sp he ends eet SE bwws FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No. VG58 of 1987 GENERAL DIVISION ) BETWEEN: HELLA-AUSTRALIA PTY. LIMITED Applicant AND: PLENTIUM PTY. LIMITED Respondent CORAM: Jenkinson J. PLACE: Melbourne DATE: 16 April, 1987 REASONS FOR JUDGMENT Application for interlocutory injunction. Each of the applicant and respondent is a company which sells automotive parts by wholesale. The applicant sells electrical light and signal equipment for motor vehicles and boats. Its business is very large and the reputation of its products is high. The respondent sells motor vehicle parts and accessories, including several dozen items of lighting equipment. The applicant sells hundreds of items of lighting equipment. The applicant sells items of lighting and electrical signal equipment to all of the five principal manufacturers of motor cars in Australia as well as to others who in the course of carrying on their manufacturing or repairing businesses incorporate the items into vehicles. The applicant also sells those items to persons $0.0 g@ who sell the items by retail to consumers who in turn incorporate or procure others to incorporate the purchased items into the consumers' vehicles. The respondent sells to the same description of buyers. Sellers such as the applicant and the respondent assign to each of the items they sell an identifying number. Reference to an item of equipment by those engaged in trade in the item, and even by some consumers who are not engaged in trade, | is often made by the number of that item. The respondent endorses on the packaging of a number of the items of automotive lighting equipment which it sells and on advertisements of those items not only the identifying number which it has assigned to the item, but also the word "replaces" or the words "replaces for", after which is endorsed a number assigned by the applicant to an item which the applicant sells. In each such a case the two items, that of the respondent on the packaging of which the applicant's number is endorsed and that of the applicant to which that number is assigned, have the same functions. It is the applicant's case that each of these endorsements constitutes a representation by the respondent that the item of equipment which it is offering for sale (a) is of the same quality as the applicant's item, (b) is substantially identical with the applicant's item, (c) is suitable for the purpose or purposes for which the applicant's item is represented by the applicant to be suitable, and (d) may lawfully be used for the purpose or purposes for which the applicant's item is represented to be suitable. The making of these representations is said by the applicant to constitute contraventions of sections 52(1), 53(a) and 55 of the Trade Practices Act 1974. I should hesitate to take the endorsement as amounting to either of the representations specified in (a) and (b). As to (c) and (d), the applicant's case is seriously arguable, in my opinion. The endorsement may give rise, pursuant to statutory provisions such as section 71 of the Trade Practices Act, to an implication of terms, to the general effect specified in (c) and (d), of some contracts of sale of the item. And to the consumers who do not make contracts for the purchase of the item with the respondent the endorsements may constitute representations to the effects specified in (c) and (qd). As to (d), there is evidence that examples of some five items endorsed as replacing particular items of automotive lighting equipment which the applicant sells did not on testing by employees of the applicant function in accordance with requirements of function or specifications endorsed by the Australian Transport Advisory Council, and incorporated by reference into the legislation of Victoria and of other states, which imposes those requirements on persons who use motor vehicles on public roads. Some testing of other examples of those items by a university lecturer in optometry showed compliance with the performance requirements of those laws, but some of those tests also showed failures to comply. There was conflicting opinion evidence as to whether an item of automotive lighting equipment functioning in use ina motor vehicle in the way those of the tested items which failed to comply with the law had functioned would constitute a danger on the public roads. The questions which the contradictory opinions raised are not easily resolved without much more consideration, and expert assistance, than' the Court could give, and receive, respectively on the hearing of this interlocutory application. I am not persuaded that any substantial impairment of public road safety is being caused by use of the defective items of automotive lighting equipment marketed by the respondent. And I am certainly not persuaded that unrestrained marketing of its products by the respondent will cause any serious damage to the applicant. On the other hand any injunctive restraint of the respondent's trade in the items alleged to be defective would be likely to cause not only calculable loss of sales income but also grave injury to the respondent's reputation in the automotive parts trade. It would be very difficult if not impossible to ascertain the financial loss which such an injury would cause. On balance I think that, if the respondent and a director of the respondent, Peter Uve Von Schassen, will each undertake to keep appropriate records of sales of the five items of equipment between this time and the time when the hearing of the proceeding concludes, the proper course is to refuse interlocutory relief. Mr. Hayes of counsel for the respondent has indicated the willingness of those two persons to give those undertakings and accordingly interlocutory relief will be refused on their being given. As to costs, it would seem that the appropriate order would be, would it not, that the respondent's costs of the proceedings for interlocutory relief be its costs in the cause.