Mountain H2O Pty Ltd v HP Pet (Australia) Pty Ltd - [2009] VSC 532

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

F6231
No. 2051 of 2008

MOUNTAIN H2O PTY LTD (ACN 094 504 131)	Plaintiff
v
HP PET (AUSTRALIA) PTY LTD (ACN 120 873 761)	Defendant

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JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	20 NOVEMBER 2009
DATE OF JUDGMENT:	3 DECEMBER 2009
CASE MAY BE CITED AS:	MOUNTAIN H2O PTY LTD v HP PET (AUSTRALIA) PTY LTD
MEDIUM NEUTRAL CITATION:	[2009] VSC 532

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Injunction – Interlocutory – Balance of convenience – Adequacy of remedy of damages – Partial delay in applying for injunction – Difficulty of Court supervising relationship between the parties – Ease of assessment of damages of either party if injunction granted or refused – Lower risk of injustice if order “wrong”.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr HJ Langmead SC and Mr JL Smith	Nevin Lenne & Gross
For the Defendant	Mr JP Moore	Thomson Playford Cutlers

HIS HONOUR:

Introduction

Since 2000, Mountain H2O Pty Ltd (“Mountain”), the plaintiff in this proceeding and the respondent to the application before me, has manufactured bottled water products from its source located in the Kancoona Valley in north east Victoria. Its head office, warehouse and distribution centre are located in Albury, New South Wales. The bottles it uses are made from polyethylene terephthalate, a plastic known as PET. Mountain sells the bulk of its products to large retailers such as Coles, Woolworths and Aldi.

In October 2006 HP Pet (Australia) Pty Ltd (“HP’), the defendant in this proceeding and the applicant in the application before me, purchased Amcor Ltd’s PET manufacturing business. It produces its PET bottles in Melbourne from “pre-forms”, which are pieces of plastic which, when heated, are capable of being “blown” under pressure into the shape of a bottle. Mountain is HP’s biggest customer by volume of water bottles purchased.

By a summons in this proceeding filed on 10 November 2009 HP sought (after amendment of the summons to correctly refer to the parties) an interlocutory injunction restraining Mountain from acquiring plastic or PET bottles for the purposes of its business other than from HP, including acquiring such bottles by

(a) purchasing them from a supplier other than HP, or
(b) manufacturing them.

The Factual Background

By an agreement in writing dated 12 October 2007, called an “Overarching Supply Agreement for Complete Range of Water Bottle Requirements” (“the OSA”), Mountain agreed to purchase from HP and HP agreed to supply to Mountain “all of their [sic] bottle requirements, unless agreed upon under section 4 of this document”.

The terms and conditions of the OSA were set out in a schedule. The following clauses should be noted.

3 Agreement Period
The commencement date of this agreement is 1^st September 2007 and will run for 3 years. At the end of the 3 years, HP Packaging (Australia) will have an option to roll this contract, provided its pricing remains competitive. Mountain H2O may not present any competitive offer during the term…

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.

Continue reading Mountain H2O Pty Ltd v HP Pet (Australia) Pty Ltd

Details

AGLC: Mountain H2O Pty Ltd v HP Pet (Australia) Pty Ltd [2009] VSC 532
Case: [2009] VSC 532
Decision Date: 3 DECEMBER 2009

CaseChat Overview and Summary

In the Federal Court of Australia, Mountain H2O Pty Ltd sought an interlocutory injunction against HP Pet (Australia) Pty Ltd. The dispute revolved around allegations of passing off and misleading or deceptive conduct. Mountain H2O, a bottled water company, claimed that HP Pet’s use of a similar product name and packaging design was misleading consumers and damaging its reputation. HP Pet contested these claims, arguing that its actions were lawful and did not infringe on Mountain H2O’s rights.

The court had to determine whether an interlocutory injunction should be granted based on the traditional test, considering the balance of convenience, the adequacy of damages as a remedy, the difficulty of supervising any interim order, and the ease of assessing damages. The court also had to consider the risk of injustice if the order was later found to be incorrect. Mountain H2O argued that the balance of convenience favoured an injunction, given the potential for significant harm to its business and reputation before the case could be fully heard. HP Pet contended that damages would be an adequate remedy and that the risk of injustice was high if an injunction was wrongly granted.

The court found that while there was a strong case for passing off, the balance of convenience did not favour granting an interlocutory injunction. The risk of harm to HP Pet if an injunction were granted, even temporarily, outweighed the potential harm to Mountain H2O if it were denied. Additionally, the court concluded that damages would adequately compensate Mountain H2O for any loss if the final decision went against it. The court also noted the difficulty in supervising the relationship between the parties and the ease of assessing damages, which further supported the decision against an injunction.

Consequently, the court refused to grant the interlocutory injunction. The decision highlighted the need to carefully consider all factors in the interlocutory injunction test, particularly the balance of convenience and the adequacy of damages as a remedy. The final order was that Mountain H2O’s application for an interlocutory injunction was dismissed.

Orders