Who can enforce a release

Global Brands is still suing YD Pty Ltd. The trial on quantum for infringement of registered design was almost due to start when YD applied to amend.

After YD admitted it had infringed Global Brands’ registered design, YD discovered, over 9 months earlier, that Global Brands had entered into a settlement agreement with Pegasus/Coastal relating to Global Brands allegations that Pegasus/Coastal had infringed the same registered design. The settlement agreement was in fairly typical terms:

the parties (and any related body corporate as that term is defined in s 9 of the Corporations Act 2001 (Cth) (Related Bodies Corporate) hereby permanently release and forever discharge each other, their Related Bodies Corporate, directors, customers, servants and agents from and against all and any claim cause of action liability suit or demand which the parties … have or but for this deed may have had against each other…their customers servants or agents prior to the date of this deed for or in respect of or arising out of the subject matter or the conduct of the proceeding and the cross claim.

YD claims that Pegasus/Coastal supplied the infringing products to it and so it was a customer within the terms of the release. Pegasus/Coastal apparently did not want to become embroiled in the litigation. The amendment was to join Pegasus/Coastal as a respondent and to rely on the release.

Dodds-Streeton J has granted leave to amend, finding that YD although not a party to the settlement deed could rely on it as a special exception to the rules on privity, so long as Pegasus/Coastal was joined as a respondent.

Aon Risk Services was distinguished:

In all the unusual circumstances of this case, including:
the existence of the release, its apparent relevance as the basis for an arguable claim; its relatively circumscribed scope; the respondents’ belated knowledge of the deed and their conduct thereafter; the impact of the decision in Airberg only recently appreciated by the respondents’ counsel; the applicants’ preference that the quantum trial should not proceed if the amendments be allowed; the fact that although the proceeding has been long on foot, there has already been one trial and the parties have apparently acquiesced in various stages of non-progression:
in my opinion, weighing all relevant matters, including the nature and importance of the amendment to the respondents, notwithstanding the delay, wasted costs and prejudice to the applicants (which may not be wholly compensable by a costs order) the respondents’ applications to amend and to join Pegasus should be allowed.

Global Brands apparently denies that YD is a “customer” and, in any event, apparently intends seeking rectification to exclude the term as a “mistake”.

All this has led to the vacating of the trial date.

Global Brand Marketing Inc v YD Pty Limited [2010] FCA 323

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