Inchcape Liquor Marketing P/L v Goulburn Wine Beer and Spirit Supply P/L

[1993] FCA 697

697  , 93

JUDGMENT MO. ........ . m . . . . . . .oommoemoa

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

B E T W E E N :

INCHCAPE LIOUOR MARKETING PTY LIMITED

A N D :

GOULBURN WINE BEER & SPIRIT SUPPLY PTY LIMITED

COURT::	NORTHROP J
PLACE :	MELBOURNE
W:	17 AUGUST 1993

FEDERAL COURT OF

AUSTRALIA PRINCIPAL

EX TEMPORE REASONS FOR JUDGMENT REOISTFIY

The motlon being dealt with at the moment is that

contained in paragraph 4 of the respondent's amended notice of
motion as filed in Court today, being essentially the motion
dated 10 June 1993 as amended on 13 July 1993. The
proceedings have been before the Court on at least two

previous occasions when the Court gave oral reasons for

judgment in relation to other procedural matters.	It is not
is based upon the assignment to the applicant. Goulburn Wine

necessary to repeat what was said in those reasons.
Essentially, this is a case where the applicant commenced the
action seeking injunctions and other relief against the
respondent for infringement of trade mark. The respondent,
Goulburn Wine Beer and Spirit Supply Pty Limited ("Goulburn
Wine and Beer"), denies infringement by its defence and
alleges that the registration of the trade mark in the name of
the applicant is invalid and that the trade mark register
should be rectified by deleting the registration insofar as it
and Beer also cross claims alleging the invalidity of the
registration on a large number of grounds and has joined a
Russian company which for the sake of convenience I will refer
to as VAO. The Russian company has not entered an appearance

and is taking no part in these proceedings.

The order sought iq paragraph 4 of the motion is brought

I

pursuant to 0 29 r 2(a) of the Federal Court Rules which
empowers the Court to hear separate questions before trial.

The relevant rule reads:

"2. The Court may make orders for:

(a) the decision of any question separately from

any other question, whether before, at or after

any trial or further trial in the proceedings;"

Rule 1 defines question as including any question or

issue in any proceeding, whether of fact or law, or partly of
fact and partly of law, and whether raised by pleadings,

agreement of parties or otherwise.

In this case, one thing is clear: there is no agreement

between the parties as to any question of law to be determined
before the trial. What is urged strongly on behalf of
Goulburn Wine and Beer is that the questions referred to in
paragraph 4 of the motion should be tried as separate issues

before the hearing.

The discretion conferred by 0 29 r 2 is unfettered

although in the course of submissions the Court was referred

to a number of decisions where views have been expressed on

the application of that rule. Reference was made to m

Enterprises Limited v m (No 3) (1985) 8 FCR 93 per Sweeney J at 95, a member of a Full Court, where he expressed the view that the discretion should be exercised in favour of a

separate issue if the result would save the parties the

expense of a trial upon all issues. Reference is made also to

Blurton v Minister for Aboriainal Affairs (1991) 29 FLR 442

and particularly at 449 a decislon of French J. At page 449,

1

his Honour referred to the judgment of Toohey J in
Enterprises Limited v Duffy, unreported, 28 March 1985,
apparently being the judgment from which the Full Court
judgment just referred was taken. His Honour, Toohey J,

merely said:

"Order 29 rule 2 provides a useful procedure in certain
cases though its usefulness depends upon the obtaining of
answers which are likely to make a substantive hearing
unnecessary, at least if the questions are answered in a
particular way. The decision ultimately is one for the
court though naturally it will have regard to the

attitude of the parties."

His Honour Mr Justice French then referred to what was

said by Lord Denning in the case of Car1 Zeiss Stiftunq v
Herbert Smith and CO [l9691 1 Ch 98 which appears at page 449
of Blurton's case. It is important to note what His Lordship

said, and I quote:

"I have always understood such to be the practice. I
quite agree that in many cases the facts and law are so
mixed up that it is very undesirable to have a

preliminary issue. I always like to know the facts

before deciding the law. "

I must say I agree very strongly with the last comment

made by His Lordship. Although 0 29 r 2 empowers a Court to
order an issue to be tried as a separate issue involving an
issue of fact, this quite clearly is a case where issues of
fact and of law are intertwined and it is very difficult to

separate the issues applicable.

Reference was also made to the case of Orrison Ptv

Limited v Strateaic Minerals Cor~oration NL [l9871 ATPR page 48,729, a judgment of French J. There, His Honour agreed to the trial of a separate issue but in circumstances where there

was a statement of agreed facts between the parties who were
going to have the preliminary issue determined, a case very

different from the present.

In the present case, the questions sought to be raised

are those set out in sub-paragraphs (1) (a), (b) and (c), sub-

paragraph (2) and sub-paragraph (3) of paragraph 4 of the

notice of motion of the Goulburn Wine and Beer. In the course

of submissions, there was a detailed examination of the issues
as appearing from the pleadings between the parties. In some
respects, the pleadings are somewhat unusual in that some
matters are admitted subject to certain comments which
themselves give rise to problems, but what is apparent is that
the nature of the Russian entities W O and VAO does loom large
in this case. It is quite clear from what is before the Court
that the legal principles to be applied in relation to Russian
entities might be very different from concepts known in the
Australian law of corporations, the names of corporations, the
people who form the corporation, the incorporators and
directors and matters of that kind. In this case counsel for
the applicant has submitted that, as far as most of the
questions sought to be the subject of a preliminary issue are

concerned, it will be n cessary for the applicant to have 7

expert evidence as to tpe Russian law, together with expert

evidence and other evidence concerning what occurred in I

relation to W O and VAO, Thls is because it is said, and this
is difficult to comprehend for an Australian lawyer, that
although they have different names and are possibly different
institutions, they are in substance the one, the
transformation occurring over some lengthy period of time,
including the change of name VVO to VAO. This depends largely
on the changes which occurred in the Soviet Union at the time
when the Commonwealth of Independent States replaced the
previous Soviet Union. As a consequence, it is said that what
was previously a Soviet institution, W O , became an

institution or corporation, known as VAO, in the Russian

state, in circumstances where it is said that all the riohts

of W O became automatically the rights of VAO, even though
during a period of time the names may not have been the same

and the name might have changed quite long after the initial

proceedings were begun. This is of importance since the

original assignment of the trade mark was executed by W O ,
although it is possibly wrongly described in that assignment
as a Russian corporation. There was a subsequent document in
which VAO purported to assign some of the trade marks. This
subsequent document apparently was before the Registrar of

Trade Marks in Australia and was considered prior to the registration of the assignment in December 1992.

After hearing the submissions on behalf of the applicant,

it became apparent that the preliminary questions,
particularly in relation to the paragraph 4(l)(b), could not

be determined without a 1 full examination of all of the

evidence involving the position in Russia and that it would be

almost impossible to dotthat by way of preliminary issue.

That question depends upon the construction and application of s57 of the Trade Marks Act. This is so despite counsel for Goulburn Wine and Beer contending, very strongly, that, on the facts and issues as appearing in the pleadings and as a result of the documentation available in Australia, including evidence which could be given by persons in the office of the Registrar of Trade Marks, question 4(l)(a) could be determined without the need to investigate the legal position in Russia in relation to the W O and VAO.

This question is based upon s37 of the Trade Marks Act

which requires that associated trade marks are assignable or
transmissible only as a whole and not separately, and the
argument is that the assignment of the trade mark A298660
without the assignment or transmission of the associated trade
marks, which are identified in other documents, does have the
effect of making that assignment invalid. There is much force
in this argument, but in my opinion it would be undesirable to
have this matter dealt with as a separate issue.

The reasons which lead me to that conclusion are that,

while it can be accepted that much of the documentation
evidence on question 4(l)(a) is available in Australia, I have
formed the view that those documents and that evidence could
not be fully understood or appreciated, particularly the
relevance of it, without an understanding of the position of
the Russian companies or Soviet companies, which depends upon
other evidence of the kind which is sought to be avoided

because of the expense and delay occasioned by having to go

into all that matter at,a trial. This is a case where, as I

said before, the facts are not agreed to. The applicant is
disputing all the factual bases asserted by Goulburn Wine and
Beer and says that it will be necessary to rely and act upon
other evidence. As againat that, counsel for Goulburn Wine
and Beer says that the information from the Australian
industrial property section of the trade marks office does
indicate that associated marks are involved. I refer in
particular to a letter dated 13 August 1993 addressed to the

solicitors for Goulburn Wine and Beer where these details are

and is found in favour of Goulburn Wine and Beer, that would

set out. It is argued that if this issue is heard separately

be sufficient to end the whole proceeding. Counsel for the applicant denies this and says that the discretionary matters in s22 will still need to be considered. Having regard to the whole of the nature of this case, in my opinion this is one where it is not appropriate to have the preliminary question as indicated in paragraph 4(l)(a) dealt with separately. From what has been said, I have formed the view that it would not achieve the desired effect, questions would arise as to the admissibility and relevance of evidence in relation to the Russian position and that the objective of shortening and lessening the expense of the trial would not be achieved.

Having come to that view, the other matters are not so

complex. Sub-paragraph 4(l)(b) has, for practical purposes,
been conceded to involve evidence of the Russian position.
Sub-paragraph 4(l)(c) is in a different category. This
relates to the fact that the assignments have contained in
them references to other conditions of the assignment. This
of itself could make the assignment invalid but, in my
opinion, it is not possible to extract that from the whole of
the issues arising in this case and that should not be made

the subject of a separate issue.

The issue contained in sub-paragraph (2) is based upon

what is said to be misleading conduct by the applicant in
information it gave to the Registrar of Trade Marks in

relation to the procurement of the assignment and registration

of that assignment. In my opinion, this again depends upon a

consideration of a whole of the issues raised, including the nature of the Russian institutions, and should not be made a subject of a separate issue.

The issue contained in sub-paragraph (3) is in a

different category; it does not arise on the cross claim.	It
arises on the claim by the applicant and the defence raised
under subsections 82 (6) and (7) of the Trade Marks Act.	It

is based on the assumption of certain facts and goes to the question of liability for damages. This is a case where it would be almost impossible, in my opinion, to determine that

matter without knowing all the relevant facts. I refer to
what was said earlier in these reasons by Lord Denning and
quoted by French J in the Blurton case: "I always like to
know the facts before deciding the law". It can be contrasted
also with the position in Orrison where there was a statement
of agreed facts. There is no such agreement here, despite the
fact that counsel for Goulburn Wine and Beer has sought the
agreement of counsel for the applicant in relation to the
facts which are sought to be assumed for the purposes of

answering question 3.

In the absence of any agreement, the Court is not

prepared tc make the orders sought.

Accordingly, paragraph 4 of the Respondent's amended

motion, notice of which is dated 10 June 1993 as amended 13

July 1993, is refused.

I certify that this and the preceding eight (8) pages are a

true copy of the Ex Tempore Reasons for Judgment of The

Honourable Mr Justice R.M. Northrop.

Associate:	; %)(@3*
Date: apje&.~~'	rqq3