OZI4x4 sold counterfeit Toyota parts after a $145K settlement — $100K exemplary damages

OZI4x4, a New South Wales aftermarket 4WD accessories seller run by sole director Mr Safi, had already settled one Toyota dispute: proceedings over Toyota-branded bash plates, snorkels and grilles ended in a 1 October 2021 agreement to stop selling Toyota-marked parts, to prefix compatibility references with 'suitable for' or 'compatible with', and to pay Toyota $145,000 by instalments. The settlement expressly allowed Toyota to cite the earlier conduct when seeking additional or exemplary damages for any repeat.

The repeat came anyway. Toyota's investigators made trap purchases of counterfeit HILUX tail lights — imported from China, stocked in Australia and sold — and LAND CRUISER armrests drop-shipped from an overseas supplier directly to buyers. Armrest sales continued past a 27 October 2022 demand letter, and past a statement from OZI4x4's own solicitors that sales had ceased. The court found OZI4x4's sales records incomplete and was satisfied more infringing goods were sold than the records showed.

In the Federal Court of Australia, Wheelahan J drew a line by supply model: importing and stocking the tail lights infringed the HILUX trade mark, but the drop-shipped armrests did not — the mark became apparent only on delivery, after the course of trade had ended. Either way the conduct breached the Australian Consumer Law's misleading-conduct provisions and passed off Toyota's goodwill, and both OZI4x4 and Safi breached the settlement agreement.

Deterrence drove the money. The court awarded $100,000 in additional damages — Toyota had sought $300,000 — and $100,000 in exemplary damages because ordinary compensation was insufficient to condemn and deter the conduct, plus smaller compensatory awards; after concurrency and $4,800 in interest, final judgment was $171,180 against OZI4x4 and $21,180 against Safi personally, with costs to Toyota.

Final judgments of A$171,180 against OZI4x4 (in liquidation) and A$21,180 against its director, including A$100K exemplary damages, plus costs.

The 2021 settlement and the court's deterrent award framed the same lesson: OZI4x4 treated continued infringement as a cost of doing business, so the court made it an expensive one.

Sales continued after a demand letter and assurances from its own solicitors — giving the director actual knowledge and making him personally liable as an accessory under the ACL.

OZI4x4's records were so incomplete the court assumed unrecorded sales against it, and a similar business was continuing through another company associated with Safi.

Drop-shipping dodged trade mark infringement but not consumer law: the court found reasonable buyers could read the marks on the counterfeit goods as Toyota's approval or origin.

A settlement ignored is evidence against you: the breached agreement became the yardstick for exemplary damages — and it bound the director personally, not just the company.

OZI4x4 was in liquidation by judgment, so Toyota sought no injunction against the company. The court instead granted Safi a permanent ACL injunction restraining involvement in false representations by businesses associated with him, citing evidence a similar business was continuing through another entity. Toyota received its costs, with an indemnity order only for the court book wasted when Safi missed trial. The case maps the gap: drop-shipped counterfeits can escape trade mark law yet still attract consumer-law and passing-off liability.