Glenwood Trading Pty Ltd v Leo Magnani and Wife Pty Ltd

[1984] FCA 371

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I , Thls is an extempore ~udgement on an applicatlon to stay

proceedings. It 1 s of no general lnterest and should not

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.IN THE FEDERAL COUPT iJF AUSTRALIA	I	!	1 3 NOv 1984 ,
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tTEW SOUTH WALES DISTP.ICT	REGISTPY	I	No.	of l984	;;;
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GENEPAL DIVISION l -. - . .-- /-

E r n E N :	CLENWOOD TRADING PTY
LIMITED

ANN :

LEO MAGNANI AND WIFE PTY

LIMITED

Respondent

REASONS FOR JUDGHENT

(W: WILCOX J

IjAE : 31 AUGUST 1984

PUCE : SYljNEY

This matter was before me in the directions list last

Fridav. I was informed that the oriuinatinu vrocess had not

been served upon the respondent. and the matter was adiourned

unt i 1 today .

The Appl icat ion. the Statement of Claim and the

ThlS mornina. by consent I have allowed the Amendment

of the Application and Statement of claim to add a further

respondent. Associated Italian Manufacturers Pty Limited. Mr

Karkar appears on behalf nf both respondents and submits that

the Atwlicatlon and Statement of ITlaim should be staved or

dismissed Pursuant to rule 2 of order 2 0 , on the armlnd that the ororeedlnvs do not disclose an:r re.asonable c1use nf

act inn. In SUPPort of that submission he has analvsed the

alleaations'mad- in the Statement gf Claim.

It ir; cnmmon. in t.he r1rc~tmstanc~~ m~f thls ra?F?, to

e3rh n€ those causes of actlon that ph?r- m u s t b.? m allcqation that the croods. the .31b7-ct nf the Drnceedlnas. be Introduced on to the market in cirrlum~tances vhere thev are represented as beina aoods nf the applicant, .-lther hecause thev are $0 labelled nr otherwise identlflcd. nr because the

application has such a renutation In mn4.q as to cause

people to believe that the lroods m w t be those of the

applicant. so that the selltnu of T u c h aoods amounts to

deceptive or misleadinu conduct under section 52. or one of

3 .

the false representations referred to In section 53. It is. of course. an ingredient of the action ot Passina off that the aoods he represented be those of the appllcant.

Mr Karkar points out that. although the Statement of

Claim alleues that the uoods were manufactured In accordance

wlth the desian and speciflcatlons of the appllcant, the

Statement of Claim nowhere alleues that the uoods bear any

identification associating them wlth the applicant, nor does

It alleqe such a reputation as to constitute the sale by the

respondent of such uoods a3 misleadinu or deceptive conduct	or
a false representation.

A sample of the uoods has been tendered. and It is

apparent that there Is no label assoclatina the goods wlth

that of the applicant. Thev onlv label refers to the

manufacturer in Yuuoslavia.

It seems t o me that the Statement of Claim as

originally prepared is demurrable. and that the sltuation 13

sufficientlv clear as to iustlfv the exercise of the court's

Powers under rule 2 .

4 .

I say that havinu reuard to the principle that an

action should only be struck out in the clearest of cases and

I have in mind the tests laid down by Chief Justice Barwick in

General Steel Industries v Commissioner for Railwavs 112 CLR

125.

Durino the arcrument Mr Evatt for the applicant

indicated that his client would be prepared to amend the

Statement of Claim so as to include an alleoation that it had acquired a reputation in the uoods such as to constitute the

sale bv the respondent of identical uoods a3 beins misleadincr

or deceptlve conduct or the makino of false representations.

Dependino upon the Drecise form of the alleuation it

seems to me that such an amendment would result in a Statement

of Claim which ousht not to be struck out. I say nothins as

to the prospects of success of such an actlon because It seems

to me that some difficult questions are involved In

determlnlnu the extent to which one trader may Dut on the

market uoods identlcal or substantiallv slmilar to those of

another trader without beinu involved In breach of sections 52

or 53. I have in mind that this matter was referred to in the

declslon in the Hiuh Court in Pa-rMale Custom Built Furniture

Ptv Limited v Puxu Ptv Limited 149 CLR 191. It appears from

what was said that the mere fact that soods are substantiallv

simllar is not enouoh to mean that there has been a breach of

sectlons 52 or 53 of the Trade-Practices Act.

5.

I think the course that should be taken is for me to

stay further proceedinas upon the Statement of Claim as

presently framed but. in view of the indication uiven by the

applicant that it would	wish to amend. to urant	leave to
amend.

The costs of the application to strike out should be

paid bp the applicant. It may be that the applicant would

have amended the Statement of Claim of its own volition

without the necessity for argument if it had considered the

matter at areater lenuth. It 1s perhaps unfortunate that it

did not have a lonaer period in which to consider the

complaint by the respondent that the Statement of Claim was

demurrable. However. it seems that this is a result of the

considerable delay in serving the initiatinu process. That

process was filed on 8 Auqust and aPparent1:J not served until

2 7 Auaust.

In respect of the strikeout aoollcation I stay any further Proceedinus upon the Statement of 8:laim as presently

framed. I arant leave to the applicant to amend the Statement be paid by the applicant. In relation to the future conduct

of Claim so as to add such alleuations reuardlnu reputation as

of the proceedinas and on the basis that there wlll be an

amendment. I think it Is desirable that	he matter ororeeri by
way of affidavit evidence.

!Counsel addressed re directions

In resoect of directions. I direct that the apolicant

file and serve its amended Statement of Claim not later than Thursday, 13 September 1984 . I direct that the apolicant file

and serve on the respondents all affidavits upon which it will

relv i n the proceedinas not later than Thursdav. 11 Qctober

1984 and that the respondents file and serve coples nf all

affidavits amon which the7 will rplv nnt later than Thursday, 1 November 1984. I dlrect khat not lltor than Thursdav, 8

November 19R4. marh Dart7 furntsh t o the nthcr 3 11st: CO€

rioclJments for discnverv and thp neres93rv in=oections take

place not later than Thursdav, 15 Novwnber. The matter will

stand over €or further directions m Fridav. Q Clnvember 1?R4.

I certifo that this and the C53

orecedinu Paues are a true coov of the

Reasons for Judoement herein	of His
Honour Mr Justice Wilcox.