Monster Energy AU Pty Ltd v Whincup [2013] NSWSC 87

Supreme Court New South Wales

Medium Neutral Citation: Monster Energy AU Pty Ltd v Whincup [2013] NSWSC 87 Hearing dates: 13 February 2013 Decision date: 14 February 2013 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Amended notice of motion dismissed with costs Catchwords: REMEDIES - injunctions - interlocutory injunctions Category: Interlocutory applications Parties: Monster Energy AU Pty Ltd (plaintiff / applicant) Jamie Whincup (first defendant / respondent) Triple Eight Race Engineering Australia Pty Ltd (second defendant / respondent) Red Bull Australia Pty Ltd (third defendant / respondent) Representation: Counsel: I M Jackman SC with T W Marskell (plaintiff / applicant) N Kidd SC with G E S Ng (first and second defendants / respondents) A A Henskens SC with S J Duggan (third defendant / respondent) Solicitors: HWL Ebsworth Lawyers (plaintiff / applicant) Hugh & Associates (first defendant / respondent) Hughlaw Pty Ltd (second defendant / respondent) Swaab Attorneys (third defendant / respondent) File Number(s): SC 2012/349785 Publication restriction: Nil

EX TEMPORE Judgment 1This is an application for an interlocutory injunction pending the final hearing of these proceedings on 12 and 13 March 2013. In my opinion, the application should be dismissed. 2The plaintiff ("Monster Energy") markets, sells and distributes an energy drink known as "Monster Energy". One of its direct competitors is the third defendant ("Red Bull") which markets, sells and distributes an energy drink known as "Red Bull". 3The first defendant, Mr Jamie Whincup, is a prominent motor racing competitor. He is the defending champion of the annual Drivers Championship of the Australian V8 Supercar Championship Series. 4The second defendant ("Triple Eight") is a participating team in that series. It holds a racing entitlement contract from the governing body of the series, V8 Supercars Australia. 5During 2012, the parties entered into three agreements as follows. 6First, a "Racing Driver's Agreement" was made between a company of which Mr Whincup is the sole director and shareholder ("Whincup Motorsport Pty Ltd" - "WCM") and Triple Eight on 19 March 2012. 7Mr Whincup is not expressed to be a party to this agreement. At the hearing there will be an issue as to whether, on the proper construction of the agreement, Mr Whincup is a party to the agreement, whether Mr Whincup is entitled to enforce the agreement even if he is not a party, and whether there is, in any event, an implied agreement between Mr Whincup and Triple Eight to the effect of the Racing Driver's Agreement. I am not in a position, and it would not be appropriate for me, to express any opinion about those matters at this stage. For the purposes of this application, I propose to proceed upon the basis that, one way or the other, Mr Whincup is bound by the promises set out in the agreement. 8Those promises are that: - (a)WCM will supply Triple Eight with Mr Whincup's services "exclusively to drive a Team Super Car" for the 2013 and 2014 Australian V8 Supercars Championship Series; (b)WCM and Mr Whincup will promote Triple Eight and all "sponsors allied to the Team"; and (c)Mr Whincup will wear team clothing, racing uniform, overalls and the like. 9The agreement contains a provision in which Mr Whincup purports to acknowledge that "no personal sponsorship will be permitted... that could be deemed to conflict and/or clash with a Team sponsor". 10Second, Monster Energy and Mr Whincup entered into a "Promotion/Endorsement Agreement" on 26 March 2012 pursuant to which: - (a)Mr Whincup agreed to promote and endorse Monster Energy products during 2012 and 2013 (and, at Monster Energy's option, 2014) including by wearing a Monster Energy branded helmet when motor racing and making personal appearances at three events at which he competes; (b)Mr Whincup agreed to not at any time "promote the products of a competitor that either directly or indirectly" competes with Monster Energy products. 11Third, on 28 September 2012 Red Bull and Triple Eight entered into a "Sponsorship Agreement" pursuant to which: - (a)Red Bull became the sponsor of the Triple Eight V8 Supercar Team; (b)Triple Eight gave Red Bull exclusive rights to name Triple Eight's V8 Supercar Team "Red Bull Racing Australia"; (c)Triple Eight agreed to ensure that no other "non-alcoholic beverage brand" was associated directly or indirectly with the Triple Eight V8 Supercar Team without Red Bull's consent; and (d)Triple Eight and Red Bull agreed if any severance payment was required to terminate Mr Whincup's agreement with Monster Energy, they would share that cost on an agreed basis and up to a specified limit. 12When Mr Whincup entered into the agreements in March 2012 with Triple Eight (through WCM) and with Monster Energy, the major sponsor of Triple Eight was Vodafone Hutchison Australia Pty Ltd ("Vodafone"). In June 2012 Vodafone announced that its sponsorship of the Triple Eight V8 Supercar Racing Team would finish at the conclusion of the 2012 V8 Supercar series. 13In early August 2012 Triple Eight and Red Bull announced that Red Bull would become the Triple Eight sponsor in the upcoming season. The Triple Eight Team agreed to call itself "Red Bull Racing Australia". 14Mr Whincup was thereby placed in a difficult position. He (through his company) had agreed to drive exclusively for Triple Eight and not to enter into a sponsorship agreement which would conflict or clash with the team sponsor. Presumably, it was on this basis that he entered into the Promotion/Endorsement Agreement with Monster Energy a few days later. 15Once Red Bull became Triple Eight's sponsor, Mr Whincup found himself in the position where, on one view of it, he was bound by inconsistent contractual obligations. No doubt that is a matter to be explored at the hearing. 16The 2013 V8 Supercar series is about to commence. There are two events scheduled between now and the hearing date of 11 March 2013. This coming Saturday, 16 February 2013, the "Official V8 Supercar test" will take place at Eastern Creek in Sydney. Between 28 February and 3 March 2013 the "Clipsal 500" event will take place in Adelaide. Mr Whincup is scheduled to drive in each of these events. 17In these circumstances Monster Energy seeks the following orders: - (1)Upon the plaintiff by its Counsel giving to the Court the usual undertaking as to damages, an order that until further order of the Court the defendant, Jamie Whincup, be restrained from promoting Red Bull products in breach of the written agreement made between the plaintiff and the defendant on 26 March 2012 (Promotion and Endorsement Agreement) other than by driving a Red Bull branded racing car for the first respondent, Triple Eight Race Engineering Australia Pty Ltd, while displaying "Monster Energy" trademarks on the defendant's clothing and equipment specified in the Promotion and Endorsement Agreement. (2)Upon the plaintiff by its Counsel giving to the Court the usual undertaking as to damages, an order that until further order of the Court the first respondent, Triple Eight Race Engineering Australia Pty Ltd, and the second respondent, Red Bull Australia Pty Limited, be restrained for the term of the Promotion and Endorsement Agreement from inducing the first defendant to breach the Promotion and Endorsement Agreement by promoting Red Bull products other than by instructing the defendant, Jamie Whincup, to drive a Red Bull branded racing car for the first respondent, Triple Eight Race Engineering Australia Pty Ltd, while displaying "Monster Energy" trademarks on the defendant's clothing and equipment specified in the Promotion and Endorsement Agreement. 18It can be seen from those orders that Monster Energy does not seek, in terms, to restrain Mr Whincup from competing in the forthcoming events. Indeed, Mr Jackman SC, who appeared with Mr Marskell for Monster Energy, emphasised in oral submissions that Monster Energy did not wish to achieve that result. 19Mr Jackman agreed that if the effect of granting the injunction sought would, or may be, that Mr Whincup be "sidelined", and prevented from driving in any of those events, that would be a powerful reason why the injunction should not be granted. 20In written submissions, Monster Energy said: - "Interlocutory relief is sought in a limited form only. The relief would restrain Whincup from promoting Red Bull products unless: (a) The promotion involved Whincup driving a Red Bull branded car; and (b) Whincup displays the Monster Energy trademarks that he promised to display in his agreement with Monster Energy." 21Thus, Monster Energy is, for present purposes, content for Mr Whincup to drive in a car bearing Red Bull logos and the like, but seeks, in effect, to compel the result that Mr Whincup also display Monster Energy logos (for example, on his helmet and clothing).