FEDERAL COURT OF AUSTRALIA

Rewaco Pty Ltd v Touroz Trikes Pty Ltd [2011] FCA 754

THE COURT ORDERS THAT:

1.    On the provision of the usual undertakings as to damages by the applicant, until further order:

(a)    Each of the first, second and third respondents is restrained, whether by itself, its agents or howsoever otherwise, from importing, promoting, distributing, advertising, offering for sale, communicating, describing, displaying or otherwise using the mark “Rewaco” in Australia in any way in relation to three wheel motorcycles (“trikes”) or otherwise infringing in Australia the registered trade mark number 954114, which is the word “Rewaco”; and

(b)    Each of the first, second and third respondents is restrained, whether by itself, its agents or howsoever otherwise, from using a carriage service as defined in the Telecommunications Act 1997 (Cth) to communicate, publish, promote, inter-link websites, distribute, advertise, offer for sale, display or otherwise use the mark “Rewaco” in Australia in any way in relation to trikes or otherwise infringing in Australia the registered trade mark number 954114, which is the word “Rewaco”.

2.    The goods seized by Customs under s 133 of the Trade Marks Act 1995 (Cth) and referred to in the Notices of Seizure to Objector dated 3 May 2011 (being Customs file No. 2011/013923-01) and 23 May 2011 (being Customs file No. 2011/041764-01) be released forthwith to the first respondent on the following conditions:

(c)    The first respondent will remove and deliver to the Court:

(i)    all instruments (including but not limited to the speedometer, tachometer, battery gauge and temperature gauge) bearing the mark “Rewaco” on the trikes seized by Customs;

(ii)    all documentation to which the mark “Rewaco” has been applied in relation to the trikes seized by Customs;

(iii)    any other accessory or document to which the mark “Rewaco” has been applied that has been seized by Customs.

(d)    The first respondent will maintain all appropriate records in relation to the sale of trikes by the first respondent.

3.    The application for interlocutory relief so far as concerns the fourth and fifth respondents be adjourned to the next directions hearing.

4.    Costs be reserved.

5.    There be liberty to apply on three (3) days notice.

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 Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    By application filed 8 June 2011 Rewaco Pty Ltd seeks both permanent and interlocutory relief against the respondents pursuant to the Trade Marks Act 1995 (Cth) (“the Act”) in relation to alleged infringement of Trade Mark “Rewaco”, Registration No 954114 (“the trade mark”). The permanent relief the applicant seeks includes, in summary, injunctions prohibiting the respondents using the mark “Rewaco” in Australia in relation to three wheel motorcycles (“trikes”), injunctions prohibiting the respondents from using a telecommunications service to offer for sale or otherwise use the mark “Rewaco”, orders that the respondents forfeit to the Commonwealth goods infringing the trade mark seized in May 2011, costs, and damages.

2    The interlocutory relief sought by the applicant overlaps with the permanent relief but also includes orders restraining the Chief Executive Officer of Customs from releasing to the respondents a number of trikes infringing the applicant’s trade mark. Two shipments of trikes imported by the first respondent have been seized by Customs pursuant to s 133 of the Act. There is time sensitivity in respect of this aspect of the interlocutory relief sought as Customs is required under the Act to release to the respondents seized goods by Friday 8 July 2011 in the absence of an order of this Court.

3    The proceedings currently before the Court concern only the interlocutory relief sought by the applicant.

4    The applicant is a company incorporated in Australia, operating out of Cairns in north Queensland. The first respondent, Touroz Trikes Pty Ltd, is also a company incorporated in Australia which sells and distributes three wheel motorcycles manufactured in Germany by the fourth respondent, Rewaco Spezialfahrzeuge GmbH. The second respondent, Mr Martinus Kropman, and the third respondent, Ms Anna Kropman, are directors of Touroz Trikes Pty Ltd. The fifth respondent, Mr Schmitz, is the founder and managing director of the fourth respondent. Notwithstanding the common name, there does not appear to be any relationship between the applicant and the fourth respondent.

5    At the hearing yesterday morning the first, second and third respondents were represented by Mr Luke Fox of Blue Fox Legal. In Court Mr Fox sought to file an affidavit sworn by him. Annexed to that affidavit was a copy of an unsworn affidavit of the third respondent, Ms Kropman, signed by Ms Kropman in Innsbruck, Austria on 3 July 2011, although not before an authorised witness.

6    It appears that the fourth and fifth respondents have not been served with process in this case. No appearance was entered by either of these respondents yesterday at the hearing.

7    Further at the hearing the applicant was not represented by a solicitor contrary to O 4 r 14(2) of the Federal Court Rules. Rather, Mr Shane Subloo, a director of the applicant, sought the leave of the Court to appear on behalf of the applicant.

8    An order granting leave to Mr Subloo to appear on behalf of the applicant was opposed by Mr Fox on behalf of his clients, for reasons including that the matter involved complex legal issues and that his clients would experience significant prejudice should Customs continue to retain possession of the seized goods.

9    In light of factors including that Mr Subloo was one of three directors of the applicant, that he had already filed material in respect of the proceedings, and that the proceedings before me involved determinations only in relation to interlocutory relief, I ordered that leave be granted to Mr Subloo to represent the applicant but for the purposes only of the interlocutory relief sought. Any further hearings in these proceedings in which Mr Subloo seeks to represent the applicant will require a further application for leave by the applicant.

10    At the hearing Mr Fox also informed the Court that he had been instructed to offer undertakings until trial or further order in respect of use of the trade mark, material and instruments associated with the trikes currently held by Customs bearing the mark “Rewaco”, including an undertaking as to damages. After an adjournment to enable Mr Subloo to consider these undertakings, Mr Subloo informed me that the parties had been unable to reach agreement in respect of the undertakings offered by the first respondent.

Background

11    The background to the proceedings is summarised in the affidavit of Mr Subloo sworn 8 June 2011 and also in oral evidence given during the hearing yesterday by the parties. Relevant facts as claimed by Mr Subloo are as follows:

    The applicant is a family business, based in Cairns, which is in the business of manufacturing, distributing and selling trikes in Australia.

    On 16 May 2003 Mr Subloo lodged on behalf of the applicant the trade mark registration application for the mark “Rewaco”. On 8 January 2004 he was notified of the registration of the trade mark the subject of these proceedings.

    On 3 March 2010 Mr Subloo sent a letter by fax to the fourth respondent warning it of the applicant’s registered trade mark and to cease and desist use of the trade mark. He received no reply.

    On 4 March 2010 Mr Subloo saw several pictures on the website www.touroztrikes.com.au with the trade mark on them. (I note there is no snapshot of the website at that date in evidence before me.)

    On 5 March 2010 Mr Subloo sent a letter to the first respondent by fax and email warning them of the existence of the registered trade mark and to cease and desist use of the trade mark. Several more warnings followed. There was no reply or action taken by Touroz Trikes Pty Ltd.

    On 3 May 2011 Mr Subloo received an email from Customs Officer Greg Smith that Customs had located, detained and seized a consignment of four trikes infringing the trade mark, imported by Touroz Trikes Pty Ltd. On 10 May Mr Subloo requested Ms Olivia Doggen to visit the area where the seized trikes were located and take photographs of them. These trikes were accompanied by keyrings bearing the trade mark, as well as documentary material including brochures and owners manuals also bearing the trade mark.

    On 8 May 2011 Mr Subloo wrote to Touroz Trikes Pty Ltd regarding the seized shipment and stated that they had infringed the trade mark, and that the applicant did not authorise or permit the first respondent to use the trade mark.

    On 13 May 2011 Mr Subloo received an email from the legal representative of the first respondent, Mr Luke Fox of Blue Fox Legal, denying inter alia that the importation of trikes manufactured by the fourth respondent infringed the applicant’s trade mark.

    On 23 May 2011 Mr Subloo received an email from Mr Smith that Customs had located, detained and seized a second consignment of eight trikes infringing the trade mark, imported by Touroz Trikes Pty Ltd. On 23 May 2011 Mr Subloo asked Mr Gordon Subloo, another director of the applicant to inspect the second consignment. Mr Gordon Subloo advised that he had detected 40 concealments of the trade mark on the trikes seized. There is evidence before the Court that the trade mark was visible on the trikes, in particular on the instrument panel of each trike.

    On 24 May 2011 Mr Subloo saw photographs of goods seized in the second consignment and saw a sophisticated concealment method constructed by the shipper to conceal the trade mark from the detection of Customs – specifically the use of black vinyl to cover the trade mark on the instrument panel of the vehicles. On the same date Mr Subloo wrote to Mr Fox advising that the second consignment had also infringed the trade mark.

    On 20 March 2010, 10 April 2010 and 11 May 2011 Mr Subloo saw promotional articles and statements describing trikes imported by the first respondent as “Rewaco” trikes. On 18 August 2010 Mr Subloo saw a statement published on an internet chat forum by a person, suggesting that the applicant “ripped off” the REWACO design.

    On 8 June 2011 Mr Subloo saw the website www.rewaco.com which contained a statement infringing the trade mark.

12    These facts appear, in substance, to be undisputed. The real dispute in this case is as to whether actions of the respondents have in fact infringed the trade mark.

Interlocutory relief sought by the applicant

13    The applicant claims interlocutory relief in the following terms:

B. CLAIM FOR INTERLOCUTORY RELIEF

AND the applicant claims by way of interlocutory relief:

1.    Under section 137(5) of the Trade Marks Act of 1995 the applicant seeks an order restraining the Chief Executive Officer of Customs from releasing to the respondents the goods infringing the applicant’s trade mark under section 20(2), section 120(1) and section 126(a) of the Trade Marks Act 1995, as seized on the 3rd of May 2011 (Customs File 2011/01 3923-01).

2.    Under section 137(5) of the Trade Marks Act of 1995 the applicant seeks an order restraining the Chief Executive Officer of Customs from releasing to the respondents the goods infringing the applicant’s trade mark under section 20(2), section 120(1) and section 126(a) of the Trade Marks Act 1995, seized on the 23rd of May 2011 (Customs File 2011/014764-01).

3.    Under section 20(2), section 120(1) and section 126(a) of the Trade Marks Act 1995 the applicant seeks an order prohibiting the respondents from importing, promoting, distributing, advertising, offering for sale, communicating, describing, displaying or otherwise using the mark “Rewaco” in Australia in any way with relation to three wheel motorcycles or otherwise infringing in Australia the registered trade mark number 954114, which is the word “Rewaco”.

4.    Under section 20(2), section 120(1) and section 126(a) of the Trade Marks Act 1995 the applicant seeks an order prohibiting the respondents from using a carriage service as defined in the Telecommunications Act 1997 to communicate, publish, promote, inter-link websites, distribute, advertise, offer for sale, display or otherwise use the mark “Rewaco” in Australia in any way with relation to three wheel motorcycles or otherwise infringing in Australia the registered trade mark number 954114, which is the word “Rewaco”.

5.    Under section 20(2), section 120(1) and section 126(a) of the Trade Marks Act 1995 the applicant seeks an order prohibiting the respondents from delivering, offering for sale or selling any three wheel motorcycle to any individual or body corporate in Australia that believes or has been lead to believe by the respondents that the three wheel vehicle offered as a “Rewaco” three wheel motorcycle.

6.    Under section 20(2), section 120(1) and section 126(a) of the Trade Marks Act 1995 the applicant seeks an order prohibiting the fourth and fifth respondents from making, communicating, publishing or causing to be published statements relating to the applicants mark “Rewaco” in Australia or making, communicating, publishing or causing to be published statements relating to the products which the applicant applies the mark “Rewaco”.

14    The applicant relies in particular upon ss 137(5), 20(2), 120(1) and 126(a) of the Act.

15    Section 137 permits an objector to bring an action for infringement of a notified trade mark in respect of seized goods and give notice of it to the Chief Executive Officer of Customs. In respect of such an action the Court may order relief including that the seized goods be released to their designated order subject to the conditions (if any) that the Court considers fit to impose, or that the seized goods be forfeited to the Commonwealth (s 137(3)). Section 137(5) provides:

If, after 20 working days from the day on which the action was brought, there is not in force at any time an order of the court directed at the Customs CEO preventing the goods from being released, the Customs CEO must release the goods to their designated owner.

16    Section 20(1) of the Act entitles the registered owner of a registered trade mark to the exclusive rights to use the trade mark and to authorise other persons to use the trade mark in relation to the goods and/or services in respect of which the trade mark is registered. Section 20(2) upon which the applicant relies provides:

The registered owner of a trade mark has also the right to obtain relief under this Act if the trade mark has been infringed.

Note: For what amounts to an infringement of a trade mark see Part 12.

17    Section 120(1) is a pivotal provision defining use of a trade mark amounting to infringement, and provides:

A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

18    Section 126(a) provides that the Court may grant relief including an injunction for an infringement of a registered trade mark.

Submissions of the parties

19    In summary, Mr Subloo submitted as follows:

    The trikes currently held by Customs all either bear or are supplied with documentation bearing the trade mark.

    It is important that there be no confusion in the market that there is only one Rewaco manufacturer in Australia – namely the applicant. To that extent damages would not be adequate compensation should the interlocutory relief be refused, because the damage the respondent’s actions could cause the applicant’s business is potentially irretrievable.

    The trikes were originally shipped from Germany in August 2010 and held in Customs until seized in respect of trade mark infringement in May 2011. Accordingly, continuation of the trikes in the custody of Customs pursuant to Court order would not cause prejudice to the respondents more than had existed prior to May 2011.

    Evidence of Ms Kropman to the effect that the trade mark was mistakenly applied to the bodies of the trikes and accompanying documentary material is simply hearsay from a third person employed by the fourth respondent in Germany.

20    For the first, second and third respondents Mr Fox submitted, in summary, as follows:

    The primary issue for determination at the hearing was whether the trikes currently in the custody of Customs should be released.

    The evidence of Anne Kropman is that:

    relevant documentation included in the first shipment was included in error and did not in fact relate to the trikes, and was not intended to be used by the first respondent in the course of trade;

    the mark “Rewaco” was applied to five instruments on each of the eight trikes in the second shipment, however those marks should not have been on the trikes. The first respondent intended to replace those instruments with instruments that did not bear the mark “Rewaco”;

    the first respondent had no intention of selling trikes bearing the Rewaco mark or using the documentation bearing the Rewaco mark accompanying the trikes;

    the first respondent has a registered trade mark “TourOZ Trikes”, and sells trikes with that trade mark.

    As it is clear from the marketing of the first respondent that the trikes it sells are of German manufacture, there can be no market confusion with the trikes sold by the applicant.

    The instrument panels upon which the mark “Rewaco” appeared are in a separate class of goods to those of the trikes.

    The first respondent has offered undertakings that sufficiently protect the applicant’s position and the balance of convenience does not favour making an order restraining Customs from releasing the trikes.

Relevant principles

21    In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [19], Gleeson CJ and Crennan J explained principles relevant to the exercise of the Court’s discretion to grant interlocutory relief, in the following terms:

(I)n all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction.

22    Further, Gummow and Hayne JJ at [65] said:

The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.

By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.

(footnotes omitted)

23    In the circumstances, and taking into consideration these principles, I consider that the applicant has demonstrated a limited entitlement to interlocutory relief. In particular, I consider that:

    subject to the applicant giving the usual undertaking as to damages, I am satisfied that the applicant is entitled to the interlocutory relief it has claimed in paragraphs B 3 and 4 of the application as against the first, second and third respondents.

    I am not persuaded that the applicant is entitled to the interlocutory relief it has claimed in paragraph B 5 of the application as against the first, second and third respondents.

    On the balance of convenience I consider that an order should be made that the trikes should be released from the custody of Customs, subject to certain conditions (and, therefore, the applicant refused the relief it seeks in paragraphs B 1 and 2 of the application).

    At this stage, I am not persuaded of the applicant’s entitlement to interlocutory relief it seeks in paragraphs B 1, 2, 3, 4, 5 and 6 as against the fourth and fifth respondents.

24    I have formed these views for the following reasons.

Usual undertaking as to damages

25    As a preliminary issue I note that, at the hearing yesterday, Mr Fox on behalf of his clients proferred “the usual undertaking as to damages” should the Court be prepared to make orders releasing the trikes from the custody of Customs. The “usual undertaking as to damages” refers to Practice Note issued by the Chief Justice of this Court entitled “CM 14 Usual Undertaking as to Damages” and which provides as follows:

The “usual undertaking as to damages” if given to the Court in relation to any interlocutory order made by it or any interlocutory undertaking given to it, is an undertaking:

•    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof; and

•    to pay the compensation referred to in (a) to the person there referred to.

26    That the respondents should offer such an undertaking as to damages in the context of an application for interlocutory injunctive relief is unusual – it is usually the applicant which offers an undertaking as to damages in relation to an application for an interlocutory injunction. Indeed there is extensive authority to the effect that an undertaking as to damages should, except in special circumstances, be required in every case of an interlocutory injunction or an undertaking in lieu of an injunction: Kerridge v Foley (1968) 70 SR (NSW) 251 at 255, In the application of the ACT Civil Administrative Tribunal v Abbey and Mack [2010] ACTSC 140 at [43], National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 at [9], Westrac Equipment Pty Ltd v Gendredge (Australia) Pty Ltd [2002] WASC 215 at [8], Kirklees Borough Council v Wickes Building Supplies Ltd [1991] 4 All ER 240.

27    The applicant is not, at this stage, legally represented. To that extent the applicant, through Mr Subloo, did not appear aware of what is, in substance and in the absence of unusual circumstances, its obligation to offer the usual undertaking as to damages in an application for interlocutory injunctive relief. On putting this issue to Mr Subloo this morning prior to delivery of judgment however, Mr Subloo make an undertaking on behalf of the applicant as to damages. I understand that Mr Subloo, as a director, is entitled to make that undertaking on the applicant’s behalf.

Interlocutory relief sought in paragraphs B 3 and 4 of the application as against the first, second and third respondents

28    The relief sought by the applicant in paragraphs 3 and 4 is dependent on there being a serious question to be tried that, in summary, the conduct of the first, second and third respondents has infringed the trade mark. At this stage of the proceedings there does not appear to be any differentiation between the position of these respondents. Certainly at the hearing Mr Fox did not draw my attention to any reason to distinguish between them for the purposes of the proceedings.

29    Evidence before the Court demonstrates that the first respondent is in the process of importing trikes which either on their bodies or on accompanying material bear the word “Rewaco”. The applicant’s trade mark is the word “Rewaco”, and the trade mark is registered in respect of class 12 Trikes (3 wheeled motorbike). I am not persuaded as to the merit of Mr Fox’s submission that there can be no potential infringement of the applicant’s trade mark because the mark “Rewaco” appears on the instrument panel (being in Mr Fox’s submission a class 9 good) of the relevant trikes rather than elsewhere on the body of the trike. The goods which have been seized are trikes, not separate instrument panels. The instrument panels bearing the word “Rewaco” are part of the trikes.

30    I am also not persuaded by Mr Fox that there is no serious question to be tried in respect of trade mark infringement because the trikes currently in the custody of Customs were manufactured in Germany rather than in Australia.

31    The orders sought by the applicant in paragraphs 3 and 4 seek to prevent the respondents from, in summary, using the mark “Rewaco” in Australia and using a carriage service as defined in the Telecommunications Act 1997 (Cth) from displaying the mark “Rewaco” in relation to trikes. I consider that the applicant shows a sufficient likelihood of success in relation to its claim of trade mark infringement to justify in the circumstances the preservation of the status quo pending the trial. The orders sought in paragraphs 3 and 4 are effective to achieve this objective. I am also satisfied by the submissions of Mr Subloo as to the ineffectiveness of damages as compensation for the applicant should there develop market confusion in respect of the trade mark and trikes, and that the balance of convenience favours restraints on the first, second and third respondent using the mark “Rewaco” pending trial in terms of the orders sought in paragraphs 3 and 4 of the part B of the application.

Interlocutory relief sought in paragraph B 5 of the application as against the first, second and third respondents

32    However I am not satisfied as to the appropriateness of an order in the terms sought by the applicant in paragraph 5. In this paragraph the applicant seeks an order prohibiting the respondents from “delivering, offering for sale or selling any three wheel motorcycle” to any third party that “believes or has been lead to believe by the respondents that the three wheel vehicle offered as a ‘Rewaco’ three wheel motorcycle”.

33    The applicant is entitled to orders restraining the conduct of the first, second and third respondents to as to maintain the status quo pending determination of the applicant’s claims at trial. It is not in dispute that the applicant is the registered owner of the trade mark, and it is also not in dispute that the first, second and third respondents are in the process of importing trikes with the word “Rewaco” either on the body of the trikes or in accompanying material. However in relation to the relief sought in paragraph 5:

    On the state of the evidence currently before me I am not satisfied that there is a serious question to be tried that the first, second and third respondents have engaged in misleading or deceptive conduct, so as to lead third parties to believe that trikes which the first, second and third respondents are selling or plan to sell are “Rewaco” trikes. I form this opinion particularly in light of the evidence of Ms Kropman concerning the nature of the first respondent’s business, which is to import, promote and distribute motorised trikes under the brand name of “Touroz Trikes”.

    I do not consider the terms of this relief sought to be supported by the Act. To the extent that the applicant seeks to restrain the sale or delivery of any trike to a person who has been lead to believe that the trike is a “Rewaco” trike, the claim appears referable to an substantive allegation of misleading and deceptive conduct contrary to s 18 of The Australian Consumer Law (being Sch 2 to the Competition and Consumer Act 2010 (Cth)) rather than an allegation trade mark infringement referable to ss 20(2), 120(1) and 126(a) of the Act.

    I consider the terms of the relief sought to be too vague and general to warrant the exercise of the discretion of the Court at this stage of the proceedings. Not only are the beliefs or otherwise of third party customers of the first respondent not currently in evidence before the Court, but as a general proposition it may be that potential third party customers form a belief for reasons outside the control of the first, second and third respondents – for example, because of ill-informed speculation on internet websites to which the first, second and third respondents do not contribute. It may also be that the third parties form beliefs about other trikes supplied by the first, second and third respondent (if any) which are in no way related to these proceedings. On the state of the evidence before the Court I consider the position unclear. To that extent, I do not consider the balance of convenience favours the applicant in respect of the grant of the relief sought in paragraph 5.

Interlocutory relief sought by the applicant in paragraphs B 1 and 2

34    In paragraphs 1 and 2 the applicant seeks orders pursuant to s 137(5) of the Act restraining the Chief Executive Officer of Customs from releasing the seized trikes to the respondents.

35    The legislative context of s 137(5) of the Act was explained in Chanel Limited v Kim [2007] FCA 2076. As Greenwood J further explained in Jemella Australia Pty Ltd v Bouobeid [2009] FCA 1567 at [10], an order can be made under s 137(5) to, in effect, preserve the status quo in circumstances where the Court is satisfied that there is a prima facie case of infringement.

36    In relation to the trikes currently in the custody of Customs, I consider it clear that the applicant has made out a prima facie case of infringement of the trade mark for the purposes of Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 per Gleeson CJ and Crennan J at [19] and Gummow and Hayne JJ at [65]. However Mr Fox for the first, second and third respondents has submitted that:

    on the evidence of Ms Kropper, any infringement of the applicant’s trade mark was in error; and

    the first, second and third respondents seek release of the trikes subject to removal of all references either on the bodies of the trikes or any accompanying material to the trade mark.

37    As I observed earlier in this judgment, I understand from Mr Fox that Ms Kropper is currently in Europe, and it for this reason that her evidence before me (which is included in Mr Fox’s affidavit) is currently unsworn. I also note that Ms Kropper’s evidence concerning the conduct of the fourth respondent which constituted alleged errors appears to be hearsay, referable to an employee of the fourth respondent. To that extent evidence concerning the alleged errors of the fourth respondent in, for example, leaving instrument panels with the mark “Rewaco” on trikes subsequently seized by Customs, is of dubious weight.

38    However it does not appear to be disputed by the applicant that, if all references to the trade mark are removed from the trikes, the balance of convenience favours the release of the trikes to the first, second and third respondents. That this appears to be the case is evident from:

    the fact that all references to the mark “Rewaco” appear to be easily removed from the trikes;

    the fact that the material bearing the mark “Rewaco” is easily surrendered by the first, second and third respondents;

    the fact that the first, second and third respondents are willing to remove all references to “Rewaco” from the trikes;

    the concession by Mr Subloo that, once the references to the trade mark are removed, there appears little reason not to allow release of the trikes to the first, second and third applicants (TS p 40 ll 21-28);

    notwithstanding the low weight of the evidence – such evidence as is before the Court suggesting that the references to the trade mark in relation to the trikes were as a result of error by the fourth respondent.

39    Section 137(3)(a) empowers the Court, at any time, if it thinks it just, to order that seized goods be released to their designated owner subject to the conditions (if any) that the court considers fit to impose. For the reasons I have given, the balance of convenience favours release of the trikes subject to orders requiring removal of references to the trade mark and a requirement that the first respondent maintain records of sale of the relevant trikes for future reference if necessary in these proceedings.

Interlocutory relief sought by the applicant as against the fourth and fifth respondents

40    The application has not been served upon the fourth and fifth respondents. At the hearing before me yesterday Mr Subloo indicated that he proposed to seek the leave of the Court in relation to service of process upon the fourth and fifth respondents. Following a submission by Mr Fox that he would ascertain as soon as possible whether he would obtain instructions from the fourth and fifth respondents, Mr Subloo did not proceed with an application in respect of service upon the fourth and fifth respondents.

41    It follows that the applicant is ex parte in terms of the injunctive relief sought. I note that the applicant seeks orders against the fourth and fifth respondents in respect of all forms of interlocutory relief claimed, although paragraph 6 is particularly relevant.

42    In The City Finance Company Ltd v Matthew Harvey & Company Ltd [1915] 21 CLR 55 Griffiths CJ and Gavan Duffy J observed:

It is ordinarily a condition of the administration of justice that the person against whom relief is sought shall have an opportunity of being heard. Hence the necessity for service or notice of the writ or other originating proceeding. (at 60)

43    Traditionally however the Courts have recognised that, in some circumstances, a plaintiff may seek to invoke the jurisdiction of the Court without having served process on the defendant. In Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 681-682, Isaacs J explained:

There is a primary precept governing the administration of justice, that no man is to be condemned unheard; and therefore, as a general rule, no order should be made to the prejudice of a party unless he has the opportunity of being heard in defence. But instances occur where justice could not be done unless the subject matter of the suit were preserved, and, if that is in danger of destruction by one party, or if irremediable or serious damage be imminent, the other may come to the Court, and ask for its interposition even in the absence of his opponent, on the ground that delay would involve greater injustice than instant action.

44    In this case, however, I am not persuaded that ex parte orders ought be made against the fourth and fifth respondents. The application before me was filed almost four weeks ago on 8 June 2011. No real explanation has been provided by the applicant as to why efforts have not been made to serve the application on the fourth and fifth respondent. While I have already found that there is a serious question to be tried in respect of trade mark infringement by the first, second and third respondents (and it very well may that similar findings are warranted in respect of the fourth and fifth respondents) I am not satisfied that the applicant risks prejudice from any delay in properly serving the fourth and fifth respondents and entitling them to an opportunity to be heard in defence to the application.

45    In my view the appropriate order is to adjourn the hearing of the application for interlocutory relief so far as concerns the fourth and fifth respondents to the next directions hearing on 15 July 2011 when the position in respect of relief sought against those respondents can be properly reviewed.

Associate:

Dated:    5 July 2011