Trio Brothers Trading Pty Ltd v Road Runner Company Pty Ltd

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 60

Counsel for the Applicant: Mr B Fitzpatrick

Solicitor for the Applicant: Dov Silberman Lawyer

Counsel for the First and Second Respondents: Mr M Goldblatt

Solicitor for the First and Second Respondents: PBP Lawyers

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 538 of 2014

BETWEEN: TRIO BROTHERS TRADING PTY LTD (ACN 079 259 279)

AND: ROAD RUNNER COMPANY PTY LTD (ACN 083 778 670)

JUDGE: COLLIER J DATE OF ORDER: 23 APRIL 2015 WHERE MADE: BRISBANE

1. The relief sought in paragraphs 1 and 2 of the interlocutory application filed by Road Runner Company Pty Ltd (ACN 083 778 670) on 18 November 2014 be refused.
2. The proceeding QUD 538 of 2014 be transferred to the Victorian District Registry of this Court. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 538 of 2014

BETWEEN: TRIO BROTHERS TRADING PTY LTD (ACN 079 259 279)

AND: ROAD RUNNER COMPANY PTY LTD (ACN 083 778 670)

JUDGE: COLLIER J DATE: 23 APRIL 2015 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 This is an interlocutory application in which the respondents seek an order that the originating application filed 2 October 2014 be dismissed as an abuse of process, or alternatively that there be summary judgment for the respondents. The respondents also seek their costs on an indemnity basis. 2 It is convenient to refer to the parties by their names rather than by reference to the litigation between them. In doing so, it is also convenient to abbreviate the names of the parties to "Trio Bros" and "Road Runner", and to refer to the second respondent as Mr Merie. 3 Mr Merie is the sole director and secretary of Road Runner. I understand that Mr Zhong Min Qin (also known as Jack Qin) was at all material times the sole director and shareholder of Trio Bros.

Background facts 4 The substantive matter between the parties concerns a dispute over intellectual property rights in vaporizers - which are a form of smoking pipe - which both parties are importing from China. These pipes are sold by both parties to retail outlets in Australia for further on sale to consumers in Australia. 5 In a letter of demand dated 29 May 2014 from the solicitors for Trio Bros to Road Runner, Trio Bros made various allegations of design infringement against Road Runner and sought various undertakings from Road Runner by 9 June 2014. In his affidavit sworn in these proceedings on 18 November 2014, Mr Merie deposed that on 2 June 2014 he received a telephone call from one of Road Runner's customers, informing him that the customer had received an email from Trio Bros containing allegations of infringement against Road Runner and reserving its rights in relation to recovery of damages suffered or recovery of profits made by any third party as a result of Road Runner's wrongful conduct. Mr Merie further deposed that he subsequently became aware that other customers of Road Runner had received a similar email from Trio Bros. 6 On 6 June 2014 Road Runner commenced proceedings in the Supreme Court of Victoria seeking urgent interim injunctive relief in respect of Trio Bros emails to Road Runner customers and Trio Bros' allegations of design infringement. The Supreme Court of Victoria granted the urgent relief. On 10 June 2014 Road Runner issued and served a summons and writ with general endorsement on Trio Bros and Mr Qin. 7 In that writ Road Runner claimed, in summary: Trio Bros had made unjustified threats against both Road Runner and its customers within the meaning of s 77 of the Designs Act 2003 (Cth) ("Designs Act"). The designs upon which Trio Bros relied - namely Trio Bros' Australian registered designs numbered 353716, 353233 and 10038 - ("the relevant designs") were not registrable designs within the meaning of s 93(3)(a) of the Designs Act. Mr Qin was not the creator, author or designer of any of the relevant designs. Rather each of the relevant designs were designed by a person or persons other than Mr Qin, who has falsely claimed to be the author of each of the offending designs. The email to Road Runner's customers contains a representation that Road Runner has infringed one or other of the relevant designs, and this is false or misleading because no finding of infringement has been made against Road Runner and each of the offending designs are invalid. It follows that Trio Bros has infringed s 18 of the Australian Consumer Law ("ACL") (Sch 2 to the Competition and Consumer Act 2010 (Cth)). Mr Qin has aided and abetted, counselled or procured the breaches of the Australian Consumer Law by Trio Bros. Road Runner has suffered and is continuing to suffer loss and damage as a result of Trio Bros' wrongful conduct pleaded. By threatening existing and potential suppliers of Road Runner, Trio Bros is engaging in exclusive dealing in contravention of s 47 of the Competition and Consumer Act 2010 (Cth). 8 On 26 August 2014 a directions hearing in the Supreme Court proceedings was conducted before Zammit AsJ. In the course of that hearing, Trio Bros and Mr Qin informed the Court that it intended to make application to transfer the proceedings to the Brisbane Registry of the Federal Court. 9 Trio Bros and Mr Qin had filed a defence and counterclaim to the Road Runner proceedings on or about 14 July 2014. Pursuant to orders of her Honour, Trio Bros and Mr Qin subsequently filed an amended notice of defence and counterclaim on 20 October 2014. Materially, they claimed that: They had not threatened legal proceedings against Road Runner or any third party but if they had, those threats were justified on the basis that Road Runner's products embodied a design that was identical in overall impression to Trio Bros' designs. They denied that Mr Qin was not the creator, author or designer of the designs the subject of Australian Design Registration No 353716. In relation to Australian Design Registration No 10038 there was no such registered design. In relation to Australian Design Registration No 353233 Trio Bros had offered to surrender it pursuant to s 49 of the Designs Act. Mr Qin denied that he had threatened Road Runner's suppliers in China. 10 In their counterclaim, Trio Bros and Mr Qin sought declarations that Road Runner and Mr Merie had infringed Trio Bros' vaporizer design, injunctions pursuant to s 75(1)(a) of the Designs Act, delivery up of promotional and other material concerning the pipes, damages and costs. 11 On 2 October 2014 Trio Bros filed an originating application and statement of claim in the Brisbane Registry of the Federal Court which are the subject of this matter, QUD 538 of 2014. 12 In its originating application, Trio Bros sought the relief in the form of: Declarations the Road Runner had contravened s 18 and s 29(1)(g) of the ACL and that Mr Merie had (inter alia) aided and abetted this conduct. Declarations that Road Runner had passed off its goods as goods of Trio Bros and that Mr Merie had (inter alia) aided and abetted this conduct. An injunction pursuant to s 232 or s 234 of the ACL restraining Road Runner from engaging in misleading or deceptive conduct or from falsely representing in trade or commerce that its goods are authorised or approved by Trio Bros, and restraining Mr Merie from (inter alia) aiding and abetting this conduct. An injunction restraining Road Runner from passing off its goods as having been manufactured, promoted or approved by Trio Bros, and restraining Mr Merie from (inter alia) aiding and abetting this conduct. Delivery up of (inter alia) promotional material by Road Runner relevant to its conduct the subject of the statement of claim. Damages. Interest. Costs. 13 In its statement of claim Trio Bros claims that it is in the business of importing and reselling two types of tobacco pipe. Materially, Trio Bros claims that: Continuously since in or about 1998, it has carried on the business of importing, promoting, offering for sale and selling a tobacco pipe with the product identifier P613E ("P613E tobacco pipe"). This pipe is a 9cm pipe comprising three separate portions. Trio Bros claims to have sold in excess of 46,000 pieces of this pipe in Australia since approximately 1998. Continuously since in or about March 2003, it has carried on the business of importing, promoting, offering for sale and selling a tobacco pipe with the product identifier GP6015 ("GP6015 tobacco pipe"). This pipe also comprises three separate portions. Trio Bros claims to have sold in excess of 20,000 pieces of this pipe in Australia since approximately 2003. 14 Trio Bros alleges that at all material times since in or about March 2003, it has widely advertised and promoted both the P613E and GP6015 tobacco pipes in catalogues in Australia. It claims that these pipes have become very well and widely and favourably known and identified in the minds of the general public throughout Australia, and have become known as goods of Trio Bros. It claims further that persons who buy these products associate them with Trio Bros, which accordingly has a reputational investment in them. 15 Trio Bros claims that at some date Road Runner commenced selling these pipes either identical to or of very similar size, shape and configuration as the P613E tobacco pipe and the GP6015 tobacco pipe in Australia. In particular, Trio Bros complains that Road Runner has promoted, advertised and sold tobacco pipes under and by reference to the same product identifier in Road Runner's catalogues and on its website. Trio Bros claims that pipes with these designations have been sold by Road Runner without the licence or authority of Trio Bros at: Cuban Cigar World at Harbourtown, Biggera Waters, Brisbane Queensland; Erotique Nights, Mildura, Victoria; and Tobacco Station, Noble Park, Victoria. 16 Trio Bros claims that these acts of Road Runner are calculated to and are likely to and will injure the reputation, goodwill and credit of Trio Bros. 17 In its defence to the originating application and statement of claim in this Court filed on 28 November 2014, Road Runner states materially that: The codes GP6015 and P613E are codes for the respective products which originated from their Chinese manufacturers and were used by Road Runner since it commenced selling the products in 2009 and early 2012 for the purposes of ordering replacement products from their Chinese manufacturer. Trio Bros does not use code P613E but rather P613B as its catalogue code in respect to the particular tobacco pipe. The tobacco pipes are sold in retail stores to which Trio Bros supplies such pipes without any indicia contained on them at point of sale identifying either Trio Bros or the product code in any way. Road Runner has been selling each of these tobacco pipes by reference to the manufacturer's code for many years - since 2009 in respect of the GP6015 tobacco pipes and since early 2012 in respect of the P613E tobacco pipes. There are currently proceedings in the Supreme Court of Victoria involving all of the parties to this proceeding, which has been on foot since June 2014. No application has been made in the Supreme Court of Victoria to transfer the proceedings to the Brisbane Registry of the Federal Court. The commencement of these proceedings in the Federal Court of Australia is an abuse of process and such proceedings should be struck out and/or dismissed.

Relevant principles 18 Courts have unlimited power over their own processes to prevent those processes being used for the purpose of injustice. Proceedings within the jurisdiction of a court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that court is an inappropriate forum to entertain them: Walton v Gardiner (1993) 177 CLR 378 at 393; Croker v Minister for Finance [2013] FCAFC 154 at [16]. However the power to stay or dismiss a proceeding for an abuse of process is "a power which ought to be very sparingly exercised and only in exceptional cases" (Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279) as the onus of satisfying the Court that there has been an abuse of process is heavy: Williams v Spautz (1992) 174 CLR 509 at 529; Ashby v Slipper (2014) 219 FCR 322 at [59]. 19 Both this Court and the High Court have had reason to consider applications for either a stay or dismissal of an application for abuse of process, in circumstances where there are similar proceedings underway in another Court. 20 In Union Steamship Company of New Zealand Ltd v Ship "Caradale" (1937) 56 CLR 277 at 281 Dixon J said: The inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration. 21 However simply because parties on opposite sides of a dispute have instituted separate proceedings relating to the same facts in different courts does not mean that one of those proceedings is an abuse of process. Notwithstanding the comment of Dixon J in Caradale his Honour did not grant the defendant's application for a stay of an action in rem brought in the admiralty jurisdiction of the High Court, where the defendant had already instituted separate proceedings in the Supreme Court of Victoria. Reasons for his Honour's decision in that case included that: the High Court's admiralty jurisdiction was established for cases such as this and in that respect the institution of the action by the plaintiff was proper; the admiralty jurisdiction in the Supreme Court of Victoria was in doubt; federal law treated a case of this kind as prima facie unsuited for trial by jury as was contemplated by the application in the State court; the plaintiff brought in an action for a very large claim an appropriate jurisdiction; and the action was instituted for a proper purpose which might not otherwise be achieved. 22 In these circumstances his Honour did not consider it sufficient reason to stay the High Court matter that the defendants' writ was issued three days earlier and the defendants were ready to allow the security to stand until the conclusion of the proceedings in the Supreme Court. 23 In Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287, The Boots Company (Australia) Pty Ltd ("Boots") sought orders that the proceeding brought against it in the Federal Court by Sterling Pharmaceuticals Pty Ltd ("Sterling") be stood out of the list or stayed until the hearing and determination of proceedings pending in the High Court of New Zealand between associated companies. The ground of the motion was that the primary issue between the parties in both proceedings was the same. In the New Zealand proceedings, Sterling applied for an interim injunction against Boots, which the High Court of New Zealand refused. Extensive affidavit evidence had been filed in respect of the interim relief, and further interlocutory steps had been ordered to take the New Zealand proceedings to hearing. 24 Lockhart J observed at 290-291: The court has a general power to control its own proceedings, and that power extends to enable it to order a temporary stay of proceedings in various circumstances including the case where proceedings are pending in another court and it is desirable that those proceedings should proceed to their conclusion first. … The court has power specifically conferred by O 20 r 2 to order that a proceeding in the court be stayed or dismissed generally, where no reasonable cause of action is disclosed or the proceeding is frivolous or vexatious or an abuse of the process of the court; but this power is not the court's sole source of power to stay proceedings in the court. The court is a superior court of record and obviously may control its own proceedings including, where appropriate, the exercise of a power to grant a stay. Bowen CJ gave a helpful list of relevant factors to be considered on an application for a stay of this kind in Wang Computer at 353 which I have considered. In my opinion relevant consideration is to be taken into account in the present case includes the following:- • Which proceeding was commenced first. • Whether the termination of one proceeding is likely to have a material effect on the other. • The public interest. • The undesirability of two courts competing to see which of them determines common facts first. • Consideration of circumstances relating to witnesses. • Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted. • The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues. • How far advanced the proceedings are in each court. • The law should strive against permitting multiplicity of proceedings in relation to similar issues • Generally balancing the advantages and disadvantages to each party. (Case references omitted.) 25 Lockhart J found that there was a substantial identity of issues between the High Court proceedings and the proceedings in the Federal Court, and that the resolution of issues in the New Zealand litigation should determine the result of those issues in the Australian proceeding. His Honour added at 292: Indeed, whether the parties to the Australian proceeding do or do not agree to accept the result of the New Zealand proceeding, this Court will be able to control the future conduct of the Australian proceeding by giving directions with the benefit of the findings in New Zealand which may substantially reduce the scope of the issues in the Australian proceeding, in particular, the medical issues. 26 Further, his Honour observed in summary that: If the Australian proceeding continued in the normal course at the same time as the New Zealand proceeding was being conducted, there was likely to be a substantial measure of duplication in the preparation for and the conduct of the final hearing of the two proceedings in respect of the same or substantially the same issues. Many of the expert witnesses would give evidence in both cases. It could not be right that necessary calls would be made upon the resources of the Federal Court or the High Court of New Zealand in relation to the final hearing of the issues substantially common to both proceedings. Both proceedings were public interest proceedings rather than proceedings to protect proprietary rights of corporations. Sterling interests chose to commence the New Zealand proceeding first and the Australian proceeding was commenced many months afterwards. 27 In circumstances where only a temporary stay of the Federal Court proceedings was sought, his Honour was prepared to grant that stay. 28 In Henry v Henry (1996) 185 CLR 571 the High Court considered an appeal from the Family Court confirming the validity of divorce proceedings commenced by a husband while at the same time the wife had divorce proceedings on foot in Monaco. In their joint judgment Dawson, Gaudron, McHugh and Gummow JJ referred to the comments of Dixon J in Caradale, and followed the earlier decision of the High Court in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538. In Voth, the High Court there constituted held that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of "seriously and unfairly burdensome, prejudicial or damaging", or, vexatious, in the sense of "productive of serious and unjustified trouble and harassment" (cf summary of findings in Voth in Henry v Henry at 587). 29 Their Honours in Henry v Henry continued at 590-591: Foreign proceedings usually fall for consideration in a context in which they involve the same or related factual issues as those involved in the local proceedings, but not the same legal issue and, perhaps, not the same parties. Even in cases of that kind it may sometimes be appropriate to grant a temporary stay of the local proceedings to allow the factual issues to be determined in the other jurisdiction. There are more compelling considerations in favour of a stay of the local proceedings if, as can happen, there are proceedings in another country which has jurisdiction to entertain those proceedings and the proceedings are between the same parties and with respect to the same issue or controversy. … It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words. It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed. However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are oppressive in the sense of "seriously and unfairly burdensome, prejudicial or damaging", or, vexatious, in the sense of "productive of serious and unjustified trouble and harassment". And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation. (Footnotes omitted.) 30 Principles relevant to stay for abuse of process in circumstances where proceedings have been instituted in different courts were also recently considered by the Full Court of the Federal Court in Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) [2011] FCAFC 117. In that case proceedings had been separately instituted, first in the Supreme Court of Victoria and second in the Federal Court of Australia. The judge in the Federal Court at first instance dismissed an application for a stay of the Federal Court proceedings. On appeal, the majority of the Full Court of the Federal Court dismissed the application for leave to appeal against the primary judgment as well as the substantive appeal against that judgment. 31 In considering matters before the Court, at [30] the majority agreed with the primary judge that the relevant considerations listed by Lockhart J in Sterling did not constitute an exhaustive list, but nonetheless provided a helpful guide to considering issues before the Court. Further, the majority endorsed the views of the primary judge that, in the circumstances of the case: There was no real significance in the action in the Supreme Court being earlier in time to that in the Federal Court, as neither action was significantly more advanced than the other. If both proceedings are pursued it was entirely likely that one would have an effect of some sort on the other. The public interest factors were neutral. It was uncertain whether, if the stay motions were refused, the proceeding in the Supreme Court of Victoria would be pursued to its ultimate conclusion. The Federal Court proceedings raised a broader range of matters than the proceedings in the Supreme Court of Victoria. The two sets of proceedings appear to ask different but related questions. Various factors pointed to Western Australia being the more convenient forum. Each action was properly instituted, and it could not be said that there was an abuse of process in commencing the action in the Federal Court.

Consideration 32 It is clear that the facts underlying Road Runner's application in the Supreme Court of Victoria, and the application in this proceeding, coincide, in that: the parties are the same; the complaints of both sides relate to the importation of smoking pipes from China; and each party complains about subsequent conduct of each party in reselling those pipes to retail outlets. 33 However in my view there are good reasons to conclude that the substantive proceedings of Trio Bros in this Court do not constitute an abuse of the Court's process. 34 First, the proceedings commenced by Road Runner relate to the validity or otherwise of Trio Bros' Australian registered designs numbered 353716, 353233 and 10038. These designs are not the subject of the proceedings commenced in this Court by Trio Bros. Rather, Trio Bros' claim is not by reference to its registered designs, but to products bearing the sign and product identifier GP6015 and P613E. One obvious question is whether, if Road Runner is successful in its claim in the Supreme Court of Victoria, the claim of Trio Bros against Road Runner in this Court is rendered nugatory because Trio Bros would have no standing to enforce rights concerning the smoking pipes the subject of their claim against Road Runner. However in submissions before me, Trio Bros contended that the tobacco pipes in issue in the Federal Court proceeding are completely different products to those involved in the Supreme Court proceeding. Whether this is the case will presumably eventually come to light, however on the material before me (including submissions at the hearing of this matter) the position is not clear. Certainly Road Runner has not made submissions to the contrary. 35 In such circumstances I consider it imprudent to draw any comparisons regarding the similarity of product or otherwise the subject of each claim, particularly as the Supreme Court case has been pleaded by reference to registered design rather than product. 36 Second, in the Supreme Court of Victoria, Road Runner has sought relief against Trio Bros: under the Designs Act, in effect challenging Trio Bros under s 77 and s 93 to prove that the designs are valid and that Trio Bros is an entitled person in relation to the designs, and under the Australian Consumer Law, to the effect that Trio Bros has infringed s 18 and Mr Qin has contravened s 75B. 37 In the Federal Court, Trio Bros has sought relief against Road Runner: claiming passing off in respect of two types of pipe described by reference to product identifier and signs; and under the Australian Consumer Law against both Road Runner and Mr Merie pursuant to s 18 and s 29(1)(g). 38 The causes of action pursued by each party are different, requiring different evidence and the findings by the Court on different issues. On the material before me I am not satisfied that resolution of the earlier application (namely, the Victorian application) will resolve the application in this Court. I take this view, even endeavouring to take a common sense view of the two applications and the impact of a possible successful outcome for Road Runner in its application in the Supreme Court of Victoria on Trio Bros' application in this Court. 39 Third, this is a proceeding between private parties concerning a matter of commercial interest in the market in which they both operate. In my view the public interest factor here is neutral. 40 Fourth, the proceedings in the Supreme Court of Victoria are more advanced than the proceedings in this Court. In the Supreme Court an amended defence and counter claim has been filed, as well as a substantial affidavit filed by Mr Merie. That affidavit has been incorporated into an affidavit in the Federal Court proceedings. I do not consider this issue of great import however, as the material before me suggests that the Supreme Court matter has not proceeded beyond this point. 41 On balance, I consider that the Trio Bros' proceedings have been properly instituted. I do not consider it appropriate to order that they be dismissed for abuse of the process of this Court.

Application for summary dismissal 42 Section 31A(2) of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") provides: The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. 43 A proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success: s 31A(3). Section 31A(2) has, however, been interpreted to require a practical judgment by the Court as to whether the applicant has more than a "fanciful" prospect of success (Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [25]). 44 As I have already noted, the substantive proceedings in this case concern (inter alia) claims of Trio Bros against Road Runner and Mr Merie for passing off Trio Bros' GP6015 and P613E pipes as those of Road Runner, and for engaging in conduct in contravention of s 18 and s 29(1)(g) of the ACL. Trio Bros also complains that Road Runner has promoted, and advertised for sale, smoking pipes in Queensland, Mildura in Victoria, and Noble Park in Victoria. 45 In summary, Road Runner submits that: No retailer who purchased the impugned products from Road Runner could ever intend or expect to acquire those products from Trio Bros, because the only basis of similarity between the impugned products and those of Trio Bros which was relied on is the product identifier or code. The product identifier or code was not displayed to end consumers at any stage. Trio Bros only relied on confusion by the retailers who purchased products from both Road Runner and Trio Bros. There is no possibility of confusion at that level. Every impugned product sold to a retailer was wholly distinguishable by reference to the barcodes displayed alongside the product codes. The process of delivery made it obvious to the retailer that particular products were from either Road Runner or Trio Bros. The product codes were not unique to Trio Bros, nor did they originate from Trio Bros. There is no reputation associated with them and the impugned products cannot be the subject of any confusion. The evidence before the Court supports these submissions, in particular that of Mr Qin in his affidavit dated 18 February 2015. 46 Trio Bros claims however that it has reasonable prospects of success in respect of its substantive claim in this Court. In particular, it submits that: The product codes which are central to Road Runner's defence do not belong to Trio Bros as they are the codes of a particular Chinese manufacturer from which Road Runner sources its products. The evidence of Mr Qin is that the product codes were developed by him and used by Trio Bros from 1997, and that those codes are different to the codes used by the Chinese manufacturers. That this is so is clearly apparent from Mr Qin's evidence that Trio has consistently used the same product code to identify the same product notwithstanding that products supplied by it have been manufactured by different manufacturers in China. Trio has received faulty or broken pipes returned from its customers which have turned out to be Road Runner's goods bearing the GP6015 product code. Despite Road Runner's claims that retailers could not be deceived as to the origin of pipes supplied because of the different barcodes displayed alongside the product codes, no retailer would be expected to carefully examine barcodes if they order by reference to product codes. Road Runner has not disputed Mr Qin's evidence that when Australian retailers see the GP6015 and P613E product codes, this signifies to them that the products are Trio Bros' products. Mr Qin has given evidence that, despite being the Trio Bros and Road Runner products being identical, the Road Runner GP6015 product is inferior in quality to Trio Bros' product. It is a triable issue of fact whether there is any evidence of deception as alleged by Trio Bros, which cannot be resolved summarily. The evidence of Mr Merie that Road Runner has ceased using Trio Bros' product codes is irrelevant to Trio Bros' application. 47 In my view it cannot be said that Trio Bros has no reasonable prospects of success. 48 First, I note that Road Runner criticises the evidence of Mr Qin, in particular his evidence at paragraphs 40 and 41 of his affidavit, and the credibility of his evidence that the shops he listed had returned defective pipes. While this criticism does raise questions concerning that evidence, I am not satisfied that it reduces to "fanciful" the case of Trio Bros. 49 Second, I note Road Runner's submission that Chinese factories make products for several customers including Trio Bros and Road Runner. In my view that in itself does not categorically answer Trio Bros' complaints of passing off and misleading or deceptive conduct on the part of Road Runner. 50 Third, I note the submissions of Trio Bros concerning the derivation of the relevant product codes and consider that these are important issues which warrant proper forensic inquiry at trial. 51 Fourth, I understand from submissions made at trial that not all evidence has yet been filed. Mr Fitzpatrick for Trio Bros indicated at the hearing that his client proposed to call witnesses from, inter alia, Brisbane and China. While it is not clear what that evidence would be, I consider it likely at the very least that evidence from witnesses from China will relevantly inform the Court in respect of issues in this litigation. 52 I consider that the relief sought by Road Runner in paragraphs 1 and 2 of its interlocutory application filed 18 November 2014 should be refused.

Transfer to Victorian District Registry 53 No formal application was made by either party for these proceedings to be transferred to the Victorian District Registry of this Court. Mr Fitzpatrick for Trio Bros indicated at the hearing that his client did apply for such an order. Mr Goldblatt for Road Runner did not press for such an order. 54 In my view however it is appropriate that such an order be made. 55 Section 48(1) of the Federal Court Act provides: (1) The Court or a Judge may, at any stage of a proceeding in the Court, direct that the proceeding or a part of the proceeding be conducted or continued at a place specified in the order, subject to such conditions (if any) as the Court or Judge imposes. 56 Rule 2.02 of the Federal Court Rules 2011 (Cth) ("Federal Court Rules 2011") deals with circumstances where a party applies for the proceeding to be transferred to another place. This has not occurred in this case. However under r 5.04(1) the Court may make directions for the management, conduct and hearing of a proceeding. Furthermore r 5.04(3) Item 34 of the Federal Court Rules 2011 contemplates that the Court may make directions for the transfer of a proceeding to another place at which there is a Registry. 57 "Proper place" is defined in The Dictionary to the Federal Court Rules 2011 as follows: "proper place", for a proceeding, means: (a) the place where the proceeding is started; or (b) if the proceeding is transferred to another place--the other place, from the date of transfer. 58 Section 48(1) was considered in detail by the Full Court in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155. In that case at 161-162 the Full Court observed as follows: The Federal Court is a court of wide jurisdiction throughout Australia whose judges may sit, whether as Full Courts or single judges, at any place in Australia. The Court has registries in each of the capital cities of the States and the Territories. … The power conferred on the Court or a judge by s 48 is in terms wholly unfettered. It should be exercised flexibly having regard to the circumstances of the particular case. It would be regrettable and unwise if the Court were to circumscribe the general power conferred by s 48 with inflexible rules or impose inelastic constraints upon its exercise. As the power may be exercised subject to conditions, the Court or a judge is in a position to mould orders under the section to take account of the many and varied circumstances that arise in particular cases. The power conferred by s 48 recognises the national character of this Court. The factors which the Court is entitled to take into account in considering whether one city is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The Court must weigh those factors in each case. Residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances. The balance of convenience will generally be a relevant consideration, but not necessarily determinative of each case… The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the Court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for some time at the place of commencement with many steps having been taken there, for example, filing of pleadings and affidavits, discovery and inspection. Due weight would be given by the Court to such matters before directing that the proceeding should continue at a different place. The balance of convenience is important, but its weight must vary from case to case. Ultimately the test is: where can the case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the Court. It cannot and should not, in our opinion, be defined more closely or precisely. (Emphasis added.) 59 I do not consider that Trio Bros has acted in any way capriciously in commencing proceedings in the Brisbane Registry of this Court. At the hearing Mr Fitzpatrick for Trio Bros explained that proceedings had not been commenced in the Victorian District Registry because Mr Qin is in Brisbane, impugned conduct of Road Runner has taken place throughout Australia rather than only in Victoria, and witnesses of Trio are not only in Victoria, but also in Brisbane and China. While this may be the case, I also note the following points which in my view support a finding that the case would be continued most suitably in Melbourne: Road Runner is based in Melbourne, and originally sought to issue proceedings in the Federal Court or the Federal Circuit Court in Melbourne, rather than the Supreme Court of Victoria. The solicitors and Counsel for all parties are based in Melbourne. While Trio Bros indicated that it would call some witnesses from Brisbane and China - including Mr Qin - I understand that Trio Bros also proposes to call witnesses based in Victoria. I understand that all of Road Runner's witnesses are based in Victoria. While Trio Bros claims that conduct of Road Runner the subject of these proceedings has taken place around Australia, the evidence given by Mr Qin refers to conduct of Road Runner in Victoria. At the hearing before me Mr Goldblatt for Road Runner indicated that his client would accept an order that these proceedings be transferred to the Melbourne Registry of this Court, with the prospect that the Road Runner proceedings in the Supreme Court of Victoria would also be transferred to the Federal Court. Notwithstanding the position adopted by Trio Bros in respect of the prospect of transfer of these proceedings, I note the following interchange at the hearing: MR FITZPATRICK: I don't say that - I'm serious, your Honour. That's also, in a sense, if your Honour felt that it was easier to have the trial in Melbourne, then we would have no objection to that at all, because that's where the real issue is, where are the witnesses coming from, those sort of issues arise. HER HONOUR: Right. MR FITZPATRICK: And we would have no objection to that whatsoever, if your Honour … HER HONOUR: All right. I will take that on board. Thank you, Mr Fitzpatrick. MR FITZPATRICK: Yes. Sorry, I'm just looking if my friend wanted to say something. HER HONOUR: I'm sorry, you want to say something, Mr Goldblatt? MR GOLDBLATT: No. Well, it's interesting that this is now said for the first time, your Honour, because if that was said before we might not be here. (Transcript p 61 ll 1-19.) At the conclusion of the hearing the parties asked for an indulgence from the Court of seven days following the hearing, during which they proposed to have discussions concerning whether the parties could agree to dispose of the interlocutory application before the Court by agreement that the substantive proceeding be transferred to Victorian District Registry of the Court. No agreement was reached, however in my view it was clear at the hearing that both parties accepted the prospect that the substantive proceedings could conveniently be transferred to the Victorian District Registry if not otherwise dismissed.

Costs 60 To date the parties have made no formal submissions as to costs. Accordingly at present I make no orders in this respect. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.