Bedford Industries Rehabilitation Assoc Inc v Pinefair Pty Ltd
[1995] FCA 979
•27 NOVEMBER 1995
CATCHWORDS
TRADE PRACTICES - misleading or deceptive conduct - passing-off -packaging resembling that of rival trader - earlier version of packaging copied from that of rival trader - interlocutory injunction - whether serious issue to be tried.
Trade Practices Act 1974 (Cth) s 52
Cayne v Global Natural Resources plc [1984] 1 All ER 225
Sabre Corporation Pty Ltd v Laboratories Pharm-a-Care Pty Ltd (1995) ATPR 41-396
The Kettle Chip Company Pty Limited v Apand Pty Ltd(formerly CCA Snack Foods Pty Limited) (1994) ATPR 41-287
Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) ATPR 40-966
Voyager Distributing Company Pty Ltd and Anor v Cherry Lane Fashion Group Limited and Ors (1985) 4 IPR 247
No SG 84 of 1995
BEDFORD INDUSTRIES REHABILITATION ASSOCIATION INC v PINEFAIR PTY LTD (ACN 061 754 247) and RONALD JOHN PORTER
Branson J
Adelaide/Hobart (delivered via video link-up from Hobart)
27 November 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIA DISTRICT REGISTRY ) No SG 84 of 1995
)
GENERAL DIVISION )
BETWEEN:
BEDFORD INDUSTRIES REHABILITATION ASSOCIATION INC
Applicant
- and -
PINEFAIR PTY LTD
(ACN 061 754 247)
First Respondent
- and -
RONALD JOHN PORTER
Second Respondent
REASONS FOR DECISION
CORAM: Branson J
PLACE: Adelaide/Hobart (delivered via video link-up from Hobart)
DATE: 27 November 1995
By a notice of motion dated 9 November 1995 the applicant ("Bedford") has sought an interlocutory injunction against the first respondent restraining it from:-
"(a)Promoting by any means, offering for sale or hire, selling, hiring or distributing any garden edging or product under the names of Rola-Edge, and/or Roll-a-Edge;
(b)Promoting by any means, offering for sale or hire, selling, hiring or distributing any garden edging in the packaging, examples of which are annexures "JB-1" and "JB-9" and "JMB-10" (sic) to the affidavit of James William Bell."
Background
On 6 September 1995 Bedford acquired certain assets of the company Rolapak Pty Ltd (Receivers and Managers Appointed) ("Rolapak"). The assets acquired by Bedford included plant, machinery and equipment, intellectual property, and goodwill related to the manufacture, sale and distribution of a garden edging product known as Rolapak Ezy Edge. Rolapak Ezy Edging is a treated pine-log edging which is sold in different heights in packs of 3 metre lengths.
The Rolapak Ezy Edge product has been on the Australian market since approximately October 1982. Since that time the product has been marketed in all Australian States and territories by reference to the words "Rolapak" and "Ezy-Edge" or a combination thereof. In the financial years ending 30 June 1992, 1993 and 1994 Rolapak spent $394,000, $494,000 and $120,000 respectively advertising the product. At least for the last 3-4 years the product has been sold in the same packaging, which can fairly be described as distinctive.
Prior to 1992 Rolapak was the only substantial manufacturer in the Australian market of the type of garden edging product with which this case is concerned. Other players have now entered the market. Since 1992 Rolapak has maintained at least 60% of the market which in total is worth on an annual basis in excess of $6,000,000.
During the negotiations between Bedford and the receivers of Rolapak for the purchase and sale of Rolapak assets, officers of Bedford became aware that a treated pine-log garden edging product known as Rola-Edge was being stocked by the Big W retail chain ("Big W"). Previously Big W had stocked the Rolapak Ezy Edge product exclusively, but this arrangement apparently came to an end when the receivers and managers of Rolapak were unable to maintain supply to Big W. In 1994 23% of Rolapak's sales of $3,320,000 were sales to Big W.
Officers of Bedford formed the view that purchasers of garden edging could be mislead or deceived into believing that there was some association between the Rola-Edge and the Rolapak Ezy Edge products, or that they were indeed the same product. Concern centred on the packaging in which the Rola-Edge product was being sold: it was similar to the packaging in which the Rolapak product was being sold.
Solicitors for the receivers and managers of Rolapak, by letter dated 6 September 1995, wrote to the respondents complaining of, amongst other things, passing-off at common law and misleading and deceptive conduct within the meaning of s52 of the Trade Practices Act 1974 (Cth) ("Trade Practices Act"). They sought certain assurances, including assurances that the respondents would immediately cease advertising, distributing or selling any product using packaging deceptively similar to the Rolapak packaging. On 7 September, 1995 (i.e. the date after Bedford purchased assets from Rolapak as referred to above) the solicitors for Bedford wrote to the second respondent, who is apparently the managing director of the first respondent. The letter advised of Bedford's purchase from Rolapak, adopted the complaints made on behalf of the Receivers and Managers of Rolapak, and required that the response to the earlier letter be directed to them.
Considerable correspondence ensued between solicitors for the first respondent (who, although not the solicitors on the record for either of the respondents in these proceedings, will be referred to herein as "the solicitors for the first respondent") and the solicitors for Bedford. In the course of such correspondence it was indicated by the solicitors for the first respondent that:-
"... our client has no reason to market its product in a way which raises even the possibility of confusion. It is prepared to do the following:-
Our client will not order further wrapping of the present design. Our client will continue to use existing stocks, which it excepts will be exhausted in approximately four weeks.
Our client will change its wrapping design so that there can be no possible controversy."
By letter dated 13 September 1995 the solicitors for the first respondent gave an undertaking on behalf of their client that it would not sell any further product in its existing wrapper "after the date which is 21 days from the date of this letter." By letter dated 14 September 1995 the solicitors for the first respondent gave the following response to a telephone query from the solicitors for Bedford:-
Our client will change the design of the wrapping so that it is entirely distinctive from your client's wrapping. The precise details of this have yet to be finalised, but we are instructed that the change will result in no possible potential for confusion.
Our client does not accept that use of the word "Rola-Edge" is a breach of your client's intellectual property, nor is it a name which is deceptively similar to any name used by your client. The word "Rola" is simply descriptive of the product.
Nevertheless, the point is not important to our client and he will not pursue it. He will change the name of his product to "Roll-a-Edge"."
The solicitors for Bedford by letter dated 14 September 1995 responded to the above undertaking by requesting, in effect, that the change to packaging and the change of name be achieved within 14 days. This letter contains the following paragraph:-
"However, our client would reserve its rights in the event that, the design of the wrapping was not distinctive, to call on interlocutory applications regarding the new wrapping and the change of name. In our view the suggested change of name could not be sufficient unless the wrapping is entirely distinctive."
Ultimately an agreement was reached that the first respondent would cease using its existing wrapping and the name "Rola-Edge" by 29 September 1995. Undertakings were also given by the first respondent as to the keeping of records.
These proceedings, and the notice of motion claiming interlocutory relief, were filed and served after the solicitors for the first respondent provided to the solicitors for Bedford an example of the new wrapping which the first respondent had commenced to use for its garden edging product.
Principles governing grant of interlocutory injunctions
The principles which govern the grant of interlocutory injunctions are not in dispute: there must be a serious issue to be tried between the parties, and the balance of convenience must favour the grant of the injunction. The issue of whether the applicant for the injunction will suffer irreparable harm for which damages will not be an adequate compensation is normally considered as part of the balance of convenience.
Mr McCarthy QC, who appeared with Mr Hart for the respondents, suggested that the appropriate approach in a case of this kind, where, as he contends, an interlocutory injunction might finally determine the dispute, is for the Court to take the course of lowest risk. If this submission was intended to convey that the Court should endeavour to weigh "... the 'balance of the risk of doing an injustice'..." (Cayne v Global Natural Resources plc [1984] 1 All ER 225 at 237) I accept it. I also accept his submission that, in a case where an interlocutory injunction might finally determine the dispute, it is appropriate for the Court to evaluate the strength of the applicant's case for final relief (see the consideration of this issue by Beazley J in Sabre Corporation Pty Ltd v Laboratories Pharm-a-Care Pty Ltd (1995) ATPR 41-396).
Issues in the proceedings
In a case of this kind there is probably no practical difference between the elements required to be established on a claim made in reliance on s52 of the Trade Practices Act and on a common law claim of passing-off.
For present purposes there are three elements which the applicant must establish in these proceedings. First, that there is reputation or goodwill in the Rolapak packaging to which it is entitled. In part, this involves establishing that members of the public recognise the Rolapak packaging as distinctive of garden edging from a particular source. Secondly, that the conduct of the first respondent in selling its product in the Roll-a-Edge packaging involves it in making a misrepresentation that its product is from or associated with that source. Thirdly, that the applicant has suffered (on a quia timet application - that it is likely to suffer) damage as a result of such misrepresentation.
Submissions on the Notice of Motion
Argument on the notice of motion concentrated on the packaging in which the two products are being sold. On behalf of Bedford, weight was placed on the appearance on packaging used by the first respondent of the words "Rola-Edge" and "Roll-a-Edge". It was argued that such words contributed to a likelihood that such packaging would have been understood by potential purchasers as being Rolapak packaging. However, the case for an injunction in terms of paragraph (a) of the notice of motion, which is reproduced above, was not pressed. This application may therefore be treated as an application for an interlocutory injunction in terms of paragraph (b) of the notice of motion.
Mr Roder, counsel for Bedford, dealt at some length with the packaging being used by the first respondent in September 1995 ("the Rola-Edge packaging"). He submitted first, that the Court should find that the respondents had deliberately copied the packaging of Rolapak. The significance of any such finding is discussed below. Secondly, he submitted that the packaging presently used by the first respondent ("the Roll-a-Edge packaging") will be linked in the minds of potential customers with the Rola-Edge packaging in a way which minimizes the significance of the differences between the Roll-a-Edge packaging and the Rolapak packaging. He made reference to Burchett J's discussion of packaging changes in The Kettle Chip Company Pty Limited v Apand Pty Ltd(formerly CCA Snack Foods Pty Limited) (1994) ATPR 41-287 at 41,872.
The similarities between the Rolapak packaging and the Rola-Edge packaging are marked. Although nothing adverse to the first respondent is to be deduced from this because of the nature of the product, the two packagings are of the same kind and the printed portions of them are the same size. It is against this factor, however, that other features of the packagings are to be considered. Each of them has a yellow background and predominantly green lettering. Their layouts are virtually identical. Each of them uses the same distinctive font for the prominent lettering, and in each case such lettering is outlined in white. Each of them bears an illustration of pine-log edging laid out in front of plants: the patterns in which such edging is shown are identical. The printed installation instructions on the two packagings are remarkably similar, not only in content, but, in part, as to the actual words used.
The evidence placed before the Court on behalf of the first respondent as to the design of the Rola-Edge packaging is contained in an affidavit sworn on 16 November 1995 by the second respondent to these proceedings ("Mr Porter"). The relevant paragraphs of the affidavit are as follows:-
"28.I proposed the name "Rola Edge" to Big W who said that they were happy with it. Prior to them using the name, they wanted me to show them the packaging including the name and provide a sample of the art work. Now produced and shown to me and marked with the letters "RP2" and annexed to this my affidavit is a sample of that wrapping.
29.The wrapping has on it a drawing of the Rola Edge product. This drawing was produced especially for the Rola Edge product. I chose to have the drawing of the product in the form that appears on the wrapper because it shows the product in use in the garden.
30.On the packaging containing the name "Rola Edge" I used green and gold colours. In the gardening business the majority of all products packaging is green and gold. Green and gold is the standard colour used in the gardening business for gardening products. As an example of this, I refer to a page out of the K Mart gardening catalogue which has a photograph of a garden hose. The colour of the garden hose is green and the colours of the packaging are yellow. Annexed to this my affidavit and now produced and shown to me and marked with the letters "RP3" is a copy of the page of that catalogue.
31.I went to a marketing and graphic design agency by the name of "Savage Graphics" to complete the artwork for the packaging for the garden edging product. Savage Graphics completed artwork for a wrapper and after showing this to Big W it was accepted. From that time we began to use the Rola Edge wrapper."
It is not disputed that the Rolapak packaging was in existence well before the Rola-Edge packaging. The conclusion, in my view,
is irresistible that the Rola-Edge packaging was copied from the Rolapak packaging. So much was, indeed, effectively conceded by Mr McCarthy. Surprisingly, the above paragraphs from Mr Porter's affidavit make no mention of the Rolapak packaging. To the extent that Mr Porter's evidence conveys an impression that the Rola-Edge packaging was designed without reference to the Rolapak packaging, it cannot be accepted.
The Roll-a-Edge packaging has more differences when compared with the Rola-Edge packaging than the Rolapak packaging. Yet there are many points of similarity between it and the Rolapak packaging. Again they are packagings of the same kind and the printed portions of them are of the same size. The pattern of a yellow background and predominantly green lettering is continued with the Roll-a-Edge packaging. Its layout remains basically the same as that of the Rolapak packaging except with respect to the predominant lettering: it is reduced in size, is not outlined in white, is of a different font, and appears under, rather than over, the illustration of the edging. This illustration itself is not markedly different from those which appeared on the Rolapak packaging.
The Roll-a-Edge packaging also has many points of similarity with the Rola-Edge packaging. Possibly more than it has with the Rolapak packaging.
A report from Professor David Reay Corkindale, Professor of Marketing Management, was placed in evidence. It contains the following assertion:-
"The packaging or get-up of both Ezy Edge and Roll-a-Edge uses a yellow background with green lettering. This is common to most garden products and is extensively used in promotional material, for example the Mitre 10 catalogue. These colours and styles are, therefore, generic to this market and type of product. Customers for garden accessories would expect all such products to be packaged in this way."
I accept what Professor Corkindale says in this regard. Nonetheless, the similarities between the Rolapak packaging and the Roll-a-Edge packaging go well beyond colour.
It would not, in my view, be apt to describe the Roll-a-Edge packaging as packaging which is "entirely distinctive" from the Rolapak packaging (see the excerpt set out above from the letter dated 14 September 1995 from the solicitors for the first respondent).
I am satisfied on the evidence before me that there is a serious issue to be tried in these proceedings as to whether there is reputation or goodwill in the Rolapak packaging to which Bedford is entitled. Moreover, I am satisfied that there is a serious issue to be tried as to whether the first respondent in selling its product in the Roll-a-Edge packaging is involved in making a misrepresentation that its product is made by, or with the licence and approval of those responsible for the Rolapak product. I do not understand so much to be seriously contested by counsel for the first respondent.
I turn to consider the balance of convenience. This was the real area of argument before me.
Mr McCarthy sought to characterise the case for Bedford as a weak or marginal case and argued that this was a factor tending to weigh the balance of convenience in favour of the first respondent. I do not see the applicant's case for final relief as weak. In weighing the balance of convenience I take into account my evaluation of the applicant's case, on the evidence presently before the Court, as a case with apparent merit.
It was contended on behalf of the first respondent that Bedford will suffer limited, if any, damage, if the injunction sought is not granted, and that for this reason the balance of convenience does not call for an injunction to be granted. Mr McCarthy pointed out that Bedford does not supply to Big W and cannot be assured that it will do so if an injunction is ordered. He relied on the report of Professor Corkindale and particularly on the following paragraphs of the report:-
"5.This product is a 'commodity' in that differences in makes or versions is unlikely to be well established in customers' minds. The actual products do not carry signs or labels. After the packaging is removed they are anonymous. Retailers like Mitre 10 advertise this type of product in its generic, unlabelled and unbranded form. This will encourage many potential customers to believe the product is a commodity - all versions are the same.
6.Since the product is unlikely to be bought frequently any familiarity with the name and get-up of one version of the product is likely to be forgotten by the time a customer might wish to purchase again.
7.This type of product is non-essential to most gardeners. It is discretionary and, to some extent, will be an impulse purchase. In this situation attracting attention to it in a retail environment is very important to get potential customers to even think about purchasing it. Yellow is one of the best colours for catching the eye. That is why it is used with black stripes in work places to warn of dangerous protrusions etc.
The use of yellow in the get-up of Roll-a-Edge is therefore to be expected as part of purpose of the get-up to attract attention in a self-service, retail environment.
8.This product category would be classed as a 'low-involvement' purchase in the marketing literature. That is, it is not something that is very important to people and they would not contemplate the purchase and seek out information and brands beforehand as they would for a videoplayer or an electric drill.
For this reason, customers would buy whatever version a retailer happened to stock.
9.As there are not widely differing versions of this product, in terms of length, sizes, and materials, it is not likely that retailers will stock more than one version of the it. It takes up quite a lot of space, is not a 'fast turnover' item and will not carry a high 'mark up'. It is, therefore, not in the retailer's interest to take up space with more than one version.
For this reason, it is unlikely that different versions of this product will appear side by side in the same outlet. Any similarity in get-up is not going to confuse potential customers as they will rarely be confronted with more than one version.
10.Given the relatively modest price of this product and the fact that it is likely to be an impulse purchase it is unlikely that customers will shop around, travelling from one outlet to another comparing prices.
11.The particular names of the various types are unlikely to be well-known by potential customers since they are not advertised extensively and continuously. For this reason, no one name will be known and recognised more than any other. If the product were frequently bought by customers they would receive regular reminding of the name through the packaging and get-up but this is not the case with this particular product. Once the product is bought the packaging is discarded and the name is lost and forgotten."
The qualifications of Professor Corkindale to express all of the above opinions is not clear.
In considering the weight which should be given to Professor Corkindale's opinions, it is, I consider, appropriate to take into account the conduct of the first respondent, and possibly Big W, as established by the evidence before me. A similar approach was taken by the majority of the Full Federal Court in Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) ATPR 40-966. In that case, at 50,553-4, Wilcox and Einfeld JJ stated:-
"In the present case, the evidence established that a deliberate decision was made by two senior marketing executives of Coles Myer to adopt both the descriptive words used by Telmak on its packaging and the style and layout of that lettering in which that description was proclaimed. Their employer, Coles Myer, has endeavoured to maintain that position throughout this litigation. From those circumstances, we think that the inference should be drawn that, in the judgment of those two executives, and presumably others in their organisation, the retention of these words, and this lettering, on its packaging would be likely to assist sales of the Coles Myer product. It could do so only if it caused persons who saw the Coles Myer package to relate that package to the product advertised on television by Telmak. Any hesitation on our part must yield to those judgments, made as they are by people of considerable marketing experience on behalf of a company enjoying some 28% of total Australian retail turnover."
It is not to be suggested that Mr Porter is in the same marketing league as Coles Myer. Yet it may be presumed that he knows something of the marketing of pine-log garden edging products. More importantly, perhaps, the Rola-Edge packaging was approved by officers of Big W which is a major retailer. Big W had previously sold the Rolapak product: the Rola-Edge packaging which was approved by its officers I have found to have been copied from the Rolapak packaging. I am not able to conclude that Big W required a packaging copied from the Rolapak packaging, but it appears that, at the least, one or other of the first respondent and Big W saw a retailing advantage in such copying and the other did not demur. Following the giving of an undertaking to change to "entirely distinctive" packaging, the first respondent has in fact changed to a packaging which maintains many points of similarity with the Rolapak packaging. It is hard to resist the conclusion that such similarities are seen as bestowing a marketing benefit on the first respondent's product.
The significance of the copying of the Rolapak packaging might have been lessened, or obliterated, had Mr Porter been more frank in his affidavit evidence as to the circumstances in which the Rolapak packaging came to be copied by the first respondent. Unfortunately, the Court did not have the benefit of such evidence. Nor was evidence placed before it as to the design process for the Roll-a-Edge packaging.
In evaluating the balance of convenience I am not prepared to act on the basis that the applicant will suffer limited, if any, damage by reason of the utilization by the first respondent of the Roll-a-Edge packaging.
Certain of the points made by Professor Corkindale in his report do, however, tend to support the contention of Mr Roder that, should Bedford ultimately succeed at the hearing of this matter, proof of the actual damage suffered by it will be difficult, if not impossible. In this regard it is significant that Bedford does not have an established trading record in the Rolapak product against which its ongoing sales may be measured. Difficulties relating to the proof of damages may appropriately be taken into account in evaluating the balance of convenience (Voyager Distributing Company Pty Ltd and Anor v Cherry Lane Fashion Group Limited and Ors (1985) 4 IPR 247).
Another factor to be taken into consideration in evaluating the balance of convenience is the financial capacity of the first respondent to satisfy any award of damages which might ultimately be made against it. Pinefair Pty Ltd was registered on 17 September 1993. It has a paid-up share capital of $1,000. Its first annual return is dated 31 December 1994. That return shows that at the end of the financial year it had a deficit in shareholders' equity of $33,366 and that it had made an operating loss for the financial year of $34,366. It has charged by way of Bill of Sale its "stock in trade, book debts, books of account, vouchers, documents, print outs, records of chargor's business" in favour of Softwoods Queensland Pty Ltd, its timber supplier. No offer to provide security against any award of damages has been made. I am not able to feel satisfied that the first respondent would be able to meet a significant award of damages made against it.
The principal factor put to me in support of the contention that the balance of convenience strongly favours the refusal of an injunction is the risk that, if the injunction sought is granted, the business of the first respondent will be destroyed before the principal proceedings can be heard and determined. Mr Porter has given affidavit evidence that the factory of the first respondent must close when packaging for its product is not available. He has annexed to an affidavit a letter from his present supplier of packaging which advises that, if an order were now placed by him for more packaging, it would not be able to be supplied until the second week of January 1996 by reason of the supplier's workload. I interpolate that Bedford has provided evidence that its packaging supplier can design artwork and produce packaging material within 7-10 days.
Mr Porter has also given evidence by an affidavit dated 20 November 1995 as follows:-
"5.On 17 November 1995 I rang Geoff Pollard, the buyer for gardening products for Big W nationally who I have delt (sic) with for four months to establish Big W's requirements for edging over the next three months. Geoff Pollard said to me "There is a Do it Yourself Booklet for the 31st December 1995 through to the end of January. As well as a poster line featuring 150mm size garden edging during the same period. Also from 11 February 1996 for a twelve week period, Big W are running a major reduction on all gardening lines and will feature garden edging. The orders you have received over the past two weeks would be for minimum orders per fortnight for the next three to four months", or words to that effect. I understand that poster lines refer to products which will be promoted by way of point of sale, posters in store.
6.Over the past fortnight, I have received orders from Big W totalling $95,040.00. Of those orders, two orders totalled $48,613.50 which will be required to be in the store no later than 22 November 1995. This is the first amount of stock for the 31 December 1995 catalogue, Geoff Pollard said to me on 17 November 1995, "The two orders would be what would be required per week for these catalogues" or words to that effect."
In addition he has exhibited to an affidavit a notification received by him from Big W which is in the following form:-
"Chief Executive Officer
Pine Fair Pty Ltd
07 534 5111
Dear Sir/Madam
SUPPLY OF MERCHANDISE TO BIG W - DEC 95/JAN 96/FEB 96.
Doing business with BIG W for basic re-orderable merchandise is conditional on your ability to maintain continuous supply 365 days a year. The December/January/February selling period is of particular importance because of the extremely high customer traffic and sales volume at the time.
Consistent supply of merchandise is vital to BIG W during the post-Christmas/New Year holiday period. It is BIG W's intention to continue ordering standard merchandise in the normal manner throughout the Christmas holiday period. We look forward to your support in ensuring the continuous availability of your products.
Please confirm by completing the bottom of this page that supply of BIG W orders will not be disrupted during December 95/January 96 (except public holidays).
If you are unable to fulfil this obligation because of factory or warehouse shutdown or if ordering arrangements will vary during the December/January holiday period, contact JENNY OLIVER, Stock Replenishment Manager on 02 847 1330 or by Fax 02 347 1830, reply by 17-11-95.
Yours faithfully,
(signed)
K.R.J. McMerron
GENERAL MANAGER MERCHANDISE
REPLY BY FAX 02 847 1830 By 17-11-95
WE WILL BE SUPPLYING STOCK THROUGHOUT DEC/JAN PERIOD ______
(public holidays excepted)
WE WILL BE CLOSING DOWN OVER THE FOLLOWING PERIOD _________
SIGNED: ____________________________________________
POSITION: __________________________________________"
Although the affidavit to which the above form is exhibited was sworn on 20 November 1995, Mr Porter does not indicate in his affidavit whether he replied to Big W as required by the form by 17 November 1995 or at all. Nothing was put to me by counsel which suggests that the first respondent is not in a position to fill the orders referred to by Mr Porter in paragraph 6 of his affidavit of 20 November 1995. It would appear that part of the order may already have been supplied.
I am not satisfied that the business of the first respondent will necessarily fail if an interlocutory injunction is granted, although I am prepared to act on the basis that there is some risk that it may do so. Mr Porter has not deposed to a belief that the business will fail. To the extent that it may have been inferred in argument before me that Big W will not tolerate a change in Roll-a-Edge packaging to a packaging distinctly different from the Rolapak packaging, this also is not established by the evidence. I accept, however, that the Big W business is vital to the first respondent, and that loss of that business is likely to prove fatal to the first respondent. I accept further that any injunction that results in disruption to
the supply by the first respondent to Big W of its product may place at risk its Big W business.
The parties are in agreement that the summer months, which have now commenced, are the important months for the selling of garden products, including garden edging products. I accept that any disruption of the first respondent's business at this time will have a great significance than a similar disruption during winter.
Mr McCarthy queried the financial strength of the applicant and the value of the undertaking as to damages proffered on its behalf. No evidence was placed before me which supports the suggestion that the applicant may not be able to stand behind a usual undertaking as to damages. I see no reason to conclude that it could not.
I have found the balancing of convenience in this case particularly difficult. I accept that any injunction will result in some disruption of the first respondent's business and may adversely affect its relationship with Big W. After considerable reflection I have, nonetheless, formed the view that the appropriate balance will be best achieved by the grant of an interlocutory injunction with respect to the use of packaging which is substantially similar to the Rolapak packaging, but on the basis that the first respondent is given time to obtain an alternative packaging. Provided first, that the applicant gives the usual undertaking as to damages, which it has proffered, and secondly, that the first respondent is able to assure the Court that it has maintained the financial records referred to by the solicitors for the parties in correspondence exhibited as "GRT 12" and "GRT 14" to the affidavit of Gregory Ralph Tye sworn on 9 November 1995, and that it will continue to maintain such records until the trial or earlier determination of this matter, I propose to make an injunction of the kind envisaged by paragraph (b) of the notice of motion but on the basis that it will not come into effect for a period of 4 weeks.
It would be appropriate for minutes of order to be prepared.
Counsel will have the opportunity to speak to such minutes of order.
I certify that this and the preceding pages are a true copy of the Reasons for Decision of The Honourable Justice Branson.
Associate:
Dated:
Counsel for the Applicant : Mr M J Roder
Solicitors for the Applicant : Norman Waterhouse
Counsel for the First and Second : Mr K R McCarthy QC
Respondents with him
Mr D S Hart
Solicitors for the First and : Phillips Fox
Second Respondents
Hearing Date : 21 November 1995
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