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Welcome to our litigation know-how update, where you will find the latest developments on commercial litigation topics from HSF Kramer’s Australian practice.
This is a monthly wrap-up of recent cases, developments, reports and other items of interest.
Court rules against Dexus over validity of default notice
The Supreme Court of NSW has ruled against Dexus in its attempt to halt the forced sale of its 27.3% stake in Australia Pacific Airports Corporation (APAC), the owner of Melbourne and Launceston airports.
The dispute arises out of a claim by APAC that, in the course of offering shares in APAC for sale, Dexus breached the shareholders’ deed by disclosing APAC’s confidential information to third parties without agreed confidentiality controls in place, as part of an attempted private sale of part of Dexus’ stake in 2023.
This led the APAC Board to issue a Default Notice which would require Dexus to divest its interests in APAC to the remaining APAC shareholders. The validity of the Default Notice (which Dexus challenged) was upheld by the Court, with Justice Hammerschlag finding that Dexus committed a "material irremediable breach" of the shareholders' deed.
Dexus has stated that it is reviewing the judgment and may seek to appeal or apply for further injunctive relief to prevent the sale in the interim.
Misleading pricing representations
The Court concluded that Coles' ‘Down Down’ tickets for the sample products conveyed a representation to ordinary consumers that Coles had reduced the price of the product from the ‘Was’ price and implicitly, that the reduction in price involved a real or genuine discount.
The Court further found that, for a majority of the sample products the subject of consideration, the representations were misleading because the relevant products were not sold at the ‘Was’ price stated on the ticket for a reasonable period (i.e. less than 12 weeks was not considered reasonable) and, as a consequence, the discount represented on the tickets was not genuine.
However, Justice O’Bryan clarified that the fact that a price is intended to be temporary does not indicate that the price is artificial.
See: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2026] FCA 598
Parent company size and regulatory penalties
In Emma Sleep, the Respondents were found to have made certain representations in their advertisements to Australian consumers that were misleading or deceptive, and false and misleading.
A critical issue in determining the appropriate penalty was the weight to be given to the financial position of the Respondents’ parent companies.
In the circumstances, the Court found that – although the mere existence or size of a parent company is not relevant by itself – it was appropriate to have regard to the much greater financial resources available to the immediate parent company.
On the facts, the Court found that the Respondents’ immediate parent company (Emma Sleep GmbH) had played a meaningful role through management oversight and prior financial support to the Respondents. This justified taking its financial position into account. Although the Australian business had limited ability to pay a penalty on its own, the Court considered it appropriate to look to the broader group’s financial capacity to ensure the penalty was meaningful.
The case serves as a valuable reminder for corporate subsidiaries that where parent companies are involved in, or benefit from, contravening conduct, their resources may be considered to ensure that any penalty achieves its intended deterrent purpose.
See: Australian Competition and Consumer Commission v Emma Sleep GmbH (Penalty) [2026] FCA 493
High Court clarification on trademark law
A recent High Court decision has clarified the operation of the statutory defence of “honest concurrent use”.
In Zip v Firstmac, the Court found that Zip Co could not rely on the defence of "honest concurrent use" in relation to its use of ‘ZIP’, a term which was registered to Firstmac.
The Court held that the relevant time for assessing honest concurrent use is the time of each occasion of alleged potential infringement, being when the “ZIP” mark was first used in November 2013. The Court rejected Zip Co’s argument that the assessment should occur at some later time, such as when the defence was pleaded or at trial, making clear that subsequent honest conduct could not retrospectively cure an earlier infringement.
Secondly, the Court clarified that ‘honesty’ requires a person’s subjective knowledge, belief or intent to be judged against the objective standards of ordinary decent people. While the Court emphasised that knowledge of a prior trademark does not automatically negate a finding of honesty, Zip Co’s decision to proceed with the “ZIP” branding despite knowing of adverse IP Australia reports weighed against a finding of honest use.
See: Zip Co Limited v Firstmac Limited [2026] HCA 16
Artificial Intelligence: Contractual construction & new Victorian Practice Note
The Queensland Supreme Court has confirmed that large language models such as ChatGPT should not be used to determine the ordinary meaning of disputed contractual phrases.
Rejecting ChatGPT-generated responses in a lease construction dispute over the term "medical centre", the Court found that contractual construction is an inherently contextual exercise, the questions posed to ChatGPT lacked sufficient context, and the construction of the lease was ultimately a matter for the Court to determine.
The Supreme Court of Victoria has separately introduced Practice Note SC Gen 25 on the use of AI by Court users, accompanied by separate Judicial Guidelines.
SC Gen 25 makes clear that Court users remain responsible for the content of documents they file regardless of AI usage.
Particular caution is urged when GenAI is used to assist in the preparation of affidavits, witness statements or other evidentiary materials. This contrasts with the Supreme Court of New South Wales, which outright prohibits the use of Gen AI in generating the contents of affidavits, witness statements, character references or other material (although Gen AI may be used in work that is merely preparatory).
The Victorian Judicial Guidelines provide that AI must not be used for judicial decision-making but may be used to support in limited ways, such as proofreading, organising case materials and assisting with legal research.
See: Inspired Medical Pty Ltd v S Mohindra Pty Ltd [2026] QSC 78, Supreme Court of Victoria – Practice Note SC Gen 25 - The Use of Artificial Intelligence by Court Users; Supreme Court of Victoria – The Use of Artificial Intelligence by Judicial Officers;Supreme Court of NSW – Practice Note SC Gen 23
Foreign litigants and discovery obligations
The Federal Court ordered Credit Suisse and UBS to produce unredacted discovery documents to insurer Respondents in the $2.2 billion Greensill proceedings, rejecting arguments that Swiss and Luxembourg banking secrecy laws justified the redactions.
The Court held that a foreign party who commences litigation in Australia “is ordinarily required to play by the local rules, including by producing discoverable documents wherever those documents are located”.
The Court found the risk of criminal prosecution to be overstated, noting the absence of any instance of Swiss or Luxembourg authorities prosecuting a bank for disclosure made in the context of foreign litigation. The Court also found the redactions had been applied inconsistently and on instructions that went beyond what the foreign secrecy laws actually required.
This decision serves as a reminder that foreign parties who invoke the jurisdiction of Australian courts cannot selectively engage with local procedural obligations.
See: Credit Suisse Virtuoso SICAV-SIF v Insurance Australia Limited [2026] FCA 618
When costs will not be ordered
An interesting decision by the Supreme Court of NSW has confirmed the broad discretion possessed by a court when making costs orders. In Macnab v Deverell & Ors, the proceedings had previously been dismissed without a determination on the merits. In a subsequent judgment, the Court accordingly declined to order costs in favour of either party.
The Court found that neither party had conducted the case in a way that allowed the issues to be properly determined, that neither had clearly capitulated and that neither had acted more unreasonably than the other. Because the allegations could not be tested on the merits, the Court was not prepared to conclude that either party was likely to have succeeded had the matter gone to trial.
The case demonstrates that even where proceedings are dismissed, a costs order should not be considered as automatic.
See: Macnab v Deverell & Ors [2026] NSWSC 544
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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