Elconnex Pty Ltd v Gerard Industries Pty Ltd

[1991] FCA 864

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JUDGMENT NO. ....- ........ .... -.-.-..

NOT SUITABLE FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
)

NEW SOU TH WALES DISTRICT REGISTRY ) NG 351 of 1990

1

GENERAL DIVISION 1

BETWEEN:  ELCONNEX PTY LIMITED

Applicant

AND :  GERARD INDUSTRIES PTY LIMITED

Respondent

CORAM: Burchett J.
PLACE: Sydney

DATE : 20 December 1991

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J.:

An issue as to costs has been raised in this matter, which proved lengthy and fraught with some difficulty. The applicant sought relief in respect of the sale by the respondent of certain electrical connectors. Relief was sought on a number of bases: it was alleged there had been an infringement of patent, an infringement of the monopoly in a registered design, and breaches of S. 52 of the Trade practices Act. There was a cross-claim for revocation of the patent. The cross-claim succeeded, so the case on the patent, although otherwise established, was not successful. The case in respect of a registered design also failed, but the case succeeded under S. 52 of the Trade Practices Act.

Certainly, a large amount of time was taken up on issues on which the applicant ultimately failed, but it seems to me that sight cannot be lost of the fact that, if one departs from the formal categories of the law and looks at the substance of the matter, the applicant sought to restrain the sale of the connectors, and to obtain damages in respect of the sale that had occurred; and the applicant succeeded in finding an appropriate legal category of claim, albeit it also failed in alternative ways of putting the claim.

I do think the court should endeavour to make an appropriate over-all order, if possible, rather than a form of order that involves a great deal of additional work in connection with taxation. Taking all these factors into account, I think the appropriate order is that the respondent pay one third of the applicant's costs.

Mr Catterns asks for some orders for corrective advertising. I will defer the question what the orders, if made, ought to be, but in general tens he seeks a notice to

go individually to wholesalers or bulk contract purchasers,	and he also seeks advertisements in trade journals.
The power to make an order requiring corrective advertising in cases where there has been an infringement of S. 52 of the Trade Practices Act was confirmed by me in Janssen Pharmaceutical Ptv Ltd v. Pf izer Ptv Ltd [l9961 ATPR 47285 at 47295, which was approved by a Full Court in Hos~itals Contribution Fund of Australia Limited v. Switzerland Australia Health Fund Ptv Limited [l9881 ATPR 49108 at 49117. However, although there 1s plainly power, I do accept the submission of Mr Yates that a court ought to be sparing in its exercise. It is a power to be exercised where there is shown to be a real need for it, and certainly not as of course. An obvious example of a case where it is appropriate is to be found in the comparative advertising area, where a commercial enterprise seeks and actually obtains an illicit advantage by its own advertising denigrating the product of another, or unfairly promoting its own product. In such cases, the court may consider that it is entirely appropriate that the offending party be required to remedy the harm, and that he who has been living by the sword should die by it. Here, nothing of that sort is involved.
On the other hand, there are other cases - and safety seems to me clearly to be an example - where an order for corrective advertising may be made in an important publlc interest. In this particular case, the infringement related
to the failure to meet requirements reasonably to be expected, and impliedly, and perhaps, really, expressly, represented to
be obtainable; and the standard itself was, I think, quite plainly directed to safety considerations. I think it is obvious, equipment that might be used for connecting insulation over electric wiring, which is capable of pulling apart under stresses that it ought to be able to withstand, may be a source of danger in more ways than one; and there was in fact, as Mr Catterns has pointed out, express evidence to the effect that the standard was an essential requirement in the interests of safety. That standard was imposed by an expert committee of the Standards Association of Australia. It certainly appears, on the face of it, to be a fairly stringent test, but in this particular case the evidence shows a quite dramatic failure to meet it. The evidence also shows that there are some thousands of these defective connectors which are likely to be currently in the stocks of wholesalers, and perhaps of other bulk contract purchasers.
In those circumstances, I think it is appropriate that an order be made requiring some corrective notice to wholesalers and bulk purchasers. However, I do not think the applicant has made out a case for the further requirement of advertising in trade journals, so long as the notice to the categories of persons I have mentioned is adequate to provide a reasonable assurance that the connectors will not go out of their hands to other contractors without notice to them of the problem.
For these reasons, I propose to make a more limited order than that which is sought, but an order that would require notice to the classes of persons I have mentioned.
I order that within 21 days the respondents send to each electrical wholesaler or bulk contract purchaser to whom it has sold quantities of the connectors, a letter in the following terms;

"Notice: Cli~sal 263-20C C l i ~ Ada~tor

The Federal Court of Australia has determined that Clipsal 263-20C clip adaptors suppl~ed before 20 December 1991 do not comply with AS2053 and the AS3000 wiring rules. If such connectors are to be supplied by you, notice should be given of this fact to the person supplied. Please contact us if you have any questions."

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Burchett.

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Associate:  m2qf lm .

Date: 20 December 1991