FEDERAL COURT OF AUSTRALIA

Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd (No 11) [2011] FCA 1108

THE COURT ORDERS THAT:

1.    The applicants/cross-respondents’ motion in relation to alternative labelling relief dated 3 June 2011 be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

INTRODUCTION

1    The background to and abbreviations in these reasons are the same as those in Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd (No 9) [2011] FCA 1087 (Schutz No 9).

ALTERNATIVE LABELLING RELIEF

2    Schutz has advanced (again) the argument that the labels fixed to the IBCs should be replaced by steel plates. That relief is sought as an alternative to the injunctive relief pursued and discussed in Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd (No 10) [2011] FCA 1107 (Schutz No 10). The motions for injunctions were, again, dismissed in Schutz No 10.

3    The following alternative relief is now sought:

… [VIP], whether by themselves, their officers, servants, agents or otherwise:

(b)    be released from their undertaking to the Court dated 13 October 2010 … and in lieu thereof the Court order that [VIP] must, whether by themselves, their officers, servants, agents or otherwise:

…

(ii)    affix to each cage of any cross-bottled [NDG] IBC (comprising a Schütz-manufactured cage and a VIP-manufactured inner plastic container) that is sold, offered for sale or distributed in the course of trade by them an etched or engraved steel plate in the form and dimensions of the example annexed hereto and marked ‘B’ and to remove therefrom any marking affixed by the applicants signifying that the cross-bottled IBC is certified for use in the transport of dangerous goods; and

(iii)    affix to each cage of any reconditioned cross-bottled IBC (comprising a Schütz-manufactured cage other than as described in (a) or (b) (Reconditioned Cross-Bottled IBC)) that is sold, offered for sale or distributed in the course of trade by them an etched or engraved steel plate in the form and dimensions of the example annexed hereto and marked ‘C’ and to remove therefrom any marking affixed by any other person signifying that the Reconditioned Cross-Bottled IBC is certified for use in the transport of dangerous goods; or

…

New Evidence

4    Although Schutz has previously sought this relief, there is new evidence on which it relies. Schutz now relies on the evidence contained in the 7th Johnston affidavit relating to a plant fire in Dandenong South in Victoria in the Tri Tech Lubricants Pty Ltd (Tri Tech) plant. Schutz says that the evidence in this affidavit shows that the VIP cross-bottled IBCs do not appear to be cross-bottled once affected by fire. The evidence showed that the Schutz cages were all that remained after the fire of several of the VIP cross-bottled IBCs at the Tri Tech site. Moreover, it is also apparent, Schutz argues, that the embossed Schutz trademark remains, despite extensive damage to the label plates fixed by VIP to the IBCs.

5    Prior to receipt of this evidence, I previously rejected the attempt by Schutz to obtain orders for warnings to be affixed to cages on steel plates (Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd (No 5) [2010] FCA 1105 (Schutz No 5) (at [36]-[37] and [49]-[50])). On that occasion, I observed:

36    Schutz points to the fact that VIP’s cross-bottled DG IBCs manufactured in accordance with the approval, if any, will be certified for use in the storage and transport of dangerous goods in packaging groups II and III as categorised in the Dangerous Goods list at cl 3.2.3 of Pt 3 ADG7. Those groups include class 3 flammable liquids. Schutz points to the fact that the Health and Safety Laboratory research report entitled ‘Fire Performance of Composite IBCs’ records that in the United Kingdom the result of research undertaken by the UK Health and Safety Executive into fire risks associated with Composite IBCs indicates that there have been at least three serious fires which have started or spread as the direct result of the use of IBCs for combustible liquids. The first of those fires was in 2000. A characteristic of the fires was the rapid release of liquid from the IBCs and the damage caused as a result of the unconfined flow of burning liquid. The Report concluded that problems of low ignition resistance and high rates of liquid loss in fire engulfment were generic problems for Composite IBCs.

37    The fire complaint is said to have an impact on the potential for consumers being misled because while the embossed Schutz trade mark would remain visible on the label plate of any IBC affected by fire and may expose Schutz to loss and damage including but not limited to loss of reputation and custom, the less resilient label to be affixed by VIP would not provide the necessary identification as to the source of the problem.

…

49    On the sufficiency of the undertaking in relation to labelling, the evidence from Mr Smith is that the labels used by VIP have ‘the highest heat and weather resistance of any plastic material available as label stock’. The label would be in and of the same form as VIP uses for its UN labelling of DG IBCs which are required to be durable and legible in accordance with Pt 6.5.2.1.1 of the ADG7. ADG7 does not require riveted metal plates for such labelling.

50    Although Schutz refers to a risk of fire which may arise by transporting flammable liquids, there is no evidence at all of any such event occurring in Australia. Mr Smith has said that he has not had a single experience of fire caused by a fill product of an IBC but, in any case, if such an incident were to occur, the filler or transporter will have documentation relating to the supply of the IBC such that ascertaining the identity of the manufacturer would not be difficult. It is not open to speculate that because some incidents have occurred in the United Kingdom, that such a danger necessarily exists under Australian conditions. The overtures from Schutz to the authorities must have placed the actions of VIP under their close scrutiny. No adverse response from the authorities on a danger risk has been evident.

6    It was not then in dispute (and never has been), that in a substantial fire, a plastic bottle and a non-steel label may be destroyed.

7    However, I have previously accepted and still take the view that the labelling by steel plates is an excessive requirement. It exceeds the UN requirements and there is no evidence now, and has not been on any other occasion in this proceeding, that a fire has been caused in Australia by any IBC or its content or by any cross-bottled unit. In this case, the fire was caused by an electrical fault in the plant office, according to the 9th Smith affidavit.

8    Further, there appears, again, at least on VIP’s evidence, to be confusion between cross-bottled and reconditioned IBCs. VIP’s records appear to establish that VIP has only ever supplied reconditioned IBCs to Tri Tech not cross-bottled IBCs.

9    Any suggestion that Schutz might be blamed for the fire, if it be made, is not supported by any evidence. Nor in the particular circumstances under consideration is there any evidence that any person has formed the view, rightly or wrongly, that Schutz manufactured bottles were contained in the Schutz cages.

CONCLUSION

10    I remain unpersuaded that the prohibitive cost involved in manufacturing and affixing steel labels (to which I have previously referred) warrants any departure from the previous decision.

11    The Schutz motion in relation to alternative labelling relief dated 3 June 2011 be dismissed with costs.

Associate:

Dated:    28 September 2011