Nylex Corporation Ltd v Sabco Ltd

[1986] FCA 454

Re: NYLEX CORPORATION LIMITED
And: SABCO LIMITED
No. VG 331 of 1986
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J.

CATCHWORDS

Practice and procedure - Discovery and inspection - Trade practices - Misleading or deceptive conduct - Sale of garden hose - Similarity between hoses offered for sale by applicant and respondent - Whether disclosure of identity of manufacturer of respondent's hose will be compelled - Whether disclosure of identity of distributor of respondent's hose will be compelled.

Trade Practices Act 1974 - s.52(1)

Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 C.L.R. 191

Norwich Pharmacal Co. v. Customs and Excise Commissioners (1974) A.C. 133

Yorke v. Lucas (1985) 61 A.L.R. 307

HEARING

MELBOURNE

#DATE 22:10:1986

Counsel for Applicant: Mr. M.W. Shand

Solicitors for Applicant: Clayton Utz

Counsel for Respondent: Dr. C.N. Jessup

Solicitors for Respondent: Mallesons

ORDER

The motion of which notice was filed the 17th day of September 1986 be adjourned to a date to be fixed by either party on reasonable notice to the other party.

Each party's costs of the motion to and including this day be reserved.

(Settlement and entry of orders is dealt with in O.36 of the Rules of Court.)

JUDGE1

Applicant's interlocutory motion in the proceeding for orders that the respondent discover and produce for the applicant's inspection documents which disclose the identities of persons concerned in the manufacturing or in the distribution to consumers of garden hose of a particular description.

1. The evidence establishes, for the purposes of the motion, that both parties were at relevant times and still are trading corporations within the meaning of that expression in the Trade Practices Act 1974, that the applicant has for some years made and sold in this country a garden hose the exterior surface of which is distinctively coloured and patterned, and that recently the respondent has caused garden hose the exterior surface of which is of similar appearance to be prepared for sale by retail in this country. The evidence suggests that each party's garden hose is for sale in packages marked with its name.

2. Dr. Jessup of counsel for the respondent pressed the submission that the applicant's allegation of misleading conduct by the respondent in imitating the applicant's colouring and marking of its hose must fail, because the case was indistinguishable from that which was considered by the High Court in Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 CLR 191. But if the name, of respondent and of applicant respectively, be inconspicuous on the package and if the combination of colour and markings has been established in consumers' minds as betokening a single supplier of garden hose, known not by name but by that combination, then the case may be different from that with which the High Court dealt. There is enough in the evidence to suggest that this case may be different, and that this motion should be determined on the footing that the cause of action will be held to lie, which is pleaded in the statement of claim in the proceeding and which is founded on the allegation that the respondent's placing before consumers of garden hose so similar in appearance to the applicant's hose constituted a contravention of s.52(1) of the Trade Practices Act 1974.

3. The applicant having been refused information by the respondent as to the identity of the manufacturer of the hose, but having been informed by the respondent's solicitors that the respondent was not the manufacturer, the Court is now moved to compel disclosure by the respondent of the identity of the manufacturer, so that the manufacturer may also be sued for contravention of s.52(1). The sources of the Court's authority to compel that disclosure were said by Mr. Shand of counsel for the applicant to be Order 4 Rule 17 of this Court's Rules and the power formerly exercised by the Court of Chancery in accordance with principles which were elucidated by the House of Lords in Norwich Pharmacal Co. v. Customs and Excise Commissioners (1974) AC 133. Either source, it was submitted, would justify the order sought.

4. One day before notice of the motion was filed, information was received by a representative of the applicant from a wholesaler of garden equipment that the hose to be offered for sale in packages marked with the respondent's name was manufactured by Dawn Plastics Pty. Ltd., a company well known as a manufacturer of garden hose. The applicant very properly filed an affidavit narrating those circumstances, which its legal advisers had to consider after notice of the motion had been filed. Dr. Jessup based on the evidence in that affidavit the submission that the identity of the manufacturer had been ascertained by the applicant and that therefore no occasion for an order with respect to the manufacturer's identity existed. I accept that submission. The respondent has at no time suggested that it is not concerned in the commercial exploitation of the hose on the packaging of which its name appears. There is no reason to doubt that the respondent knows the identity of the manufacturer. It is inconceivable, as I think, that Dr. Jessup would have been able to make the submission he did if Dawn Plastics Pty. Ltd. were not the manufacturer. But, lest I be mistaken, the motion may be adjourned sine die so far as it concerns the identity of the manufacturer.

5. Mr. Shand sought also orders which would disclose the identity of each "distributor" of the respondent's garden hose. In a letter from the applicant's solicitors to the respondent's solicitors, received a few days after the originating application had been filed, there occurs this passage:
   
   

"Our client naturally wishes to include in its Application each and every alleged

infringement by any person of the rights of our client as a result of the manufacture, distribution, sale and offering for sale of the Sabco product. Our client wishes to join every person participating in the manufacture, distribution, sale and offering for sale of the Sabco product so that all these matters may be disposed of in the one action."

1. No claim for interlocutory injunctive relief is made in the originating application, nor has the applicant moved the Court for such relief. There is no satisfactory evidence that any person other than the respondent and the manufacturer has engaged, as a party principal, in a contravention of s.52(1), nor any satisfactory evidence that any such a person had the knowledge without which he could not be "involved" or implicated in a contravention by the respondent or by the manufacturer : see Yorke v. Lucas (1985) 61 ALR 307. Further, even if the evidence were thought to show a case of contravention, or a case of involvement in another's contravention, of s.52(1) by a "distributor", the discretionary powers the exercise of which the applicant seeks to invoke are in my opinion available in order to prevent injustice to a person which would be suffered if he were left in ignorance of the identity of one who has fallen under a legal liability to him, and not so that he may, if he choose, bring legal proceedings against every person who has fallen under such a liability. The evidence presently before me gives no ground to fear that the applicant will fail to obtain in a proceeding against the respondent and the manufacturer all the relief which justice requires that he should have. There is no reason, on the evidence before me, to fear that the applicant will not recover against those two a judgment for the whole of the damages sustained in consequence of all the contraventions, if contravention there has been, of s.52(1), or that such a judgment would not be satisfied, or that injunctive orders made against those two would not effectively stop all the contraventions which other persons who or which answer the description "distributors" might have been committing, or might have been minded to commit. There is in my opinion good reason to have regard in the exercise of the powers invoked to considerations of policy. It is in my opinion not easy to see why in point of policy the powers should be exercised to facilitate the joinder, as respondents to a proceeding instituted under Part VI of the Trade Practices Act 1974 in respect of misleading conduct, of every person or of many of the persons, who by reason of involvement in trade in a commodity may have engaged in that conduct or may have become involved in a contravention of s.52(1) constituted by a corporation's engaging in that conduct, if it appears likely that the proceeding as presently constituted as to parties will result in substantial justice to the applicant. On the evidence before me that does appear likely. I decline to make any order on the motion at present. I will adjourn the motion to a date to be fixed by either party on reasonable notice to the other party. Each party's costs of the motion to and including this day will be reserved.