Gull Petroleum (W.A.) Pty Ltd v Sinbads Nightclub Pty Ltd

[1986] FCA 561

B E T W E E N :

GULL FEXROLEUM (W.A. ' , FTY. LTD.

First Applicant

and

RANILO NOMINEES PTY. LTD.

Second Applicant

and

SINBADS NIGHTCLUB FTY. LTD.

Respondent

C B :	TOOHEY J.
4 November 1986

M TEMPORE REASONS FOR JUDGMENT

There is before the Court a claim for an interlocutory

injunctlon to restrain the respondent from engaging in certain

conduct which is defined in the application.

I am satisfied as to the Court's jurisdiction to

entertain the application and the claim for an interlocutory

injunction, on the basis that what is being asserted for the purposes of today's proceedings is an infringement of Part V of the Trade Practices Act 1974 and the common law tort of passing

off, which is based essentially upon the same facts as are said to

give rlse to the claim under the Trade Practices Act.

2 .

Two questions I have to conslder thls aftetnoon are

these : one, whether there 1s a serlous questlon to be trled.

Unless the applicants make uoud that proposltlon. there 1 s no

justification for the grantlng of an mterlocutory injunction. If they make good that proposition, the question becomes one of where the balance of convenience lies.

Now, as to the first of those propositlons. I am

satisifed that there is a serious question to be tried. There are

matters that remain unresolved, and will remain unresolved, I

imagine, until the substantive hearing takes place. Perhaps the

most important of them is the extent of the rlghts and obligations between the first applicant in particular and the respondent in terms of the purchase of products from the first applicant, and whether or not the respondent is committed to deal exclusively in the first applicant's producta.

So far as that is concerned, there is no evidence before

me today that would justify a conclusion that the respondent is

bound to deal only in the first applicant's products.

I accept for the purposes of today's application that the first applicant has established a reputation in its own products. That is sufficiently evidenced by Mr. Green's affidavit. There is also evidence that for some considerable time the respondent has not been purchasing the products of the first applicant, although it continues to sell other products from premises which are painted according to the colours of the first

3 .

appllcant and whlch carry a louo which 1 s the louo of the flrst

appllcant.

In response to that contentlon. the respondent says two

thlnas. The flrst is that the premises have been malntained in

that condition, In those colours, because of a requirement by the

second applicant that the premises be maintained in the same

colours as they were when the lease was granted. And the

respondent says secondly that, faced with that situation, it has

endeavoured by signs on bowsers (at one time a sign that stated

that the fuel being sold was BP petroleum and later a replaced

sign which simply said "This is not Gull petroleum") to avoid

giving custorers, prospective customers, the impression that the

service station was selling Gull petroleum products.

These are issues of fact that cannot be resolved at this

stage of the proceedings. There is enough to justify a finding

that there is a serious question to be tried. I say that, having

regard to the applicants' submission that the respondent undertook

the obligations of a lease and a supply agreement with the second

applicant and the first applicant respectively and that, if the

respondent chooses not to deal in the first applicant's products,

it does not become it to complain if the applicants themselves complain that the first respondent is conducting its business in

such a way as to give the	public the impression that it is	a Gull
service station.

Having said that, I move to the question of the balance of convenience and that seems to me to give rise to several quite

.

4 .

dlfflcult matters. difficult In the sense that they cannot be readlly resolved on the evldence that 1 s available at the present

tlme.

From the applicants' point of new. it is said that the first applicant's reputation is being affected by the conduct of the respondent in uivlnu the impression that it i s sellins Gull petroleum products when in fact It is not.

I accept that to be a consequence, or a likely

consequence, of what the respondent is doing. On the other hand, it is conduct that has continued for some considerable time. I am

not in any sense giving the Court's endorsement to what has

happened. I am simply pointing out that, in terms of an interlocutory injunction, it is conduct that has been on foot for some time. I am not persuaded that there is any element of urgency about the present application.

From the respondent's point of view, however, there are real problems if an injunction is granted, particularly in the

terms sought. In saying that, I am again not giving any

endorsement to what the respondent has been doing. But if I take

as a starting point, as I think I must, that the respondent is not

obliued to sell only the first applicant's petroleum products, then the mere act of selling other petroleum products of itself does not constitute a breach of the arrangement between the

parties. Of course, If in selling those products the respondent

misleads or deceives members of the public (and as to that there

is some evidence). it runs the risk that its conduct will be

. . * 5.

restrdlnecl and thdt It wlll have to pay damaaes for anv loss that the appl1,:dlts have suffered. But In the context of an lntrrlocutury dppllcatlon. lt seems to me that there are these dlfflcultles ln the appllcants’ path.

The first is that the premises are painted in a way that

is requlred by the terms of the lease and bears a sign that is

required by the lease, both of which give the impression at least

from a distance that the service station	is a Gull	petroleum
service station.

Now that can only be altered, it would appear, on

application by the respondent to the second applicant to change

the painting on the premises and to remove the sign. There is

some debate in correspondence as to whether the second applicant

has insisted upon the existing colour8 and sign being maintained

or whether it simply replied to the respondent by requiring it to

maintain the premises in the colours in which they were originally

painted. But if I were to grant an injunction in the terms sought

by the applicants, it would place the respondent in a very

difficult position of knowing just how and in what circumstances

it could continue to operate on the premises as they are presently

painted and signed. Maybe that can be resolved as between the

parties; but at the moment it has not been resolved and that	is a
consideration I must have regard to.

More importantly, though, I think that an injunction in

the terms sought would necessarlly be vague and would put the

partles, and the respondent in particular, under the very

.

b

heavy burden of assessing whether what the respondent was doinu was In fact In breach of the in!unction. That 1s a situation the

Court IS verv loath to countenance.

The applicants seek an interlocutory injunction in two respects; one In para.tb) en?oining the respondent from selling or offering for sale petroleum products which are not the products of the first applicant from any premises displayinu the mark of the first applicant. There is simply no basis offered to me at the present time for granting an injunction in those terms, because I an not persuaded that selling products other than those of the applicant is of itself in breach of the agreement between the parties or of itself constitutes misleading or deceptive conduct.

As to the injunction that is the more seriously pressed,

namely an injunction in terns restraining the respondent from passing off or attempting to pass off petroleum products not the products of the first applicant as the first applicant’s products,

I am of the opinion that an injunction in those terms would do no

more than have the parties back before the Court within a very

short time, arguing as to whether conduct was or was not in breach

of the injunction. I would not be prepared to grant an injunction

in such broad terms and at the moment I have not been offered any more specific basis. Indeed it might be difficult to formulate a more specific basis at the present time because of the uncertainty that surrounds the situation as to the painting of premises and as to the Gull sign that is on the premises.

. .

For those redson> ~t seems to me lnapproprlatr at thls

scaqe t o urdnt an Interlocutory ltllunctlon. 1 can envlsaue

clrsumstdrices l n whlcll an lntef locutorv lniunctlon - couched I n

specific terms auainst a clearer factual backuround ds to the

position between the parties regardinu excluslvlty or

non-exclusivity and the second applicant's response to any

question of palntina the premises in a different colour or

removing the Gull sian - miaht appropriately be uranted. But on

the material presently before me and the submissions that have

been addressed to the Court, I am not prepared to grant an

interlocutory injunction.

I certify that this and the

preceding six pages are a true

copy of the ex tempore reasons

for judgment herein of his

Honour Mr. Justice Toohey.

Associate

Dated: 4 November 1986