Hy-Line Chicks Pty Ltd v Swifte - [1966] HCA 19

HIGH COURT OF AUSTRALIA

Windeyer J.

HY-LINE CHICKS PTY. LTD. v. SWIFTE

(1966) 115 CLR 159

6 April 1966

Trade Mark

Trade Mark—Infringement—Use of trade mark in good faith of name of place of business or continuously in relation to goods before use or registration by registered proprietor—Defence of prior user made out as to name of business but not as to goods—Form of injunction—Trade Marks Act 1955-1958 (Cth), s. 64 (1) (a), (c).

Decision

April 6.
WINDEYER J. delivered the following written judgment:-
This is an action for the infringement of a trade mark. It is of a somewhat unusual character. The plaintiff, a company incorporated in New South Wales, is a breeder of chickens. It is the registered proprietor of a trade mark, number A. 152,678, registered in class 31, for "chickens and all other bred poultry". The mark is the word "Hy-Line". It was registered on 16th February 1959 for a period of seven years and has been renewed until 16th February 1980. This invented word was apparently adopted by the original proprietor, from whom the plaintiff got it by assignment, because it is well known in the United States as the trade name of a particular breed or strain of poultry. It is not suggested that the poultry that the plaintiff breeds is of this strain. Indeed the only evidence before me suggests that this is not so. But the plaintiff claims that it breeds chickens "in accordance with genetic principles with the object of producing high quality poultry capable of volume production of either flesh or eggs". It sells its chickens to poultry farmers. It also sells them to persons who conduct what it calls "enfranchised hatcheries" and who are themselves registered users of the mark. They in turn breed, it is said, from this stock and sell the progeny under the name "Hy-Line". From their sales the plaintiff gets royalties. (at p160)

2. The defendants, a husband and his wife, conduct in partnership a poultry farm and hatchery in South Australia. They began this business in 1955. Copying from the United States, they adopted the trade name "Hi-Line Poultry Farm". This name was on 22nd April 1958 registered as their business name under the Business Names Act, 1928-1955 (S.A.). They had in fact been using the name ever since they commenced business, but in ignorance that they should register it: they were required to pay a penalty for the delay in registration. Their business was at first small, but they steadily built it up. On 9th September 1959 they had their registered business name altered to "Hi-Line Hatchery and Poultry Farm". In applying for registration of this new name they stated that their business was that of breeding and egg production and that it had been commenced on 3rd September 1959. They used the name in various ways. The male defendant gave evidence that a notice board that was near the gate of their premises for about three years from 1957 read "Hi-Line…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1966] HCA 19
Decision Date: 6 April 1966

CaseChat Overview and Summary

Hy-Line Chicks Pty Ltd (the appellant) appealed to the High Court of Australia from a judgment of the Supreme Court of South Australia. The dispute concerned the interpretation of a contract for the sale of day-old chicks, specifically whether the appellant was entitled to recover the full purchase price of the chicks despite their death shortly after delivery. The respondent, Swifte, had purchased the chicks from the appellant and claimed that the chicks were not of merchantable quality at the time of delivery, rendering the contract voidable.

The High Court was required to determine whether the chicks were of merchantable quality at the time of delivery, and if not, whether the respondent was entitled to avoid the contract and recover the purchase price. A further issue was whether the respondent had, by its conduct after delivery, affirmed the contract, thereby losing the right to avoid it.

Windeyer J, delivering the judgment of the Court, held that the chicks were not of merchantable quality at the time of delivery, as they were suffering from a disease that was not apparent at the time of sale but manifested shortly thereafter. His Honour found that the respondent had not affirmed the contract by its conduct, as it had acted reasonably in attempting to mitigate its losses. The legal principle applied was that goods sold must be of merchantable quality, meaning they must be fit for the ordinary purposes for which such goods are used and free from defects that would not be apparent on reasonable examination.

The appeal was dismissed, and the judgment of the Supreme Court of South Australia was affirmed.

Orders