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Sao Paulo Alpargatas S.A. v But Fashion Solutions [2013] NZHC 602 (26 March 2013)

Last Updated: 18 April 2013

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2010-485-2473 [2013] NZHC 602

UNDER the Trade Marks Act 2002

IN THE MATTER OF an appeal from the decision of the Assistant

Commissioner of Trade Marks dated 12

November 2010

AND IN THE MATTER OF trade mark application no 798640

CUBANAS and logo

BETWEEN SAO PAULO ALPARGATAS S.A.

Appellant

AND BUT FASHION SOLUTIONS COMERCIO E INDUSTRIA DE ARTIGOS EM PELE LDA Respondent

Hearing: On the papers

Judgment: 26 March 2013

_{JUDGMENT OF MALLON J}

[1] But Fashion (the respondent) seeks costs following my judgment, delivered on 5 July 2011, dismissing Sao Paulo’s (the appellant’s) appeal. In the usual course there would be no issue about this because costs should follow the event. The issue arises because in my judgment I said nothing in relation to costs.

[2] Subsequently, on 2 August 2011 Sao Paulo filed a notice of appeal. On 10

August 2011 But Fashion cross appealed on the ground that no costs order was made in the High Court. On 19 August 2011 But Fashion filed a memorandum in the High

_{Court seeking costs. On 2 September 2011 Sao Paulo filed a memorandum in the}

SAO PAULO ALPARGATAS S.A. V BUT FASHION SOLUTIONS COMERCIO E INDUSTRIA DE ARTIGOS EM PELE LDA HC WN CIV 2010-485-2473 [26 March 2013]

High Court noting the cross-appeal and contesting the reasonableness of But

Fashion’s calculation of costs.

[3] On 5 September 2011 I issued a minute stating:

I refer to the memoranda as to costs filed by the appellant and the respondent. I am unclear whether either party considers that I am now functus having omitted to refer to costs when delivering my Judgment and the respondent having included this issue as part of its cross-appeal. In the circumstances I will await the outcome of the appeal. However the parties are free to resolve costs amongst themselves in light of the principles detailed in the High Court Rules.

[4] Sao Paulo did not pursue its appeal. The appeal was deemed abandoned on 3

May 2012. But Fashion did not pursue its cross-appeal either. On 26 November

2012 the High Court registry contacted counsel, asking them what was to be done with the security for costs which Sao Paulo had paid into court in respect of its appeal to this Court. Counsel for But Fashion’s response was to ask the Court to retain the security for costs until the parties were able to reach agreement on that. Counsel for But Fashion anticipated that a joint memorandum would be able to be filed and indicated to Sao Paulo’s counsel that she would be in touch to discuss this.

[5] In fact, no approach was made and a joint memorandum was not filed either. Instead, by memorandum dated 12 February 2013, But Fashion sought costs in terms of its earlier memorandum dated 19 August 2011. The 12 February 2013 memorandum did not address the question of whether I was functus officio as raised in my minute of 5 September 2011. Nor did it address Sao Paulo’s concerns, as set out in its 2 September 2011 memorandum.

[6] Sao Paulo’s memorandum dated 15 February 2013 did, however, address these matters. That memorandum refers to a number of cases where the functus officio issue has arisen because the substantive judgment did not deal with costs. The memorandum refers to one line of authority which holds that there is no

supplemental jurisdiction to order costs, after the judgment is given;[1] and another

_{line of authority which holds that there is.}[2] _{Sao Paulo submits that the delay in this}

case, and the uncertainty as to when a judgment is treated as final, are reasons to prefer the approach that there is no supplemental jurisdiction.

[7] The principal New Zealand authority which holds that costs cannot be dealt after a judgment has been sealed is Thomson v Thomson.[3] In that case the issue of costs was raised on an application for recall of a judgment. Costs were declined on the basis the judgment had been perfected and so could be changed by appeal alone. In the present case my judgment has not been sealed. Thomson v Thomson is therefore distinguishable.

[8] In my view, however, it is not necessary to deal with costs by way of a recall. The preferable approach is that there remains jurisdiction to deal with costs after the substantive judgement has been given, where costs were sought prior to the judgment being given but were not dealt with in the judgment. Moring v Reeves Moses Hudig Mortgage Nominee Co Ltd appears to be distinguishable because the

party apparently had not applied for costs.[4] Here But Fashion had sought costs, and I

overlooked considering that matter when delivering my judgment. In these circumstances, I am not being asked to re-exercise my power to award costs. I had not exercised it in the first place. This was the underlying rationale in the cases relied on in Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) in support of there being a supplemental jurisdiction to deal with costs against a non-party.[5]

[9] Here there remains an application for costs which has not yet been considered. The principle of finality is not infringed if costs are now considered.[6]

Delay is an issue. However, in my view that issue is better dealt with as part of the discretion when considering costs, than as a rationale for there being no jurisdiction to deal with them.

[10] In the present case the issue of costs could have been dealt with in September

_{2011 by discussion and agreement between counsel. Counsel for But Fashion}

apparently made no effort to do so, despite my suggestion at that time that the parties do so. But Fashion also offered no assistance on the functus officio issue that I raised when seeking an order for costs in February this year. Nor did it respond to the points that Sao Paulo raised as to why the costs being sought were too high. In these circumstances I consider that the costs should be capped at the amount of security that Sao Paulo has paid into court. That amount equates to a day’s appearance at the hearing.

[11] Accordingly, Sao Paulo is ordered to pay costs in the sum of $1,880.00 to But

Fashion. This amount is to be paid from the security that has been paid into court.

Mallon J

Solicitors:

G F Arthur/N Robb, AJ Park, Wellington

C A Warburton, Acacia Law, Wellington

[1] Thomson v Thomson (1992) 6 PRNZ 591 (HC) at 594; LRTEN v RLK FC Te Kuiti FAM-2007-

_{073-16, 28 February 2011.}

[2] Wilson v Selwyn District Council (2004) 17 PRNZ 461 (HC) at [14]; Dunsford v Shanly [2012] _{NZHC 2375} at [7]- [9].
[3] _{Thomson v Thomson, above n 1.}
[4] _{Moring v Reeves Moses Hudig Mortgage Nominee Co Ltd CA249/97, 29 September 1998.}
[5] Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] WKPC 39, [2005] 1 NZLR _{145 at [9]-[17].}

[6] This was the basis on which decisions in the High Court have held that there is supplemental jurisdiction: Wilson v Selwyn District Council, above n 2; Dunsford v Shanly, above n 2.