Serebryanski, C. v Jalna Diary Foods Pty Ltd

Woodward

J .

1.6	J u l y 1984

MelSourne

IN THE FELiifi&L COLmT OF AUSTRALIA )

)

VICTORIA	DISTRICT	REGISTRY	)	No. VG 203 of 1984
)

GENERAL DIVISION

)

JUDGE MAKIIJG OZDER : Ckodw,;rd J . EATE OF ORDER : 16 Jv1.y l S 8 ?

WERE MADE

... : Kelbourne

THE

COURT

ORDERS

THAT:

1.	A p p l i c a t i o n	f o r	i n t e r l o c u t o r y	i n ~ u n c t l o n s
dlslnissed.

2 .

Costs

reserved.

IN THE FEDERAL COURT OF AUSTPALIA )

)

VICTORIA	D STRICT	REGISTRY	)	No. VG 203 of 1984
)

__	GENERAL DIVISION	!
EX TEMPORE JUDGMENT
BETbIEEN :

REASONS FOR JUDGMENT

TMs 15 ELI applicaslm;

t k

!;artnc-r%

in EI

f i t - l ; l ~~!>!rii

can-ics cm husrness a 5 a wholesale distributor of groceries, dairy

produce and other foods. In the course of thak business it has

for

the

last

several

years

dlstrlbuted

the

products

of the

respondent company to some 15 outlets in the city of Sydney.

That

arrangement has now been terminated.

- 2 -

The produce

involved,

so far as the

respondent is

concerned, is cultured dairy

food, cottage cheese and

slmllar

products.

Obviously

the

respondent,

the

absence

of any

contract for a flxed term (as to whlch there 15 no evidence before

me), is entltled

to brlng

to an end the agreement whereby the

applicants distribute its goods.

It claims to have had a number

of good

commercial reasms for doing 50,

which can be sumarlzed

by saying

that

it claims that the appllcants

have not been

successful ds they should have been, and have added to the cost

the respondent's products by

an excessive mark-up.

It is also

said that the appllcants

have been unsatisfactory in

mllcing

payments to the respondent,

zlt1loQqh T

must s z . ~ that, *L

ttr

evldence stands, any derault under th3t headicg	doss !lot sc'eir	:.o
have been particularly serious.

I am

not really concerned m t h rhe vzlidxcy

of zny of

those complaints aqamst the applicants because

the respondenr;

would have been entitled to terminate

the contract even if the

applicants had represented the respondent satisfactorlly

in all

respects. What the applicants complain about 1s the method which the respondent has chosen to terminate the relationship betmen them. It is alleged, and for the purposes of this application I

accept, that

the

respondent

obtalned

from a xrvant of

the

applicants 3. list of

the applicants' customers in the Sydney

area

who receivecl the respondent's goods.

- 3 -

There is a dlspvte as to

whether at the

tlme of

receiving that llst the respondenr; intended to make irproper use of It, or whether the reason qlven for seeklng the llst - namely, to better promote the respondent's goods at the last Easter Show

in Sydney - was a genuine one.

Either wzy it

clear

that

some stage it has

occurred to the respondent's managers that it would be helpful to

its business

if it were

to attempt to take over all the Sydney

outlets which the applicants had built up f o r Its products. In the hope of zchievinq that end, the managers have nadc L15e of the lists supp.iled to them for a conpletely differclt purpo.;c 1-rm that which the zppllcants intended. They hive done e o bp wcity.ng

directly to eclch of

those cdstoitlcss of the applic.mr;s sayinq that

it, the respondent, would

1.n future esal dlreCLly with r.hoz,c

shopkc?pers and other d~stributois	and that thc applica-nts w c u l d
no longer act as its distributors.

It I s said on behalf of the applicants that chis mis-use

of the llst that was provided f o r a

different purpose, whlch ~ 7 a s

clearly a confldential list of customers, amounted to

a breach of

contract and a breach of trust within the principles referred to

in the case of

v Green, 1895 2 Ql3 315.

further said that thls use

of the eocLments

=	amounted to a breach of section 52 of the Trade Practlces Act,
1974 thereby qivillq jurisdiction to this Court. I should say in

- 4 -

passing that the respondents lxive dellvered a condltlonal notice of appearance, but counsel has lnformed me that he does not wish to arque any question about the Court's jurisdiction.

I think that all I need sag about the merlts

of the

matter are that, whichever of the tests I apply - whether I apply

that laid down in the

Australian Co2rse Grain Pool Ptv.ad. v

Barley Marketinq Rnard of Dueenslend (lSE2) 57 ALJR 425, which asks I f there is a serious question to be trled, or whether 1 use

the wordjnq

of the decision

of the Full

Court of this Court in

IfiJorld Serles Crlcket v

Parish ( 1 3 7 7 ) 16 ALR 161 @ 186, which a7ould

requLrc m C O bct sacisfjed that the

a p p I ? c ~ ~ ? t

has a fair rhitrI;s 05

success, or

whether I apply the more strincrcnt test

l a i 6 d o m In

eeftcham G>"^GUP Ltd.

V Hriscol Labsratorles PtV. Ltc. (1966) llEi CLl?

618, whicl:

requires satisfaccion that there is a probdb1lity of

cntjtleacnt to relief as the evlnence sriands - 1 am sdtlsfied thac the applicants have established a sufficlent case to warrant the

granting of

interlocutory relief if I decide

that the balance of

convenlence

their

favour.

In consjdering where

the balance of convenlence lles, I

have regard, among other things, to the undertaking

vhich has been

offered on behslf of the respondent in the

followmg terms -

"1.

The respondent undertakes not to by its servants or

agents telephor.e, write to, or call upon any of the customers on the customer list given to Campbell

McLaren (being exhibit A referred to jn

the

. _

1 ,

- 5 -

C ’ . . .

a f f i d a v i t of

Campbell

McLaren or e x h i b i t

B t o

t ’ e

a r f i d a v i t

t h e

f i r s t - n a m e d

a p p l i c a n t )

f o r

period of

four weeks

from today o ther than:

a. Grace

Brothers

b.	David Jones

Safeway	c.
d. rnloolworths
e. New WorldlColes

2 .

the e v e n t

t h a t

customer

the said

l i s t

c o n t a c t s the

respondent or any of

i t s se rvan t s OK

agents seeklng any o€ the

respondent ’ S produc-l-.

whether i n response to the

rcspondrmt‘

qcnzral

adver t . i s ing or othecwlse

save as referred t o above

the respondent

shall be a t Ilb5t-ty

to SUpp1y i h 9 . C

customer for thwith.

3 .

t h e

v e n t

that

t h e

a p p l l c a n t s

f a l l

t o abide

b y

the

e x i s t m g 30

dity

t r a d i n g

terms,

s p e c l r l c a l l y the

pagment of all ou t s t and~ .ng i nvo ices by the f i r s t day of August 1984 then this under tak ing shall

lapse.

”

This undertaking

goes

part of the way towards

covering

the same

ground as would be

covered by a n

i n t e r l o c u t o r y

- 6 -

I n j u n c t i o n .

Mocrevcr,

i t h a s

been

criticised

counscl

f o r the

a p p l i c a n t s ,

q u i t e

u n d e r s t a n d a b l y ,

a t S

number

:.oi.nts

whlch

t h i n k

shol l ld adver t

to .

- 7 -

- 0 -

re leased

f rom

I t s unLertaking.

T h a t

could

l m i t

the e € f e c t ~ v e n e s s

the

m d e r t a k i n s ,

b u t

:r?.ev of t h e

f a c t

tbzt J

i n t e h d that;

th i s matter

should be brought

back

kefore ths

Court a t somc tine

before I August, ‘c t h i n k that

that is e mat,l;er w?lich

can

be d c a l t

vi th

I ‘I

Another matter

that I haire t o t&e

in to

accounk

I s r,he

e f f e c t of

the

injunct lons

whlch

are

souqht

upon

the

companies

ar!J

persons named

on t h e cv.stomer

l i s t and

the l r

customers.

Thd

e f f e c t

the

i n j u n c t i o n soqhr ;

would

that

t h e respondents

could

no t

sup2ly

thelr prociucts

t o

t hose

shopkeepe r s

during

the

slx

week

p e r l o d , u n l e s s t h e

shopkeepers

t o o k t h e i n l t l a t l v e .

r e l e a s e d

from

i t s under tak ing .

That

could

limit

the

e f i e c t - ~ v e n e s s

the

u n d e r t a h n q ,

b u t

i n

view of

the

f a c t that I

i n t e y d tha t

t h i s matter

should

brought

back before th?

C o w t a t somc

t lne

b?Zore 1 August,

'c t h i n k that

that i s a matzrr t.+icil

c m bc c 'ca l t

w i

r;h .

Another matter

that I n a v s

t o

take

Into account is r.he

e f f e c t of

t h e

i n j u n c t i o n s w h ~ c h

are

sought

upon

the conpanles

persons named on the customer

l i s t and O,I thexr

customers.

The

e f i e c t

t h e

i n j u n c t i o n

souqhc

wonlci

be that

the

r-espondcnts

could

no t

supply

thelr

products

those

shopl reepers

dur inq

the

s i x wee!< perlad,

u n l e s s t h e

shopkeepers took

the

i n i t m t l v e .

- 9 -

" he

app l i can t s

have

s a id

that they

7 ~ 0 ~ 1 6

~ o t

h e

I n

p o s i t i o n

t o

supply

a 1 . t e r n a t i v c

p r o d u c t s

u n t i l

a f t e r

pe r iod oi

about

s ix

weeks ,

that the

shopkeepers would presumably

hcv?

make

then-

OWE

arrangements

and

l o o k e l s e x h e r e f o r t n c l r s u p p l i e s .

It i s

d i f f i c u l t €o r me t o t e I 1 t o

xhat

extc.l.2

the?:? a ! ?

thsir customers might sLCfer

that

p rocess ,

bu t

hey

wo.~lC: A C

least

b e

c o n s i d e r a b l y

i n c o n v e n i e n c e d ,

a n d

t h c r e

i s

very rc-!l

r i s k , i t s e e m t o

me,

that

the

market

f o r

t h e s e

produszs

migili

l o s t

botl i

t o t he

app l i can t s

and

the

r e spondenx ,

and

c h a t

U O J ~ L ?

n o t

a d v a n t a g e

e i t h e r

t h e

p a r t i e s

the

shopkeepe;s

avi t3:i:-

CUC'Z@i'lt!Z S ,

- 9 -

The appl ica! l ts

have s a i d

that they

woula

no':

i n J.

p o s i t i o n

t o

s u p p l y

a : t e r n s t i v e

p r o d u c t s

u n t l l

a i t e r a

pe r iod

a b w t s i x weeks,

s o

that the

shopkeepers

would

presumab1.y have to

make

the i r

own

arrangements and

l o o k e l sevhe re

f o r thlf s u p p l i e s .

1 s

d i f f i c u l t €or mc

t o t e l l t o

w h a t e x t e n t

t h c y

anii

their customers

nught suifcr i n

th6.t p rocess ,

bu t

hey

~7sulr;

a c

l e a s t

be considerably

inconvenxencrd,

and

there

i s a

very rc~.*. l

r i sk , it seems t o me,

t'nat

the

marke t

f o r these

prod.?sLf; mlghi lx

lost b o t h t o the

app l l canks

and

to the

respondenc,

and that wu-~id

n o t advantage	either oi t L e	p a r t i e s	o r	t h e	s h o p k ~ e p e r s	m c i tl?-.i+
CI.lYl;@Xf?L S .

r 7

lkrr , a cornnerc5,.1

arrangement has

beer.

brouqht

t o a n

end.

It nCxy wel l be

that i t has been brought

t o an

end

improperly

a ~ d

t h a t dal~~aq?s

w i l l floTJ

2.n

the

ven7

tha t

t h o s e

f a c t s

AY(.-

- l 0 -

esLabl i shed .

I t

i s t r u e ,

has

beer?

pomtc -d

ou t

fo r

t he

a p p i i c a n t s ,	that	t h o s e	damaqz-s are	g o i n g	t o	b e	d i i f i c u l t	t u
- _ _ _ _

~ ? L . J C J B . That

w ~ i l d

he true whatever happened

from now on, \qbether

the

unde r t ak ing

was

a c c e p t e d

o r

t h e

injunctions

5+7ere

g r a n t e d or

there was

112) ther

i n ~ u n c t l o n

nor

undercdkirq.

The only d i f f e r e n c e

I s tl'ial

the damages would

probably, indeed

a lmos t

ce r t a in ly ,

reduced

tine

under tak ing tha t have bccn of fered .

Accordlnglp,

the

a p ~ l

i c c t l o n

i n t e r l o c u t o r y

f o r

i n j u n c t i o n s

i s d ~ s m l s s e d .

r e s e r v e

t h e

c o s t s

thal;

appl*catlor;

LO b e d e a l t

wlth

a t

t h e

t r i a l .

, . .

. .

- 11 --

I hereby

c e r t l f y t h a t

the

t e n

(10) preceding pages	a r e a t r u e
and a c c u r a t e copy of	the Reasons

f o r Judgment

h e r e i n of

The Hon.

Mr.

Jus t i re Woodward

[1984] FCA 222

16 Jul 1984