Southern Cross Corporation Ltd v Southern Cross Machinery (Australia) Pty Ltd

[1992] FCA 532

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JUDGMENT No. ..sZ..J 5%-

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DISTRICT R E G X S W	1	No. QG58 of	1992
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SOUTEE3W CROSS CORPORATION LIMITED

A.C.N. 009 667 092

First Applicant

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SOUTHERN CROSS MACHINERY (AUSTRALIA\ PTY LTD

A.C.N. 009 727 557

Second Applicant

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dmiz:	Heerey J
m:	1 July 1992

E&&3: Brisbane

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EX TEl@ORE REASONS FOR JU

I am indebted to counsel for very precise gnd helpful K.,- \\

arguments. I have come to the conclusion that the appropriate order in this case is to order that the respondent keep an account of profits. Because this is not the final hearing of the matter, I should make it clear at the outset that I am only concerned with whether there has shown to be a triable issue as to the matters on which the applicants rely.

under a different name. The mere fact that the goods in	of the applicants' windmill. The respondent proposes to sell
question - that is, windmills - are likely to be similar in
appearance is not sufficient to establish passing off. Such evidence as there is as to the activities of the respondent up until now points the other way. What the respondent has been doing is making it clear that his product is a different one from the applicants' product while nevertheless pointing out (which the applicants do not suggest is untrue) that they are very similar in design and use interchangeable parts.
Turning then to the claim based on the agreement in 1980, there is a point of construction, namely, as to whether the agreement is with Southern Cross Machinery Limited or with its subsidiary which was, in fact, the company with which the respondent was dealing.
There is considerable force in Mr Morris' submission as to this point. As he puts it, the agreement must be construed in a commercial setting as being made on behalf of the
at the time of the agreement Southern Cross Machinery Limited subsidiaries of Southern Cross Machinery Limited, given that
was a holding company only. Nevertheless, the agreement in its express terms does seem to distinguish between Southern Cross Machinery Limited on the one hand and Industrial Enterprises Limited on behalf of its subsidiaries on the other.
There is additionally to the contract point the issue as to whether the respondent had the necessary intent to injure the
applicant which is said by Mr Boughen to be a necessary element for the tort of inducement of breach of contract.
Turning to the other main issue in the case, that is, the claim that the agreement of 1980 was a breach of s.45 of the Trade Practices Act 1974, I think there is an arguable case that to give effect to the agreement now would be to substantially lessen competition. In this regard I note that the advertised prices of the respondent's product: compared with those charged by the applicants and other participants in the market, as revealed in the affidavit of M r Christophersen reveal a very substantial difference in price. For present purposes one can infer, I think, that to exclude a potential competitor charging a much lower price from a market might well have the effect of substantially lessening competition in that market.
There is also the independent argument that on its face the agreement of 1980 might be thought to have the purpose of lessening competition; indeed, it could be difficult to see
what other purpose it had.
As to the balance of convenience, I think the applicants'
interests are sufficiently protected by a requirement that the respondent keep an account of profits. In this regard, I bear in mind, as I have noted that there is no evidence that the proposed sale by the respondent of his products will damage the reputation of the applicants' products. I think on the
evidence at the moment, all that can be said is that the applicants might lose some sales because the respondent's products are sold at a lower price. That seems a purely financial loss, and one for which appropriate compensation can be ordered should the applicants prove to be successful at the ultimate trial of the action. Looked at another way, it would seem to me much more unjust were there an interlocutory injunction granted against the respondent, but he succeeded on the trial of the action; that could well have had the effect of in practical terms of excluding him from the market permanently. It would also be difficult to make out a case in damages for the loss of purely hypothetical sales.
So upon the usual undertaking as to damages being given by counsel for the applicants, I will direct in terms of the application that the respondent, until the trial of this action, keep full and proper records and accounts in relation to (a) the importation of windmills into Australia, and (b)
the sale of windmills in Australia.
I note that such an undertaking was given to the court.
Counsel for the respondent accepted that there had been a breach of the applicants' copyright in photographs used for the respondent's advertisement. This is no longer a live issue. The respondent undertook that he would make no such use of the photographs.
The costs will be reserved.

The passing off claim strikes me as one which is certainly a triable issue. Thqre is no evidence of any misuse of the name

I certify that this and the

preceding (4) four pages are a true copy of the Reasons for Judgment of Mr Justice Heerey

Counsel for the applicants:	Mr A J H Morris
Solicitors for the applicants:	Blake Dawson Waldron
Counsel for the respondent:	Mr D Boughen
Solicitors for the respondent:	Biggs and Biggs