T-Shirt Corp Pty Ltd v Shiny Australia Pty Ltd
[2001] VSC 384
•5 October 2001
IN THE SUPREME COURT OF VICTORIA Not Restricted AT MELBOURNE
PRACTICE COURT
No. 7649 of 2001
T-SHIRT CORP PTY LTD (ACN 060 730 127)
Plaintiff
and
SHINY AUSTRALIA PTY LTD (AN 069 834 340)
Firstnamed Defendant
PETER WU
Secondnamed Defendant
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JUDGE:
ASHLEY, J.
WHERE HELD:
MELBOURNE
DATE OF HEARING:
5 October 2001
DATE OF JUDGMENT:
5 October 2001
MEDIUM NEUTRAL CITATION:
[2001] VSC 384
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Injunction - Interim injunction - terms disclosed to be unjustifiably wide - Whether interlocutory injunction should be granted - Injunction granted. Terms confined.
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APPEARANCES: Counsel Solicitors For the Plaintiff Mr A.K. Panna McDonald & Associates For the Firstnamed and Secondnamed Defendants Ms E. Strong Freehills HIS HONOUR:
1 Before the Court are applications by the defendants, Shiny Australia Pty Ltd and Peter Wu, to set aside an interim injunction granted by Eames, J. on 19 September this year, and to set aside an Anton Pillar order made by His Honour on the same day. The plaintiff, T-Shirt Corp Pty Ltd, conversely, seeks an interlocutory injunction in lieu of the interim injunction granted on 19 September. It does not seek an injunction in the same terms as those now in place. It concedes by counsel, rightly, that those terms were too wide.
2 The hearing of the applications commenced yesterday. It concluded this afternoon. In the interim, an agreement was reached concerning the fate of the application to set aside the Anton Piller order. I shall refer to that agreement a little later.
3 The background to the cross applications, as emerges from the Statement of Claim endorsed on the writ filed 19 September and from affidavits filed by the parties, is that the plaintiff claims since about 1997 to have "designed, manufactured or caused to be manufactured, imported, marketed and distributed throughout Australia a distinctive range of clothing and, in particular, a distinctive range of polo shirts". The polo shirts are described by the plaintiff as "a distinctive range of polo shirts, which are available in about 19 different styles with about 15 different collar arrangements and various sizes".
4 The polo shirts are not the subject of trademark, copyright or registered design. They are described as "promotional clothing", that is, it is often the case that they are embossed or printed with corporate or other logos.
5 The plaintiff alleges that the polo shirts "have become known to the trade and public in Australia as signifying exclusively the plaintiff's polo shirts and no other", in consequence of which the plaintiff has acquired a large and valuable reputation and its clothing has achieved reputation for high quality.
6 The plaintiff next alleges that from about 3 August this year Shiny has "manufactured or caused to be manufactured, imported, advertised for sale, distributed, supplied and sold in Australia polo shirts bearing substantially identical or misleadingly or deceptively similar designs to the plaintiff's polo shirts". Particulars appended to paragraph 10 of the Statement of Claim identify a trap purchase of a polo shirt on 3 August this year, and they allege that Shiny offered for sale offending polo shirts on 14 September.
7 Nowhere in paragraph 4 of the Statement of Claim is what is distinctive about the plaintiff's polo shirt specified. Nowhere in paragraph 10 of the Statement of Claim is it made clear by what criteria it is alleged that the Shiny polo shirts are substantially identical or misleadingly or deceptively similar in design to the plaintiff's polo shirts.
8 In any event, the plaintiff pleads by paragraphs 11 and following a passing-off claim and claims under s.52 of the Trade Practices Act and s.9 of the Fair Trading Acts. It then pleads by paragraph 15 a knowing involvement by Mr Wu in Shiny's statutory breaches.
9 There is another basis of claim altogether upon which the plaintiff relies. It alleges that an agreement was made between it and Shiny on about 31 August this year by which Shiny agreed:
"(a)the Firstnamed Defendant would stop all sales and distribution of polo shirts that appear similar to those of the Plaintiff's, and more particularly, those polo shirts that were displayed to the Firstnamed Defendant at a meeting at the offices of McDonald & Associates, on Wednesday, 29 August 2001, and such suspension of sales to take effect as of 31 August 2001; and,
(b)The Firstnamed Defendant undertook to refrain from selling such products which are deceptively similar to or in breach of the Plaintiff's products in future; and,
(c)the Firstnamed Defendant would export all remaining stock referred to in paragraph (a) hereof out of Australia, and to provide evidence of the said re-export within fourteen (14) days of 31 August 2001.".
10 It alleges breach of that agreement. It relies upon a trap purchase allegedly made on 14 September. It alleges that the defendants' breaches, statutory and other, have caused it loss and damage. It was upon affidavit material to the general effect of the Statement of Claim that Eames, J. made the orders that were attacked in different ways by the defendants before me.
11 In order to understand those attacks, only some of which were pursued to the end stage of the hearing, it is necessary to note that, according to evidence before me, Shiny conducts its business in leased premises at 72-88 Cambridge Street, Collingwood, its main business being, allegedly, embroidery of designs onto promotional clothing. It is also necessary to apprehend that Shiny has historically acquired clothing for embroidery purposes either from the plaintiff or, in some cases, from a company named Silverking Investments Pty Ltd.
12 Silverking, as I shall call it, according to material before me is the sublessee from Shiny of premises at 90 Cambridge Street, Collingwood. It also operates a warehouse at Gipps Street, Abbotsford. There is a close connection between Shiny and Silverking. That, I think, is very clear.
13 According to material filed for the defendants, the Anton Piller order was largely executed at premises in fact occupied by Silverking. Goods that were seized, polo shirts and catalogues, were either entirely or for the most part the property of Silverking. Counsel for the defendants submitted that this state of affairs was attributable to rank carelessness by the plaintiff's legal advisers, who did not bring to the attention of Eames, J. or themselves appear to understand the distinction between Shiny and Silverking and the activities in which they respectively engaged. Much of what was said about those issues may, however, be put to one side for present purposes. The agreement concerning the application to set aside the Anton Piller order makes provision for restitution, more or less, of the various items that were seized.
14 As I indicated a little earlier, what remained at the end of the hearing was the question whether the plaintiff should have an injunction against the first defendant and, if so, then as to its terms. Counsel for the defendants submitted that no injunction should be granted because, first, the terms of any injunction would be too uncertain. A defendant must know what it can and cannot do. It was impossible to construct an injunction in the terms of the agreement to which I earlier referred, that is, the agreement of 31 August this year, because it made use of terms that were themselves imprecise.
15 Second, counsel submitted that there should be no injunction granted because an undertaking had been offered in terms that were suitable. The terms of the undertaking that was offered were as follows:
"The Firstnamed Defendant, Shiny Australia Pty Ltd, UNDERTAKES that until the determination of the trial in this proceeding or unless excused from this undertaking by order of the Court, it will not, whether by itself, its servants or agents or howsoever otherwise, sell or otherwise supply any of the polo shirts referred to in the Schedule below.
Nothing in this undertaking applies to, or purports to prevent or limit:
(a)conduct of the Firstnamed Defendant (including its servants or agents) in facilitating or otherwise acting for or on behalf of Silverking Investments Pty Ltd in respect of the sale or other supply of such polo shirts by Silverking Investments Pty Ltd to persons other than the defendants; or
(b)conduct of the Firstnamed Defendant (including its servants or agents) sending or delivering to its customers such polo shirts purchased by those customers from Silverking Investments Pty Ltd.
Schedule
The following 'Winning Spirit' polo shirts described in the 'Winning Spirit' brochure, a copy of which appears as exhibit 'PGS4' to the affidavit of Peter George Smith sworn on 15 September 2001:
PS01 210gm pique knit short sleeve polo (unisex)
PS02 250gm pique knit short sleeve polo (unisex)
PS03 240gm men's drop needle interlock polo
PS04 240gm ladies drop needle interlock polo."
16 Third, it was contended that the plaintiff's case that an injunction should be granted depended upon one alleged breach of the contract. But in fact the alleged sale of 14 September had been a sale not by Shiny but by Silverking. Documents showed this to be so.
17 Fourth, it was submitted that damages would be a sufficient remedy in this case.
18 Counsel for the plaintiff submitted that there should be an injunction in terms as follows:
"THE COURT ORDERS THAT:
1.Until further Order the First Defendant, whether by itself, its officers, servants or agents or howsoever otherwise be restrained from distributing, offering for sale, supplying or selling in Australia, polo shirts that are substantially or deceptively similar to the Plaintiff's polo shirts described in the attached Schedule which were displayed to the First Defendant at the offices of McDonald & Associates on Wednesday, 29 August 2001.
SCHEDULE
The following 'Winning Spirit' polo shirts described in the 'Winning Spirit' brochure, a copy of which appears as exhibit 'PGS4' to the affidavit of Peter George Smith sworn on 15 September 2001.
PS01 210gm pique knit short sleeve polo (unisex)
PS02 250gm pique knit short sleeve polo (unisex)
PS03 240gm men's drop needle interlock polo
PS04 240gm ladies drop needle interlock polo."
19 Counsel for the plaintiff argued that it was possible to frame an injunction in terms that were sufficiently certain; that the undertaking offered by the defendants' side offered the first defendant the opportunity of putting a coach and horses through the contract; that damages would not be an adequate remedy because there would be a difficulty of demonstrating what breaches had occurred; and that the balance of convenience in all the circumstances ran strongly in the plaintiff's favour.
20 The view that I have formed is this: If the plaintiff had sought to found its claim for interlocutory injunctive relief on the passing-off claim or the s.52 claim, I have some doubt whether it would have satisfied me that such claim(s) provided a sufficient starting point for a grant of relief. But that need not be decided, for I consider that the agreement upon which the plaintiff relies in its Statement of Claim can be said to provide an arguable basis of claim, notwithstanding the imprecision of some of the terms used in it. It was, after all, an agreement reached between commercial people, and the Court should attempt to give effect to such an agreement.
21 Conveniently, the next question to be considered is whether or not the plaintiff has shown, at least arguably, breach of that agreement. Notwithstanding the contentions for the first defendant to the contrary, I think that such a case has been demonstrated. There are, I think, some anomalies in the evidence advanced for the first defendant with a view to showing that the trap sale effected on 14 September was in fact a sale by Silverking. It is unnecessary, and it would be, I think, unhelpful, to dwell upon the anomalies that arguably exist in that evidence.
22 Given, then, an agreement to desist from certain behaviour and breach of that agreement, I think that in principle there is no reason why an injunction to restrain further breaches ought not be granted, particularly in circumstances where, looking at the material overall, one might fairly discern the risk of further apprehended breaches in the absence of injunctive restraint.
23 The next matter to which I should refer concerns the adequacy of damages as a remedy. I consider that the submissions made by Mr Panna of counsel for the plaintiff were convincing in that respect. I think it might prove very difficult for the plaintiff to demonstrate, after the event, just what breaches of the agreements had been committed by the first defendant. Such a difficulty would probably arise by reason of the obviously close relationship between Silverking and Shiny, which operate de facto out of the same premises at Cambridge Street; and by reason of the suggestion that some of the staff do business on behalf of the first defendant and Silverking indiscriminately. The risk certainly exists, as I perceive it, if an injunction were not granted, that it would be impossible at trial, assuming that the contract that the plaintiff relies upon was sustained, to work out just what breaches (if any) had been committed by the first defendant in the circumstances which I have described. I said in the course of Mr Panna's submissions that there appeared to be a thimble and pea element to the operations of the first defendant and Silverking. It may in the end be made clear that that is not so. But at the moment it is a perception fairly created by the material before me.
24 The first question that remains is whether the undertakings proffered on behalf of the first defendant adequately address the situation. That is a matter proper to take into account in considering whether to exercise a discretion to grant injunctive relief. It leads on to consideration of the balance of convenience more generally.
25 I am not satisfied that the undertakings offered by the first defendant would sufficiently provide the protection to which the plaintiff is, in my opinion, entitled on an interlocutory basis. In my opinion they would leave too much room to permit the first defendant to undertake activities which would, in substance, breach the agreement but which, in form, might seem not to do so.
26 Finally, as to the balance of convenience, what I have already said combines to show that the balance of convenience, if considered discretely, dictates the grant of an injunction.
27 In all, then, the plaintiff should have an injunction. But its terms should be not those proposed by the plaintiff. There is the need for certainty, to which I earlier referred, and for that reason I would not be prepared to grant an injunction which precluded the first defendant from, in substance, dealing in polo shirts "that are substantially or deceptively similar to the plaintiff's polo shirts". An injunction in those terms would seem to me to invite disputation. I think that insofar as the plaintiff can be protected, it should be by an order restraining Shiny from selling or distributing in Australia polo shirts as described in a schedule, and that the schedule should refer to styles of polo shirts described in the "Winning Spirit" brochure, a copy of which is Exhibit PGS4 to the affidavit of Peter George Smith, sworn 15 September 2001, specifically the styles described as PS01, PS02, PS03 and PS04. I think that to make the extent of the inhibition upon the first defendants' activities crystal clear, a copy brochure should be annexed to the Court's order. I am conscious of the fact that an injunction in the terms that I consider should be granted will not necessarily preclude activities by the first defendant in conjunction with Silverking which would have the potential of undermining the effect of the order. But the fact is that Silverking was not a party to the contract pleaded by the Statement of Claim and is not a defendant to this proceeding. The difficulties that may arise from the plaintiff's standpoint in giving the injunction effective operation are difficulties dictated by those two circumstances.
28 It remains to refer to the resolution of the application to set aside the Anton Piller order. The agreement reached between the parties I note as being to this effect: that the application should be adjourned to the hearing of the proceeding or the hearing of any application for contempt which is brought by the plaintiff in connection with that order; that the cartons of "Winning Spirit" brochures seized in the course of the execution of the Anton Piller order, save for six copies of those brochures, should be returned to Silverking; that a total of 47 polo shirts seized in the course of the execution of the Anton Piller order should be returned by the plaintiff's side to the solicitors for the defendants on the latter undertaking to hold them until hearing and determination of the proceeding or further order.
29 Now, Mr Panna and Ms Strong, you have heard my opinion as to what should be the terms of the injunction. I think I have set it out clearly.
MR PANNA: Yes, Your Honour.
HIS HONOUR: I would be appreciative if the two of you would give me some minutes on Monday morning that coincide with what I have said.
MR PANNA: Yes, Your Honour.
HIS HONOUR: Before I formally make any orders, I require the plaintiff to give the usual undertakings to as to damages.
MR PANNA: Yes, Your Honour.
HIS HONOUR: And that can be given Monday morning or now.
MR PANNA: I can get it done now.
HIS HONOUR: Can be given now?
MR PANNA: Yes, I give it now.
HIS HONOUR: And is given?
MR PANNA: Yes.
HIS HONOUR: I note that.MR PANNA: That was part of the proposed orders I handed up to Your Honour; that was offered then.
HIS HONOUR: And the resolution of dispute concerning the Anton Piller order, so far as it involves the return of certain goods should, I think, be stated in the "Other Matters" portion of an order.
MR PANNA: Yes, Your Honour. We will work out a form, when to give these goods back, some time in the course of the next week.
HIS HONOUR: You could help me by giving me on Monday morning some initialled orders. I will not require you to come back to Court if you can agree upon the precise terminology. A memorandum can simply be provided to Mrs Bursac and I will formally pronounce the Orders.
MR PANNA: If Your Honour pleases.
HIS HONOUR: If there is any difficulty, come back to me on Monday morning. That leaves, I think, only the costs of the application.
MR PANNA: Reserve the costs.
HIS HONOUR: Reserved?
MR PANNA: Yes, all costs.
HIS HONOUR: Yes, I will do that.---
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