Weston Communications Pty Ltd v. Fortune Communications Holdings Ltd & Anor [1985] FCA 579

CATCHWORDS

Trade Practices - misleading and deceptive conduct - claim

that use of name by the respondents similar to established

name of the applicant contravened s.52 of the Trade Practices

Act 1974 - considerations applicable in a claim involving similar names - scope of relief granted including form of injunction.

Interlocutory injunctions - test to be applied in determining

whether to issue an interlocutory injunction.

Trade Practices Act 1974 3.52

WESTON COMMUNICATIONS PTY. LTD. v.. FORTUNE COMMUNICATIONS

HOLDINGS LIMITED and THE WESTON COMPANY LIMITED

VG 225 OF 1985

Smithers J.

15 November 1985

Melbourne.

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IN THE FEDERAL COURT OF AUSTRALTA

VICTORIA DISTRICT REGISTRY VG NO. 225 OF 1985

GENERAL DIVISION

Between: WESTON COMMUNICATIONS PTY.

LIMITED (Applicant)

And: FORTUNE COMMUNICATION

HOLDINGS LID. and THE WESTON COMPANY

LIMITED (Respondents) Judge Making Order: Smithers Jd. Date of Order: 15 November 1985 Where Made: - Melbourne MINUTE OF ORDER THE COURT ORDERS THAT: 1. (a) The second respondent by itself, its servants and

agents and each of them or otherwise howsoever be restrained from carrying on the business of advertising or public relations industries or advertising or offering for sale or selling advertising or public relations services under or by

reference to the style or name "The Weston Company

Limited" or any style or name deceptively similar

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thereto or substantially identical therewith save and except in communicating under the name and style or against the credit of "The Weston Co. Limited" of 70 William Street, Sydney, N.S.W., with media organizations in the course and for the purpose of booking advertising space in the course of its business as an advertising agency for the purpose of doing so as an accredited agent of The Media Council of Australia where it is necessary to do so for it to use the financial arrangements appertaining to such accreditation and the benefits thereof are not

otherwise obtainable; and

The operation of this order be suspended for

fourteen days from this date.

The respondents are to pay the costs of this

application.

Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

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IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG NO. 225 OF 1985

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GENERAL DIVISION

Between: WESTON COMMUNICATIONS PTY. LIMITED

(Applicant)

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FORTUNE COMMUNICATION HOLDINGS LTD. and THE WESTON COMPANY LIMITED

(Respondents)

Coram: Smithers J.

Date: 15 November 1985

REASONS FOR JUDGMENT

The applicant seeks interlocutory relief against the second respondent on the ground that it has engaged or is likely to engage in conduct which is misleading or deceptive contrary to s.52 of the Trade Practices Act 1974 (the Act) which will cause loss and damage to it in the conduct of its

business.

The applicants' business is that of a public relations consultant and adviser in matters relating to the marketing by business entities of their goods and services and an advertising agency. It has carried on business since May

1983. The business was originally almost wholly confined to

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consultancy and advising but has developed an advertising function which now provides it with about 5 per centum of its

income.

The applicants commenced a business called "Weston Communications" in May 1983 with Mr. Richards and his wife in partnership, they being the staff thereof and the business premises being their home in Hawthorn. The name "Weston" is the second christian name of Mr. Richards. The business prospered. In November 1983 premises were acquired at Coventry Street, South Melbourne. In that same month the business was incorporated under the name "Weston Communications Group Pty. Ltd.". Mr. and Mrs. Richards were

directors of that company.

At the commencement of the business Mr. Richards contemplated that the business would operate in three divisions, namely promotions, advertising and video

presentation. It was for this reason that the word "Group"

was made part of the company name.

By November 1983 the monthly income had risen to approximately $9,500 per month. By March 1984 the monthly income had risen to $14,500 per month. Since then the business has continued to grow and the income has increased to many many times that figure. It is clearly a successful and substantial business. It operates for clients whom it serves on a continuing basis called permanent clients and others.

The clients are largely entities such as BHP Steel Division,

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Dulux Australia Limited and Shell Company of Australia Limited which operate nationally. The executive offices of the companies which use the services rendered by the applicant are

situated in Melbourne.

The extent of the provision by the applicant of advertising services offered by it has grown substantially since the beginning of 1985 and continues to grow. Much of such advertising is in publications operating nationally and any person interested would be able to see the word "Weston" or "Westcom" in very small type alongside the advertisement. Those words indicate that the applicant was the advertising

agent responsible for the advertisement.

The second respondent is a company the predecessor to which commenced business in New South Wales in 1901 under the name "The Weston Company". In 1906 that predecessor became incorporated as "The Weston Company Limited". It has since carried on the business of an advertising agency in New South Wales apparently under the name "The Weston Co. Limited". That is the name in which it appears in the Sydney White Pages of the telephone directory. Until some time in 1983 the second respondent conducted its business from its head office in New South Wales. It is a wholly owned subsidiary of the first respondent. Having acquired the advertising agency business then conducted in Victoria by another company in the first respondent's group of companies in the name of Angus Goldfinch & Stagoll the second respondent has carried on that

business in Melbourne from 1 December 1984. That business was

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well established when the respondent acquired it, the annual turnover being approximately $10 mitlion. After acquisition of the business of Angus Goldfinch & Stagoll the second

respondent adopted the name "The Weston Company Limited" as

the name of that business.

Mr. Todd, the Managing Director of The Weston Company Ltd., has, for some time, had an ambition that his company will be the first advertising agency to be a national company operating in every State and that it shall operate in the name "The Weston Company Limited". In pursuance of this ambition in September 1984 application was made to the New South Wales Corporate Affairs Commission to reserve the name "The Weston Company" in the various States of Australia. Its solicitors were informed, however, that there was registered in Victoria a company called "Weston Investments Pty. Ltd." and the name "The Weston Company Limited" was not avarlable in Victoria. On 3 January 1983 the Commissioner for Corporate Affairs of Victoria advised the respondent that two other companies, "Weston Studstock Advertising Pty. Ltd." and "Weston Communications Group Pty. Ltd." were also registered in Victoria and that the Commissioner was of the opinion that

"The Weston Company Limited" was not available in Victoria for

the second respondent.

On 21 January 1985 the respondent made submissions to the Victorian Commissioner but was advised on 8 February 1985 the name "The Weston Company Limited" was not available to the

respondent in Victoria as its submissions had not changed the

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Commissioner's opinion. on 22 July 1985 further representations were made to the Victorian Commissioner but

without result.

It was notwithstanding that the name "The Weston Company fLaimited" was not registered in Victoria or available for registration by the second named respondent, that that respondent changed the name of its Victorian business, apparently, soon after acquiring it to "The Weston Company Limited" and it has used that name in the carrying on of that

business in Victoria ever since.

An immediate question is whether it is apparent that the use of the name "The Weston Company Limited" by the respondent in Victoria will mislead or is likely to mislead persons who, but for being misled, might do business with the applicant. In the current situation the class ot persons who may do business with the applicant comprises persons requiring advice from a consultant marketing adviser or requiring advertising. A situation of direct communication between the applicant and a client may occur by canvass, invitation, recommendation or reputation or possibly otherwise. One would infer that the

latter two specified methods are most important.

To my mind it is, in the current situation, highly likely that in recommendation and reputation in particular, the significant word identifying the applicant is likely to be "Weston". It is when a business executive remembers, "Oh yes,

Weston was the name" that he may seek the telephone number.

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If he seeks advertising he will find in the White Pages not "The Weston Company Limited", but "Weston Co. Ltd, The Advertising Agents, 499 St. Kilda Road, Melbourne". He could well be satisfied. If he went further he would see the next

entry, "Weston Communications Group Pty. Ltd. 566 St. Kilda Road, Melbourne". If he did he might well decide that the

advertising agency was what he wanted.

In the case of a potential client requiring purely marketing consultancy who has heard by recommendation or reputation of the applicant there is a real likelihood that going by the name of which he has heard, he may refer to or instruct his secretary to look up "Westons" or "The Weston

Company" and that he or his secretary will be satisfied because of the similarity of the name "Weston Co. Ltd. - The" to that of the "Weston" establishment he had been told about or otherwise had in mind, that the "Weston Co. Ltd. - The" is that establishment. He may well be satisfied that it was that establishment he had been told about and thereby be caused to

communicate with, and possibly do business, with it.

There is obviously an affinity between general marketing strategy, market consultancy and advertising. In the mind of

a business man requiring marketing assistance there may well be doubt as to whether it is advertising or consultancy or as to the precise kind of marketing strategy he requires. It is inevitable that consultancy will involve consideration of advertising, and 1t must often happen that advertising will

lead to consultancy. The client accidentally finding himself

with "The Weston Company Limited" although he was really seeking the applicant, may well never find his way to the

applicant.

It is of critical significance in all this that the only word by which the respondent is to be identified is the word "Weston". That is the key word by which the applicant has been known since May 1983. In discussions in commercial circles about consultancy and advertising each company is no doubt referred to as "Westons" or "The Weston Company". The possibility of a person seeking the one or the other actually reaching "The Weston Company Limited" must be quite high. An important feature of the name chosen by the respondent is that 1t makes what one may describe as a universal claim. It says "we are the Weston Company". It implies that there is only one such. The situation resembles that dealt with in Bridge

Stockbrokers Ltd. & Anor v. Bridges & Ors. (1984) 57 ALR 401,

to the reasoning in which I would refer. The inevitable use of the word "Weston's" to refer to the second respondent is

exemplified by the paragraph in the following terms which

appeared in B & T Advertising Marketing & Media Weekly in November 1984:

"WESTON'S MELB MOVE by Neil Shoebridge

The Weston Company, part of the Fortune Communication Holdings group, has moved into Melbourne with the 'takeover' of sister agency Angus Goldfinch Stagoll, also part of FCH.

Weston managing director Dennis Todd says that effective this week, AGS will change its name to Weston Advertising, Melbourne. AGS, which has

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billings estimated at $4m, will continue to be run by its current management, with Neil Stagoll as managing director.

FCH acquired AGS last December, although the move vas not announced until February (b&t February The move gives Weston a three-State network. Earlier this year, Sydney-based Weston opened an office in Perth (b&t April 13)."

Similarly, articles have appeared in trade publications announcing the loss of accounts by "Weston Melbourne". Clients of the applicant have referred to those articles expressing concern that the applicant has lost those accounts. This tended to create loss of confidence in the applicant. The applicant has not lost such accounts or to the best of its knowledge any accounts. Thus in the business publication Ad Brief of 21 dune 1985 appeared a paragraph announcing that

"Druids Friendly Society leaves Weston Melbourne for Madison

Advertising"

There igs no evidence of a person minded to deal with the applicant actually communicating with the respondent. Such

evidence would not be readily obtainable. However, actual examples of error or confusion appear in the evidence. The

confusion which has occurred 1s not without significance.

It appears that on numerous occasions deliveries of goods intended for the second respondent have been made to the applicant. The probability is that the reverse has occurred. In August of 1985 the applicant received accounts for

$1,403.40 and $1,373.40 in respect of services rendered by

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David Syme & Co. Limited intended tor the second respondent, an account for $54.90 in respect of services rendered by AAV~Australia Pty. Ltd intended for the second respondent, and an account for $60 for services rendered by Apple International Pty. Ltd. to the second respondent. An STD call was received from Tableland Advertisers of Queensland requiring payment of an account which was actually an outstanding account of the second respondent. In October 1985 the applicant received a demand by Wisewould's, solicitors, threatening proceedings unless the sum of $1,373.40 due by it was not paid immediately. The account was actually owing by the second respondent. In October 1985 an account was received from Bernard Leser Publications Pty. Ltd. for an

advertisement in "Vogue" inserted for the second respondent.

I believe that there is every likelihood of business persons being misled by the use by the second respondent of the word "Weston" or "Weston's", and really, only that name, as that in which it carries on business. The more the two organizations expand their businesses the greater the likelihood of confusion. The second respondent says that it does not desire to interfere with the applicant's business if it does not diversify into advertising. Of course, the applicant entered the field of advertising agency very early in its business life. The second respondent's statement suggests it does desire to interfere with this. It concedes a general tendency to confusion. It raises the question, - does

that respondent suggest that the applicant not engage in

advertising? It as not for the respondent to lay down a

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restrictive condition so that confusion will be modified. The question really is whether a company known as ""Weston" or "Westons"" or "The Weston Company" is likely to be confused with a Victorian business with the key word "Weston" in its name and also likely to be known as "Westons", "The Weston Company" or "Weston Communications". Merely to state the question in this way 1s to reveal that it ought to be answered

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It as true that the clients of each business are relatively few in number and some of great financial significance to the companies concerned and the likelihood of current clients being confused must be small. But the issue concerns the people who are potential clients. The loss of any one of _ these may represent loss of a most valuable account. In an expanding business the likelihood of the loss of numerous of such accounts must be regarded as real and most

serious.

Having regard to the foregoing I am satisfied that there is a serious question to be tried between the applicant and the second respondent as to whether that respondent has not

engaged in misleading and deceptive conduct and conduct that

is likely to mislead and deceive.

It is now clearly established that the test to be applied in this Court when determining whether to issue an interlocutory injunction is that approved by members of the

High Court and articulated by the Full Court of this Court in

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Epitoma Pty. Ltd. v. Australasian Meat Industry Employees Union (1984) 3 FCR 55 and Bullock & Ors vv. Federated

Furnishing Trades Society of Australasia & Ors. (1985) 60 ALR

235, namely, that the granting of an interlocutory injunction is contingent upon finding, first, the existence of a serious question to he tried and second, that the balance of convenience is in favour of granting such an injunction. This test has been used by Justices of the High Court of Australia.

See Australian Coarse Grain Pool Pty. Ltd. v. Barley Marketing

Board of Queensland (1982) 46 ALR 398 (per Gibbs CJ);

Tableland Peanuts Pty. Ltd. & Ors. v. Peanut Marketing Board

(1984) 52 ALR 651 (per Brennan J.); A.& Ors v. Hayden & Ors

(No.1) (1984) 56 ALR 73 (per Dawson J);and Queensland v-~-

Australian Telecommunications Commission (1985) 59 ALR 243

(per Gibbs CJ).

It is my view, however, that the two components of the test should not in all circumstances be applied in isolation

from one another. In Junqpradit v. Hurford (unreported

Federal Court of Australia; 21 August 1985), a case concerning an application for a stay order pursuant to s.15 of the

Administrative Decisions (Judicial Review) Act 1977 against a

deportation order made against the applicant by the respondent, Woodward J. indicated that the two limbs of the

test must be considered together so that proper consideration

can be given to the way in which they interact. I respectfully agree with what was suggested by Woodward J. in

the Jungpradit Case (supra). When applying the two components of the test toa given fact situation, it may be that they

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will interact and impinge upon one another. In those circumstances 1t would be artificial to apply the components of the test as it they were independent of one another. In this regard I would respectfully adopt what was said by Dawson

J. in Hayden's Case (supra) at p. 79 where his Honour said:

"yee. a@ court ought not to be misled by an overstrict application of verbal formulae to

depart from its primary duty to do complete justice in the cause..." See also what was said by Wilcox J. in Azemoudeh v. Minister

for Immigration and Ethnic Affairs (unreported; Federal Court of Australia; 10 October 1985).

IT have formed the opinion that the prospects of success

of the applicant at the trial are good.

On the question of balance of convenience I have come to the conclusion that that balance favours the applicant. The second respondent has carried on business in Victoria only since December 1984. The number of "accounts" it has is limited. With most clients, particularly the more important ones, there is a close personal relationship established, in the main, before the name "Weston" was used by the second respondent in Victoria. The second respondent's managing director, Mr. Todd, has deposed that if it 1s restrained from using the name "Weston Company Limited" it would have to:

(a) disband the organization which presently carries on

business under that name in South Melbourne;

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(b) terminate the employment of at least twenty of its

employees in Victoria; and

(c) establish a new company under a new name retaining the services of only three to five of its present Melbourne employees to service two of its present Victorian clients which account for approximately forty five per

cent of its gross turnover in Victoria.

I do not accept this except that it would be inconvenient for the second respondent to be required to book advertising space from Sydney. I was not aware that counsel

attempted to support this deposition of Mr. Todd.

The second respondent, if required to cease to use the name "Weston", can well within its resources, explain to each of its clients that, as there is difficulty in obtaining registration in the name "Weston Company", the former Victorian name has been resumed, or make some such arrangement and explanation. [ fail to see why it will lose any accounts in doing this. As indicated, there is said to be personal rapport between the second respondent and its clients. If it is true, as the second respondent alleges, that the use ot a name different from "The Weston Company Limited" will seriously slow the growth of its advertising business in Victoria, it is the growth of its business by the use of that name which, partly as the result of the misleading quality of that conduct, is in issue. Further, growth induced

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to law. On the other hand, if the second respondent continues to trade, the very magnitude of its business must tend to depreciate the name "Weston" as a reference to the applicant. The applicant's separate business identity 1s in danger of

being submersed.

It is an important consideration that this continuing inquiry to the applicant's idependent identity as ""Westons" or "Weston Communications Pty. Ltd." occurs at the hands of the second respondent in the course of conduct on its part in which, by law, the second respondent is not entitled to engage. It was quite cavalier for the second respondent to commence business in the name "The Weston Company Limited." with full knowledge that it had not obtained registration thereof and had not obtained registration for the very reason that in the judgment of the relevant authority the name was too close to that of another company. It did this notwithstanding that 1t must have known that injury to the applicant was, to say the least, a distinct possibility. It is likely that, but for the intensity of Mr. Todd's attraction to the idea of spreading his company name Australia wide, he would not have done this. Whether or not trading in a name which the second respondent could not register is strictly a matter going to the balance of convenience, it is surely a matter going to justice according to law, in the situation which has emerged. The inconvenience on which the second respondent desires to rely 1s inability to carry on business in aname which 1t 1s unlawful for 1t to use. It is the use

of this name which gives rise to the alleged contravention of

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$.52 of the Act. Accordingly, whether or not this aspect of the matter goes strictly to "convenience" it is, I think, a matter relevant, in the words of Dawson J., in Hayden's Case (supra), to the primary duty of the Court, free from "overstrict application of verbal formulae", to do complete

justice.

I am conscious that 1n booking advertising space go that business may be done by the second respondent as an agency accredited with The Media Council of Australia, and on the credit terms applicable to such an agency, it may be necessary for the second respondent to do the business in the name of

"The Weston Co. Limited".

I consider, therefore, that an injunction restraining the second respondent from trading in the name of "The Weston Company Limited" should, if possible, except from the same, communications by the respondent with a media organization for the purpose of booking such space as is made against the credit of The Weston Company Limited of 70 William Street, Sydney N.S.W., and that the operation of this injunction

should be suspended for fourteen days from this date.

Accordingly, the order of the Court is that the second respondent by itself, its servants and agents and each of them or otherwise howsoever be restrained from carrying on the business of advertising or public relations industries or advertising or offering for sale or selling advertising or

public relations services under or by reference to the style

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or name "The Weston Company Gimited" or any style or name deceptively similar thereto or substantially identical therewith save and except in communicating under the name and style or against the credit of "The Weston Co. Limited" of 70 William Street, Sydney N.S.W. with media organizations in the course and for the purpose of booking advertising space in the course of its business as an advertising agency for the

purpose of doing so as an accredited agent of The Media

Council of Australia where 1t is necessary to do so for it to use the financial arrangements appertaining to such accreditation and the benefits thereof are not otherwise obtainable and I order that the operation of this order be suspended for fourteen days from this date. I aiso order that

the respondents pay the costs of this application.

Addendum _to Judgment: 15 November 1985

I have this morning been advised that the Ministerial Council for Companies and Securities has, pursuant to sub-s. 38(2) of the Companies (Victoria) Code consented to the reservation and registration of the name "The Weston Company Limited" by the second respondent. I had of course realised that it was possible that the registration might become legal. I had not expected it but I had no knowledge of the standards which would be applied by the Ministerial Council. In considering the balance of convenience I took into account that perhaps not as a matter of convenience but as a matter

going to the general justice of the situation that the second

respondent is not registered in its name in Victoria. It

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seems then that that consideration is no longer operative. I am, however, quite satisfied that on the balance of convenience strictly interpreted the injunction must go. It is to my mind impossible to withstand the factor that the colloquial name of each company is "Weston" or "The Weston Company", that they operate in cognate fields, that the applicant has built up a goodwill around the name "Weston" and the incursion of another company the key word of whose name is "Weston" is obviously calculated to injure most seriously the

applicant's goodwill and that every day counts.

I certify that this and the sixteen (16) preceding pages are a true copy of the Reasons

for Judgment herein of the

Honourable Mr. Justice Smithers. —_— Q n J Orn+ADKRT OS (); ct 5 LU. Associate

Dated: 15 November 1985

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