s registration of [NAME] 945207, a trade [NAME] is a sign used to distinguish goods or services provided in the course of trade from the goods and services of others: section 17, [NAME]. Only a person claiming to be the owner of a trade [NAME] may apply for its registration: section 27(1), [NAME]. On registration, the registered owner has the exclusive right to use, or authorise others to use, the trade [NAME] in relation to the goods or services in respect of which the trade [NAME] is registered: section 20(1), [NAME]. The registered owner of a trade [NAME] has the right to obtain relief under the [NAME] if the trade [NAME] is infringed: section 20(2). These rights are taken to have accrued to the registered owner from the date of registration of the trade [NAME]: section 20(3), [NAME].

2. Section 21 of the [NAME] provides: 21 Nature of registered trade [NAME] as property (1) A registered trade [NAME] is personal property. (2) Equities in respect of a registered trade [NAME] may be enforced in the same way as equities in respect of any other personal property. A registered trade [NAME] may be assigned or transmitted, in which event application must be made to the [NAME] for the assignment or transmission to be recorded: sections 106 and 107, [NAME]. Other interests or rights in respect of the registered trade [NAME] may also be recorded on the [NAME] of [NAME]: section 113, [NAME]. 1. [NAME] [NAME] said that, whilst [NAME] held the trade [NAME] to the Name, the business was conducted by [NAME], which manufactured goods in Vietnam and shipped them to Australia for sale using the Name and Logo. Pausing again to consider the significance of [NAME]'s use of the Logo, rights in a trade [NAME] can be established either by use or by registration; the [NAME] supplements rather than displaces the common law: [COMPANY] v [COMPANY] (1998) 42 IPR 277 at 286. At common law, a person who uses a trade [NAME] may thereby acquire the right to preclude its use by others: Re "GE" [NAME] [1972] 1 WLR 729; (1972) 1B IPR 543 per Lord [NAME] at 571. Thus, [NAME]'s use of the Logo from 2003 presumably gave rise to common law rights notwithstanding that the Logo was not a registered trade [NAME].

Federal Court proceedings 1. In November 2006, [NAME] commenced proceedings in the Federal Court of Australia against [NAME] for infringement of [NAME]'s patent in respect of the lifting clamps.

2. In 2007, [NAME] [NAME] moved to Vietnam and re-centred business operations there. On 7 May 2007, [NAME] was incorporated in Vietnam to manufacture and distribute the items which [NAME] had been selling. There is some contemporaneous evidence of this:

1. On 5 July 2007, [NAME] [NAME] wrote to [NAME] of [COMPANY] advising that he had put a new business structure in place: [NAME] had restructured its business in Asia and all new orders were to be sent to [COMPANY], a Singapore company, and futures payments made to that company's bank account. According to [NAME] [NAME], [NAME] was a related company to [NAME] and acted in an administrative capacity only; goods were manufactured and shipped by [NAME] to CDK Stone.

2. On 1 August 2007, [NAME] [NAME] wrote to a customer advising that [NAME] was no longer trading and suggesting that [NAME] was willing to take over the supply and delivery of the particular items required by this customer. In September 2007, [NAME] began to distribute its goods in Australia through CDK Stone.

1. In April 2008, [NAME] also became a director of [NAME].

2. On 18 March 2009, [NAME] discontinued the Federal Court proceedings. On 27 September 2010, Bennett J ordered [NAME] to pay [NAME]' costs of the proceedings on a party and party basis until 7 November 2007 and on an indemnity basis thereafter.

3. On 29 March 2011, [NAME] was incorporated. [NAME] was sole director and shareholder. [NAME] became the main supplier of [NAME]' goods in Australia, which were advertised and sold using the Name and Logo.

Appointment of [NAME]

1. On 3 June 2011, [NAME] filed an application to appoint a [NAME] to [NAME] by reason of their failure to pay the costs ordered in the Federal Court proceedings. On 8 August 2011, the Court appointed the defendants as [NAME].

2. On 17 August 2011, the defendants wrote to the officeholders of [NAME] requesting that they complete a Report as to Affairs (RATA) and a questionnaire and also deliver the company's books and records. There was no reply.

3. According to the [NAME]' later correspondence, the Australian Securities and Investments Commission (ASIC) commenced a prosecution in respect of the directors' failure to answer the [NAME]' requests. Section 475 of the Corporations Act obliged the officeholders of a company to submit a RATA to [NAME] within 10 business days after a winding up order is made; failure to do so is an offence of strict liability. Section 530A of the Corporations Act obliges the officeholders to deliver to [NAME] all books in their possession as soon as practicable after the winding up order is made and to tell [NAME] where other books are. Further, the officer of the company "must do whatever [NAME] reasonably requires the officer to do to help in the winding up": section 530A(3). Failure to do either is an offence of strict liability: section 530A(6A). [NAME] was required to attend [ADDRESS] and was charged with various offences for which he was convicted. [NAME]' evidence is silent on this subject.

4. A year later, on 13 August 2012, [NAME] [NAME[NAME] sent a letter to both the [NAME] and ASIC enclosing the last bank statements for [NAME] and advised: These companies have been dormant for more than five years; therefore there are no books to submit. [COMPANY] was a company for holding patents only and did not trade. [COMPANY] has not traded for more than 5 years and does not hold any assets.

1. On 21 September 2012, [NAME]'s registration of the Name in the US expired as [NAME] did not file a declaration of continued use. In later correspondence, [NAME] advised that he was not aware of US [NAME] 76530214 at the time.

2. On 10 December 2012, the defendants wrote to [NAME] [NAME[NAME] again pressing for delivery up of the companies' books and records and requesting a completed RATA by close of business on 24 December 2012.

3. On 8 January 2013, according to government records maintained by IP Australia (an agency of the Commonwealth Department of Industry, Innovation and Science which administers intellectual property rights in Australia), a renewal reminder was sent in respect of registration of [NAME] 945207 as it was due to expire on 26 February 2013. The registration of a trade [NAME] expires ten years after the filing date of the application for its registration: section 72(3), [NAME]. If the Registrar has not received a request for renewal, the Registrar must notify the registered owner of the trade [NAME] that the renewal is due: section 76, [NAME]. The address for service for [NAME] was in the Australian Capital Territory and not the [NAME]' address so, presumably, it was the address of [NAME]'s agent as required by section 215 of the [NAME].

4. Some six weeks after the renewal reminder notice was sent by IP Australia to [NAME]'s agent – and some 18 months after the appointment of [NAME] – on 18 February 2013 [NAME] [NAME] and [NAME] finally completed RATAs for [NAME]. In both cases, they declared that neither company owned any assets. This might have been a curious thing to declare in circumstances where they likely had been recently reminded that [NAME] was the registered owner of [NAME] 945207. [NAME] [NAME] and [NAME] [NAME] also completed a questionnaire in respect of [NAME]. They advised that [NAME] ceased trading in 2007, and: [[NAME]] used the rights of the patent held by [COMPANY]. No questionnaire is in evidence for [NAME]. 1. [NAME] [NAME] says that he had only two telephone calls with the [NAME]' office sometime before he provided the RATAs, in which he was accused of "phoenixing" activity in relation to [NAME]. A member of the [NAME]' staff mentioned that the domain name, www.[NAME].com.au, was registered in the name of [NAME], which was said to suggest phoenixing activity. "Phoenixing" is winding up a company to avoid paying liabilities but transferring assets and employees to a new company: Cmr of Taxation v [NAME] (No 2) [2019] FCA 1818 per [NAME] J at [114] and [123]; [COMPANY] (In Liq) v Zheng [2019] FCA 2162 per [NAME] J at [16]. [NAME] [NAME] told the [NAME]' staff that the companies had been dormant for years and the transfer of the business to [NAME] was done for legitimate commercial reasons. [NAME] [NAME] does not suggest that he told the [NAME]' staff that the trade [NAME] rights of [NAME] had been abandoned. [NAME] [NAME] and [NAME] did not hear further from the [NAME] after they submitted the RATAs.

[NAME] applies for trade [NAME]

1. On 26 February 2013, [NAME]'s registration of [NAME] 945207 expired. However, section 79 of the [NAME] provides: Renewal within 6 months after registration expires If, within 6 months after the registration of a trade [NAME] has expired, a person asks the Registrar, in accordance with subsection 75(2), to renew the registration of the trade [NAME], the Registrar must renew the registration of the trade [NAME] for 10 years from the day on which the registration expired. [NAME] [NAME] was aware that there was a six month 'grace period' for renewal of trade [NAME] registrations after expiry. [NAME] deposed that, although [NAME]'s registration of the Name had lapsed, it was still possible to renew it upon the payment of late fees. Notwithstanding this shared understanding, less than a week later and with apparent unseemly haste, on 4 March 2013, [NAME] applied to [NAME] the Name and the Logo. The applications were numbered 1544189 and 1544186 respectively (these applications will be referred to as the [NAME], for reasons which will become clear). The applications are not in evidence and thus the basis on which [NAME] claimed to be the owner of the Name and Logo is not known.

1. Section 44(1) of the [NAME] provides that an application to [NAME] a trade [NAME] must be rejected if the trade [NAME] is substantially identical with, or deceptively similar to, a trade [NAME] already registered by another person in respect of similar goods. On 19 and 24 April 2013, a trade [NAME] examiner at IP Australia informed [NAME] that the Parents Applications could not be accepted for registration as the Word and Logo resembled the registered trade [NAME] of [NAME]. The trade [NAME] examiner advised: Your trade [NAME] is identical to or closely resembles trade [NAME] number 945207. This trade [NAME] has an earlier priority date and is for the same or similar goods or services. … Note: I note that the address of the earlier trade [NAME] and your trade [NAME] is the same. It appears that the two companies may be related. If you are able to bring the ownership in line, I will reconsider the ground for rejection. In addition, the examiner advised that the description of goods and services provided by the trade [NAME] for which application was made included "dollies and trolleys", which should be submitted in a different class (being Class 12 rather than Class 7).

1. The trade [NAME] examiner suggested ways that [NAME] could overcome this problem, including by supplying evidence under subsections 44(3) or 44(4) of the [NAME] 1995, which provide: Identical etc. trade [NAME] (3) If the Registrar in either case is satisfied: (a) that there has been honest concurrent use of the 2 trade [NAME]; or (b) that, because of other circumstances, it is proper to do so; the Registrar may accept the application for the registration of the applicant's trade [NAME] subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade [NAME] has been used only in a particular area, the limitations may include that the use of the trade [NAME] is to be restricted to that particular area. (4) If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade [NAME] for a period: (a) beginning before the priority date for the registration of the other trade [NAME] in respect of: (i) the similar goods or closely related services; or (ii) the similar services or closely related goods; and (b) ending on the priority date for the registration of the applicant's trade [NAME]; the Registrar may not reject the application because of the existence of the other trade [NAME].

1. The trade [NAME] examiner provided, with each letter, a three page guide, "HOW TO SUPPLY EVIDENCE OF HONEST CONCURRENT USE, PRIOR USE and/or OTHER CIRCUMSTANCES". The trade [NAME] examiner invited [NAME] to contact her if it believed it could supply evidence of its use of the trade [NAME] or a declaration containing such evidence, which would be accepted in confidence. Of potential relevance to [NAME]'s application were "honest concurrent use" and "other circumstances". The guide set out what kind of evidence could be supplied in respect of these matters, how much evidence might be needed and what any declaration ought contain. Any declaration was required to contain the name of the person or organisation using the trade [NAME] (being the applicant), someone authorised to use the trade [NAME], or a person or company from whom the applicant acquired the trade [NAME] (being a predecessor in title). Where a declaration was to be submitted supporting "honest concurrent use", the guide suggested: For honest concurrent use, the declaration should include: • A brief history of the trade [NAME], including: • When the trade [NAME] was chosen (this must be a significant period of time before you filed your application). • Why the trade [NAME] was chosen. • Whether you knew of the earlier filed trade [NAME] when you chose your trade [NAME]. • Whether you know of any confusion between the trade [NAME]. • When the trade [NAME] was first used in Australia to sell goods or services (please give the year and, if possible, the month). • Whether it has been used continuously. If it has not been used continuously, when or for how long it has been used. • The area/s where the trade [NAME] has been used to sell goods or services (please give States or regions in Australia). • The specific goods or services sold using the trade [NAME]. • Examples of how the trade [NAME] has been used to sell those goods or services (please refer to and attach copies of packaging and/or advertising and/or promotional materials). • The annual figures in Australian dollars spent on advertising and promoting the trade [NAME]. • The annual turnover figures in Australian dollars for goods or services sold using the trade [NAME]. These figures must cover only the goods or services claimed in your application. • Any other information or materials which will help show how the trade [NAME] has been used (please refer to and attach copies of these materials).

1. Where "other circumstances" were advanced, the guide suggested: There may be other relevant circumstances which may allow your application to be accepted. For example: • If you have been using your trade [NAME] with the permission of the owner of a conflicting trade [NAME]. • If the owner of a conflicting trade [NAME] agrees to your trade [NAME] being registered, and gives you their written consent. If you believe these or other circumstances apply, and if you wish to discuss how to proceed, please phone me.

1. On 13 May 2013, a trade [NAME] examiner sent an email to [NAME] advising, As discussed to overcome the ground for rejection raised due to the existence of a previously applied for trade [NAME] with different ownership, a letter of consent can be provided. An example of an acceptable format for a letter of consent was provided. [NAME] [NAME] was also reminded to address the query about the classification of the goods.

1. In later proceedings, [NAME] said he spoke to his father about the letter of consent, and [NAME] [NAME] thought he would be able to give consent to speed the acceptance of the [NAME] along. On 27 May 2013, [NAME] [NAME] sent a letter of consent to IP Australia on behalf of [NAME] stating: As owner of trade [NAME] [NAME] (logo) & [NAME] (word) … I hereby consent to the use and registration of the trade [NAME] [NAME] (logo) & [NAME] (word) … by [COMPANY] under application 1544186 and 1544189 … [NAME] forwarded the letter of consent to IP Australia and, in regards to the classification query, requested that IP Australia remove the words "dollies and trolleys" from the description. The letter of consent is significant as it does not accord with [NAME] having abandoned [NAME] 945207 and, further, suggested that [NAME]'s trade [NAME] rights extended to the Logo.

1. On 31 May 2013, according to the records of IP Australia, the trade [NAME] examiner accepted the [NAME] as the problem posed by section 44 of the [NAME] had been resolved by the letter of consent provided by the owner of [NAME] 945207 and the classification issue had been resolved by deletion of "dollies and trolleys". On 31 May 2013, IP Australia wrote to [NAME] – not to the address of the [NAME] but to the address of the [NAME] – advising that the [NAME] had been accepted for registration and would soon be advertised. On 27 June 2013, IP Australia advertised the registration of the [NAME].

[NAME] [NAME] gets involved 1. On 17 July 2013, [NAME] [NAME] filed an intent-to-use application in the US for the Name, which was approved by the US Patent and [NAME] Office. On 26 July 2013, [NAME] [NAME] obtained various records from ASIC in respect of [NAME], including the RATAs. On 29 July 2013, [NAME] [NAME] obtained a search of [NAME]'s [NAME] 945207 from IP Australia, which recorded that the trade [NAME] had been due for renewal on 26 February 2013. The status of the trade [NAME] was recorded by IP Australia as: "Expired – Renewal Possible". Such a notation is consistent with [NAME]'s right, conferred by section 79 of the [NAME], to apply for renewal of registration notwithstanding it had expired.

1. On 27 August 2013, [NAME] filed a Notice of Opposition with IP Australia in respect of the [NAME]. Section 52(1) of the [NAME] provides that, if the Registrar has accepted an application for the registration of a trade [NAME], a person may oppose the registration by filing a notice of opposition. [NAME] [NAME] later said that [NAME] opposed the [NAME] because discussions were taking place with [NAME] of [NAME] to sell all of [NAME]'s rights, title and interest in the trade [NAME] "[NAME]", including [NAME] 945207.

2. On 12 September 2013, IP Australia removed [NAME] 945207 from the [NAME] for non-payment of renewal fees. On 19 September 2013, IP Australia published the fact that this had occurred. Section 78 of the [NAME] provides that, if registration of a trade [NAME] is not renewed within six months after registration expires, the Registrar must remove the trade [NAME] from the [NAME].

3. Section 58 of the [NAME] provides that the registration of a trade [NAME] may be opposed on the ground that the applicant is not the owner of the trade [NAME]. On 27 September 2013, [NAME] served a Statement of Grounds and Particulars, objecting to registration of the [NAME] on the basis that it was substantially identical with or deceptively similar to [NAME]'s trade [NAME] and [NAME] was not the owner or first user of the trade [NAME] in Australia but [NAME] and / or [NAME]. Further, the application was opposed on the ground that it was made in bad faith: [COMPANY] is currently being liquidated. In its presentation of accounts and statement to the ACCC (sic), [COMPANY] failed, refused or neglected to list Australian trade [NAME] no. 945207 for [NAME] as personal property. It should have been included in the assets of the business and dealt with by [NAME]. Nevertheless, [COMPANY] has purportedly "consented" to the filing of [NAME] by [[NAME]], despite that consent being contrary to law. The opposed application was made in bad faith, possibly as a means of avoiding the [NAME] [NAME] from being subject to the liquidation process and creditors.

Deed of assignment 1. On 29 November 2013, the [NAME], on behalf of [NAME], executed a "Trademark Deed of Assignment" with [NAME] [NAME]. [NAME] [NAME] and [NAME] were unaware that the [NAME] were proposing to enter into this deed. The recitals to the deed noted: [NAME]. [NAME] is the registered proprietor of the [NAME] registration number 945207. [NAME]. [NAME] [sic] has not paid its renewal fee and the registration is currently expired with renewal being possible. [NAME]. [NAME] at the date of liquidation was the registered proprietor of [NAME] registrations number 1544186 and 1544189. [NAME]. [NAME] is the registered proprietor of [NAME] Community [NAME] [PHONE]. E. [NAME] also has common law rights to [NAME] associated with the [NAME]. F. [NAME] may have common law rights associated with the [NAME]. G. It has come to the attention of [NAME] that on or about 27 May 2013 a person not from the [NAME] office nor with the approval or authority of the [NAME] purported to consent to the registration of an assignment of the [NAME] registrations number 1544186 and 1544189 to [COMPANY] [NAME]. H. The [NAME] have not consented to any matter or thing in connection with [NAME] registrations numbers 1544186 and 1544189. The letter that appears in Schedule 2 was not a letter authorised or consented to be sent by the [NAME] and the date that appears on the letter is a date that is of a time in which the Assignors were the registered proprietors of the [NAME].

I. Assignor being the registered proprietor of the [NAME] set out in Item 1 of the Schedule ("the [NAME]") wishes to assign to the Assignee all their rights and title in the applications, the [NAME] and any and all common law rights that Assignor may have. The parties warranted that each of the recitals was true and correct and acknowledged that each entered into the deed in [NAME] thereon: clause 6.10.2.10. The only recital which appears to be obviously incorrect is Recital C. The [NAME] were made by [NAME] in March 2013 and long after [NAME] were appointed.

1. Clause 1.1 of the deed provided: For the consideration of $5,000.00, receipt of which is hereby acknowledged, Assignor hereby assigns to the Assignee all its rights and title to the [NAME], the applications, and common law rights. The [NAME] were defined in Schedule 1 to the deed as [NAME] 945207, the [NAME] and [NAME]'s registration of the Name in the European Union. Obviously, to the extent that the [NAME] purported to assign rights which [NAME] did not have, then the deed failed to assign such rights. The drafting is consistent with [NAME] endeavouring to transfer whatever rights those companies may have had in the Name and Logo to [NAME] [NAME], including in the event that the matters set out in [NAME]' Statement of Grounds and Particulars were made out.

1. Under the deed, [NAME] also agreed to do all acts as may be reasonably necessary to enable [NAME] [NAME] to apply for and obtain registration as the registered proprietor of the [NAME], the applications, and common law rights: clause 1.4. For his part, [NAME] [NAME] agreed to procure the execution of a Deed Poll by [NAME], subordinating its right to priority for its costs of the application to wind up [NAME].

2. On 3 January 2014, [NAME] [NAME] filed an intent-to-use application in the US for the Logo, which was approved by the US Patent and [NAME] Office. On 16 January 2014, [NAME] [NAME] filed an application in Australia to [NAME] the Name, being [NAME] 1601206.

3. On 30 January 2014, [NAME] [NAME] signed a declaration in support of [NAME]'s opposition to the [NAME]. [NAME] [NAME] confirmed that [NAME] [NAME] had no authority to sign the letter of consent as all powers of directors ceased on the date of [NAME] [NAME] appointment as [NAME]. [NAME] [NAME] also confirmed that, by the Trademark Deed of Assignment, [NAME] assigned its entire rights in the [NAME] trade [NAME], including common law rights and registered rights, to [NAME] [NAME].

4. Thereafter proceeded something of an international scramble to [NAME] the Name and Logo, although [NAME] [NAME] had something of a head start by having already lodged an intent-to-use application in the US for the Name and Logo. On 24 February 2014, [NAME] applied to [NAME] the Name and Logo in the European Union. On 6 March 2014, IP Australia received an application for assignment of [NAME] 945207, presumably from [NAME] [NAME].

Abandonment 1. On 24 March 2014, [NAME] signed a declaration in answer to [NAME]' opposition to the [NAME]. [NAME] [NAME] stated that, as [NAME] [NAME] was the administrator of [NAME], he should have known that those companies had not traded for the previous six years. For this reason it would be obvious to an administrator that any trademarks held by the companies are abandoned. For [NAME] [NAME] to draw up a Deed of Assignment and sell to a rival company is an act of bad faith. The following are the facts: • Both the companies [COMPANY] and [COMPANY] were dormant companies that had not traded in more than 4 years prior to the appointment of a [NAME] on 8 August 2011. • Both the companies [COMPANY] and [COMPANY] did not used [sic] any trademark or logo in more than 4 years prior to the appointment of a [NAME] on 8 August 2011. • The registration of the trademark no. 945207 as previously registered by [NAME] had lapsed. • The [NAME] logo, trademark no. 1544186, as registered by myself was never the property of either [COMPANY] or [COMPANY]. • The [NAME] logo, trademark no. 1544186, as registered by myself was designed by my brother, [NAME] and had not been registered by any party previously. It was specially designed for [NAME] products, products that [COMPANY] sells. [NAME] [NAME] referred to the statements made in the Trademark Deed of Assignment as "grossly irresponsible, false and mischievous". [NAME] [NAME] proceeded to address each of the recitals in the deed and concluded by saying, "[NAME] is dishonest and is engaging in deceit and fraud". This declaration contained the first suggestion that [NAME] 945207 and any common law rights to use the Logo had been abandoned.

1. Pausing here, title conferred by the [NAME] is not contingent upon actual use of the trade [NAME]. Once registration is achieved, the ownership of a trade [NAME] is sustained by the terms of the [NAME] itself: [NAME] and [NAME] of [NAME] and Passing Off (5th ed, 2012 [NAME]) at [10.1505]. Section 92(4)(b) of the [NAME] provides a mechanism for a person to remove a trade [NAME] from the Registrar for non-use. Such an application may be made where the trade [NAME] has been registered for three years and, at no time during that period, has the registered owner used the trade [NAME] in Australia. On receipt of such an application, the Registrar must provide a copy to each person who, in the Registrar's opinion, should receive one: regulation 9.6, [NAME] 1995 (Cth). The Registrar must also advertise the application in the Official Journal: section 95(2), [NAME].

2. An applicant for registration of a trade [NAME] may be able to avoid the requirement that only an owner of a trade [NAME] may apply to [NAME] it by demonstrating that the prior user has abandoned its trade [NAME], consistently with the general rule that an owner may voluntarily relinquish his or her ownership of personal property. [NAME] and [NAME], [NAME] (2nd edition, 2016, Oxford University Press) note at page 268, "…although there are only a handful of trade [NAME] cases in which abandonment has been claimed successfully, the proposition that abandonment is possible has invariably been accepted in trade [NAME] cases. … that abandonment is possible has been accepted in at least four Federal Court cases." The four Federal Court cases cited by the [NAME] were Riv-Oland Marble Co (Vic) [COMPANY] v [NAME] (1988) 19 FCR 569, 571-2; (1998) 12 IPR 321; (1988) AIPC 90-517; [NAME] v [COMPANY] (1995) 30 IPR 261, 266-7; [COMPANY] v Catanese [2000] FCA 1141; (2000) 51 IPR 134, 146-7 [35]-[42]; and [NAME] v [NAME] [COMPANY] [2014] FCA 795; (2014) 106 IPR 457.

1. Whether a trade [NAME] has been abandoned is fundamentally a factual question: [COMPANY] v [COMPANY] per Greenwood J at [14]. As Chitty J explained in Mouson & Co v Boehm (1884) 26 Ch D 398 at 405 "the question of abandonment is one of intention to be inferred from the facts of the particular case". Mere non-use of a trade [NAME] is insufficient to prove abandonment; intention must be shown: Malibu Boats per Finkelstein J at [40]. As Bowen CJ observed in Riv-Oland at 571-2: … [I]n my opinion, to show abandonment of the [NAME] in circumstances such as the present it would be necessary to demonstrate more than slightness of use. There would have to be some evidence indicating an intention to abandon the trade [NAME] to result in the right to proprietorship being lost… The requirement for intention was followed by [NAME] v [NAME] at 267 per Burchett J; [NAME] at [188]-[189] per Greenwood J; [COMPANY] v [COMPANY] (2018) 143 IPR 358; [2018] ATMO 133 per I C Thompson at [25].

1. Having regard to these principles, [NAME] declaration (at [44]) indicated he was aware of the possibility of abandonment of trade [NAME] but did not yet appreciate that the fact that [NAME] had not used the trade [NAME] for some time did not suffice to establish abandonment.

International activity continues 1. On 22 April 2014, [NAME] [NAME] filed an application to [NAME] the Name and Logo in Canada. On 2 May 2014, [NAME] applied to [NAME] the Logo in India. On 16 July 2014, [NAME] registered the Name and Logo in the European Union. On 29 and 30 September 2014, [NAME] applied to [NAME] the Name and Logo in the US. On 2 October 2014, [NAME] registered copyright in the Logo in the US. On 24 October 2014, [NAME] [NAME] incorporated [COMPANY] in California and, on 10 November 2014, assigned all of his rights in the trade [NAME] to [COMPANY]. [NAME] [NAME] also registered various domain names containing "[NAME]" in Vietnam.

Another deed of assignment 1. On 8 April 2015, [NAME] and [NAME] executed a "[NAME] of Assignment". The purpose of the deed was stated to be, "to confirm the previous oral assignment of ownership of the [NAME] (as defined) from [NAME] … to [NAME]". According to recital B: On 29 March 2011 (Effective Date), the Assignor agreed (by way of an oral agreement with the Assignee) to assign its entire benefit, right, title and interest in and to the [NAME] in Australia (Territory) to the Assignee. The [NAME] were defined as the Name and Logo. How it was that [NAME] had any rights in the [NAME] in the first place, orally assigned to [NAME], was not laid bare by the Confirmatory Trademark Deed of Assignment.

Further applications by [NAME] for trade [NAME]

1. On 23 April 2015, [NAME] lodged divisional applications with IP Australia to [NAME] the Name and Logo, being applications 1689002 and 1689004 respectively (Divisional Applications). Section 45 of the [NAME] provides that if an application for the registration of a trade [NAME] is pending (the "parent application"), the applicant may make another application (a "divisional application") for the registration of the trade [NAME] in respect of some only of the goods or services for which registration is sought under the parent application. Divisional applications are often made where an objection to the parent application is raised in relation to some specified goods and services and the applicant wishes to obtain registration for the [NAME] in relation to the unaffected goods or services expeditiously: [NAME] [NAME] at page 27. Perhaps oddly, [NAME] also lodged a fresh application for registration of the Name and Logo in Australia (numbered 1689023 and 1689027 respectively, the Fresh Applications).

2. On 26 and 27 May 2015, [NAME] [NAME[NAME] and [NAME] signed declarations which [NAME] sought to have considered at the upcoming hearing of the [NAME]. These declarations are not in evidence but a summary of their contents in [NAME]'s outline of submissions dated 27 May 2015 indicates that the contents were by and large the same as declarations later signed by the [NAME] in March 2016 in respect of the Divisional Applications and described at [64]. That being the case, it was the first time that [NAME] suggestion that [NAME]'s intellectual property rights had been abandoned – made in his declaration on 24 March 2014 referred to at [44] – was given form. As summarised in counsel's submissions of 27 May 2015, it was said that during 2003, [NAME] formed an intention to abandon any ownership of the Name and its trade [NAME] registration. In 2007, [NAME] ceased trading including any further commercial use of the trade [NAME]. In 2011, [NAME] orally assigned its common law rights in the trade [NAME] to [NAME]. [NAME] contended that [NAME] abandoned any common law rights either of them had to the trade [NAME] prior to the Trademark Deed of Assignment and, after abandonment, the trade [NAME] were first used by [NAME] in Australia in relation to its goods such that there were no common law rights capable of being assigned by [NAME] to [NAME] [NAME].

3. On 29 May 2015, the [NAME] were heard by a Delegate of the [NAME]. [NAME] conceded that [NAME] [NAME[NAME] had no authority to execute the letter of consent as [NAME] was then under external administration. [NAME] also conceded that section 62(b) of the [NAME] applied, which provides that registration of a trade [NAME] may be opposed where the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars. Nonetheless, [NAME] argued that the Registrar had a discretion to [NAME] the trade [NAME]. The Delegate did not agree. On 24 June 2015, in [COMPANY] v [NAME] [COMPANY] [2015] ATMO 55; (2015) 114 IPR 204, the Delegate held at [15]: … the Applicant has, in effect, executed a falsehood upon the [NAME] which has led to two applications being accepted for registration when they ought not to have been. It is not in the public interest that this behaviour be in any way condoned or encouraged. The Registrar must be able to place full [NAME] on material placed before her, or one of her delegates. … The Delegate did not address [NAME]'s contentions in respect of abandonment.

1. Also on 24 June 2015, the defendants ceased to be [NAME] of [NAME].

2. On 5 May 2015, IP Australia accepted the Divisional Applications for registration. On 6 July 2015, [NAME] [NAME] filed Notices of Intention to Oppose the Divisional Applications on the grounds that the owner of the trade [NAME] was [NAME] or [NAME], and those companies had assigned their rights to [NAME] [NAME] as part of the liquidation process.

Enforcement activities abroad 1. On 9 July 2015, the Government of Canada approved [NAME] [NAME] application to [NAME] the Name and Logo. On 17 July 2015, [COMPANY] ([NAME]'s company) commenced proceedings in the US District Court, Central District Court of California against [NAME], [NAME], [NAME] and [NAME] to determine the parties' respective rights to use the Name and Logo. On 27 July 2015, the US Patent and [NAME] Office sent a notice of refusal to [NAME] in respect of its application to [NAME] the Name and Logo in the US.

2. On 7 September 2015, [NAME] were deregistered.

3. On 8 September 2015, IP Australia accepted the Fresh Applications for registration.

4. On 17 September 2015, the US proceedings were dismissed against [NAME] [NAME] for lack of personal jurisdiction. On 18 September 2015, the US proceedings against [NAME[NAME] for copyright invalidity of the Logo were summarily dismissed. On 7 October 2015, [NAME] notified its opposition to registration of the Name and Logo by [NAME] [NAME] in Canada.

5. On 29 October 2015, [NAME] filed an answer, counterclaim and third party complaint in the US proceedings. Amongst the pleading, it was contended that in 2007 "[NAME] and licencee [COMPANY]. entirely ceased using the [NAME] [NAME] in United States commerce" (emphasis added). I note that this may be considered an admission by [NAME] that, until 2007, [NAME] used the trade [NAME] under a licence from [NAME] rather than by reason of any abandonment by [NAME], in 2003, of the trade [NAME]. Further, [NAME] contended that the Trademark Deed of Assignment did not address or contemplate the transfer of US trade [NAME] rights as none existed to transfer. [NAME] [NAME], therefore, did not receive any rights to the trade [NAME] in the US as the deed could not have transferred [NAME] or rights that did not exist. [NAME] sought a declaration that the deed failed to transfer any common law or statutory rights to the trade [NAME] in the US.

6. On 17 November 2015, [NAME] [NAME] filed a Notice of Intention to Oppose registration of the Fresh Applications. On 9 December 2015, [NAME] [NAME] filed his evidence in opposition to the Divisional Applications. On 17 December 2015, [NAME] [NAME] filed a Statement of Grounds of Opposition in respect of the Fresh Applications, including because the trade [NAME] was substantially identical to his [NAME] 1601206 (referred to at [41]).

7. On 29 December 2015, [NAME] filed a Statement of Opposition to [NAME] [NAME] application to [NAME] the Name and Logo in Canada. On 26 January 2016, the US Patent and [NAME] Office accepted [NAME]' applications to [NAME] the Name and Logo. On 12 February 2016, [NAME] sent a letter of demand threatening to commence copyright infringement proceedings unless [NAME] [NAME] withdrew his application in Canada. [NAME] [NAME] attorneys responded, advising that the trade [NAME] which [NAME] [NAME] was seeking to [NAME] had been assigned to him by [NAME] of [NAME] and, … as a practical matter, it turns out that substantially the same issues are already being litigated in the U.S. (in California), where your clients are among the defendants rather than [NAME].

1. In February 2016, in the US proceedings, [COMPANY] sought to discontinue the proceedings against [NAME] as, following discovery, it was apparent that [NAME] had not engaged in any business in the United States. In March 2016, [NAME] commenced a second set of proceedings in the US against a company associated with [NAME] [NAME] to recover domain names on the basis of trade [NAME] infringement. [NAME] also commenced a third set of proceedings in the US against [NAME] [NAME] and associated companies alleging trade [NAME] infringement, copyright infringement and cybersquatting violations. 'Cybersquatting' is the practice of registering names, especially well-known company or brand names, as internet domains in the hope of reselling them at a profit: [COMPANY] v [COMPANY] (No 1) (2008) 79 IPR 454; [2008] FCA 1760, Collier J at [119]. On 25 March 2016, [COMPANY] notified its opposition to [NAME]' registration of the Name and Logo in the United States.

2. On 23 and 24 March 2016, [NAME] [NAME] and [NAME] (of CDK Stone) signed lengthy declarations in respect of the Divisional Applications. By my count, these declarations comprised some 940 pages of declarations and supporting documents. [NAME] [NAME] signed three declarations: one in his capacity as a director of [NAME], one in his capacity as a director of [NAME] and a third in his capacity as a director of [NAME]. [NAME] signed a declaration in his capacity as the secretary and a former director of [NAME]. The following propositions emerge: 1. [NAME] [NAME] described his early business dealings with the [NAME[NAME] in [NAME] and said that, when the company endeavoured to move its manufacturing operations to Vietnam, the [NAME[NAME] established a corporate entity in Vietnam and manufactured goods which had the effect of infringing the intellectual property rights of [NAME], to [NAME] [NAME] disadvantage.

2. Even though [NAME] had the registered trade [NAME] for the Name – in Australia, the US and the EU – [NAME] never used the trade [NAME] in Australia or elsewhere. [NAME] [NAME] decided instead that [NAME] would carry on all trading activities under the Name and the Logo. [NAME] [NAME] said that [NAME] never used the Name and intended to abandon any rights afforded by these registrations. This abandonment occurred in 2003. 3. [NAME] then also abandoned its intellectual property rights in about May 2007, when [NAME] took over the business of manufacturing [NAME] goods under the Name and Logo. ([NAME] [NAME] confirmed [NAME] [NAME] description of the use of CDK Stone to distribute [NAME]' goods in Australia.)

4. Father and son declared that, when [NAME] was incorporated, they spoke and agreed that [NAME] would assign all rights which it had through use in Australia of the Name and Logo to [NAME]. ([NAME] confirmed the continuing use by [NAME] of the Word and Logo since 2011.)

5. As to why the letter of consent referred to at [32] did not mention that [NAME] had abandoned its intellectual property rights in the trade [NAME] or that those rights now resided in [NAME], [NAME] [NAME] said that he followed the example letter of consent provided by IP Australia and, on reflection, should have said that he was writing as a former director of [NAME] as the company had intentionally abandoned any rights afforded by [NAME] 945207 in 2003 or when the company ceased to trade in 2007. He sent the letter without the benefit of legal advice at the time.

1. The declarations were in essentially the same terms as the affidavits of [NAME] [NAME] and [NAME] filed in these proceedings. As is evident from the summary above, the declarations were infused with legal submissions and conclusions of law. Adherence to the Evidence Act 1995 (NSW) was, however, unnecessary in respect of the declarations as regulation 21.15(4) of the [NAME] provided: The Registrar is not bound by the rules of evidence, but may be informed on any matter that is before the Registrar in a way that the Registrar reasonably believes to be appropriate. The same position did not apply in the hearing before me where numerous objections and rulings on evidence were made.

US judgment 1. In April 2016, Judge George Wu of the United States District Court in the Central District of California heard various applications, including an application by [NAME] for summary judgment on the basis that [COMPANY] did not own a valid, protectable trade [NAME] as [NAME] had abandoned any common law rights to the Name and Logo before execution of the Trademark Deed of Assignment and thus had no rights to assign. [COMPANY] position was that, notwithstanding the expiration of [NAME]'s US registration of the Name on 12 September 2012, [NAME] and its licensee, [NAME], continued to have US common law rights to the Name and Logo, which had been assigned to [NAME] and then to [COMPANY].

2. According to Judge Wu's provisional judgment in [COMPANY] v [COMPANY], et al. (case no. CV 14-9556-GW(JEMx)), [NAME] proffered evidence that [NAME] had entirely ceased using the [NAME] in commerce in the US in 2007. [COMPANY] offered no evidence to the contrary, nor any sufficient evidence to establish that [NAME] had licenced the [NAME] from [NAME]. The fact that [NAME] [NAME] played a role in each entity at various points in time was considered insufficient to establish an implied licence. Judge Wu noted that the Trademark Deed of Assignment did not refer to [NAME]'s registration of the Name in the US, either in Schedule 1 or at all. Judge Wu concluded that, as [COMPANY] could not establish that [NAME] used the [NAME] pursuant to a licence, [NAME] had established a prima facie case of abandonment through its unrebutted evidence that [NAME] ceased using the [NAME] in 2007. As there was no genuine dispute that [NAME] abandoned its common law rights to the [NAME] prior to the Trademark Deed of Assignment, there were thus no rights in the US [NAME] to assign.

3. On 21 June 2016, the judgment of Judge Wu was formally handed down and, on 24 June 2016, [NAME] transferred various domain names to [NAME]. On 11 October 2016, default judgment was entered in the second set of US proceedings (in the District Court for the Eastern District of Virginia, Alexandria Division, Civil Action number 1:16-cv-00234-LO-TCB) and orders made for infringing domain names to be transferred to [NAME] although it appears that the domain names had largely already been transferred on 24 June 2016. Since the judgment of Judge Wu, [NAME] has proceeded to [NAME] the Name and Logo in the US and Canada. On 27 February 2017, [NAME] [NAME] dissolved [COMPANY].

4. Back in Australia, on 16 May 2016, [NAME] [NAME] filed his evidence in opposition to the Fresh Applications. On 29 June 2016, [NAME] [NAME] filed evidence in reply in the Divisional Applications.

Letters to [NAME]

1. In September 2016, [NAME]' solicitors wrote to the defendants requesting information about the Trademark Deed of Assignment. [NAME] [NAME] responded in detail. [NAME] [NAME] explained: During the initial period of the liquidation the [NAME] focussed on investigations into potential uncommercial transactions by the directors following the advice of the petitioning creditors' solicitor of suspected asset stripping namely, involving [COUNSEL] setting up a new company with a similar name and trading in the same goods and services. … Given the confluence and timing of events, the [NAME] were investigating potential 'phoenix activity' by the former directors of [COMPANY] in transferring assets (including Intellectual Property) to [COMPANY]. I note that the directors did not comply with their duties pursuant to the Corporations Act (2001) for breaches of not attending on the [NAME] pursuant to Section 530A, and not lodging a Report as to Affairs pursuant to Section 475 ("RATA"). The directors lodged their RATA over 2 years after the appointment of the [NAME]. Prosecution action was commenced against the directors resulting in [NAME] facing the local [ADDRESS] for being in breach of his duties as director in both companies. The director eventually submitted RATA's in both companies with zero assets and zero liabilities.

1. As to [NAME] [NAME] efforts to locate relevant intellectual property of the companies whilst a [NAME], [NAME] [NAME] advised: General searches were conducted on Intellectual Property indexes in the absence of company books and records being provided by the directors of the company. Given that we did not receive cooperation from the director, the [NAME] did not discover the existence of all Intellectual Property in the company until much later and were not able to effect a sale on the trademarks in a timely way which reduced the value of the trademark. Specifically, I note that an EU trademark database search was conducted on Trademark Nos. [PHONE] and 945207 soon after appointment showing that the trademarks were registered to [NAME] from 2005 to 2013. At that time, the [NAME] were not aware of any other trademarks or Intellectual Property owned by the company as a result of the directors' lack of cooperation with the [NAME]. 1. [NAME] [NAME] advised that it was only when he came into possession of the letter of consent that he discovered trade [NAME] "which were previously concealed by the companies directors" and proceeded to sell the trade [NAME] based on available information. The [NAME] lacked funding in the liquidations to undertake a rigorous advertising campaign, conduct a comprehensive tendering process for the trademarks or an extensive due diligence process. Further, the value of the rights was discounted to reflect the costs the purchaser would incur to mount a legal challenge for the trade [NAME] in dispute. [NAME] [NAME] stated that [NAME] [NAME] was aware of these circumstances "and wanted to take action against [NAME] to oppose their registration".

Australian judgment 1. On 19 April 2017, a further hearing took place before a Delegate of the [NAME] in respect of [NAME]'s Divisional Applications. [NAME] relied on the declarations described at [64]. On 26 June 2017, in [NAME] v [NAME] [COMPANY] (2017) 130 IPR 209; [2017] ATMO 63, the Delegate of the [NAME] in Australia found at [51]: …both [NAME] and [COMPANY] had abandoned the [NAME] trade [NAME] by 2007. In particular, I accept that both companies had ceased trading by about May 2007. I further accept that [[NAME]] commenced use of the [NAME] trade [NAME] in Australia by about September 2007 when it began using CDK Stones to distribute its goods. The combination of these various actions goes beyond simply a demonstration of slightness of use and is, rather, positive evidence indicating an intention to abandon the trade [NAME]. As a consequence of the abandonment of the [NAME] trade [NAME] in 2007 the [Trademark Deed of Assignment], executed some six years later in 2013, is ineffective so far as it purports to assign any rights in the [NAME] trade [NAME] to [[NAME] [NAME]].

1. The Delegate also accepted that [NAME]' use of the [NAME] following abandonment resulted in it becoming the common law owner of the [NAME] by virtue of that use: at [52]. Further, at [56]: [NAME] and [NAME] have declared that there was an oral agreement whereby [[NAME]] assigned all rights which it had acquired through use of the [NAME] trade [NAME] in Australia to [[NAME]]. [[NAME] [NAME]] has not satisfied me on the balance of probabilities the situation is otherwise. Consequently, I am satisfied that [[NAME]] is the owner of the [NAME] and that [[NAME] [NAME]] has failed to establish this ground of opposition.

1. In light of this decision, [NAME] [NAME] withdrew his opposition to [NAME]'s remaining applications to [NAME] the Name and Logo.

2. On 13 November 2017, Judge Wu gave judgment in the third US proceedings (United States District Court, Central District Court of California, case number CV 16-1968-GW(JEMx)). [NAME] complained of [NAME] [NAME] attempts to exploit the Name and Logo through websites, Facebook and a YouTube video. However, Judge Wu considered that [NAME] believed that he had acquired the rights to the trade [NAME] when he purchased those rights from the [NAME]. There was no evidence that [NAME] [NAME] had filed the first US proceedings in bad faith or created domain names for any other purpose than to attempt to lawfully exploit the [NAME] which he believed he had lawfully acquired. [ADDRESS] found that [NAME] [NAME] did not harbour the requisite bad faith to violate cybersquatting legislation.

Letters before action 1. Shortly after judgment was handed down in the third US proceedings, [NAME]' solicitors wrote again to the [NAME] seeking further information about the Trademark Deed of Assignment. [NAME] provided copies of the recent judgments and asked various questions about the [NAME]' previous letter. The [NAME] responded in detail, repeating: I also emphasise that the [NAME] did not receive any assistance from the directors during approximately the first two (2) years of the liquidations. The directors were consequently prosecuted by the [COMPANY]. As mentioned in that letter, the lack of assistance from the directors prevented the [NAME] from thoroughly obtaining all information that was known by the directors of the trademarks and the [NAME] therefore operated on the information that was available to them at the time. [NAME] [NAME] suggested that the [NAME] may have avoided considerable time, cost and damage had they carried out their duties as directors and attended on the [NAME] in accordance with their obligations under the Corporations Act.

1. In May 2018, [NAME] sent a letter of demand, to which [NAME] [NAME] responded in detail disclaiming that, as a [NAME], he owed a duty of care to [NAME] or [NAME] in circumstances where neither was a creditor or contributory of [NAME] or [NAME]. [NAME] [NAME] noted that he received no assistance from the directors in his investigations during the first two years of the liquidations. Further: Prosecution action was commenced against the directors against by the [COMPANY] resulting in [NAME] facing the [ADDRESS] for being in breach of his duties as director in both companies. He was subsequently prosecuted and convicted. The director eventually submitted RATA's in both companies with zero assets and zero liabilities. The lack of assistance from the directors prevented the [NAME] from obtaining all information that was known by the directors of the trademarks, and the [NAME] therefore operated on the information that was available to them at the time.

1. These proceedings were commenced in July 2019. On this application, [NAME] relied on affidavits by [NAME] and [NAME] in essentially the same terms as those relied on before the Delegate of the [NAME] in Australia and summarised at [64]. As already mentioned, extensive evidentiary rulings were sought and made at the hearing given the legal submissions and conclusions of law contained in the affidavits; [NAME] affidavit was also affected by the problem that he deposed to events which occurred before he became involved in the companies. The affidavits would, largely, be inadmissible at a final hearing but I have broadly assumed that the deponents will be able to attest to the subjects addressed in their affidavits in accordance with the Evidence Act 1995 (NSW) if leave is granted to proceed. Exhibited to these affidavits were three folders of documentary material comprising documents filed in previous legal actions taken in respect of the trade [NAME], correspondence with the [NAME] and documents lodged in the liquidations. No rulings or limitations under the Evidence Act 1995 (NSW) were sought in respect of this material.

2. In addition to what was set out in the declarations before the [NAME], [NAME] and [NAME] said that the Trademark Deed of Assignment was exchanged without their knowledge. [NAME] [NAME] says that, if he had known about the Trademark Deed of Assignment, he would have told them that those rights had been abandoned many years ago. [NAME] [NAME] says that he would have told the [NAME] that neither [NAME] nor [NAME] had any rights to the trade [NAME] after 2007. Such hindsight evidence would likely be inadmissible at a final hearing by reason of section 5D(3)(b) of the Civil Liability Act 2002 (NSW), the law of the forum being the appropriate law: In the matter of [COMPANY] (in liq) (receivers and managers appointed) (No 2) [2019] NSWSC 1682 at [7] and [10]-[30] and the cases cited therein.

Leave to sue a court appointed [NAME]

1. Leave of the Court is required to sue a Court appointed [NAME]. Leave can be sought nunc pro tunc: McDonald v Dare [2001] QSC 405 at [25]. As McLelland J explained [COMPANY] (No 1) (1991) 9 ACLC 1580 at 1582: It is well established that at least unless the Court's leave has been obtained, the Court "will not allow its officer to be subject to an action in another court with reference to his conduct in the discharge of the duties of his office, whether right or wrong. The proper remedy for anyone aggrieved by his conduct is to apply to the Court in the action in which he was appointed".

1. The rationale was explained more fully by Young J in [COMPANY]; Condon v Rodgers (1995) 13 ACLC 1271; (1995) 120 FLR 399 at 403, who noted that [NAME] are given very strong powers under the Corporations Act "virtually as the delegate of the court, or a delegate of [ASIC]" and "until the bulk of the work became so heavy … the matters which under New South Wales law are entrusted to a [NAME] were part of the functions of a court official". Thus, at 403: The court will be very jealous of its delegate exercising the powers that it is given. The court will take every precaution to make sure that those powers are used impartially and for a proper purpose. The corollary of this is that the court will not permit its officers to be sued by a creditor or have an inquiry made under s 536 unless it is satisfied that there is a prima facie case: Re Siromath at 1590.

1. These authorities were followed by Tamberlin J in [COMPANY] (in liq) v [COMPANY] (1996) 144 ALR 159; (1996) 65 FCR 234, who observed that one of the rationales for the requirement to obtain leave was the Court's concern, when administering the Corporations Act, to satisfy itself that there is no wrongful interference in, and to protect the integrity of, the winding up under its supervision and control: at 241. Further, at 242: The discretionary power of the Court to grant leave must be exercised having regard to all the circumstances of the particular cases and bearing in mind the need to protect the integrity of its process. It does not necessarily follow that, in order to obtain leave, a prima facie case must be demonstrated. There is no specific threshold appropriate in all cases, however there must be more than mere assertion. [ADDRESS]'s discretion may be exercised on many grounds including, but not [COMPANY] to, the sufficiency of the evidence adduced as to the prospect of success of the action on the application for leave.

1. More recently, in [COMPANY] v Handberg [2014] VSC 665; (2014) 32 ACLC 14-081, Croft J reviewed the authorities at [18]-[22]: 18 … The rationale behind this requirement derives from two distinct, yet related, aspects of the protective role that a court often must undertake; in this instance, that role is enlivened to ensure that a court appointed [NAME] be unencumbered so as to allow them to perform their official functions, as well as providing a means of protecting the court's own processes. 19 This latter aspect focuses on the role which a court-appointed official – in this case, a court appointed [NAME] – undertakes as a representative of the court. When acting in such a position, the court takes the view that the actions of the appointed official are to be deemed as actions of the court. This proposition can be traced back to a decision of Lord [NAME] in Aston v Heron (1834) 2 My & K 390 at 396-7; 39 ER 993 at 995… 21 The rationale behind the first branch of the principle to which I referred earlier – that a court will act to protect its own officers so as to ensure they may perform their official function - was explained by [NAME] J in [COMPANY] (Australia) [COMPANY] v [NAME] (as [NAME] of [COMPANY]) (in liq) (No 2) [2013] NSWSC 1625, where his Honour said: The … principle is intended to protect [NAME] from being subjected to claims against them in their personal capacity in relation to the performance of their duties, so putting their personal assets at risk, by any application made outside the winding up of the company, unless leave be given by the winding up court.

22. As the judicial statements in these cases indicate, there is a close relationship between a court and a court-appointed [NAME]; so much so that it will protect [NAME] as one of its officers, through the same processes by which it will protect its own processes. See also [NAME] J in Re [COMPANY] (in liq) [2012] NSWSC 1215; (2012) 92 ACSR 588 at [112].

1. A useful illustration of the application of these principles is Mamone v Pantzer [2001] NSWSC 26; (2001) 36 ACSR 743, where the lessee of commercial premises went into liquidation. [NAME] arranged to sell the assets of the lessee's business but the purchaser was not interested in taking an assignment of the lease. [NAME] sent the lessors a cheque for rent for the period commencing on his appointment as [NAME] and ending on the day of sale of the lessee's assets, stating that by banking the cheque the lessors acknowledged that they had no further claim against [NAME]. The cheque was banked and the lessors permitted the purchaser to occupy the premises without a lease and to pay rent for seven months. When the purchaser left the premises, the lessors sought leave to sue [NAME] personally for repudiation of the lease by abandoning possession and ceasing to pay rent. By this time, the liquidation had been completed for some time and only $200 remained in [NAME]'s bank account. 2. [NAME] J noted that two public purposes underlie the requirement for a prospective litigant to obtain leave to sue a court appointed [NAME], being for the Court to protect its officers from spurious or vexatious litigation and to protect the integrity of its winding up process: at [4]. In light of these two public purposes, [NAME] J noted at [4]: To those ends, a prospective litigant must, to obtain the necessary leave, demonstrate its claim has sufficient merit. What is sufficient is affected by circumstances and timing in which that leave is sought. Moreover courts recognise that [NAME], like administrators, often have to make decisions on the run; to expect perfection in those circumstances is unrealistic.

1. His Honour adopted the approach of Tamberlin J in Sydlow, noting there is no rigid test for when the Court should refuse leave. At [5]: Thus I would not adopt as a universal rule some variant of the test applicable to the setting aside of statutory demands or which draws on the analogy of interlocutory injunctions. This is because the two factors earlier identified will have a significant effect on how the court should exercise its discretion.

1. In that case, [NAME] J considered it to be a powerful factor that [NAME] completed his tasks with not a word of complaint from the lessors, who were aware from the outset that the lease was abandoned and a new occupier had gone into occupation, happily accepted rent, did nothing to formalise the terms of occupation and only took any steps after the occupant had vacated the premises: at [6]. [NAME] J considered that the lessors essentially wanted to have it both ways, "to approbate [NAME]'s actions leading to the new tenancy whilesoever the rent was paid, but reprobate it after later default": at [8]. Further, at [9]: … litigation brought in such circumstances has all the hallmarks of the spurious. That the litigation does not interfere with the particular current winding up does not detract from its capacity to do so in a broader sense. If leave were to be given following completion of the liquidation and for litigation so weakly grounded no future [NAME] could have any sense of safety in carrying the onerous tasks imposed. No [NAME] could feel safe that there would not be some belated action brought at the very time when [NAME] has no longer the wherewithal to be indemnified from the company's assets. It would be incongruous indeed if a plaintiff were precluded from bringing such an action during the winding up because of its capacity to interfere with that process, but were to be advantaged by holding back and suing thereafter. Nothing could be more calculated to interfere with the integrity of the liquidation process. Thus, his Honour did not need to consider whether [NAME] could be said to owe the lessors any kind of duty but considered that such a contention faced considerable difficulty; "While that is a factor which may be weighed in the balance, the earlier factors I have identified in my opinion suffice to decline leave to [NAME] even without that additional factor": at [11].

1. This approach, and an equivalent outcome, pertained in [NAME] v [COMPANY] [COMPANY] [2011] VSC 419 where [NAME] sold plant and a forklift truck. The relevant events occurred in 2004, the liquidations were completed in 2007 but proceedings were not commenced until 2010, two days prior to the expiration of the limitation period. His Honour Almond J considered the delay to be lengthy with no reason advanced to explain it and applied Mamone v Pantzer to what his Honour considered to be similar facts: at [62]-[63]. Having done so, [NAME] J further noted that [NAME] had passed away since the plaintiff had commenced proceedings seeking leave to sue him, and his Estate would be required to defend proceedings about events which occurred some six years earlier and would thus be at a significant disadvantage in defending the proceedings: at [64].

Proposed negligence claim 1. Turning then to the claims which [NAME] seeks leave to bring, it is said that the [NAME] owed [NAME] and [NAME] a duty of care to exercise reasonable care and skill in investigating, inquiring and determining ownership of the trade [NAME]. It is proposed to be contended that the [NAME] failed to take any reasonable steps to determine the ownership of the trade [NAME], make any enquiries of [NAME] and [NAME] as to their ownership of the trade [NAME], failed to have any proper regard to the fact that [NAME] had ceased trading by 2007, or to have any proper regard to the declarations in the RATA that neither company had any assets. It is proposed to contend that the [NAME] failed to have any proper regard to the fact that [NAME] claimed to be the owner of the trade [NAME] pursuant to the [NAME] and failed to make any personal enquiries with [NAME] [NAME[NAME] or [NAME] in respect of this application, or to obtain appropriate legal advice before entering into the Trademark Deed of Assignment.

2. Loss and damage is said to have been suffered by reason of [NAME] [NAME] and his related entities relying on the Trademark Deed of Assignment to assert that he was the owner of the trade [NAME] of [NAME] or [NAME], and using those trade [NAME] to promote and sell infringing goods. [NAME] have thus incurred costs and expenses in relation to administrative and legal proceedings initiated by or against [NAME] [NAME] and his related entities including some $700,000 in US dollars in respect of the US proceedings, some $60,000 in Canadian dollars in relation to the dispute in Canada and some $120,000 in trade [NAME] applications in Australia. Further, [NAME] say they have suffered a loss of sales as a result of [NAME] [NAME] and his related entities' extensive use of the trade [NAME] in the promotion and sale of infringing goods, which has caused confusion in the marketplace and damage to the reputation of [NAME]' goods and trade [NAME].

[NAME]' submissions 1. [NAME] submitted that they have demonstrated that this proposed claim has sufficient merit, putting a substantial amount of evidence in support of their claim before the Court. By contrast, the [NAME] had not gone on oath to explain their conduct in relation to the trade [NAME]. From the date upon which they were appointed as [NAME] of [NAME], the [NAME] were under a duty to exercise reasonable care and skill in investigating, inquiring and determining ownership of the trade [NAME], and that it was reasonably foreseeable that [NAME] would suffer economic loss if the [NAME] failed to properly carry out their duty. It is said that [NAME] were vulnerable in that they were unable to protect themselves from the consequences of a want of reasonable care on the part of the [NAME]: [COMPANY] v [NAME] (No 3) (2017) 317 FLR 227; (2017) 120 ACSR 32; [NAME] (2007) 99 SASR 357; (2007) 214 FLR 367; [2007] SASC 365; Eighty Second Agenda. 2. [NAME] submitted that the [NAME] were negligent in that they breached their duty of care and failed to take precautions against a risk of harm which a reasonable person in the [NAME]' position would have taken in the circumstances. The risk of harm was the risk of economic loss if the [NAME] failed to exercise reasonable care and skill in investigating, inquiring and determining ownership of the trade [NAME] and entered into an agreement for the disposal of the trade [NAME], which risk of harm was foreseeable and not insignificant. [NAME] say that they have suffered substantial loss and damage. [NAME] relied on the two decisions in favour of [NAME] as to their ownership of the trade [NAME], being the US District Court decision and the Australian Delegate of the [NAME].

3. Claims for pure economic loss is a developing area of law in Australia, not yet constrained by firm principles, but determined by judicial evaluation of a variety of factors found to be relevant to the particular case at hand: [NAME] at 240 [86], citing Perre v Apand (1999) 198 CLR 180, 253 [198], 254 [201] (Gummow J); followed in [COMPANY] v [NAME] J Ramsay and Associates [COMPANY] [2018] VSC 75 at [92]. On this basis, [NAME] submitted that the Court should be reluctant to preclude the plaintiff from bringing an action in factual circumstances which are not closely analogous to those of previous authority: [NAME] at [110] per [NAME] J ([NAME] J agreeing).

Defendants' submissions 1. The defendants opposed a grant of leave as the claims lacked "sufficient merit" in the sense referred to by [NAME] J in Mamone v [NAME] having regard to prospects of success and the circumstances and timing of the proposed claim. As to prospects of success, the claim in negligence was said to be unarguable. Whilst the allegations of negligence seek to embrace the concept of vulnerability as explained in [COMPANY] v [COMPANY] (2004) 216 CLR 515; (2004) 205 ALR 522; [2004] HCA 16, no doubt inspired by [NAME] in which the concept of vulnerability was applied in the context of an external administration under the Corporations Act, the defendants submitted that this proposed claim had a fundamental and insoluble flaw which dooms it to failure. [NAME] could not possibly have been vulnerable to the defendants in the performance of their functions as [NAME] as they had a statutory remedy against the [NAME] in the form of section 1321 which then provided that a person aggrieved by any act, omission or decision of a [NAME] of a company: may appeal to the Court in respect of the act, omission or decision and the Court may confirm, reverse or modify the act or decision, or remedy the omission, as the case may be, and make such orders and give such directions as it thinks fit. 1. [NAME] would have fallen within the meaning of an aggrieved person under section 1321 as it was, on [NAME]' case, the unregistered owner of [NAME] 945207 and the EU [NAME]. Section 1321 was not considered by [NAME] in his analysis of vulnerability in [NAME] and his Honour does not appear to have been referred to this provision. To this, [NAME] submitted that section 1321 did not have the consequence that [NAME] were not subject to the general law in respect of negligence or the Australian Consumer Law.

[NAME]' duty to third parties 1. The primary question is whether the [NAME] may be considered to have owed a duty of care to third parties in the position of [NAME], at least to the level of cogency to support a grant of leave to permit the contention to be fully ventilated in these proceedings. This is to be determined by consideration of the principles by which it is decided whether a party is liable for economic loss it has caused, as expounded in Perre v Apand and [ADDRESS]; [NAME] at [85]; [NAME] v [NAME] at 361-363, at [15] and [23] per Debelle J with whom [NAME] and [NAME] JJ agreed. As Debelle J noted in [NAME] at [26]: The vulnerability of the plaintiff is an important requirement: Perre v Apand; [ADDRESS] (at [23]). [ADDRESS] (at [80]), [NAME] J described it as a critical issue. In this context, vulnerability means more than that the plaintiff is likely to suffer damage if reasonable care is not taken. It is to be understood as a reference to the plaintiff's inability to protect himself from the consequences of the defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of the loss on the defendant: [redacted]

1. By way of illustration, in [NAME], [NAME] sold land, plant and equipment. [NAME] were liable for the shortfall between what the companies owed and the amount which [NAME] was able to realise from sale of the companies' assets. [NAME] asserted that [NAME] had sold the assets at a significant undervalue such that [NAME] were liable for more than they would have been if the assets had been sold for their proper value. [ADDRESS] concluded that [NAME] were vulnerable in the sense defined in [ADDRESS] as [NAME] were not able to protect themselves from the economic consequences of [NAME]'s sale of the assets; their liability was entirely dependent on what [NAME] got for the assets; [NAME] had no ability to ensure that [NAME] took care to secure the best price reasonably obtainable in all the circumstances: at [26].

2. In [NAME], a case factually similar to [NAME], guarantors of loans made to a company in liquidation wished to bring a claim against the [NAME]. The [NAME] had sold properties and used the sale proceeds to reduce the company's indebtedness, and the guarantors claimed that the [NAME] had breached their duty by failing to sell the properties at market value and exposing them to liability for a shortfall under the guarantees. [NAME] J noted that the vulnerability of the party alleged to have suffered pure economic loss was an important requirement: at [128]. Further, at [129]: The Guarantors found themselves in a position in which they were not able to adequately protect themselves and were left to suffer from the consequences of the sale by the [NAME] of those assets. Their liability to indemnify under their Guarantees was entirely dependent upon what the [NAME] obtained for those assets. They were vulnerable in the sense that they had no ability to ensure that the [NAME] would take care to secure the best price reasonably obtainable in all the circumstances. [NAME] J held that the [NAME] owed a duty of care to the guarantors to sell the company's property in good faith and with due care and skill to the extent that was reasonable in all the circumstances, including taking reasonable care to secure the best possible price in the commercial context which existed at the time: at [144].

1. In contrast, the [ADDRESS] of the Supreme Court of South Australia, in [NAME] (2017) 130 SASR 1; (2017) 353 ALR 201; [2017] SASCFC 172, cast doubt on [NAME] v [COMPANY] v [NAME] (No 3) at [200], [205]-[206], at least where [NAME]'s fiduciary duty to the company did not coincide with the asserted duty of care. In Seaman v Silvia [2018] FCA 97, Derrington J considered [NAME] to be "plainly right": at [39].

2. The alleged vulnerability here is different to that in [NAME] and [NAME] v [NAME] (No 3). The proposed statement of claim contends that [NAME] were vulnerable as they were unable to protect themselves from the consequences of a want of reasonable care on the part of the [NAME]. Whilst this pleading is a little obtuse, the core allegation, as I understand it, is that, if the [NAME] did not exercise due care and skill in ascertaining what the assets of [NAME] were, then the [NAME] may purport to sell assets which they thought the companies were entitled to sell but in fact the companies were not so entitled.

3. It is difficult to see how [NAME] were vulnerable in the manner suggested. The most accurate source of information as to the assets of [NAME] was the directors of those companies. As it happened, when the Trademark Deed of Assignment was executed in November 2013: 1. the directors of [NAME] were [NAME] [NAME] and [NAME] and the sole shareholder was [NAME] [NAME]; 2. the directors of [NAME] were [NAME] [NAME] and [NAME], and the sole shareholder was [NAME] [NAME]; 3. the founder and managing director of [NAME] was [NAME] [NAME]; and 4. the sole director, secretary and shareholder of [NAME] was [NAME]. That is, there was an overlap between the directors of [NAME], on the one hand, and [NAME] on the other.

1. It is uncontentious that the [NAME] were seeking information from the directors of [NAME] as to what the assets of those companies were. True it is that the directors had provided information, albeit sparse, from which it is said that the [NAME] should have figured out that [NAME] had abandoned their intellectual property rights. But even accepting, for the moment, that the [NAME] should have divined from the scant information provided that the intellectual property rights had been abandoned, the missing piece of information was that [NAME] had somehow acquired the trade [NAME] rights and then assigned those rights to [NAME]. That information was not disclosed in any documentary or oral information provided by the directors of [NAME] to the [NAME], nor was it to be found on any [NAME]. The exclusive repository of that information was [NAME] [NAME] and [NAME], with whom the [NAME] were in communication. It would have been a simple matter for them to inform the defendants of this fact, for example, during one of the telephone calls from the [NAME]' staff when [NAME] [NAME] was challenged as to apparent "phoenixing" activity. [NAME] [NAME] does not suggest that he took the opportunity which these telephone calls presented to inform the [NAME] that [NAME], in fact, were entitled to the intellectual property rights previously held by [NAME] and the [NAME] would do well not to sell assets which those companies did not own. In circumstances where [NAME] [NAME] had signed the letter of consent, which represented that [NAME] was the owner of the Name and Logo, only [NAME] [NAME] or [NAME] could have 'corrected' this piece of information.

2. Thus, I do not consider that there is any real prospect that [NAME] will establish the posited duty as they lacked the vulnerability which they contend formed the basis of that duty. [NAME] and [NAME] were able to protect themselves from the consequences of any want of due care by the [NAME]; it was entirely within the power of the directors of [NAME] to protect their companies by simply telling the [NAME] what only they knew – that [NAME] having abandoned their rights to the Name and Logo, [NAME] had acquired common law rights through usage and had orally assigned those rights to [NAME]. The ability to ensure that the [NAME] did not sell assets which did not in fact belong to [NAME] was in the hands of [NAME] [NAME] and [NAME].

3. As to the defendants' submission that [NAME] were not vulnerable as there was a statutory mechanism to challenge [NAME]'s actions, being section 1321 (since repealed with section 90-15 of Schedule 2 Insolvency Practice Schedule (Corporations), Corporations Act now the relevant provision), it is not necessary to consider whether this resoundingly defeats the tort claim given the conclusion I have already reached. The ability of a plaintiff to avail themselves of the various provisions in the Corporations Act to challenge or review a [NAME]'s action may be relevant to whether a plaintiff has the requisite vulnerability, but I expect that much will depend on the facts of each case.

Proposed misleading and deceptive conduct claim 1. So far as the proposed claim of misleading and deceptive conduct is concerned, it is proposed to be alleged that, by the Trademark Deed of Assignment, the [NAME] made representations in trade or commerce to [NAME] [NAME] that: 1. [NAME] was the registered proprietor of [NAME] 945207, and the registration was expired with renewal being possible; 2. [NAME] was the registered proprietor of the [NAME]; 3. [NAME] may have had common law rights associated with these trade [NAME] and were entitled to assign the trade [NAME], the applications and common law rights.

1. It is proposed to be alleged that [NAME] [NAME] relied on these representations in entering into the deed. The representations are said to be misleading and deceptive conduct in contravention of section 18 of Australian Consumer Law, by reason of which [NAME] and [NAME] have suffered loss and damage, being the same loss and damage pleaded in the negligence suit.

[NAME]' submissions 1. [NAME] say that in [NAME] on the representations, [NAME] [NAME] entered into the deed, noting that clause 6.10.2.10 of the deed provides, "The Parties warrant that each of the recitals is true and correct and acknowledges that the each is entering into this Deed in [NAME] thereon." Relief under section 236 of the Australian Consumer Law is available to [NAME] notwithstanding that [NAME] do not have contractual privity with the [NAME]. Further, [NAME]'s conduct was directed at [NAME] [NAME] whose [NAME] has caused loss to [NAME]. 2. [NAME] contend that the representations made in the deed were false, untrue and misleading. There are said to be a number of serious matters calling for explanation by the [NAME], for example, how they formed the view that [NAME] at the date of liquidation (8 August 2011) was the registered proprietor of the [NAME] when these applications did not exist until 4 March 2013 and [NAME] was the applicant (and therefore registered proprietor) of the applications.

3. As to "trade or commerce", the alleged sale of the trade [NAME] was a commercial dealing, and the representations were in the trade or commerce of the person to whom the representations were made because [NAME] [NAME] was a direct competitor of [NAME]. As to [NAME] claim that the [NAME] 'engaged in' misleading or deceptive conduct, [NAME] contend that the [NAME] purportedly investigated the ownership of the trade [NAME], gave instructions to their solicitors as to the preparation of the deed, signed the deed, knew that the representations were false and untrue, were on notice of [NAME]'s abandonment of their rights in the trade [NAME] and that [NAME] claimed to be the owner of the trade [NAME], and, in the face of that knowledge, executed the deed. The [NAME] have not gone on oath to explain their conduct.

Defendants' submissions 1. There is also said to be a fatal flaw in the proposed misleading and deceptive conduct claim as the conduct of the defendants as Court appointed [NAME] cannot even arguably be "in trade or commerce" within the meaning of section 18 of the Australian Consumer Law: [NAME] at [215] to [236]. Every aspect of the defendants' appointment and their decisions as [NAME] was a result of the "statutory construct" as described by the primary judge and approved by the [ADDRESS] of South Australia at [225]. The appointment of the defendants occurred by reason of section 472 of the Corporations Act and entry into the deed by [NAME] occurred by reason of the defendants exercising their statutory powers under section 477(2)(c) and (d) of the Corporations Act. The exercise of these powers was not so that the defendants could secure a profit or commercial gain either personally or for the companies but for the purposes of realising the assets of [NAME] as part of the discharge of [NAME]'s role described in [NAME] at [226] as maximising returns to creditors.

'in trade or commerce'

1. Section 2 of the Australian Consumer Law defines 'trade or commerce' to include any business or professional activity (whether or not carried on for profit) within Australia or between Australia and outside places. Statements made by a person that is not engaged in trade or commerce themselves may be in trade or commerce if designed to encourage others to invest in a particular trading entity: Houghton v Arms [2006] HCA 59; (2006) 225 CLR 553 at 565 [34], citing [NAME] in [COMPANY] v Nelson [1990] HCA 17; (1990) 92 ALR 193; (1990) 169 CLR 594 at 603-4. 2. [NAME] may be engaged in trade or commerce has been considered in relatively few cases. In Baxter v Hamilton (2005) 15 Tas R 59; [2005] TASSC 64, leave was sought to sue a [NAME] for misleading and deceptive conduct in relation to appointing a real estate agent to sell property over which a loan by the company was secured. The owner of the property had entered into a contract of sale with [NAME] for some $85,000 but [NAME] refused to discharge the mortgage to enable the contract to be completed. [NAME] subsequently entered into a contract to sell the property to a third party for some $380,000. [NAME] wished to sue [NAME] for representations made by the real estate agent but leave was refused. In particular, Tennent J concluded that on no interpretation of the conduct of [NAME] could it be said that he was acting 'in trade or commerce': at [67]. [NAME] was appointed by Court order, which gave [NAME] power to wind up the business including by taking control of assets, converting property into money and distributing the proceeds of the winding up for which he would receive specific remuneration: at [64]. At [65]: It must be accepted that [NAME] [NAME] business or trade is that of a [NAME]. Acting as a [NAME] is what he does for a living. As such he oversees the winding up of entities which includes taking control of their assets and, if necessary, converting property into money for distribution to the beneficiaries in the winding up. When he discharges a mortgage as he was asked to do here, it is a function of his winding up role. Where a property is sold as part of any winding up process, he personally receives no payment either by way of profit or remuneration. The sale of a property is simply incidental to the winding up process. Baxter v Hamilton was followed by Gleeson J in [COMPANY] (in liq) (Trustee) v [NAME] (No 4) (2018) 124 ACSR 185; [2018] FCA 22, where it was sought to be suggested that [NAME] had engaged in unconscionable conduct. Her Honour doubted whether the Australian Consumer Law had any application as [NAME]'s conduct was unlikely to have been in trade or commerce: at [163].

1. In [NAME] v Worrell [2009] QCA 63, a director of the company in liquidation sought to sue [NAME] in respect of representations made in a notice to creditors and reports in respect of a deed of company arrangement. Keane JA, with whom Muir and Fraser JJA agreed, considered that [NAME]'s representations were not in trade and commerce. At [47]: … The conduct complained of by [NAME] [NAME] did not occur in trade or commerce for the purposes of s 52 of the Trade Practices Act for the simple reason that the voluntary appointment of a [NAME] had the consequence of terminating the company's trading and commercial activities, and, in any event, the internal dealings between [NAME] and directors cannot be understood as trading or commercial conduct of the company.

1. In [COMPANY] v Greig [2011] FCA 941, the applicants sought pre-action discovery from [NAME] in respect of a possible claim that the [NAME] were accessory to misleading or deceptive conduct by a company of which they were [NAME]. Whilst the judgment does not refer to any authorities in respect of obtaining leave to sue a [NAME], Collier J was satisfied on the evidence that the applicant had reasonable cause to believe that it may have the right to obtain relief from the [NAME] under the Trade Practices Act and its claim went beyond mere assertion: at [28]-[30]. This case has not been relevantly cited since.

2. In Eighty Second Agenda, [NAME] were secured creditors of the responsible entity of a managed investment scheme which raised money from investors and wrote loans to individuals to buy interests in timeshare schemes. On being appointed, the [NAME] discovered the responsible entity's bookkeeper had processed 71 fraudulent loan applications totalling some $1 million. The secured creditors sought leave to sue the [NAME] for misleading and deceptive conduct in respect of representations said to have been made in an affidavit and a report to creditors. [NAME] J considered at [49]: … While it may be true that, as the [NAME] submit, the alleged representations were not of themselves an aspect or element of activities or transactions bearing a trading or commercial character, there is some force in [NAME]' submissions that the current proceeding involved a "complex relationship of duties, which arose by reason of the [NAME] having entered into various agreements". … the Court of Appeal in [COMPANY] v [COMPANY] [2013] VSCA 158 have made it clear that the power to terminate proceedings summarily should not be exercised unless it is clear that there is no real question to be tried. In these circumstances, it is impossible to say that there are not, even at its lowest point, arguments which need to be explored further before it can be said that there is no real question of whether or not the alleged misleading conduct took place, and whether it can be said that there are occasions when the conduct of a [NAME] may occur in trade or commerce.

1. Most recently, in [NAME], [NAME] [NAME] wished to contend that an administrator had engaged in misleading and deceptive conduct in providing a section 439A report under the Corporations Act and advising creditors at the second creditors' meeting that there was no alternative to liquidation. Whilst the [ADDRESS] noted that the authorities in this field reflect each case's factual context, the trial judge's finding that the administrator's conduct was not in trade and commerce was correct when all the relevant circumstances were considered. At [233]-[234] (citations omitted): 233 … As the Primary Judge observed, the relationship between a voluntary administrator, the company, the contributors and the creditors is a statutory construct. [NAME] [NAME] was performing his statutory role as administrator in providing the s 439A report and in informing the creditors of the position of the Companies at the second creditors meeting. His conduct could be reviewed by a court pursuant to Pt 5.3A and s 1321 of the Corporations Act. The s 439A report and the statements made by him at the meetings of creditors were merely part of a process by which a decision was made to terminate the administrations and place the Companies in liquidation. 234 Accordingly, [NAME] [NAME] conduct that was the subject of [NAME] [NAME] claims under the Fair Trading Act was not in trade or commerce for the reasons that were given by the Primary Judge. We agree with his Honour's conclusion that: Of course the voluntary administrator may in the course of exercising his or her statutory duties dispose of the assets of the company in the course of trade or commerce. The prosecution, and compromise, of a chose in action of the company under administration may also involve conduct in trade or commerce. However, the conduct of an administrator in exercising his or her statutory functions, powers and duties relating to the creditors, contributories and directors of the company under Part 5.3A does not constitute conduct in trade or commerce. 1. [NAME] was noted without criticism by McDougall J in [COMPANY] v [COMPANY] [2018] NSWSC 540 at [18]-[19]. In Seaman v Silvia [2018] FCA 97, Derrington J followed [NAME] in holding that a proposed pleading of misleading or deceptive conduct said to arise from statements made in the section 439A report could not succeed: at [45].

2. As to whether the [NAME] here were engaged 'in trade or commerce', at least to the level of cogency to support a grant of leave to permit that contention to be fully ventilated in these proceedings, the following emerges from the evidence on this interlocutory application. It appears that the [NAME] were unfunded. Initially, the [NAME]' efforts were directed towards ascertaining what the assets and liabilities of [NAME] were and whether any uncommercial transactions had occurred. The [NAME]' initial searches discovered [NAME] 945207 and the [NAME]. [NAME] [NAME] had informed the [NAME] of suspected asset stripping including [NAME] setting up [NAME] with a similar name and trading in the same goods and services.

3. It was not until July or August 2013 that [NAME] became aware via [NAME] [NAME] that [NAME] was attempting to become the registered owner of the Name and Logo. It was only when the [NAME] came into possession of the letter of consent that the [NAME] formed the view that [NAME] had other trade [NAME] entitlements of which the [NAME] were not previously aware. It was in this context that the [NAME], on behalf of [NAME], sold whatever intellectual property rights those companies had to [NAME] [NAME], who wanted to take action against [NAME] to oppose the [NAME]. The value of the trade [NAME] was discounted to reflect the costs the purchaser would incur to mount a legal challenge for the trade [NAME] in dispute and [NAME] [NAME] was aware of these circumstances but wished to pursue the matter.

4. The [NAME]' actions seem to me to fall classically within a Court appointed [NAME]'s function of identifying assets of the company and realising those assets as best can be done in the circumstances so that a distribution can be made to creditors or contributories. There is no suggestion that the purchase price resulted in any profit being earned by the [NAME]. The modest price of $5,000, coupled with [NAME]' agreement to subordinate its priority for its costs of the application to wind up the companies, likely had the result that the liquidation became a 'nil sum game' for the [NAME]. There is nothing apparent from the evidence that would indicate that the [NAME]' conduct was anything other than performing their statutory powers under Part 5.3A. I consider that the prospects of establishing that the representations in the deed were made 'in trade or commerce' are poor.

[NAME]

1. The more pressing issue, however, is that of [NAME]. [NAME] do not suggest that they relied on the [NAME]' representations. Rather, [NAME] seek leave to sue on [NAME] [NAME] [NAME] on the representations in the Trademark Deed of Assignment. As [NAME] correctly submitted, section 236 of the Australian Consumer Law does not require that the plaintiff who alleges damage must have relied upon that misrepresentation. The defendants' conduct can be directed at a third party whose [NAME] causes loss to the plaintiff: [redacted]

2. I have serious doubts as to whether [NAME] have any prospect of establishing [NAME] by [NAME] [NAME]. As Kiefel J observed in [COMPANY] v [COMPANY] [1999] FCA 357; (1999) 43 IPR 545; (1999) ATPR 41-687 at [45]: The question of causation can sometimes be resolved not by direct evidence as to what part a misrepresentation played in the process of entry into contract, but by a Court determining what effect must be taken to have resulted. Indeed this course may sometimes be preferable to one which rested solely on evidence later given on the point. In Gould v Vaggelas (1985) 157 CLR 215 at 236 Wilson J held that if a material representation is calculated (which is to say, objectively likely: [COMPANY] v [NAME] & Agency Co [COMPANY] (1993) 41 FCR 229; [NAME] v [COMPANY] (No 1) (1995) 62 FCR 1, 166) to induce the representee to enter into a contract and the person in fact enters into a contract, a fair inference arises that the representation operated as an inducement, adding that it need not be the only cause.

1. And at [50]: … that Courts ought to be, and no doubt are, cautious in accepting mere assertions of [NAME] as essentially self-serving: see [COMPANY] v [COMPANY] (1992) 38 FCR 471, 483 and will usually attempt to assess that prospect by reference to objective criteria. … 1. Whatever clause 6.10.2.10 of the Trademark Deed of Assignment provided, the factual context in which the deed was executed indicates that the person who know what there was to be known about the intellectual property rights of [NAME] was [NAME] [NAME]. He was the source of the [NAME]' information on the subject. It was [NAME] [NAME] who brought the [NAME] to the attention of the [NAME]. It was [NAME] [NAME] who wished to take the matter further as part of a very long running dispute with [NAME] [NAME[NAME] in respect of the intellectual property rights of the "[NAME]" and "[NAME]" trade [NAME]. It is difficult to think of a person less likely to rely on the [NAME]' understanding of the position set out imperfectly in the recitals to the deed.

2. Thus, I consider that [NAME]' proposed claim for misleading and deceptive conduct lacks sufficient merit to warrant a grant of leave.

Other factors relevant to leave 1. The defendants submitted that [NAME] were on notice of the Trademark Deed of Assignment sometime between 30 January 2014 and 27 May 2015 during the course of the winding up of [NAME] but made no complaint until 1 September 2016 and did not approach the Court until these proceedings were commenced on 3 July 2019. [NAME] made no complaint to the defendants about the deed until 1 September 2016, almost a year after the deregistration of [NAME]. A further three years passed since that initial correspondence and the commencement of these proceedings. The same conclusion should be reached as Santow J in Mamone v [NAME] at [9] and for essentially the same reasons. 2. [NAME] submitted that it wasn't until June 2017 that the Delegate made a decision consistent with [NAME]' claims. Any proceedings commenced against the [NAME] before then would have been dashed by an adverse decision by IP Australia and thus there was good sense in awaiting the outcome of that process. I note that this does not explain the additional two years which then passed before these proceedings commenced.

3. Having regard to the principles set out at [81]-[89], I consider the follow matters are relevant to whether leave should be granted, in addition to the views I have reached on the merits of the proposed causes of action.

1. The [NAME] of [NAME] were presented with significant difficulties by reason of the failure of the directors of those companies – also the directors of [NAME] – to comply with their statutory obligations to cooperate with the [NAME], hand over the books and records and promptly submit a RATA.

2. The directors eventually provided information which was less than fulsome and did not specifically alert the [NAME] to the suggestion later made that the intellectual property rights of [NAME] had been abandoned, acquired by [NAME] and assigned to [NAME]. [NAME] [NAME] was challenged by the [NAME] as to whether he was engaging in "phoenixing" activity and did not take the opportunity to set the [NAME] straight. The timing of the incorporation of [NAME] after [NAME] discontinued the Federal Court proceedings and were the subject of adverse costs orders was itself an indication of possible 'phoenixing'.

3. Instead, on being informed that [NAME]'s trade [NAME] had expired and during the six month 'grace period', another corporate entity with the same directors as [NAME], being [NAME], made a prompt application to become the registered owner of the Name and Logo. In support of that application, the [NAME] submitted a letter of consent to IP Australia, purportedly on behalf of [NAME], to the effect that [NAME] owned the Name and Logo and consented to those trade [NAME] being registered by [NAME]. This was in circumstances where the trade [NAME] examiner had supplied a significant amount of information to [NAME] as to ways in which [NAME] could support its application to [NAME] the Name and Logo.

4. By March 2014, [NAME] was aware of the Trademark Deed of Assignment and addressed its contents in detail in his declaration of 24 March 2014. But [NAME] did not take his complaints up with the [NAME] at the time. The liquidation of [NAME] continued for another 15 months, until the Delegate refused the [NAME] on the basis that [NAME] had executed a falsehood upon the [NAME] by reason of the letter of consent.

5. True it is that [NAME] have since compiled a substantial amount of affidavit and documentary material to support a claim of abandonment, which has found acceptance in the US and with IP Australia. But no complaint was made to the [NAME] until 2016 and it was another three years until these proceedings were commenced, moments before the expiry of the limitation period.

1. I am not prepared to allow a Court appointed [NAME] to be subject to such an action in respect of matters which happened so long ago and in respect of which [NAME] have not agitated their complaints in a timely manner. Having apparently failed to cooperate with the [NAME] at the time, I consider it is necessary to protect the integrity of the winding up process by refusing leave to permit [NAME] and [NAME] through their corporate vehicles – [NAME] – to now sue the [NAME] for how they did their job in the absence of such cooperation.

orders 1. For these reasons I make the following orders: 1. Dismiss the Notice of Motion filed on 3 July 2019. 2. Dismiss these proceedings. 3. [NAME] to pay the defendants' costs of the proceedings, including the Notice of Motion filed on 3 July 2019.

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