CATCHWORDS Trade Practices Act 1974 - misleading or deceptive conduct - whether and to what extent the conduct of a manufacturer should be guided by contemplated conduct of a retailer. Trade Practices Act 1974 ss.52 and 80. PTY. LTD. VG No. 181 of 1983 ' Smithers J. ' 4 November 1983 ' Melbourne. Sener] 2 ee me Ee TES Ee Te mee mm ee ee "- = % Bene mw mek .- IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG No. 181 of 1983 GENERAL DIVISION EX TEMPORE JUDGMENT Between: BRAMMAR APPLIANCES PTY. LTD. (Applicant) And: RANK ELECTRIC HOUSEWARES PTY. LTD. (Respondent) 4 November 1983 REASONS FOR JUDGMENT HIS HONOUR: In this case I do not propose to grant any relief at this stage. Relief can only be given under s.52 of the Trade Practices Act 1974 (the Act) where 1t is shown that conduct of a misleading and/or deceptive nature has been committed or if it ais reasonably apprehended it will occur or occur again. In this case 1t is said the conduct was and is likely to mislead members of the public and to some extent potential customers of the applicant. . The respondent is a trader in a large way in ot - electrical domestic and other electrical items, and so is the applicant. A large area of their trade overlaps. A large portion, something like 40 per cent of the respondent's products, are imported and the other 60 per cent or thereabouts are Australian made. The respondent embarked upon a campaign to emphasise to the public the desirability of their buying its Australian made goods. It distributed publicity material which was capable of being used in a way in which the public might think that the respondent's products, not only Australian made but also imported articles, being displayed more or less together, would appear to the public to be Australian made. And of course on casual observance of the display of goods as proved for example at Grace Bros., the ordinary person would not know which were imported and which were Australian made. Insofar as retailers permitted customers to be misled in this way, they were guilty of conduct in contravention of the Act. The question before me 1s really whether such instances of that class of conduct which occurred can be said to have occurred because of and arising out of conduct of the respondent itself. The respondent was fully entitled ENP meer ae see anes er eta , weet mee ee tne ee to deliver to its 4000 retailers publicity material of the kind that it did. lt was fully entitled to go on delivering goods, both Australian made and imported, to those retailers. There was no doubt a possibility that some retailers would not realise that particular usage ot the posters and other publicity material would be capable of creating the impression in the minds of potential customers that goods, which were actually imported, were Australian made. Nevertheless the distinction was quite clearly made and any sensible, intelligent or ordinary business reta1ler would have known which were imported and which were Australian made and would have known that 1t was misconduct on his part 'to mix them up and put them under the same posters and other publicity material so that people would be deceived. It might be possible to make the case that the probability of retailers taking advantage of the opportunity by urging customers to buy Australian made, in the atmosphere which was to be created by the campaign, to increase the sales of their goods, including imported goods which also might well be bought by customers, under the impression that they were buying Australian made goods, and that the respondent should have teken steps to reduce the re See pire 4. likelihood of this occurring, was misleading and/or deceptive. The respondent was aware of the possibility of such a thing occurring and it did something about it. It conducted seminars which pointed out the necessity for care but, more importantly, 1t did write a letter to every retailer informing the retailer, in language which would seem to me to be reasonable for a business man, that retailers were to make sure that their customers knew which of the products marketed during the month long promotion of Australian made goods were not made in Australia, so' that every retailer had his attention drawn to the fact that it was necessary for him to make sure that people were not misled. What more a wholesaler or manufacturer as the respondent is, would be required to do I cannot say. I did have in mind that 1n this case it might be proper, having regard to the fact that the respondent is still making use of the Advance Australia logo, to grant some form of relief to the applicant. It is possible that certain of the retailers will hereafter either deliberately or by accident, fall into the error of using that logo in a way which will actually constitute a misrepresentation concerning ee et em me er ee we 9e2 5 == -a Ut goods which they are selling so that tumported goods may be thought by customers to be Australian made. Nevertheless, as was emphasised in Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. [1982] 56 ALJR 715 at 723 per Mason J., there is a large gulf between the manufacturer who supplies goods to retailers and the conduct of the retailers themselves. If the manufacturer is to be made responsible in respect of misconduct of the retailer 1t must be shown with reasonable clarity that the respondent ought to have contemplated that it would occur, or knew that it was likely to occur. In this case I think undoubtedly that the respondent knew of the possibility of misconduct. How far he was required to go to guard against 1t was a matter for ordinary and proper "business consideration. He went as far as he went in the letter. I am not prepared to say that that was not as far as was required in the circumstances of this case. Had it been brought to its attention at an early stage that confusion was occurring because of the use of the material, then its obligation might have increased. Whilst the applicant knew of the promotion in the form it alleges since early September 1983, there was never any letter, any telephoric communication, any warning until this application was taken out in ee eRepet meer nian Ae ae ene po oom, ay Tet we ne ina ARAN TT em en ee yeas " doves ve fe ena we ee a ate ee ee sue Men Lo te 6. October 1983. And these observations have added force now that the campaign has come to an end and relevant current activity concerns only the distribution of "Made in Australia" logos. This 1s essentially a different activity with much less probability that the logos will be misused to mislead the public. Accordingly, in my opinion, the circumstances are not appropriate for the making of an order granting an interim ainyunction. I, therefore dismiss the application accordingly. There will be an order for costs in favour of the respondent. Se Eee reer IT Ere ge SR eee eee ee LS - 4 -