FEDERAL COURT OF AUSTRALIA

Schutz DSL (Australia) Pty Ltd (ACN 009 069 907) v VIP Plastic Packaging Pty Ltd (ACN 095 313 705) (No 3) [2009] FCA 1195

SCHUTZ DSL (AUSTRALIA) PTY LTD (ACN 009 069 907), SCHUTZ GMBH & CO KGAA and PROTECHNA S.A. v VIP PLASTIC PACKAGING PTY LTD (ACN 095 313 705) and VIP STEEL PACKAGING PTY LTD (ACN 095 314 195)

WAD 136 of 2009

MCKERRACHER J

21 OCTOBER 2009

PERTH

THE COURT ORDERS THAT:

1.                  The letter to be dispatched (if any), to the five customers of VIP Plastic Packaging Pty Ltd and VIP Steel Packaging Pty Ltd identified in the affidavit of Mr Andrew Robert Smith sworn 13 October 2009 be in the form of Attachment ‘D’ to these reasons.

2.                  Costs associated with order 1 be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

INTRODUCTION

1                                             On 6 October 2009, (amongst others) I made the following order in this proceeding:

Upon the applicants’ giving the usual undertaking as to damages and further undertaking not to correspond with any third party disclosed as a result of order 1 of these orders until the parties have agreed or the Court has made an order in relation to the form of any correspondence or communication with such third parties,

1.         Within 7 days of these orders, the respondents by their proper officer file and serve an affidavit specifying the names, addresses, telephone numbers and email addresses of those of its customers to whom they have sold Composite Intermediate Bulk Containers suitable for use in the transport of dangerous goods manufactured by the first or second applicants, or their agents or licensees, which contain inner plastic containers manufactured by persons other than the first or second applicants (DG IBCs).

2                                             Subsequently, VIP filed and served an affidavit in compliance with that order identifying five customers to whom there had been sales of cross-bottled Composite Immediate Bulk Containers for use in the transport of dangerous goods (DG IBCs). 

3                                             Solicitors for Schutz wrote to VIP on 5 October 2009 enclosing a draft of a letter which Schutz proposed sending to the five customers.  A copy of that letter is annexed as Attachment ‘A’.

4                                             VIP responded setting out those parts of the letter to which it objected, suggesting amendments in a marked up or tracked version.  That version is attached as Attachment ‘B’.  An unmarked copy of that letter is also annexed as Attachment ‘C’.

5                                             Some matters have been agreed, others have not. 

CURRENT DEBATE

6                                             VIP submits that the Schutz draft letter goes beyond what was proposed to the Court insofar as it seeks to threaten VIP customers with possible legal action. 

7                                             Secondly, VIP objects to the heading ‘Warning’ in large font at the commencement of the letter and the advice at the completion of the letter that each VIP customer should seek ‘independent legal advice’. 

8                                             The basis on which the Norwich Pharmacal relief was granted to Schutz was on the offer made by VIP to give the requisite information on the submission made by counsel for Schutz that:

we would desire to contact those people who acquire them for the respondents and say we disassociate ourselves from them and they are not certified even though they purport to be. We need to do that as a matter of protection for them and for us.

9                                             Schutz contends that the ‘clarity, completeness and forcefulness’ of the information conveyed by the letter are ‘vital to the satisfaction of its purpose’.  It also argues that the recommendation that third parties obtain independent legal advice ‘is essential’ in circumstances where the regulatory regime is complex and where use or resale of an uncertified cross-bottled IBC manufactured by VIP may constitute an offence. 

SETTLING THE DRAFT LETTER

10                                          There are valid reasons to retain most of the content in the Schutz draft.  But the communication should be neither alarmist nor directive.  It need go no further than is reasonably necessary to reflect the possible level of risk to which I adverted in my reasons.  That risk has not been shown to be particularly significant.  The communication should be proportionate to the limited level of risk.  It should not create a commercial advantage to Schutz by denigrating VIP.  I do not suggest that the Schutz draft does this but those are the principles I have in mind in settling the terms of the draft. 

11                                          In my view it would be sufficient to head the letter with the words ‘Important Information’.  The words ‘Warning-Important Notice’ should be deleted and replaced with the words ‘Important Information’ in bold and capitals but not in a large font.  See Attachment ‘D’. 

12                                          There should be reference to the fact that VIP has disputed the allegations of Schutz and is defending the matter in Court.  That is included in Attachment ‘D’.

13                                          The heading under the VIP undertaking should refer to the fact that it was made on an expressly without admissions basis and should include the words ‘until trial or until further order of the Court’:  see Attachment ‘D’.

14                                          I consider the words ‘at the time they were sold to you’ should be included in the second portion of the advice to the customers.  Four sets of submissions were lodged in relation to the un-agreed wording of the letter.  The second exchange of submissions in each instance was primarily directed to this issue.  I was not satisfied that it is an issue presently capable of resolution.  On that basis the additional words confine the content to that which is undoubtedly accurate. 

15                                          I accept VIP’s submission that the gratuitous advice in the third paragraph originally under the draft heading ‘Notification Warning’ should be removed as should the heading.  The content should be included and should read as follows:

Recommendation

The legislation concerning dangerous goods is reasonably complex.  If you have concerns or are unclear as to any aspect of the matters raised in this letter, it is suggested that you obtain your own independent legal advice in relation to your particular circumstance and the relevant legislation concerning dangerous goods.

16                                          The letter to be dispatched (if any), in accordance with these modifications is that appearing as Attachment ‘D’ to these reasons and I so order:

1.                  The letter to be dispatched (if any), to the five customers of VIP Plastic Packaging Pty Ltd and VIP Steel Packaging Pty Ltd identified in the affidavit of Mr Andrew Robert Smith sworn 13 October 2009 be in the form of Attachment ‘D’ to these reasons.

2.                  Costs associated with order 1 be reserved.

Associate: 

Dated:         21 October 2009

Attachment ‘A’

Attachment ‘B’

Attachment ‘C’

Draft Letter to Customers

October 2009

##

Dear ##

Schütz DSL (Australia) Pty Ltd (ACN 009 069 907) & Ors v VIP Plastic

Packaging Pty Ltd (ACN 095 313 705) & Anor Federal Court of Australia

Action No. WAD 136 of 2009

We act for Schütz DSL (Australia) Pty Ltd, Schütz GmbH & Co KGaA (collectively Schütz)

and Protechna S.A.

On 6 October 2009, the Federal Court of Australia ordered that VIP Plastic Packaging Pty Ltd and VIP Steel Packaging Pty Ltd (collectively VIP) provide details of the names, addresses, telephone numbers and email addresses of those of their customers to whom they have sold for use in the transport and storage of dangerous goods, composite intermediate bulk containers manufactured by Schütz which contain inner plastic containers manufactured by persons other than Schütz (DG Cross-Bottled IBCs).

You have been identified by VIP as having purchased DG Cross-Bottled lBCs from them

designated as being certified for use in the transport and storage of dangerous goods.

The Federal Court Action

On 7 August 2009, Schütz commenced proceedings against VIP for, amongst other things,

relief in respect of alleged misleading and deceptive conduct under the Trade Practices Act

1974 (Cth) and trade mark infringement, with respect to the sale by VIP of the DG Cross-Bottled IBCs. VIP has disputed these allegations and is defending the matter in Court.

Schütz contends that VIP was selling DG Cross-Bottled lBCs where they did not have the necessary approvals from a relevant Competent Authority and that this conduct was misleading or deceptive.

The VIP Undertaking

On 27 August 2009, VIP offered, expressly on a 'without admissions' basis [until trial or further order of the Court] to:

1          immediately refrain by themselves, their servants or agents from selling, offering for

sale or distributing in the course of trade Cross-Bottled lBCs designated as being

suitable for the transport of dangerous goods; and

2          to affix to each label plate of the cage of any Cross-Bottled IBC that is sold, offered

for sale or distributed in the course of trade by them a heat resistant label

substantially in the form and dimensions of the mock up annexed and marked 'A' to

this letter and to remove therefrom any marking affixed by Schütz signifying that the

said IBC is certified for use in the transport of dangerous goods.

Notification

I write to advise you that:

1        Schütz has not in any way authorised the sale or supply by VIP of any DG Cross-Bottled lBCs to you; and

2          Schütz contends DG Cross-Bottled lBCs sold by VIP since December 2008 and

designated as being certified for use in the transport and storage of dangerous

goods, were not in fact certified for that use at the time that they were sold to you.

Yours sincerely

Martin Bennett

General Counsel

Attachment ‘D’

# October 2009#

##

Dear ##

IMPORTANT INFORMATION

Schűtz DSL (Australia) Pty Ltd (ACN 009 069 907) & Ors v VIP Plastic Packaging Pty Ltd (ACN 095 313 705) & Anor Federal Court of Australia No. WAD 136 of 2009

We act for Schűtz DSL (Australia) Pty Ltd, Schűtz GmbH & Co KGaA (collectively Schűtz) and Protechna S.A.

On 6 October 2009, the Federal Court of Australia ordered that VIP Plastic Packaging Pty Ltd and VIP Steel Packaging Pty Ltd (collectively VIP) provide details of the names, addresses, telephone numbers and email addresses of those of their customers to whom they have sold for use in the transport and storage of dangerous good, composite intermediate bulk containers manufactured by Schűtz which contain inner plastic containers manufactured by persons other than Schűtz (DG Cross-Bottled IBCs).

You have been identified by VIP as having purchased DG Cross-Bottled IBCs from them designated as being certified for use in the transport and storage of dangerous goods.

The Federal Court Action

On 7 August 2009, Schűtz commenced proceedings against VIP for, amongst other things, relief in respect of alleged misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and trade mark infringement, with respect to the sale by VIP of the DG Cross‑Bottled IBCs.  VIP has disputed these allegations and is defending the matter in Court.

Schűtz contends that VIP was selling DG Cross-Bottled IBCs where they did not have the necessary approvals from a relevant Competent Authority and that this certification was misleading or deceptive.

The VIP Undertaking

On 27 August 2009, VIP offered, expressly on a 'without admissions' basis [until trial or further order of the Court] to:

1          immediately refrain by themselves, their servants or agents from selling, offering for sale or distributing in the course of trade Cross-Bottled lBCs designated as being suitable for the transport of dangerous goods; and

2          to affix to each label plate of the cage of any Cross-Bottled IBC that is sold, offered for sale or distributed in the course of trade by them a heat resistant label substantially in the form and dimensions of the mock up annexed and marked 'A' to this letter and to remove therefrom any marking affixed by Schütz signifying that the said IBC is certified for use in the transport of dangerous goods.

I write to advise you that:

1          Schűtz has not in any way authorised the sale or supply by VIP of any DG Cross-Bottled IBCs to you; and

2          Schütz contends DG Cross-Bottled lBCs sold by VIP since December 2008 and designated as being certified for use in the transport and storage of dangerous goods, were not in fact certified for that use at the time that they were sold to you.

Recommendation

The legislation concerning dangerous goods is reasonably complex.  If you have concerns or are unclear as to any aspect of the matters raised in this letter, it is suggested that you obtain your own independent legal advice in relation to your particular circumstance and the relevant legislation concerning dangerous goods.

Yours sincerely

Martin Bennett

General Counsel

“A”