British American Tobacco Exports BV v Trojan Trading Company Pty Ltd
[2010] VSC 572
•23 December 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
INTELLECTUAL PROPERTY LIST
No. S CI 2010 00657
| BRITISH AMERICAN TOBACCO EXPORTS BV | Plaintiff |
| v | |
| TROJAN TRADING COMPANY PTY LTD | Defendant |
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JUDGE: | HOLLINGWORTH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 June 2010 | |
DATE OF JUDGMENT: | 23 December 2010 | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 572 | |
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Intellectual property – Trade marks – Defendant allegedly removed, erased or obliterated plaintiff’s trade marks – Offence provisions – Whether giving rise to tort of breach of statutory duty – Plaintiff’s claim arguable – Trade Marks Act1995 (Cth) ss 20, 21, 22, 121, 125, 126, 128, 145, 148, 149, 159, 191, 192
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B F Quinn | Corrs Chambers Westgarth |
| For the Defendant | Mr B Green and Ms S Ryan | Kliger Partners as agents for Navado Lawyers |
HER HONOUR:
Introduction
The plaintiff (“BAT”) is the registered owner of four Australian trade marks registered in relation to tobacco products (“the Captain Black trade marks”).[1] The defendant (“Trojan”) imports, distributes and sells tobacco products, including cigars bearing one or more of the Captain Black trade marks. BAT alleges that, since at least 2007, Trojan has been distributing and selling cartons and packets of cigars on which the Captain Black trade marks have been partly or wholly erased or obliterated by the placement of labels or stickers.
[1]“CAPTAIN BLACK” (Trade mark reg. no. 357317); “CAPTAIN BLACK CHERISE” (reg. no. 1137958); “DARK CREMA” (reg. no. 1137961) and “CAPTAIN BLACK and Device” (reg. no. 784595).
Trojan says that it is legally obliged to place graphic warning messages on tobacco products prior to re-sale in Australia, because of the Trade Practices (Consumer Product Information Standards) (Tobacco) Regulations 2004 (“the CPIS regulations”). For present purposes, Trojan concedes that its compliance with the CPIS regulations may result in some erasure or obliteration of the Captain Black trade marks on the cigar packaging.
On 10 February 2010, BAT issued a writ in this proceeding. It alleged that Trojan’s conduct involved the commission of certain offences under s 148 of the Trade Marks Act 1995 (Cth) (“the Act”). As well as declarations, BAT sought convictions and the imposition of pecuniary penalties against Trojan. Trojan disputed BAT’s ability to bring such a private criminal prosecution in this court.
On 19 April 2010, BAT delivered an amended statement of claim (“the current claim”), which removed the claim for criminal relief and instead sought civil relief, including injunctions, damages or an account of profits, and the delivery up or destruction of offending packaging material.
By summons dated 11 June 2010, Trojan seeks to have the proceeding or the current claim summarily dismissed, struck out or permanently stayed, under rr 23.01 or 23.02 or the court’s inherent jurisdiction. The issue in dispute involves a narrow question of law, namely, whether s 148 of the Act confers a private right to sue in respect of breaches which amount to offences against the Act. Trojan says that no such cause of action exists; BAT says it is at least arguable that it exists and it should not have its claim summarily dismissed.
The relevant statutory provisions
General
Section 20 is headed “Rights given by registration of trade mark” and includes the following:
(1) If a trade mark is registered, the registered owner of the trade mark has, subject to this Part, the exclusive rights:
(a) to use the trade mark; and
(b) to authorise other persons to use the trade mark;
in relation to the goods and/or services in respect of which the trade mark is registered.
(2) The registered owner of a trade mark has also the right to obtain relief under this Act if the trade mark has been infringed.
Section 21 provides that a registered trade mark is personal property, and s 22 sets out the powers of a registered owner to deal with a trade mark.
Infringement
Part 12 of the Act is headed “Infringement of trade marks”.
Partially or totally removing or obliterating a trade mark may, in certain circumstances, amount to a “prohibited act” for the purposes of s 121. Engaging in a prohibited act may constitute an infringement of a trade mark if the relevant goods had a notice of prohibition placed on them by the registered owner or authorised user, which notice prohibited that specific act.
In an action for infringement, a court may order an injunction, damages or an account of profits (s 126).
An action for infringement may be brought in a “prescribed court” (s 125), a term which includes the Federal Court and state and territory Supreme Courts (s 190).
Section 128 imposes certain limits on bringing an action for infringement:
(1) If the registration of a trade mark is renewed under section 79 within 6 months after it has expired, an action may not be brought in respect of an act that:
(a) infringed the trade mark; and
(b) was done after the registration had expired and before it was renewed.
(2) If the registration of a trade mark is renewed under section 80G within 10 months after the end of the prescribed period, an action may not be brought in respect of an act that:
(a) infringed the trade mark; and
(b) was done after the end of the prescribed period and before the registration was renewed.
Offences
Part 14 of the Act is headed “Offences” and it creates certain offences, including falsifying a trade mark, falsely applying a registered trade mark, and importing or selling falsely marked goods. Of particular relevance here are the following offences:
145 Falsifying etc. a registered trade mark
(1) A person is guilty of an offence if the person falsifies or unlawfully removes a trade mark that:
(a) has been applied to any goods that are being, or are to be, dealt with or provided in the course of trade; or
(b) ….
knowing that the trade mark is registered or reckless of whether or not the trade mark is registered.
(2) A person falsifies a registered trade mark if the person:
(a) alters or defaces it; or
(b) makes any addition to it; or
(c) partly removes, erases or obliterates it;
without the permission of the registered owner, or an authorised user, of the trade mark and without being required or authorised to do so by this Act, a direction of the Registrar or an order of a court.
(3) A person unlawfully removes a registered trade mark if the person wholly removes, erases or obliterates it:
(a) without the permission of the registered owner, or an authorised user, of the trade mark; and
(b) without being required or authorised to do so by this Act, a direction of the Registrar or an order of a court.
148Selling etc. goods with false marks
A person is guilty of an offence if the person intentionally:
(a) sells goods; or
(b) exposes goods for sale; or
(c) has goods in his or her possession for the purpose of trade or manufacture; or
(d) imports goods into Australia for the purpose of trade or manufacture;
knowing that, or reckless of whether or not:
(e) a falsified registered trade mark is applied to them or in relation to them; or
(f) a registered trade mark has been unlawfully removed from them; or
(g) a registered trade mark is falsely applied to them or in relation to them.
Section 149 provides that a person guilty of an offence under various provisions, including ss 145 and 148, is punishable on conviction by a fine not exceeding 500 penalty units[2] and/or imprisonment for a period not exceeding two years.
[2]A penalty unit is currently $110: s 4AA Crimes Act 1914 (Cth).
Section 159 provides that if a person other than the Director of Public Prosecutions has instituted proceedings for prosecution in respect of an indictable offence against this Part, certain forfeiture order provisions in various Acts dealing with proceeds of crime apply.
By reason of ss 191(3) and 192(1), the Federal and Supreme Courts have no jurisdiction in relation to offences under Part 14. Indeed, the Act is silent as to which court should hear such a prosecution. In that circumstance, the effect of s 68 of the Judiciary Act 1903 (Cth), and ss 4G and 4J(1) of the Crimes Act 1914 (Cth), is that jurisdiction is conferred on those courts of the states and territories which have jurisdiction in respect of indictable offences that may be dealt with summarily.[3]
[3]In Victoria, it is the Magistrates’ Court.
The current claim
BAT pleads that Trojan has exposed for sale, possessed for the purposes of trade and/or sold cartons and packets of cigars bearing labels or stickers which caused the Captain Black trade marks to be:
(a) “falsified”, as that term is defined in s 145(2)(c) of the Act, in that the trade marks were wrongfully removed, erased or obliterated in part; and/or
(b) “unlawfully removed”, as that term is defined in s 145(3)(a)-(b) of the Act, in that the trade marks were wrongfully removed, erased or obliterated wholly.
BAT then pleads (para [15]):
Pursuant to section 148 of [the Act], [Trojan] owes a statutory duty to [BAT], as the registered owner of the Captain Black trade marks, to not intentionally:
(a) sell;
(b) expose for sale; or
(c) possess for the purpose of trade,
goods to which one or more of the Captain Black trade marks have been applied by, or with the consent of, [BAT], where said trade marks have been either:
(a) partly removed, erased or obliterated; or
(b) wholly removed, erased or obliterated,
knowing or reckless of whether said partial or whole removal, erasure or obliteration was done either:
(a) without the permission of [BAT] or any authorised user of the Captain Black trade marks; or
(b) without being required or authorised by the [Act], a direction of the Registrar of Trade Marks or a court order.
BAT goes on to plead that “by reason of the matters aforesaid, [Trojan] has breached the statutory duties owed by it to [BAT]” (para [16]). The particulars of breach refer to three specific occasions, on various dates in 2009 and 2010, when Trojan is alleged to have sold or exposed for sale, or had in its possession for the purpose of trade, offending cartons or packets of cigars. Each of those occasions is alleged to involve conduct “in breach of the duty created by” one or more of the sub-sections in s 148.
BAT pleads that:
(a) Trojan has thereby made profits and will continue to do so (para [17]);
(b) BAT has suffered loss and damage (para [18]); and
(c) Unless restrained by the court, Trojan will continue to breach its statutory duties owed to BAT (para [19]).
The relief sought includes the following:
(a) A declaration that Trojan has breached its statutory duties owed to BAT;
(b) A permanent injunction restraining Trojan from committing further breaches;
(c) At the election of BAT, an enquiry as to damages or an account of profits; and
(d) Orders for the delivery up for destruction of offending packets and cartons.
Principles governing summary determination
Trojan argues that the current claim is bad in law and discloses no cause of action. Whether considered in terms of an application to strike out the statement of claim (under r 23.02), or to stay or dismiss the proceeding (under r 23.01 or the court’s inherent jurisdiction), Trojan says that the current claim is unsustainable.
There is no dispute about the principles governing such an application, which are set out in cases such as Dey v Victorian Railway Commissioners,[4] General Steel Industries Inc v Commissioner for Railways (NSW)[5], and Agar v Hyde[6]. In General Steel, Barwick CJ said that courts should not exercise their powers of summary disposal unless the lack of a cause of action is clearly demonstrated:
The test to be applied has been variously expressed; “so obviously untenable that it cannot possibly succeed”; “manifestly groundless”; “so manifestly faulty that it does not admit of argument”; “discloses a case which the Court is satisfied cannot succeed”; “under no possibility can there be a good cause of action”; “be manifest that to allow them” (the pleadings) “to stand would involve useless expense”.[7]
[4](1948) 78 CLR 62.
[5](1964) 112 CLR 125.
[6](2000) 201 CLR 552.
[7]At 129.
When the Civil Procedure Act 2010 (Vic) comes into operation on 1 January 2011, the relevant test for summary judgment will be whether the claim “has no real prospects of success” (s 62). Whether and to what extent that will make it easier to have a case summarily disposed of remains to be seen; for the purposes of this application, the General Steel formulation is the applicable one.
Trojan points to several first instance decisions in which judges decided that claims based on alleged breaches of statutory duty were untenable and ought to be struck out, including Preston v Star City Pty Ltd[8], McGuirk v University of New South Wales[9] and Porter v OAMPS Ltd.[10] There is undoubtedly power to strike out such a claim in an appropriate case, notwithstanding that difficult questions of law are involved.
[8][1999] NSWSC 1273.
[9][2009] NSWSC 1424.
[10](2005) 215 ALR 327.
Breach of statutory duty
Breach of statutory duty is a type of tort, in which the statute creates a civil right and the common law supplies a remedy (such as damages).[11]
[11]Darling Island Stevedoring and Lighterage Co Ltd v Long (“Darling Island”) (1957) 97 CLR 36 at 52 per Williams J; Downs v Williams (“Downs”) (1971) 126 CLR 61 at 74 per Windeyer J.
BAT says that the elements of the cause of action are as set out by Windeyer J in Downs, when his Honour said that to succeed in such a claim, a plaintiff must show:
(a) That the defendant was a person on whom the statute cast a duty;
(b) That the plaintiff was a person, or one of a class of persons, for whose benefit the duty was created;
(c) That the defendant failed to perform the duty; and
(d) That this failure gave rise to a civil right of action.[12]
[12]At 75.
Although Trojan described the elements of the tort using slightly different language, nothing of substance seems to turn on the differences in formulation. It is clear that in construing a statute to determine whether a civil cause of action has been created, the court searches for the intention of the legislature.[13] But, as Dixon J observed in O’Connor v S P Bray Ltd[14]:
[t]he difficulty is that in such a case the legislature has in fact expressed no intention upon the subject, and an interpretation of the statute, according to ordinary canons of construction, will rarely yield a necessary implication positively giving a civil remedy. As an examination of the decided cases will show, an intention to give, or not to give, a private right has more often than not been ascribed to the legislature as a result of presumptions or by reference to matters governing the policy of the provision rather than the meaning of the instrument.[15]
[13]See for example: Sovar v Henry Lane Pty Ltd (“Sovar”) (1967) 116 CLR 397; Byrne v Australian Airlines Ltd (“Byrne”) (1995) 185 CLR 410 at 424 per Brennan CJ, Dawson and Toohey JJ; Stuart v Kirkland-Veenstra (2009) 237 CLR 215 at [142] per Crennan and Kiefel JJ.
[14](“Bray”) (1937) 56 CLR 464.
[15]At 477-8.
And in Sovar, Kitto J said that:
The intention that such a private right shall exist is not … conjured up by judges to give effect to their own ideas of policy and then ‘imputed’ to the legislature. The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, scope and terms of the statute, including the nature of the evil against which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation. … it is not a question of the actual intention of the legislators, but of the proper inference to be perceived upon a consideration of the document in the light of all its surrounding circumstances.[16]
[16]At 405.
Given that the passage of legislation (particularly through a bicameral and federal legislature) often involves compromises between contradictory positions, McHugh and Gummow JJ noted in Byrne that “to plumb the intent of the particular body which enacted the law in question may be an illusory quest.”[17] Their Honours also said that where a question arises as to the creation of new rights and liabilities which will engage Ch III of the Constitution “it is to be expected that the Parliament will clearly state its will.”[18]
[17]At 459.
[18]At 458, cited with approval by Gummow J in Crimmins v Stevedoring Industry Finance Committee [1999] 200 CLR 1 at [157].
The cases in relation to this tort do not always sit easily with each other. As Phillips JA[19] observed in Gardiner v State of Victoria[20] “[t]he question of an individual’s right to sue for breach of some statutory duty imposed generally upon another has proved troublesome for a long time now” and “[i]t is often said that it is just not possible to reconcile the multitude of cases in which the question of an individual’s right to sue for breach of statutory duty has been considered.”[21]
[19]With whom Winneke P agreed; Callaway JA decided the case on another point.
[20](“Gardiner”) [1999] VSCA 100.
[21]At [21].
Certain categories of statutory provision, such as the industrial safety provision considered in Bray, have long been presumed to create such a right, because they protect an interest which is, in any event, recognised by the general principles of the common law.[22] Some of the cases which BAT describes as “dangerous premises” cases[23] probably fall within the same principles. Nevertheless, I agree with BAT’s submission that, given that the matter involves pure statutory construction, there is no principled basis for limiting the tort to industrial and workplace safety, or other health and safety legislation, as Trojan seeks to do. In each case, the relevant statue must be construed in its terms. The modern application of the tort has included breaches of legislation covering a wide range of subjects, such as:
(a) Breach of copyright;[24]
(b) Discrimination;[25] and
(c) Strata title common property maintenance.[26]
[22]Bray at 478; Darling Island at 49, 53, 55; Downs at 75.
[23]Calf v Sydney County Council [1972] 2 NSWLR 521; Ching v Surrey County Council [1910] 1 KB 736; Puflett v Proprietors of Strata Plan No 121 (1987) 17 NSWLR 372.
[24]Rickless v United Artists Corporation [1988] QB 40.
[25]Gama v Qantas Airways Ltd (2006) 195 FLR 475.
[26]Lubrano v Proprietors of Strata Plan No 4038 (1993) 6 BPR 13,308; Seiwa Australia Pty Ltd v Owners of Strata Plan 35042 [2006] NSWSC 1157.
The parties spent some time analysing the decision in Rickless v United Artists Corporation (“Rickless”).[27] In that case, the English Court of Appeal found that copyright protective statutory provisions imposed a statutory duty, breach of which could be addressed by a civil action for damages.
[27]Op cit.
BAT says that the provisions in Rickless are closely analogous, in terms of objective, structure and aspects of expression, to s 148 of the Act, and ought to provide guidance to this court in relation to an intellectual property statute such as the Act.
However, there is considerable force in Trojan’s argument that Rickless turns on its own facts. In that case, the Vice-Chancellor noted that there were a number of factors which pointed strongly against the relevant provision[28] creating anything more than a criminal offence. However, when regard was had to the obligations which the United Kingdom undertook under the Rome Convention[29], the court held that Parliament must have considered that the relevant statute “gave rise to civil rights to obtain an injunction, since otherwise Parliament would not have been carrying out its declared intention of giving effect to the convention.”[30]
[28]Section 2 of the Dramatic and Musical Performers’ Protection Act 1958.
[29]The International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations.
[30]At 53.
The authors of Halsbury’s Laws of Australia note that there are no “defined and specific steps” and “no universal rule” which enable one to determine whether a statute which imposes a statutory duty confers a private cause of action in tort for breach of that duty.[31] However, they suggest the following non-conclusive factors, drawn from the cases, may be considered:
[31]At 415-1345.
(1) the nature, scope and terms of the statute;
(2) the nature of the evil sought to be remedied and of the conduct prescribed;
(3) the policy of the statute;
(4) the convenience or inconvenience which would result from the existence or non-existence of a right of action;
(5) the pre-existing law;
(6) the surrounding circumstances;
(7) whether the statutory duty is imposed for the benefit of a particular person or class of persons or for the benefit of the public generally;
(8) whether the statute provides a remedy for breach of the statutory duty, for example, a statutory criminal penalty, and
(9) whether the statute sufficiently identifies specific precautions or measures or whether it merely specifies ends, not means.
Unfortunately, the cases are not necessarily consistent in the way in which they treat such factors. For example, in Gardiner, Phillips JA (with whom Winneke P agreed) referred to the existence and size of other remedies and commented:
As I have stated, a penal sanction will commonly be found attached to the legislative prescription, and prima facie that excludes the implication of additional civil liability. But if there is no such penalty or other remedy for breach of the statutory duty, or if the penalty which is fixed is considered inadequate (as in Groves v Lord Wimborne [1898] 2 QB 402), that can point towards an individual’s right to sue for breach.[32]
[32]Op cit at [25].
Whereas in Soutter v P & O Resorts Pty Ltd[33], Pincus JA (with whom McPherson JA and Fryberg J agreed) took quite a different approach to small pecuniary penalties:
Where the statute prescribes a relatively modest penalty for breach it may sometimes seem harsh to impose on the offender, as within the legislative intention, an unlimited liability for damages as well. It will not necessarily be right to do that where the offender would not otherwise be liable to pay damages, for example, on the ground of negligence.[34]
[33][1999] 2 Qd R 106.
[34]At 112.
Against that general background, I turn to consider the particular factors identified by the parties in this case.[35]
[35]I note that the parties only addressed some of the factors identified in the Halsbury’s summary.
Relevant factors
It is common ground that there has been no consideration of the availability of the tort in the context of the offence provisions in the Act.
The nature, scope and terms of the Act
Trojan points out that nowhere in Part 14, or elsewhere in the Act, has Parliament expressed an intention to confer a private right of action for breach of any of the statutory duties in ss 145-148. But, as discussed earlier, a lack of expressed intention is a common feature of cases dealing with the tort of breach of statutory duty. The question before the court is whether it is arguable that such an intention can be presumed or inferred.
BAT argues that the provisions of the Act outside of Part 14 leave no doubt that the Act’s primary objective is the protection of trade marks as a private form of intellectual property right. For example, BAT points to the following provisions:
(a) Section 21, which provides that a registered trade mark is personal property;
(b) Section 22, which provides that subject only to rights vested in others, the registered owner of a trade mark may deal with it as its absolute owner;
(c) Part 12, which prevents registered trade mark infringement; and
(d) Part 13, the object of which is to protect registered trade marks by allowing Customs to seize and deal with goods that are imported into Australia if the importation infringes, or appears to infringe, a registered trade mark.
Trojan does not dispute that much of the Act is concerned with the rights of trade mark owners. However, it points out that the rights given by registration of a trade mark include an express action for infringement, with a remedy in damages or an account of profits (ss 20(2) and 126). Unlike an action for infringement, s 20 does not create any right to damages in the event of an obliteration via s 148. Trojan argues that the rights declared by s 20, and the remedies set out in ss 120-130, are intended to be exhaustive of the civil rights and remedies associated with trade marks; BAT argues to the contrary.
Trojan also points out that there is a corresponding civil infringement provision under ss 20 and 121, which concerns itself with the partial or total removal or obliteration of a trade mark, which BAT could have invoked here had the necessary circumstances been established (namely, if there had been a notice of prohibition on the packaging).[36] There is force in Trojan’s argument that it may be doubted whether Parliament would have intended to allow a registered trade mark owner to recover via the criminal provisions of s 148, in respect of essentially the same conduct as is the subject of specific civil infringement provisions.
[36]It is common ground that the products in question in this case did not bear a notice of prohibition and therefore could not give rise to an infringement action under s 121.
It is true, as Trojan notes, ss 145 to 149 are physically separated or “quarantined” from the civil concerns of the Act by their placement in a separate offences section, namely Part 14 (although that is not an uncommon feature of modern statutes, and is not determinative of whether a tortious remedy is available).
Trojan points out that different courts have jurisdiction in relation to the civil infringement and criminal offence provisions, which it says highlights the separateness of the offence provisions from the rest of the Act. It also says that it would be “a strange result” if Parliament legislated for prescribed courts (such as this one) to have civil jurisdiction to award damages for an infringement of a trade mark, but for any common law court to have civil jurisdiction to award damages based on the tort of breach of statutory duty.
For whose benefit it the statutory duty imposed?
BAT argues that the primary purpose of s 148 is:
to protect the right of trade mark owners to control the presentation, appearance and use of their trade marks in the marketplace. It is the trade mark owner, rather than the public at large, who will suffer particular, direct and substantial damage from contravening conduct. This is made clear by the right of the trade mark owner, under s 148 read with s 145, to authorise sale of products in the Australian market bearing wholly or partly erased or obliterated versions of its trade marks. If the public at large enjoys a benefit under s 148, it is by virtue of the trade mark owner having determined whether and in what manner consumers should be exposed to goods bearing such modified versions of its trade marks. Such a consumer benefit is, however, secondary to the rights of the trade mark owner.
Trojan argues that ss 145-8 are not exclusively (or even primarily) for the benefit of registered trade mark owners. It says that there is also a consumer protection element driving those offences, which suggests that the duty is imposed not only for the benefit of trade mark owners, but for the benefit of the public at large. Trojan’s argument in this regard is supported by the extrinsic material relating to the Trade Marks Bill 1995.
In the second reading speech[37], the Minister observed that “Australia’s trade marks law serves two complementary objectives – first identification and protection of a business’s products and, second, protection of the consumer.”[38] As far as the second objective was concerned, he noted that:
trade marks also provide certainty to consumers by indicating the trade source of goods or services. Through use, consumers can also come to associate a trade mark with the quality of a particular good or service. … Because consumers make purchasing decisions based on the trade marks associated with goods or services, trade marks legislation, as well as trade practices and related legislation, provides appropriate checks and balances to ensure that use of trade marks do not deceive or confuse consumers. Quite obviously, trade marks are a vital link between the owner of the trade mark, the owner’s products, and consumers.[39]
[37]House of Representatives, 27 September 1995.
[38]At MC 1910.
[39]Ibid.
Similarly, the Explanatory Memorandum stated that clauses 145-149 served “to protect the commercial activities of the registered trade mark and [prevent] deception of consumers.”[40] There was no discussion in the Explanatory Memorandum about the possible availability of a civil remedy for breach of the proposed offence provisions.
[40]At [115].
But the fact that there may be more than one class or group who are intended to benefit from the offence provisions (namely, registered trade mark owners and consumers) does not necessarily preclude a finding that Parliament intended to impose the statutory duty for the benefit of registered trade mark owners (being persons who might suffer particular, direct and substantial damage from contravening conduct).[41]
[41]See Lonrho Ltd v Shell Petroleum (No 2) [1988] AC 173; Meade v Haringey London BC [1979] 1 WLR 637.
The pre-existing law
Trade marks are purely creatures of statute. Unlike many of the cases in which the tort of breach of statutory duty has been held to be available, there is no relevant common law duty.
Trojan says that the existence of a private right to sue in respect of consumer protection issues is conferred under the Trade Practices Act 1974 (Cth) and corresponding state Fair Trading Acts, and BAT could look to those Acts for private remedies. But the fact that erasing or obliterating a trade mark might (in certain circumstances) also be contrary to a provision dealing with misleading and deceptive conduct (such as s 52 of the TPA) is not determinative of the question whether s 148 of the Act gives rise to a tort of breach of statutory duty.
BAT argues that, in construing the Act, the court should have regard to the fact that the protection of private rights is a ‘fundamental objective” of trade mark law.
Statutory penalties or remedies for breach of the statutory duty
The Act does not provide any statutory civil remedy for a breach of s 148, or any of the other offence provisions. However it does provide for statutory criminal penalties: a person guilty of an offence under s 148 is liable to punishment on conviction by a fine and/or imprisonment (s 149), and to certain forfeiture orders in respect of contravening property or goods (s 159). The maximum current fine is $55,000 and the maximum term of imprisonment is two years.
Trojan argues that the statutory duties under ss 145-148 are adequately enforced by the criminal penalties; BAT argues to the contrary.
Other matters
Trojan makes various other criticisms of the current claim, some of which go to the question of whether or not there is a possible cause of action, others merely to the adequacy of the pleading or particularisation.
BAT has not particularised its alleged loss and damage, something which it clearly needs to do. In the course of argument, its counsel said that BAT proposes to plead, amongst other things, damage to its reputation arising from the partial or total obliteration of the Captain Black trade marks. There is no reason in principle why such damage (if properly pleaded) could not be the subject of an award of damages for breach of statutory duty. The fact that BAT has only pleaded three specific “trap” purchases may ultimately be relevant to the quantum of any damages award, but is not determinative of whether or not a cause of action exists.
Trojan also argues that in so far as the affixing of warning labels involves any obliteration of the Captain Black trade marks, that occurs because of the requirements of the CPIS regulations. It says that its obligation to affix warning messages “can never amount to the falsification of a trade mark”. But it is not clear how compliance with 2004 regulations is said to be relevant to the proper interpretation of the 1995 Act (the infringement or the offence provisions).
Trojan criticises the types of relief sought by BAT in its prayer for relief. Trojan expressly concedes that an injunction and damages would be appropriate to the alleged tort, and implicitly seems to accept that a declaration might also be an appropriate form of relief. However, it argues that an account of profits is only available either as an equitable remedy or under statute (here, s 126 of the Act), and is therefore not available as a remedy for the tort of breach of statutory duty. Similarly, Trojan argues that an order for delivery up for destruction is not available as a remedy for the tort. There seems to be considerable merit in Trojan’s arguments in relation to the remedies of accounting and delivery up, and it does not appear that BAT dealt with those arguments in its written or oral submissions.
Conclusions
As mentioned earlier, it took some months for BAT to formulate its current claim, and then for Trojan to issue the current summons. Unfortunately, due to problems concerning the availability of counsel and/or the court, the summons was heard on the last day of term before the mid-year break, so the time for oral argument and questions from the bench was necessarily constrained. Then, due to other matters before the court, it was not practicable to even commence writing these reasons for some months.
With the benefit of hindsight, it seems that it would have been preferable to have dealt with the legal issue by way of preliminary determination, or an expedited trial on liability. In either such case, considerably more time would have been allocated to the detailed hearing and consideration of the matter, leading to a final determination of the question whether s 148 of the Act gives rise to a claim for breach of statutory duty.
As I have indicated at various stages in these reasons, Trojan makes some very valid criticisms of BAT’s proposed cause of action, criticisms which may ultimately prevail. But, given the state of the law in relation to the tort, the absence of direct authority in relation to this specific Act, the various arguments put forward by BAT, and the limited time given to the hearing this application, I am not persuaded that BAT’s claim ought to be summarily disposed of.
It follows that the application will be dismissed.
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