NOT FOR DISTRIBUTION SUDGMENT No. ©3 7 S38. IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V. No. G 58 of 1587 ) ) GENERAL DIVISION HELLA-AUSTRALIA PTY. LTD. Applicant and PLENTIUM PTY. LTD. Respondent COURT: NORTHROP J. DATE : 3 MARCH 1388 PLACE: MELBOURNE MINUTE OF ORDER THE COURT ORDERS THAT the application be dismissed with costs. (Settlement and entry of Orders is dealt with in 0.36 of the Rules of Court.) IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V. No. G 58 of 1987 ) ) GENERAL DIVISION BETWEEN: HELLA-AUSTRALIA PTY, LTD. Applicant and PLENTIUM PTY. LTD. Respondent COURT: NORTHROF J. DATE : 3 MARCH 1988 PLACE: MELBOURNE REASONS FOR JUDGMENT By this application, the applicant (""Hella") is seeking a number of orders including orders under the Trade Practicas Act 1974 ("the Act") preventing the respondent ("Monopol") from advertising for sale or selling or distributing automotive electrical lamps by reference to numbers used by Hella where the standard or performance of Monopol''s goods do not equal the standard or performance of Hella's goods and from representing that the Monopol goods are (i) of the same standard or quality as Hella's goods, (ii) substantially identical with Hella''s goods or (iii) suitable for the same purpose as Hella's goods. For very many years, Hella has manufactured and sold a large range of automobile electrical lamps throughout Australia. In the marketing of those goods, by catalogue, advertising and packaging, Hella has adopted a system of numbering by which a2 given number identified a particular type of lamp. This numbering system is so well known and understood within the automobile industry that a lamp can he ordered by reference to a number. Hella sells a large number of automobile lamps and although the orders sought are in a wide form, evidence at the hearing was directed to five only of the total range of lamps. Those five lamps are identified as follows:- Hella Part No. Description of lamp 2397 Stop~Tail-FPlasher lamp (medium size). 2100 Amber lens (surface mounting). 2402 Stop-Tail-Flasher lamp (large size). 2080 Clear-Amber lens Chromed rim. 2127 Amber lenses. Double sided flasher lamp. These lamps apparently are used on trucks, and possibly buses, or trailers. The 2397 is a medium sized lamp to he fitted to the rear of the vehicle. It has three separate sections, each containing one globe holder to take a festoon globe which is shaped like an elongated glass fuse with the contacts at each end. The globe is fitted between metal holders and the globe is kept in position by the pressure of the metal holders. One section operates as a tail lamp, one as a stop lamp and the third as a direction turn indicator lamp. The outside cover of the lamp, ithe lens), is made of a plastic type material and the anside of the lens is constructed in such a way as to diffuse the light from the globe so that the light from the lamp 1s spread evenly as seen from the rear of the vehicle. This diffusion of the light plays an important part in this case. Tt can he affected by the position of the globe and the construction of the lens. The 2402 is a larger type of 2397. The 2100 has one section only and takes a festoon globe. In theory, 1t could be fitted in any direction - front, rear or side. In theory, it could be used as a continual light or as a direction turn indicator lamp. The 2080 has two sections, each of which takes a festoon globe. In theory, it could he Fitted to the front or rear. The clear section gives an ordinary white light. The 2127 1s designed to be fitted so as to show to the front and the rear. It is fitted to take one globe only with a bayonet fitting. When the globe 1s alight, the light shows to the front and to the rear. It is normally used as a direction turn indicator lamp. Monopol manufactures and sells a large range of automobile electrical lamps throughout Australia. In the marketing of those goods by catalogue, advertising and packaging, Monopol has adopted a system of numbering by which a given number identifies a particular type of lamp. Monopol sells a large number of automobile lamps. In its catalogue it depicts its lamps pictorially and by reference to its numbering system. In addition, as part of the description of Bach lamp, it uses the word "Replaces." The catalogue sets out a number which is the number of a corresponding lamp manufactured by Hella. In the main catalogue in evidence this 1s done with respect to 37 separate lamps although not all of them are designed for use as direction turn indicator lamps. In a later catalogue, also in evidence, the word "Replaces" no longer appears but with respect to some only of the lamps a Hella lamp or lens number 15 given. In addition, on separate pages, a table is set out which depicts the numbers of corresponding lamps and lenses supplied by Monopol, Hella and another manufacturer, Ashdown. This Iist 1s under the heading "Replacement Numbers for Truck + Trailer Lights." In addition, on the packaging of some of the Monopol lamps, the words "Replaces" or "Replaces for" appear before the number of the corresponding Hella lamp. The five Monopol lamps the subject of evidence before the Court can be set out in tabular form:- Description of Lamp Monopol No. Hella No. 1. Stop-Tail-Flasher Lamp (medium size) 6000 2397 2. Amber Gens (surface mounting) 6009 2100 3. Stop-Ta11-Flasher Lamp (large size) 6010 2402 4. Clear/Amber Lens Chromed Rim 6011 2080 5. Amber Lenses Double-sided Flasher Lamp 6014 2127. The substance of the complaint made by Hella was that Monopol lamps were not equal to the standard or performance of the corresponding Hella lamps, were not of the same standard or quality as the corresponding Hella lamps, were not substantially identical with the corresponding Hella lamps and were not suitable to be used for the same purpose as the corresponding Hella lamps. To establish its case, Hella examined in detail the five lamps already identified. Having regard to the intensity with which the proceedings were conducted, in the absence of evidence establishing the fact, I am not prepared to find that any of the other Monopol lamps come within the complaint made by Hella. Accordingly, it is necessary to consider the evidence relating to the rive identified lamps. Initially, Hella''s case was based upon the use of the words "Replaces" or "Replaces for" appearing in the Monopol catalogue and the Monopol packaging. At an early stage of the hearing, namely immediately after the lunch adjournment on the second day of the hearing, Monopol gave the following undertaking to the Court:- "UNDERTAKING BY RESPONDENT GIVEN WITHOUT PREJUDICE AND WITH A DENTAL OF LIABILITY. 1. Plentium Pty. Ltd. undertakes to the court by its counsel (a) that within one month of this date it will remove the words 'replaces' or 'replaces for' wherever used in comnection with a Hella part number from any brochure or packaging in 1ts possession pursuant ta which Monopal products are sold; (b) that hereafter subject to (a) hereof it will not by itself, 1ts officers, directors, servants, agents or otherwise manufacture or cause to be manufactured, import or cause to be imported, distribute, offer for sale, display for sale, advertise for sale or sell automotive signal or electrical lighting equipment by referring to Hella part numbers by the use of the words 'replaces' or 'replaces for'." That was am unconditional undertaking. The Court expects Monopol to honour that undertaking. As a result, as far as the future is concerned, the words "Replace" ofr "Replaces for" do not have the importance that they have had in the past. Hella persisted with 1ts application based upon the replacement catalogues already referred to. It objected to the giving of the Hella numbers alongside the Monopol numbers for corresponding lamps. The basis of the complaint made by Hella is that the five Moncpol lamps do not conform to the Australian Design Rules. These Rules, known as ADR, specify minimum and maximum luminous intensity for lamps fitted to automobiles and trailers. Hella referred only to ADR 6 and ADR 6A which apply with respect to direction turn signal lamps. The purpose of the specifications 15 to ensure that the light intensity, both under day and night conditions, will be sufficiently bright to attract attention, but, at the same time, not so bright as to tend to blind the observer. The light comes from a small source but spreads and the ADR's specify the range within which the light intensity should he confined at an angle of sight from the lamp. The basic unit of measurement of luminous intensity is the candela. Hella's case was that the Monopol lamps, insofar as they consisted of direction turn indicator lamps, did not conform with ADR 6 and 6A, but the corresponding Hella lamps did conform with those specifications and thus the Monopol lamps did not have the standard or performance of the corresponding Hella lamps, they were not of the same standard or quality, and were not substantially identical with the corresponding Hella lamps. Counsel for Hella took the argument to the extent that the use of the Monopol lamps would make the vehicles to which they were fitted unroadworthy and unsafe. In support of these contentions, counsel for Hella referred to a number of legislative provisions applying in Victoria. I will assume similar legislative provisions exist in other parts of Australia. In Victoria, the current provisions came into operation on I July 1987. Other equivalent provisions were in operation before then. They had a similar effect. I propose to make a brief reference to the provisions now in operation. For present purposes, those provisions are contained in the Road Safety Act 1986 and in particular the definitions contained in s.3, the requirement of registration of motor vehicles; see 5.7, the purposes of registration; see s.5, which include the purpose to ensure that equipment on motor vehicles and trailers meet safety standards, and 5.10, which empowers the Minister to require compliance with standards for registration relating to equipment on motor vehicles and trailers. The Minister has exercised that power; see Victorian Government Gazette No. $26 of 25 June 1987. The requirements are headed "Notice of Standards Required for Registration of Motor Vehicles and Trailers." Under €1.535, motor vehicles and trailers must have signal lamps, or directional indicators, constructed and fitted in accordance with that clause. Under C1.538, a lamp, which IT construe as including a direction turn indicator lamp, fixed to a vehicle must be constructed and adjusted to diffuse efficiently the light of the lamp and prevent any glare which may adversely affect the vision of a person approaching or being approached by the vehicle. Under C1.639, passenger cars manufactured on or after 16 January 1974 are to be fitted with direction turn signal lamps which comply with ADR 6 for Direction Turn Signal Lamps. Clause 640 is to similar effect but applies to motor vehicles manufactured on or after 1 July 1981 and having a gross vehicle mass exceeding 4.5 tonnes in which case ADR GA applies. Enforcement provisions are contained in the Road Safety (Vehicles) Regulations 1987 (S.R. No. 165 of 1987), made pursuant to 5.95 of the Road Safety Act 1986. Regulation 723 makes it an offence for a person to drive or use a motor vehicle or trailer ona highway which, among other things, does not comply with the requirements of the standards for registration. For present purposes, the yelevant standard for registration applies to direction turning lamps. Penalty for a breach is 1 penalty unit. Further, Reg.602 empowers a member of the police force to serve a notice of unroadworthiness on the owner of a vehicle where the vehicle requires repair, adjustment or fitting of equipment and a person who drives that motor vehicle without the vehicle complying with the notice is liable to a penalty of 8 penalty units. Counsel for Hella contended that the five lamps examined at the hearing, insofar as the lamp, or the relevant part of the lamp, was a direction turn indicator lamp, failed to conform with ADR 6 or ADR GA and that if fitted to a motor vehicle or trailer would make the motor vehicle or trailer unroadworthy and make a person using that vehicle on a yoad liable to a penalty under the Road Safety (Vehicles) Regulations 1987. In any eavent, 1t was contended the use of those lamps would make the vehicle dangerous and unsafe to use. At the hearing a lot of evidence was led directed to the issue of whether the lamps conformed with ADR 6 or ADR 6A, In addition, opinion evidence was led on whether non-conformity made the use of the vehicle dangerous or unsafe. Before proceeding further it is necessary to make reference to the relevant provisions of the Trade Practices Act. Hella relies upon the following sections:- "S82. (1) A corporation shall not, in trade ofr commerce, engage 1m conduct that is misleading or deceptive or is likely to mislead or deceive. ... 53. A corporation shall not, in trade or commerce, im connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services-— (a) falsely represent that goods are of a particular standard, quality, grade, composition, style or model or have had a particular history or particular previous UBEF sae S55. A person shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods." It is noted that 5.55 applies to "a person" and relies upon the External Affairs power of the Constitution, see 5.51( xxix). The evidence does not establish that the words "Replaces" or "Replaces for" have any special meaning in the automobile industry. Hence, for the purposes of this case, they must be given their usual meaning. It 1s difficult to understand why the word "for" is used. Tt appears to be unnecessary, it is used in the wrong syntax. The use of a numbering system to describe automobile lamps appears to be in common use in the automobile industry. In this context, it is useful to be able to identify a particular type of lamp . - ll - by reference to the number used by different manufacturers. This is apparent from the second catalogue issued by Monopol which lists the numbers of three manufacturers with respect to a similar lamp. In this context, the word "Replaces" when referring to a number, 15 used in the sense of identifying the type of lamp being referred to. Thus 6000 replaces 2397 conveys the meaning that the Monopol lamp 656000 is interchangeable with the Hella lamp 2337. This 15 consistent with meanings given by dictionaries. Thus, the Shorter Oxford Dictionary has "Replace", "2. To take the place of, become a substitute for (a person or thing)" and the Macquarie Dictionary has "2. to provide a substitute or equivalent in the place of." Counsel for Hella went Further. He contended that the word "Replaces" imports either expressly or by implication that the Monopol lamp which is said "Replaces" the Hella lamp was of the same standard or quality as the Hella lamp, was substantially identical with the Hella lamp or was suitable for the same purpose as the Hella lamp, that the Hella lamp conformed to the standards prescribed by ADR 6 and ADR 6A, that the Monopol lamp did not conform to those standards and thus Monopol, by using the word "Replaces" engaged in conduct in contravention of s.52 of the Act, or in breach of s.53(a) or s.55 of the Act. - 12- As appears later in these reasons, at one stage Monopol sold its lamps by reference to the numbering system used by Hella. By an agreement made between Hella and Monopol in November 1985, Monopol agreed not to sell its lamps by reference Eo the Hella numbers. Thereafter, Monopol introduced its numbering systen. Thus it is literally correct to say that the new numbers used by Monopol replaced the old number used by Monopol. The old numbers were the same numbers as those used by Hella. It is interesting that Hella is not seeking orders in the form of restraining Monopol from selling its lamps by reference to the Hella numbers, but only where the Monopol lamps are not of the same Standard or quality as the Hella lamp. I do not accept the contention made on behalf of Hella. Im my opinion, the use of the word "Replaces" does not import either expressly or by implication that the Monopol lamp is of the same quality or standard as the Hella lamp. That use does not constitute conduct which is misleading or deceptive or likely to mislead or deceive within the meaning of s.52 of the Act and does not constitute conduct in contravention of s.53(a) or 45.55 of the Act. In essence, what is being said on behalf of Hella, is that any corporation or person in trade of commerce, who sells or offers to sell goods which fail to comply with statutory requirements, engages in conduct in contravention of sections 52, 53(a) or 55 of the Act. This is so irrespective of whether the corporation or person makes any statement or does any thing which has the effect of asserting that the goods do - 13- comply with the law. In other words, what is being contended is that the sale of any goods carries with it, by implication, a representation that the goods comply with all legal specifications that might apply to those goods. [I do not atcept that contention. In my opinion, the word "Replaces" carries with it no more than the implication that the Monopol lamp can be used in lieu of the Hella lamp. The consequences flowing from that use are a matter for State law. If the relevant State authorities believe that the Monopol products are in breach of State law, they could take the appropriate action under State law. This is said in the knowledge that the testing of lamps to determine whether they comply with ADR 6 or ADR 6A is axtremely complicated and difficult and it is most unlikely that action would be taken against a user under the Road Safety (Vehicles) Regulations 1987 or the equivalent legislation in other States. The States have enacted that legislation. If it is desired to enforce that legislation, the State authorities should take the appropriate actions. I should add that the evidence has failed to persuade me that the use of the Monopol lamps in question gives rise to a position of danger or absence of safety. In view of this conclusion, it is not necessary to make findings on whether the Monopol lamps come within ADR 6 or ADR 6A. Nevertheless, I should say that on this aspect, I accept the evidence of Mr. Heinz Schulte, the design engineering manager for Hella. He has the necessary -~ 1a - facilities and experience to conduct tests to determine compliance with the ADR's. It appears that he regularly conducts tests on lamps manufactured by Hella. If defects are found, the particular batch of lamps involved are not used, but the defect is rectified and a new batch is supplied. It appears that one batch may differ from another batch of the same lamp, thus the continuing need to test arises. In the past, Monopol has been at fault in not specifying the wattage of the globes to be used. This has been rectified. To the extent that the tests conducted by Schulte have used the wrong wattage globes, the results should be ignored. A minor non-compliance with the ADR's does not of itself mean non-compliance. The requirements specify a maximum and a minimum intensity of light at different angles. It is difficult to see how a slight variation in some positions could make the use of the lamp unlawful or dangerous. In my opinion, the test specifications contained in the ADR's, including definitions, are sufficiently clear to define the method of testing. What has been said so far on this aspect relates to the effect of the words "Replaces" or "Replaces for." Those words are no longer being used by Monopol. Of necessity, in the absence of those words, there 15 no implication arising from the use of the Monopol number and the Hella number for corresponding lamps that the Monopol lamps are of the same quality and standard as the Hella lamps. - 15 - The applicant's claim, insofar as it is based upon the Trade Practices Act, is dismissed. In addition to claims based upon the Trade Practices Act, Hella 1s making claims based upon breach of contract. Prior to November 1985, Monopol was promoting the sale of Monopol lamps by using the same numbering system as Hella and using similar get up as Hella. After complaints by Hella and protracted negotiations between their respective solicitors, Hella and Monopol agreed to resolve their differences. The terms of the resolution of the differences are contained in an agreement in writing dated 29 November 1985. In order to understand the claim it 15 necessary to set out some parts of that agreement. The recitals contained the following: - "WHEREAS : A. Hella manufactures and sells a large range of automotive electrical light and signal equipment throughout Australia and elsewhere. B. Hella is the owner of the entire right title and interest in and to the name and trade mark 'Hella' in respect of automotive signal and electrical lighting equipment and claims to be the owner of the entire right title and interest in and to: i. particular part numbers used by Hella for many years which identify products to third parties as those of the manufacture of Hella (hereinafter referred to as 'the said part numbers') ; and ii. the copyright residing in Hella's distinctive blue and yellow packaging (hereinafter referred to as 'the said packaging'). -16- Cc. Plentium Pty. LUtd., which is the registered Proprietor of and trades under the business mame 'Monopol' is the manufacturer and/or importer and seller of, inter alia, electric lamp and signal equipment for use with road vehicles. D. Hella has alleged that Monopol has:- i. attempted to pass its products off as those of Hella and has engaged in misleading and deceptive conduct contrary to provisions of the Trade Practices Act 1974 by:- a. using the said part numbers; b. using packaging substantially identical or deceptively or misleadingly similar to the said packaging; c. offering for sale and selling its products as 'Hella' products. ... E. Monopol has denied or not admitted aach or any of the above allegations." Under the agreement, Monopol agreed, inter alia, as follows:- "PART NUMBERS : 1. Monopol hereby agrees on behalf of itself, its officers, directors, servants and agents or otherwise howsoever to immediately cease and forever desist from manufacturing or causing to be manufactured, importing or causing to be imported, distributing, offering for sale, displaying for sale, advertising for sale or selling automotive signal or electrical lighting equipment under or by reference to the said part numbers." - 17 - Since the date of the agreement, Monopol has adopted its own number system for its lamps. The numbers 50 adopted differ from the numbers adopted and used by Hella. Counsel for Hella contends that Monopol, even though selling lamps by reference to its own numbering system, nevertheless by using the words "Replaces" or "Replaces for" and then indicating the Hella mumber for the corresponding lamp or even without the use of the words "Replaces" or "Replaces for" constitutes "offering for sale, displaying for sala, advertising for sale or selling" lamps "under or by reference to the" present numbers used by Hella. I do not accept that contention. In the agreement, the phrase "part numbers" is defined to mean the particular numbers used by Hella to identify particular products ta third parties. The recitals contain the statement that Monopol was in breach of the Act "by using the said part numbers." That use was in fact the offering for sale and selling lamps under or by reference to part numbers being identical to the numbers used by Hella. Thus an order to Monopol for a lamp using a Hella number would be the same number as that used by Hella for the equivalent lamp. Under the agreement, that is what Monopol agreed not to do in the future. Subsequently it developed its own number system. Sales by Monopol take place under or by reference to its number system. The comparative number system used by Hella, and for that matter, Ashdown, merely identifies equivalent lamps. The use by Monopol of the Hella number, in that context, does not constitute offering for sale, displaying - 18 - for sale, advertising for sale or selling lamps "under or ~by reference" to part numbers. Accordingly, the applicant fails on this part of its application. In the result, the application is dismissed with costs. | I certi.y thet ilis and the Sevenreen (7) preceding pages are a true copy of the | Reasons for judgment herein of the Honourable Mr. Justice RM Northreep 1 Qharory P JUACW Associate Dated: 3 Mach 19SS ota a ST