reasoning
27 On their face, the invoices in question provide evidence, when taken together with the other documents obtained from the premises of Rainbow Apparel, and the admitted extensive involvement of Morris, that Diesel products were invoiced to "Albert" as distinct from "Morris". They indicate debts from Albert Ezekiel, as purchaser, to Rainbow Apparel in respect of the infringing products. In some instances, there is a note of the fact of payment although the payer is not identified. There are references in the accounts to separate amounts paid and owing for "Morris" and "Albert". In addition, on the invoice dated 12 November 2003, the word "Morris" has been crossed out and "Albert" inserted. This is consistent with Albert Ezekiel making purchases independently of Morris Ezekiel. On the face of the invoices, the person liable to pay for the goods is "Albert".
28 The evidence is clear that Morris Ezekiel was actively and substantially engaged over many months in the purchase of infringing Diesel-branded products. This was admitted by Morris Ezekiel in the Terms of Settlement. It is also clear that Morris and Albert Ezekiel are very close friends and brothers and have strong family ties. It is significant that, in his affidavit and statutory declaration, Morris Ezekiel does not make any statement to the effect that, to the best of his knowledge or belief, Albert Ezekiel did not purchase any infringing products from Rainbow Apparel. Morris Ezekiel does say that he gave the telephone number of 88 Beach Road, Bondi, as a contact number for Rainbow Apparel and told them to leave any messages for him with his brother, Albert Ezekiel, however, he says that this does not mean that Albert Ezekiel was a purchaser. Morris Ezekiel then speculates that his habit of calling the family home "Albert's place" must have led to a misunderstanding by Rainbow Apparel as to who the true purchaser of the goods was and caused Albert Ezekiel to become involved in the proceeding.
29 I accept that the family home was known as "Albert's place" and that Morris Ezekiel did give the telephone number of the family home to Rainbow Apparel. However, the evidence offered by Albert Ezekiel does not explain the liability for the supply of the goods which appears on the face of the documents seized from the premises of Rainbow Apparel. It is Albert Ezekiel who has been invoiced for the goods. He is liable prima facie. There is no evidence of Albert Ezekiel informing Rainbow Apparel in relation to any of the invoices that he was not a purchaser. In view of the very close relationship between the brothers that appears in the evidence, one might have expected Morris Ezekiel to have said that he had no arrangement with Albert Ezekiel or any knowledge of any dealings between Albert Ezekiel and Rainbow Apparel in relation to any infringing products. I note that Morris Ezekiel does not verify in detail the specific dates referred to by Albert Ezekiel as the occasions on which Morris Ezekiel is said to have been in Sydney and which are said to correspond closely with the dates of the invoices addressed to Albert Ezekiel. The inference Albert Ezekiel asks the Court to make is that these invoices were intended to be made out by Rainbow Apparel in respect of purchases made by Morris Ezekiel. I do not accept this inference. I do not accept the version of events given by Albert Ezekiel, namely, that a mistake was made by Rainbow Apparel and he was wrongly invoiced over a substantial period in respect of large quantities of the infringing products. I think that the true position, having regard to the quantities of goods purchased, is that Albert Ezekiel purchased the goods with the intention to resell or distribute them.
30 I am not satisfied that the evidence establishes that there has, in fact, already been distribution of the infringing goods or "use" of the trade marks by Albert Ezekiel. However, I do consider that the goods were purchased by Albert Ezekiel with an intention to distribute or sell the infringing goods.
31 An important question in this case is whether proof of the purchase of infringing products in large quantities over time is sufficient to establish that the purchaser has infringed the Diesel trade marks by using the mark on the goods. In plain English terms, it is difficult to say that merely by purchasing the goods with an intention to sell or distribute those goods, a purchaser has used the trade mark so as to infringe. But in the circumstances of this case, where there is evidence of large quantities being purchased over many months, I consider that it can be inferred, in the absence of any satisfactory evidence or explanation to the contrary, that there was an intention on the part of Albert Ezekiel to distribute the goods. The goods are not said to be second-hand. They are still in the course of trade since they have not reached the consumer. Morris Ezekiel is Albert Ezekiel's brother and, on the evidence, the family bond is very close. Morris Ezekiel has admitted to buying substantial amounts of the infringing goods over time.
32 In my view, there has been no sufficient acceptable explanation by Albert Ezekiel of the case made by the Applicants on the documents to the effect that he was a purchaser or was closely involved in the purchase of the infringing products. In view of the documentary evidence, I prefer to rely on the records rather than the evidence of Albert Ezekiel, which is not supported by any records or by his brother. I consider that there is a strong inference that Albert Ezekiel, as purchaser, will distribute the goods. Accordingly, in my view, notwithstanding that there is no evidence of receipt or on-selling by Albert Ezekiel, I think the evidence is sufficient to indicate that an injunction should be granted against Albert Ezekiel to restrain any further purchases by him of the goods and to restrain any distribution, sale or marketing of the goods by him.
33 I note that, in Nokia Corporation v Truong [2005] FCA 1141 at [40], Crennan J observed that anyone who is connected in the course of trade with infringing goods is an infringer and that such a person has a duty to see that the goods are not used or dealt with in breach of the proprietor's rights. I find that Albert Ezekiel was so involved. See also Norwich Pharmacal Co v Commissioners of Customs and Excise [1972] RPC 743 at 771.
34 One difficulty with the allegation that Albert Ezekiel has infringed the Diesel trade mark by using it as required by s 120 of the Act is that there is no direct evidence that he has ever received, sold, distributed, taken delivery of or marketed the goods. It is not the law that the mere act of purchase in itself amounts to a use of the trade mark so as to constitute an infringement. I am satisfied, however, that the probability is that he has purchased the infringing goods and that it is reasonable to draw an inference that he had the disposition of the infringing goods and was involved in their distribution, and as such has used the trade marks and other marks. This is based on the large quantities of the goods purchased and the number of invoices from which I infer that the goods were purchased with an intent to on-sell or distribute them. In the case of Albert Ezekiel, the goods had not passed into consumption by an ultimate first user. In view of these extensive purchases, I consider it has been established that there is a threat Albert may distribute the goods or use them in such a way as to infringe. Therefore, I consider that grounds have been made out which justify a quia timet injunction and that such an in junction should be granted.
35 It is not necessary for me to deal with issues of passing off or misleading conduct.
36 The above findings, in my view, are sufficient to justify a claim for injunctive and declarative relief at this stage of the proceedings. Accordingly, I propose to grant an injunction against Albert Ezekiel in the terms of cl 4 of the Second Further Amended Application. I also make orders in terms of cll 5 and 6 of that Application.
37 I stand the matter over to 17 February 2006 at 9:30 am for directions as to the further conduct of this matter in relation to the other forms of relief. I order the Eleventh Respondent to pay the costs of the Applicants to date and for these costs to be taxed and recovered forthwith.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.