Hudson Resources Limited v Australian Diatomite Mining Pty Limited & Anor [2002] NSWSC 314

New South Wales Supreme Court

CITATION : Hudson Resources Limited v Australian Diatomite Mining Pty Limited & Anor [2002] NSWSC 314 FILE NUMBER(S) : SC 50001/01 HEARING DATE(S) : 8/04/02, 9/04/02, 10/04/02, 11/04/02, 12/04/02 JUDGMENT DATE : 3 May 2002

Hudson Resources Limited (Plaintiff) PARTIES : Australian Diatomite Mining Pty Limited (First Defendant) Supersorb Minerals NL (Second Defendant) JUDGMENT OF : Einstein J

COUNSEL : Mr PM Wood (Plaintiff) Mr M Cashion SC, Mr AP Coleman (Defendants) The Argyle Partnership (Plaintiff) Kemp Strang (Defendants)

SOLICITORS :

CATCHWORDS : Contract - Implied term - A 'best efforts' clause is ordinarily inserted in a contract between parties at arms length to give protection to a licensor by imposing an obligation on a licensee to promote the sale of the licensor's products - An obligation to use "best endeavours" does not require the person who undertakes the obligation to do more than he reasonably can in the circumstances to achieve the contractual object - An undertaking to use 'best endeavours' or 'best efforts' to promote the sale of one product does not necessarily impose an obligation not to sell a competing product, although it may do so in some circumstances - A party subject to a 'best endeavours' or 'best efforts' obligation to promote the sale of one product will have breached that obligation "if he prepared a product of his own and promoted the sale of that product with the deliberate intention of appropriating for himself the market which he had in effect promised to do all he reasonably could, to secure for the person to whom he had given the undertaking" - A 'best endeavours' or 'best efforts' obligation in a contract includes an obligation not to hinder or prevent the fulfilment of the purpose of the contract - There is no material distinction of substance between the implied terms of reasonableness and good faith and a close association of ideas between the terms unreasonableness, lack of good faith and unconscionability - Misleading and deceptive conduct - Whether representation made that the plaintiff's product was being deleted and replaced by the second defendant's new product. - Passing off - Whether second defendant purposely copied the get up of the plaintiff's product packaging with the intention of misleading purchasers - Damages - Account of profits - Whether plaintiff's product likely to regain shelf space LEGISLATION CITED : Trade Practices Act 1974 Burger King Corp v Hungry Jack's Pty Ltd [2001] NSWCA 187 Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Rahme v Commonwealth Bank of Australia, (Unreported, 20/12/1991 NSWCA, CA 40155) CASES CITED : Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 Sheffield District Railway v Great Central Railway Co (1911) 27 TLR 451 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 Slazenger & Son's v Feltham & Co [1889] 6 RPC 531 Sterling Winthrop Pty Ltd v R & C Products Pty Ltd (1994) 16 ATPR 41 - 308 Terrell v Mabie Todd & Co Ltd (1952) 69 RPC 234 Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83 DECISION : Reasons for judgment generally upholding the plaintiff's cases based upon breach of contract and passing off and otherwise as set out in the judgment.; The proceedings are to be listed for the taking of any further submissions thrown up by the above reasons and for the bringing in of short minutes of order which may now be able to be agreed by the parties with the assistance of their experts.