260 Oxford Street Pty Ltd v Premetis

Case

[2006] NSWCA 96

19 May 2006

No judgment structure available for this case.


New South Wales


Court of Appeal


CITATION: 260 Oxford Street Pty Ltd & Ors v Premetis & Anor [2006] NSWCA 96
HEARING DATE(S): 31 March 2006
 
JUDGMENT DATE: 

19 May 2006
JUDGMENT OF: Tobias JA at 1; Basten JA at 116; Young CJ in Eq at 128
DECISION: Appeal dismissed with costs.
CATCHWORDS: SALE AGREEMENT – sale of business – goodwill – name of business – construction of sale agreement – whether name of business passed with sale of goodwill – whether agreement wholly in writing – parol evidence rule – exceptions – whether deletion of name from written agreement gave rise to ambiguity - CONDUCT OF BUSINESS – Trade Practices Act 1974 (Cth) s52 – Fair Trading Act 1987 s42 – misleading or deceptive conduct – conduct likely to mislead or deceive – passing off – whether conduct after sale of business amounted to misleading or deceptive conduct, or conduct likely to mislead or deceive, or passing off - APPEAL – grounds – failure to give reasons – jurisdiction – whether trial judge failed to give reasons or to give adequate reasons – conduct of case at trial –
LEGISLATION CITED: Fair Trading Act 1987, s42, s44
Trade Practices Act 1974 (Cth), s52, s53
CASES CITED: Brew v Followmont Transport Pty Ltd [2005] QSC 030
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Domain Names Australia Pty Ltd v .au Domain Administration Ltd (2004) 139 FCR 215
Ensec Pty Ltd (In Liq) v Hawkins [2004] NSWCA 243
Federal Commissioner of Taxation v Murry (1998) 193 CLR 605
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
Haberle Crystal Springs Brewing Co v Clarke (1929) 30 F 2d (2nd Cir) 219
Inland Revenue Commissioner v Muller & Co’s Margarine Limited [1901] AC 217
Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 104 FCR 61
Moorgate Tobacco Co Ltd v Philip Morris (No 2) (1984) 156 CLR 414
Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Premetis v 260 Oxford Street Pty Ltd [2005] NSWSC 904
University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481
PARTIES: 260 Oxford Street Pty Limited
Bosko Vujovic
Vladimir Vujovic
Juliet Vanessa Vujovic
Arthur Premetis
AP Pizza (Aust) Pty Limited
FILE NUMBER(S): CA 40797/05
COUNSEL: A: A Leopold / M Green
R: B W Rayment QC / D T Kell
SOLICITORS: A: Banki Haddock Fiora, Sydney
R: Tzovaras Legal, Sydney
LOWER COURT JURISDICTION: Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S): SC 2441/05
LOWER COURT JUDICIAL OFFICER: Gzell J
LOWER COURT DATE OF DECISION: 08/09/2005
LOWER COURT MEDIUM NEUTRAL CITATION: Premetis v 260 Oxford Street Pty Ltd & Ors [2005] NSWSC 904



                          CA 40797/05
                          SC 2441/05

                          TOBIAS JA
                          BASTEN JA
                          YOUNG CJ in EQ

                          Friday 19 May 2006
260 OXFORD STREET PTY LIMITED & Ors v ARTHUR PREMETIS & Anor
Judgment

1 TOBIAS JA: This appeal concerns a well-known pizzeria and restaurant known as “Arthur’s Pizza & Restaurant” at 260 Oxford Street, Paddington (the premises). Arthur Premetis (the first respondent) has owned the premises since 1974. A pizzeria has operated from the premises since that time, by the respondent from 1974 to 1979 and by his lessees from 1979 to 1992.

2 The pizzeria business operated under the name “Arthur’s Pizza” until 1980, under the name “Mena’s Pizza” until 1987 and then under the name “Jim’s Pizza” until 1992.

3 In 1992 the first respondent retook possession of the premises and operated the business under the name “Arthur’s Pizza” until June 1993, when he sold the business to the third and fourth appellants. Those appellants, as lessees, then carried on the business under the name “Arthur’s Pizza” for three years when the lease was renewed in the name of the first appellant. A further lease of the premises was entered into on 7 April 2000 and expired on 31 March 2005 when the first appellant vacated the premises and the first respondent retook possession.

4 On 2 May 2005, after renovating the premises, the first respondent and his company, AP Pizza (Aust) Pty Limited (the second respondent), recommenced the pizzeria business under the name “Arthur’s Pizza”. At or about the same time the first and second appellants began operating a pizzeria at 180 Oxford Street, Paddington – approximately 200 metres from the premises. This pizzeria also operated under the name “Arthur’s Pizza”.

5 On 20 July 2005 the first respondent instituted proceedings in the Equity Division of the Supreme Court against the appellants seeking an order restraining the latter from using the names “Arthur’s Pizza”, “Arthur’s”, “The Arthur’s Crew” or any deceptively similar name in respect of the operation of a pizzeria and/or restaurant at 180 Oxford Street, Paddington (180 Oxford) or anywhere else in the eastern suburbs of Sydney. Essentially, the first respondent claimed that he retained ownership of the name “Arthur’s Pizza” when he sold the pizzeria business to the third and fourth appellants in 1993 because it was excluded from the goodwill that passed to those appellants on the sale.

6 The first appellant filed a cross-claim against the first and second respondents on 9 June 2005 (the cross-claim). It alleged that on and from 3 May 2005 the respondents commenced operating a pizzeria restaurant, takeaway and home delivery service from the premises under the name and mark “Arthur’s Pizza” without the consent, approval or permission of the first appellant. The cross-claim then alleged that the conduct referred to was misleading or deceptive, or likely to mislead or deceive, in contravention of s52 of the Trade Practices Act 1974 (Cth) (the TP Act) and s42 of the Fair Trading Act 1987 (NSW) (the FT Act).

7 Justice Gzell heard the proceedings in August 2005 and delivered his judgment on 8 September 2005: Premetis v 260 Oxford Street Pty Ltd [2005] NSWSC 904. His Honour concluded that the name “Arthur’s Pizza” was excluded from the sale of the business in 1993 by the first respondent to the third and fourth appellants and, therefore, it did not follow the goodwill into their hands. He further found that by operating a pizzeria from 180 Oxford under the name “Arthur’s Pizza”, or any colourable imitation thereof, the first appellant was guilty of passing off as well as misleading or deceptive conduct under both the TP Act and the FT Act.

8 His Honour accordingly held that the first respondent was entitled to injunctive relief and made orders restraining the appellants from conducting or otherwise operating a pizzeria or restaurant business (including home delivery) at or from 180 Oxford, or from any other location in the eastern suburbs, under the name “Arthur’s Pizza”, “Arthur’s”, “The Arthur’s Crew”, “Arthur’s Paddington” or any colourable imitation or variation thereof. His Honour dismissed the first appellant’s cross-claim. Sixteen orders were formally made on 28 September 2005.

9 By their Amended Notice of Appeal, which was further refined on the hearing of the appeal, the appellants appealed to this Court from the primary judge’s order dismissing the cross-claim. They also sought variations to Orders 2, 5 and 10. The major issues argued on the appeal were, first, that the primary judge erred in finding that the sale of the business in 1973, although including its goodwill, excluded the name “Arthur’s Pizza”. Second, even if that the first argument failed, the manner in which the respondents operated the pizzeria business at the premises on and after 2 May 2005 involved conduct which was likely to mislead or deceive in contravention of s52 of the TP Act and s42 of the FT Act. It was also contended that that conduct involved representations that contravened s53(d) of the TP Act and s44(f) of the FT Act.


      The form of relief sought by the appellants on the appeal

10 During the course of argument, the question arose as to the precise relief being sought by the appellants and, in particular, the conduct of the respondents alleged to be in contravention of the TP Act and the FT Act. The appellants were therefore asked to provide the Court with a form of draft orders. For present purposes, the various costs orders sought by the appellants can be left aside, as can the variations sought with respect to Orders 2, 5 and 10. It is, however, appropriate to set out the relief now sought by the appellants on the cross-claim, as the manner in which the orders have been framed will assist in isolating the precise issues for determination on the appeal.

11 Relevantly, therefore, the appellants seek the following declarations and orders (some of which I have amalgamated to avoid repetition):

          “(a) Declare that the respondents have engaged in the following conduct in trade or commerce which is misleading or deceptive or likely to mislead or deceive in contravention of s52 of the TP Act and s42 of the FT Act:
              *(i) Representing that the use of the name ‘Arthur’s Pizza’ in connection with the conduct of a pizzeria business at the premises on and after 2 May 2005 had the consent, approval or permission of the proprietors of the pizzeria business conducted at the premises during the period 11 June 1993 to 31 March 2005 inclusive (the 1993-2005 Period);
              (ii) Representing that the pizzeria business conducted at the premises on and after 2 May 2005 was a business conducted at the premises continuously over the period 1974 to 2005 including the 1993-2005 Period;

(iii) Displaying signage depicting the words ‘Arthur’s Pizza’ upside down in connection with the proposed conduct of a pizzeria business at the premises on and after 2 May 2005;

              (iv) Disseminating menus in approximately the size of a postcard, that is, approximately 105 millimetres by 148 millimetres, in connection with the conduct of a pizzeria business at the premises on and after 2 May 2005;
              (v) In connection with the conduct of a pizzeria business at the premises on and after 2 May 2005, substantially replicating the various combinations of pizza toppings used in the conduct of the pizzeria business at the premises in the 1993-2005 period;
          (b) Declare that the first respondent has contravened section 44(f) of the FT Act and the second respondent has contravened s53(d) of the TP Act by falsely representing in trade or commerce:
              *(i) that the use of the name ‘Arthur’s Pizza’ in connection with the conduct of a pizzeria business at the premises on and after 2 May 2005 had the consent, approval or permission of the proprietors of the pizzeria business conducted at the premises during the 1993-2005 Period;
              (ii) that the pizzeria business conducted at the premises on and after 2 May 2005 was a business conducted at the premises continuously over the period 1974 to 2005 including the 1993-2005 Period;

(c) Order that each of the respondents by themselves, their servants and agents be restrained from doing any of the following in connection with the conduct of a pizzeria business at the premises:

              *(i) Prior to 1 April 2007 using the name ‘Arthur’s Pizza” or the name ‘Arthur’ or assigning, licensing or purporting to assign or license any right in the name ‘Arthur’s Pizza’ or the name ‘Arthur’;

(ii) Representing in trade or commerce that such pizzeria business has been a business conducted at the premises continuously over the period 1974 to 2005 including the 1993-2005 Period and/or representing in trade or commerce that the pizzeria business conducted at the premises during any part of the 1993-2005 Period was a business which either respondent conducted or owned;

(iii) Displaying signage incorporating the words ‘Arthur’s Pizza’ or the word ‘Arthur’s’ upside down or otherwise using the words ‘Arthur’s Pizza’ or the word ‘Arthur’s” upside down, that is, inverting those words or that word when used in conjunction with any image not inverted, any thing not inverted or any other words not inverted;

(iv) Disseminating to any person, or displaying, menus in approximately the size of a postcard, that is, approximately 105 millimetres by 148 millimetres;


              (v) Replicating any more than five of the various combinations of pizza toppings used in the conduct of the pizzeria business at the premises in the 1993-2005 Period, namely, those combinations of pizza toppings annexed and marked ‘A’;
          *(d) Order that each of the respondents by themselves, their servants and agents be restrained from using prior to 1 April 2007, in connection with the conduct of a pizzeria business within a 2 kilometre radius of the premises, the name ‘Arthur’s Pizza’ or the name ‘Arthur’ or assigning, licensing or purporting to assign or license any right in the name ‘Arthur’s Pizza’ or the name ‘Arthur’.

12 Annexure “A” to draft Order (c)(v) is in the following terms:

      1. Peperoni, roma tomato, capsicum, mushroom
      2. Olives, anchovies, caper, semidried tomatoes
      3. Roma tomato, bocconcini, basil
      4. Capsicum, artichokes, eggplant, pesto
      5. 4 mushrooms, smoked bacon, parmesan
      6. Ham, pumpkin, chilli, pecorino cheese
      7. Oven roasted vegetables & goats curd
      8. Lamb sausage, mascarpone, spinach, harrisa
      9. Potato, gorgonzola, onions
      10. Salami, onions, capsicum, bacon & chilli
      11. Olives, feta, red onions, tomato
      12. Prosciutto, cherry tomato, parmesan

13 A note to the draft orders states that those marked with an asterisk, being (a)(i), (b)(i), (c)(i) and (d), can be deleted if the appellants fail in their argument with respect to the right of the respondents to use the name “Arthur’s Pizza” in the conduct of a pizzeria business at the premises. However, the appellants maintain that, even if the respondents are entitled to use the name, the non-asterisked conduct and representations referred to in the draft declarations contravened the relevant provisions of the TP Act and FT Act.


      The appellants do not challenge the orders of the primary judge restraining them from using the name “Arthur’s Pizza”

14 The first respondent granted the first appellant a lease of the premises on 7 April 2000 for a term of five years commencing on 1 April 2000 and terminating on 31 March 2005 (the 2000 lease). Before the primary judge, the respondents contended that upon the expiration of this lease, the first respondent was entitled to conduct the business of a pizzeria at the premises under the name “Arthur’s Pizza”. Two grounds for this contention were advanced. The first was that in 1993 the first respondent excluded the name from the sale of the business and its accompanying goodwill to the third and fourth appellants. The second was that by clause 20 of the 2000 lease the first appellant promised not to trade from any other premises under the business name “Arthur’s Pizza”. The primary judge upheld the contention on both grounds.

15 As to the enforcement of the first appellant’s contractual promise in clause 20 of the 2000 lease not to use the name “Arthur’s Pizza”, the appellants do not challenge the injunctions granted by the primary judge restraining them from using the name in relation to any pizzeria or restaurant operated by them, either from 180 Oxford Street or any other premises in the eastern suburbs of Sydney.

16 Although the appellants accept that they are themselves restrained from using the name “Arthur’s Pizza”, they challenge his Honour’s finding that the name was excluded from the 1993 sale of the business and its accompanying goodwill. If this challenge is successful, the appellants submit that the third and fourth appellants, and possibly the first appellant (as assignee from the third and fourth appellants), are the owners of the name “Arthur’s Pizza”. Accordingly, they submitted that the respondents, notwithstanding clause 20 of the 2000 lease, are not entitled to use that name in connection with the conduct of a pizzeria business at the premises without the appellants’ consent.

17 In other words, although the appellants contend that they have the sole proprietary interest in the name “Arthur’s Pizza”, they accept that they are bound by the contractual promise contained in clause 20 of the 2000 lease not to use that name themselves at any other premises. They also contend that they are nevertheless entitled to restrain the appellants from using the name at least with respect to the premises. In this respect it may be noted that draft order (c)(i) sought by the appellants is confined to restraining the appellants from using the name in the conduct of a pizzeria business at the premises. No claim is made to restrain the respondents from using the name or licensing any other person to use the name at any other premises in the eastern suburbs. This is significant because, at the time of trial, the pizzerias were being operated under the name “Arthur’s Pizza” by lessees of the first respondent at Randwick and Bondi Junction. The first respondent was also in the process of renovating premises at Maroubra which he was proposing to operate himself as a pizzeria under the name “Arthur’s Pizza”.


      The reasoning of the primary judge

18 It was common ground before the primary judge that unless agreed otherwise, a transfer of the goodwill in a business carried with it the trade name of that business. Thus, in Federal Commissioner of Taxation v Murry (1998) 193 CLR 605 at 617 [29], Gaudron, McHugh, Gummow and Hayne JJ in a joint judgment observed that:

          “a contract for the sale of the goodwill of the business will ordinarily transfer to the purchaser all those matters and things essential to the existence of the goodwill unless the terms of the contract or the surrounding circumstances indicate otherwise.”

19 The foregoing proposition was acknowledged by the primary judge at [17] of his judgment. In this context, although not forming part of his Honour’s reasoning, it is appropriate and convenient to refer to some passages in the joint judgment in Murry under the heading “The nature of goodwill”. At 613 [16] their Honours referred to the speech of Lord Lindley in Inland Revenue Commissioner v Muller & Co’s Margarine Limited [1901] AC 217 at 235, where his Lordship remarked:

          “Goodwill regarded as property has no meaning except in connection with some trade, business or calling. In that connection I understand the word to include whatever adds value to a business by reason of situation, name and reputation, connection, introduction to old customers, and agreed absence from competition, or any of these things, and there may be others which do not occur to me. In this wide sense, goodwill is inseparable from the business to which it adds value, and, in my opinion, exists where the business is carried on.”

20 The joint judgment also referred (at 613 [17]) to Lord Macnaghten’s much cited definition of goodwill given in the same case. His Lordship said (at 223-224):

          “What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom … Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade.”

21 In Murry (at 614 [22]), their Honours considered the above definitions of Lord Lindley and Lord Macnaughton, and another provided by Judge Swan in a United States case (Haberle Crystal Springs Brewing Co v Clarke (1929) 30 F 2d (2nd Cir) 219 at 221-222). Their Honours observed that (omitting footnotes):

          “The definitions of Lord Lindley, Lord Macnaghten and Judge Swan bring out the point that goodwill has three different aspects – property, sources and value which combine to give definition to the legal concept of goodwill.”

22 The joint judgment then continued under the heading “Goodwill as property” at 615 [23] (omitting footnotes):

          “From the viewpoint of the proprietors of a business and subsequent purchasers, goodwill is an asset of the business because it is the valuable right or privilege to use the other assets of the business as a business to produce income. It is the right or privilege to make use of all that constitutes ‘the attractive force which brings in custom’. Goodwill is correctly identified as property, therefore, because it is the legal right or privilege to conduct a business in substantially the same manner and by substantially the same means that have attracted custom to it. It is a right or privilege that is inseparable from the conduct of the business.”

23 Finally, under the heading “The sources of goodwill”, the joint judgment (at 615 [24]) contained the following observations (omitting footnotes):

          “It is common to describe goodwill as being composed of elements. However, goodwill is a quality or attribute that derives inter alia from using or applying other assets of the business. Much goodwill, for example, derives, from the use of trademarks or a particular site or from selling at competitive prices. But it makes no sense to describe goodwill in such cases as composed of trademarks, land or price, as the case may be. … It is therefore more accurate to refer to goodwill as having sources than it is to refer to it as being composed of elements. In Muller , Lord Lindley referred to goodwill as adding value to a business ‘by reason of’ situation, name and reputation, and other matters and not because goodwill was composed of such elements.”

24 It is clear from the foregoing statements that there is no rule that the goodwill of a business necessarily includes its trade name. Thus, as the primary judge recognised, the goodwill of a business could be transferred without the name of the business being inextricably attached to such a transfer. Whether or not a particular name is the subject of a transfer of goodwill will depend upon the terms of the agreement between the parties or the surrounding circumstances.

25 In determining whether the name “Arthur’s Pizza” formed part of the 1993 sale of the business, the primary judge made the following essential findings:

          “13. In the 1993 agreement for sale to Mr and Mrs Vujovic, the business was described as ‘Arthur’s Pizza’ but those words were struck out of the agreement. Mr Premetis said there was a verbal agreement between the parties that the name was not included and that was corroborated by a diary note of his solicitor, John Theodoridis when taking instructions from Mr Premetis: ‘The name ‘Arthur’s Pizza’ remains with the owner’.
          14. It was common ground that Mr Premetis had provided vendor finance upon the sale of the business and that he required the business to be conducted under the name ‘Arthur’s Pizza’ until the vendor finance was discharged, at which time Mr and Mrs Vujovic were entitled to operate the pizzeria under any name of their choosing.
          15. Mr Theodoridis’ file note also contained: ‘As long as an amount is outstanding on the ‘vendor finance’ the name of the shop cannot be changed’.
          23. Although his evidence was somewhat contradictory, in the end Mr Vujovic agreed that the name ‘Arthur’s Pizza’ had been deleted from the sale agreement. When asked whether, according to him, he bought the name ‘Arthur’s Pizza’ from Mr Premetis in 1993 he replied: ‘No, we didn’t’. "

26 The appellants submitted before the primary judge that it did not follow that the assignment of the goodwill of the business did not include the name “Arthur’s Pizza” simply because it had been struck from the agreement. On the other hand, the respondents submitted that the pre-contract discussions between the first respondent and the third appellant were admissible according to the exceptions to the parol evidence rule. His Honour accepted the respondents’ argument in three respects. First, he held that the evidence was admissible to show the true nature of the transaction, namely, whether or not it excluded the business name from the transfer of goodwill. Second, the striking out of the words “Arthur’s Pizza” from the agreement for sale was admissible as evidence of a prior agreement between the parties that the name should be excluded from the sale. Third, his Honour held that a collateral agreement had been entered into between the third appellant and the first respondent, to the effect that the first respondent was entitled to the name in consideration of his entering into the agreement for sale.

27 The primary judge therefore concluded (at [37]) that:

          “Construing the agreement for sale in light of the admissible extrinsic evidence and the surrounding circumstances known to the parties, I conclude that the name ’Arthur’s Pizza’ was excluded from the agreement for sale and did not follow into the hands of Mr and Mrs Vujovic [the third and fourth appellants].”

      Rather, by the agreement for sale, the first respondent granted to the third and fourth appellants a licence to use the name “Arthur’s Pizza” and, in fact, required them to use the name until the vendor finance had been discharged. Alternatively, his Honour held that the evidence established a collateral agreement in the nature of that referred to above.

28 His Honour then dealt with clause 20 of the 2000 lease holding that the use of the name “Arthur’s Pizza”, or the threat to use that name, by the first appellant was in contravention of clause 20(c) and ought to be restrained by injunction. As I have already observed, there is no challenge to this finding.

29 His Honour then turned to the first respondent’s claim for passing off. He commenced this part of his judgment with the following findings (at [55]):

          “There is no doubt that when the 2000 lease expired, the Oxford Street company, and the Vujovics before it, had built up a successful business trading under the name ‘Arthur’s Pizza’ and that the goodwill of the business belonged to the Oxford Street company. Over the years, new menus including gourmet pizzas were introduced. A distinctive amblance (sic) was developed with music, lighting and other improvements. A home delivery service was introduced. The quality of ingredients was improved. Marketing was undertaken, including letter drops of takeaway menus on postcards. And media publicity was sought and obtained.”

30 His Honour nevertheless held (at [57]) that the intended use of the name “Arthur’s Pizza”, or similar words, by the first appellant at 180 Oxford Street constituted a misrepresentation. Such conduct would deflect the goodwill of the business conducted by the respondents at the premises to the first appellant, with consequent damage to the respondents’ business conducted at the premises. He concluded his findings on passing off in the following terms (at [60]):

          “The established businesses in the eastern suburbs operating under the name ‘Arthur’s Pizza’, means that there would be a grave risk of significant confusion in the market if the Oxford Street company were allowed to carry on business at 180 Oxford Street under the name ‘Arthur’s Pizza’ or colourable imitations thereof. In my view, the elements of a passing off action have been established and Mr Premetis is entitled to injunctive relief for passing off as well.”

31 The appellants do not challenge this finding. Nor do they challenge the one sentence finding of the primary judge which followed (at [61]), stating that the cross-claim by the first appellant in passing off failed.

32 Finally, his Honour under the heading “Misleading and deceptive conduct” held (at [62]) that the proposed conduct of the first appellant would be misleading or deceptive in terms of the TP Act and the FT Act and, as a consequence, the first respondent was entitled to injunctive relief under those statutes.

33 Although the primary judge expressly stated that the first appellant’s claim in passing off failed, he made no reference to the cross-claim or to the allegation that the respondents’ conduct in operating the pizzeria business at the premises under the name “Arthur’s Pizza” was misleading or deceptive in terms of the TP Act and FT Act. However, it is apparent that his Honour was conscious of the allegations in the cross-claim. Thus he stated at [5] that:

          “The issues to be determined are whether the name ‘Arthur’s Pizza’ passed with the goodwill to Mr and Mrs Vujovic upon the purchase of the business in 1993, whether Mr Premetis is entitled to enforce the restrictive provision in the 2000 lease, and whether Mr Premetis or, alternatively , the Oxford Street company is entitled to damages or an account of profits for passing off or damages under the Trade Practices Act 1974 (Cth) or the Fair Trading Act 1987 for misleading or deceptive conduct.” (Emphasis added.)

34 In the appeal, the appellants submitted that the claims for passing off and for misleading or deceptive conduct under the TP Act and the FT Act of the first respondent on the one hand, and the first appellant on the other, were not true alternatives. On the contrary, when one had regard to paragraphs 12 and 15 of the cross-claim, it was apparent (so it was contended) that even if the respondents were entitled to operate a pizzeria from the premises under the name “Arthur’s Pizza”, nonetheless they were guilty of conduct which breached those statutes with the consequence that the primary judge ought to have upheld the cross-claim.


      The first issue on the appeal: the primary judge failed to give reasons for his dismissal of the appellants’ cross-claim alleging conduct by the respondents that was misleading or deceptive or likely to mislead or deceive

35 In its written submissions the first appellant identified that part of the primary judge’s decision which was under challenge. Relevantly, the appellants sought (at Orange 15) to:

          “(a) appeal against the adverse determination by the trial judge of the First Appellant’s Cross-Claim, which sought to restrain the Respondents ( inter alia ) from misleading or deceptive conduct. The impugned conduct was the adoption of the name ‘Arthur’s Pizza’ for the Respondents’ pizza business at 260 Oxford Street, Paddington (‘260 Oxford’) and, by so doing, and/or in conjunction with other conduct amounting to adopting the indicia of the Appellant’s former business at those premises. This conveys the impression that (in summary) the Respondents had been the proprietor of the business that had been carried on at 260 Oxford by the Appellants between 1993 and 2005. Although the Cross-Claim propounded causes of action in passing off and for misleading or deceptive conduct, on appeal the First Appellant is content to confine its argument to misleading or deceptive conduct”.

      As I have observed, the first appellant submitted that the claims by the first respondent of misleading and deceptive conduct were not alternatives to those of the first appellant in its cross-claim.

36 Accordingly, the appellants submitted that even if his Honour was correct in finding that the respondents were entitled to operate the business of a pizzeria from the premises under the name “Arthur’s Pizza” (because the name was excluded from the 1993 sale of the business), nonetheless he failed to deal with the respondents’ other conduct, being the manner in which they conducted that business on and from 2 May 2005 and which, so it was alleged, constituted misleading or deceptive conduct. In other words, according to the appellants there were two aspects to their cross-claim. The first was that part of the cross-claim was dependant upon the adoption and use by the first respondent of the name “Arthur’s Pizza” from May 2005 onwards. The second, which was said to be independent of the first, was that the respondents conducted the business of a pizzeria, albeit legitimately under the name “Arthur’s Pizza”, in a manner that was misleading or deceptive or likely to mislead or deceive.

37 The respondents submitted that the cross-claim had no “second”, independent aspect. Rather, as the argument was formulated and advanced by the appellant at trial, the claim of misleading and deceptive conduct at all times centred upon (and, properly construed, was dependent upon) the first appellant’s complaint about the first respondent’s wrongful use of the name “Arthur’s Pizza”. Accordingly, the respondents submitted that the gravamen of the first appellant’s allegations against the respondents centred upon their operation of the pizzeria at the premises under the name “Arthur’s Pizza”. Therefore, the primary judge was correct to regard the first appellant’s passing off and TP Act and FT Act claims as being interwoven with, and dependant upon, his findings as to the second respondent’s right to use the name “Arthur’s Pizza” at the premises.

38 To determine this issue, it is necessary to have regard to two matters: first, the terms of the cross-claim as pleaded and, second, the manner in which the appellants conducted their case before the primary judge.

39 After referring to the 1993 sale agreement of the business and the fact that the third and fourth appellants (from 11 June 1993 until 10 June 1994) and the first appellant (from 10 June 1994 to 1 April 2005) advertised, promoted and conducted the business of a pizzeria at the premises under the name “Arthur’s Pizza”, the cross-claim was pleaded as follows:

          “9. By reason of the matters pleaded in paragraphs 4 to 8 hereof, the cross-claimant has acquired and enjoys a large and valuable reputation and goodwill in the Arthur’s Name when used in connection with the operation of restaurants including pizzeria restaurants, and the sale and marketing of food, including pizzas.
          10. On and from about 3 May 2005, the first and second cross-defendants commenced operating a pizzeria restaurant, take-away and home delivery service from the premises under and by reference to the Arthur’s Name.
          11. The cross-respondents commenced and have continued to operate their pizzeria without the consent, approval or permission of the cross-claimant.
          12. The cross-defendant engaged in the conduct referred to in paragraph 10 above knowing and intending that members of the public would thereby be caused to believe that their pizzeria was the business of or operated by or under licence from the cross-claimant or otherwise with its consent, approval or permission.
      Particulars
              (i) The cross-defendants adopted the Arthur’s Name for their pizzeria conducted at and from the premises.

(ii) The cross-defendants devised a menu comprising dishes named in a way which conveyed the impression that it was the menu or an evolution of the menu offered by the cross-claimant in the conduct of its business.

              (iii) The cross-defendants printed and used in their business a take-away menu which conveyed by statements and images the impression that the business conducted under Arthur’s Name at the premises over time was one continuously conducted business. An example of the take-away menu is Exhibit RFM 1 to the affidavit of Roslyn Frances Mayled affirmed 10 May 2005.

(iii) The cross-defendants printed and used in their business a menu which conveyed by statements and images the impression that the business conducted under the Arthur’s Name at the premises over time was one continuously conducted business. The said menu contained statements and images which were similar to Exhibit RFM 1 to the affidavit of Roslyn Frances Mayled affirmed 10 May 2005.

              (v) The cross-claimant reserves the right to furnish further particulars. [No further particulars were furnished.]
          13. The conduct of the cross-defendants referred to in paragraphs 10 to 12 hereof was conduct by them in trade or commerce.
          14. The conduct of the cross-defendants referred to in paragraphs 10 to 12 hereof was misleading or deceptive or likely to mislead or deceive in contravention of s.52 of the Trade Practices Act 1974 (Cth) and s.42 of the Fair Trading Act 1987 (NSW).
          15. Further, by the conduct referred to in paragraphs 10 to 12 hereof the cross-defendants represented that the pizzeria operated by them at the premises under the Arthur’s Name was:
              (a) a business which had been conducted at the premises continuously since 1974;
              (b) was a business of the proprietors of the business previously conducted at the premises under and by reference to the Arthur’s Name in the period from 1993 to April 2005;
              (c) alternatively, a business conducted with the approval or permission of or under the sponsorship of the proprietors of the business conducted at the premises under any reference to the Arthur’s Name in the period from 1993 to April 2005;
              (d) a business which provided a menu that was the same as or of the same quality as the menu provided by the business conducted at the premises under the Arthur’s Name in the period from 1993 to April 2005.
          16. The representations referred to in paragraph 15 hereof are false.
      Particulars
              The cross-claimant repeats paragraphs 5 to 11 hereof. [Paragraphs 5-8, which are extracted here, recounted the facts about the history of the business.]
          17. By reason of the matters set out in paragraphs 15 and 16 above the cross-defendants have made representations which are false in contravention of sections 53(a), (aa), (c) and/or (d) of the Trade Practices Act 1974 (Cth) and/or sections 44(a), (aa), (c) and (d) of the Fair Trading Act 1987 (NSW).”

40 The essence of the first appellant’s contention is that even if the respondents were entitled to operate a pizzeria from the premises “under and by reference to” the name “Arthur’s Pizza”, nonetheless particulars (ii), (iii) and (iv) to paragraph 12 of the cross-claim, either separately or in combination, constituted misleading or deceptive conduct. When one compares those particulars to the conduct in respect of which the first appellant seeks a declaration set forth in the draft orders referred to at [11] above it would be fair to say that particulars (ii), (iii) and (iv) are generally reflected in sub-paragraphs (iii), (iv) and (v) of the draft declaration (a). On the other hand, sub-paragraph (ii) of that draft declaration finds its source in sub-paragraph (a) of paragraph 15 of the cross-claim, as does sub-paragraph 2 of draft declaration (b). What is noticeable is that draft declaration (b) does not replicate the particulars referred to in sub-paragraphs (b), (c) and (d) of paragraph 15 of the cross-claim.

41 Particular (c) of paragraph 15 does have some resonance with sub-paragraph (i) of draft declaration (b). However, it is clear from the introduction to the first appellant’s draft orders that, as an asterisked order, particular (c) of paragraph 15 is appropriately deleted in the event that the appellants fail in their argument that the respondents’ mere use of the name “Arthur’s Pizza” in its own right was itself misleading or deceptive conduct. This contention depended upon the appellants successfully challenging his Honour’s conclusion that that name did not pass with the goodwill of the business pursuant to the 1993 sale agreement.

42 I now turn to the manner in which the appellants conducted their case at trial. I do so because, as the High Court made clear in University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483:

          “It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.”

43 The appellants submitted that the primary judge failed to fulfil his judicial duty when he disposed of the first appellant’s cross-claim alleging misleading and deceptive conduct without making any findings justifying, or exposing in any way a reasoning process for, that dismissal. However, as will become apparent, this argument is quite unfair to the primary judge when his findings are placed in the context of the case the appellants presented at the trial. In this respect, the respondents contended that the appellants conducted their case upon the basis that the success of their passing off claim and/or their misleading and deceptive claim was dependent upon their complaint about the first respondent’s use of the name “Arthur’s Pizza” at the premises. If this is correct, his Honour was right to regard the respective claims of the first appellant and the first respondent as true alternatives insofar as they related to damages or an account of profits for passing off, or damages under the TP Act or the FT Act for misleading or deceptive conduct.

44 In my opinion it is clear from his Honour’s definition (in [5] of his judgment) of the issues to be determined, and from the manner in which he dealt with the first appellant’s claim for passing off (in [61] and [67] of his judgment), that that was how he believed the appellants had conducted their case. The question, however, is whether that belief was correctly based.


      How did the appellants in fact conduct their case at trial?

45 The parties addressed their arguments to the primary judge by way of written submissions and oral argument. In the respondent’s Outline of Submissions dated 25 August 2005, under the heading “Further answers to the first defendant’s Cross-Claim for passing off and contravention of the FTA/TPA”, the following submission was advanced:

          “The gravamen of the first defendant’s Cross-Claim is that the use by the plaintiff of the name “Arthur’s Pizza” involves a representation that the plaintiff has the consent or authorisation of the defendants to use the name (that the business now conducted by the plaintiff at 260 Oxford Street is a business conducted with the approval or permission or under the sponsorship of the proprietors for the business conducted at the Premises by the defendant from 1993 to 2005). If such a representation arises, it is in fact correct. By virtue of the 2000 Lease … the plaintiff does in fact have the approval or permission of the defendants to use the name. In such circumstances there is no conduct on behalf of the plaintiff which can be regarded as misleading or deceptive.”

46 The written submissions then went on to assert that there was insufficient evidence to support the allegations in the cross-claim, and that no person had been misled or deceived by the operation of the pizzeria by the second respondent. Furthermore, it was contended that both parties had made some effort to reduce the likelihood of consumer confusion. The appellants had taken steps to ensure that customers were made aware that they were closing operations and moving to a new location. Further, since 16 May 2005, the respondents had placed a sign in the window of the premises informing customers that the business was different from, and not associated with, that of the appellants.

47 Finally, the respondents identified six differences between the second respondent’s new pizzeria and that previously operated by the appellants including:

· new fitout and décor of the premises;


· different lighting and ambience in the pizzeria (now brightly lit whereas previously subdued lighting had been used);


· a different style and volume of music played including the playing of live music;


· a change in the type of customers who frequented the pizzeria, in that the “trendy” young brash crowd had been replaced by more families and older clientele;


· differences in the food with the pizzas looking and tasting quite different;


· differences in the identity and appearance of the staff and the removal of the second appellant as mine host.


      Reference was also made to a witness called by the respondents who deposed that “ the contrast between the two restaurants is like night and day ”.

48 In paragraph 6 of the appellants’ written Outline of Submissions dated 25 August 2005, five issues were identified as requiring determination by the primary judge. The last was expressed as follows:

          “(e) whether in conducting his business under the name [‘Arthur’s Pizza‘] from the Premises from 2 May 2005 the plaintiff and his company, the second cross-defendant, are:
              (i) passing off on the first defendant;
              (ii) engaging in conduct which is a contravention of s52 of the Trade Practices Act , 1974 and s42 of the Fair Trading Act 1987 (NSW).”

      It will be noted from the manner in which the issue of deceptive and misleading conduct was expressed that that conduct was confined to the operation of a pizzeria business under the name “Arthur’s Pizza”.

49 The appellants’ written Outline of Submissions then proceeded to deal with several other issues. These included the question of construction arising out of the 1993 sale agreement; the conduct of the business by the appellants as lessees including the development of the business and its goodwill over the period they were in occupation; and, under the heading “The 2000 lease”, an allegation that the first respondent had inserted clause 20 in order to appropriate the goodwill of the appellant’s business for himself. There was evidence, it was contended, that from about the commencement of the 2000 lease the first respondent had attempted to build what might be called a franchise in the name “Arthur’s Pizza”.

50 The evidence relied on in support of that allegation related to the signage being used at the first respondent’s Bondi Junction, Randwick and Maroubra pizzerias; a postcard/photograph; the text on dockets issued by those pizzerias which stated “Arthur’s Pizza Sydney’s best pizza since 1970”; the fact that the ingredients on the menu were all the same although the names were different; the provision of home delivery; and some further references to the sign ”Arthur’s Pizza” being hung upside down. I should point out that the appellants now rely on this evidence to establish their claim for misleading and deceptive conduct even though, in their written Outline of Submissions to the primary judge, that evidence was referred to in an entirely different context, namely, the alleged attempt by the first respondent to appropriate the goodwill of the appellants’ business.

51 Finally, there are three topic headings at the end of the written submissions (at page 10), arranged as follows:

          Estoppel
          Passing off and Section 52
          Relief

      It is apparent that counsel did not have time to provide any written outline with respect to these topics.

52 I now turn to the oral submissions relied upon by the appellants as establishing that the appellants’ narrower version of the issue of misleading or deceptive conduct was the subject of submissions before the primary judge.

53 At Black 168K-170L, Mr Webb, then senior counsel for the appellants, commenced his argument to the primary judge in the following terms:

          “In paragraph 33 [of his written Outline of Submissions] we set out evidence which supports the factual contention we advance which explains what has happened in this case and, as I have touched upon already, casts light upon the fact that the name was never the subject of any separate dealing up to 1993.”

54 Mr Webb then referred to some of the evidence listed under paragraph 33 of the Outline. It was submitted orally (at Black 168S) that the evidence suggested that the first respondent:

          “was trying to take for himself the benefit of my client’s goodwill and transfer it to other locations.”

55 There were no oral submissions made to the primary judge to suggest that the evidence set out in paragraph 33 of the appellants’ Outline was in any way related to the claim for misleading or deceptive conduct on the part of the first respondent.

56 At Black 170M, consistent with the topic order set out on page 10 of the appellant’s Outline, senior counsel turned to the question of estoppel. Then, at Black 171L he said:

          “I wanted to say something about my claim for passing off.”

      Submissions on that topic then continued to Black 172M, at which point they turned to the question of relief.

57 The following exchange took place (at Black 171N-O):

          “HIS HONOUR: In the circumstances giving rise to the passing off, the causes of confusion would be the same whether the one passing off action succeeds or the other passing off action succeeds.
          WEBB: Yes, that is right. So that your Honour can really ignore the minutiae of the differences in presentation and differences in the market. It seems to be that the use of the name, and the logic of it is irresistible. … The two places are within a block of each other, the name is enough to give rise to an actionable deception, the lower falling into the habit of confusion (sic), because we want your Honour to recognise that mere confusion is not enough in this branch of the law.”

58 This exchange makes it clear that Mr Webb was submitting that his Honour could ignore the differences in presentation between the pizzeria conducted at the premises by the appellants and that subsequently conducted by the first respondent, because the use of the name “Arthur’s Pizza” was “enough to give rise to an actionable deception”. This is emphasised at Black 171X-Y where Mr Webb submitted that “Everybody passes by there with a recollection of the fact that there was an ‘Arthur’s Pizza’ there from 1992 until April 2005”. The submissions that followed at Black 172F-L (particularly at 172K-L) seemed to proceed upon the basis that the name “Arthur’s Pizza” belonged to the appellants and was being wrongly used by the respondents.

59 In my opinion, this submission correctly emphasised the necessary reliance by the appellant on the respondents’ use of the name “Arthur’s Pizza” when determining whether the “other conduct” relied on was misleading or deceptive or likely to mislead and deceive. It comes close to a concession that the “other conduct” if viewed in isolation, could not be so described.

60 It is apparent from the foregoing that, deliberately or inadvertently, the appellants conducted their case before the primary judge upon the basis that any misleading or deceptive conduct on the part of the first respondent in operating a pizzeria from the premises was in his use of the name “Arthur’s Pizza”, which he was not entitled to use unless licensed to do so by the appellants. No separate case was made based upon particulars (ii), (iii) and (iv) to paragraph 12 of the cross-claim, whether taken individually or in combination; nor was any claim pressed before the primary judge based upon paragraph 15 of the cross-claim that was not associated with the use of the name “Arthur’s Pizza”. In these circumstances, his Honour was entitled to regard the success or otherwise of the appellants’ cross-claim for passing off and/or misleading or deceptive conduct as dependent upon their entitlement to the name “Arthur’s Pizza” or, perhaps more accurately, upon their claim that the respondents were not entitled to use that name in conducting a pizzeria at the premises.

61 The foregoing analysis also finds some support in paragraph 25(c) of the appellants’ written Submission in Reply in this Court dated 27 March 2006, where the following is stated as being misleading or deceptive conduct:

          “Such other conduct, apart from the adoption of the Respondents of the name ‘ Arthur’s Pizza ’. Nevertheless, such other conduct cannot be viewed in a vacuum and is to be seen against the background of the use of the business name ‘Arthur’s Pizza’ in the conduct of a pizza business at 260 Oxford.”

62 In these circumstances, I would reject the appellants’ submission that the primary judge failed in his judicial duty to give reasons for dismissing the cross-claim. That claim was not agitated before his Honour in the manner in which it is now raised, and the appellants should not now be permitted to advance such a case on appeal.


      Would the appellants succeed in their claim of misleading or deceptive conduct in any event?

63 Even if the primary judge had erred in failing to deal with what the respondents referred to as the second aspect of the appellants’ cross-claim alleging misleading or deceptive conduct on their part, in my opinion such a claim would fail in any event. The appellants’ case on this issue was confined to the material set out in a document handed up during the hearing of the appeal. This document was titled “Mini bundle of extracts from the Blue Book and the Black Book depicting evidence of matters referred to in paragraphs 38-40 of the appellants’ written submissions in chief [Orange 29-33]”.

64 The first factor relied upon was an allegation that the respondents copied the appellants by placing a sign with the name “Arthur’s Pizza” upside-down outside the premises. The sign was apparently turned the right way up before the appellants vacated the premises on 31 March 2005. It was again placed upside down by the respondents and it remained in this position from 1 April 2005 until the pizzeria re-opened after renovation in early May, when it was reversed. Apparently, the upside-down sign was a “feature” adopted by the appellants in late 2000/early 2001. The evidence suggested that people were attracted to the upside down sign as it was “wacky” and indicated that the “place would be vibrant”.

65 The second factor related to the appellants’ pizza menu. It was submitted that a comparison of the appellants’ “Take Out and Delivery Menu Winter 2004” and the respondents’ “Take Out and Delivery Menu” adopted from the commencement of its new business in May 2005 indicated that the appellants’ pizza varieties had been substantially copied by the respondents. Although there were some minor differences in terms of ingredients and changes in the names of the pizzas, it was submitted that, for all intents and purposes, the pizzas were identical.

66 There is no doubt that the concept of the “gourmet pizza” has developed over the years. The ingredients used in pizzas today are many and varied, and many of those used in the relevant pizzas would appear to be commonplace in the pizza making business. It is difficult to see how any particular pizzeria could claim a monopoly in pizza toppings, whose combinations are only limited by the imagination of the pizza maker. In my view what differentiates one pizza from another, even if made of the same ingredients, is the quality of the ingredients, the manner in which the pizza is cooked, and the proportion of one ingredient to another when used in any particular recipe. Although some publications apparently referred to the appellants’ “innovative toppings” and even “inventive toppings”, it is difficult to conceive of the possibility that a member of the public, irrespective of their pizza eating experience, would associate the appellants’ pizzas with those now being made by the respondents.

67 The third factor relates to the appellants’ introduction of a postcard-sized menu in 2002. This menu featured a prominent black and white photo on the front, with the menu on the reverse. The respondents used a similar sized menu featuring a prominent black and white “King of Pizza” photo on the front and the menu on the reverse. The two photos are clearly different. I can see no relevant association between the two menus other than their size, the use of the name “Arthur’s Pizza” and the address of the premises.

68 Factor four relates to a “Re-Opening” sign placed in the window of the premises by the first respondent. The appellants suggested this sign was intended to convey the impression that the re-opened business was affiliated with the former business in the same premises. It was submitted that the use of the word “Re-Opening” would convey to an ordinary member of the public that the re-opened business was affiliated with or operated by the proprietor of the business operating at the premises prior to the renovation. In other words, the appellants argued that the sign suggested a renovation by the existing proprietor and a continuation of the pre-existing business. In my view, there is no substance in that submission, and it should be rejected.

69 A variant of the fourth factor relied upon by the appellants was a statement printed at the bottom of every bill issued to customers by the respondents:

          “Thank You
          from
          Arthur’s Pizza
          Sydney’s best Pizza since 1970”

70 It was submitted that this would convey to customers that the respondents’ business had been conducted continuously at the premises since 1970. I see no substance in this submission. In particular, it requires a member of the public to assume that the premises are the only premises from which “Arthur’s Pizza” pizzas have been made and consumed.

71 A further variant of the fourth factor was that from the commencement by the respondents of the business on 2 May 2005 until 20 May 2005 the postcard sized menu implied that the first respondent had continuously operated a pizza business from the premises for 31 years. The allegedly offending text on the menu was in the following terms:

          “In 1974 Arthur moved to Paddington, opening what is still Sydney’s most popular pizzeria. The secret to his success is simple … use only the finest and freshest ingredients, prepare with skill and serve to the people (young and old) with passion, bon appetite!”

72 Whatever the merit of this submission, this text was withdrawn long before the commencement of the litigation in this matter and has not been repeated since.

73 Although the orders sought by the appellants seek liberty to apply with respect to a claim for pecuniary relief, thus reserving their right to claim damages in respect of any breach of the TP Act and FT Act, it was not suggested in argument that, taken in isolation, the complaint the subject of this variant of the fourth factor caused any loss or damage to the appellants.

74 The fifth factor alleged by the appellants was that the respondents had adopted the name “Arthur’s Pizza”, which had been used in the appellants’ former business when conducted from the premises. This matter is only relevant if the respondents are not entitled to use the name, a point that I discuss below.

75 The sixth factor was the subject of an application to adduce fresh evidence, which was objected to by the respondents. However, the Court granted leave to adduce this evidence subject to objection and relevance. It comprised two elements.

76 The first was the first respondent’s conduct in placing on his website in late 2005/early 2006 a webpage with the following text:

          “Arthur’s Pizza Paddington
          In the heart of busy Oxford Street nightlife, this restaurant has been the hallmark of Arthur’s Pizza for over thirty years.
          Click to see the Arthur’s Pizza Paddington menu.
          ‘Super pizza joint. Just love to go there after being the market or on the way to a footie game or whatever. A great pizza place in my opinion.’
          04 January 2005.”

      The text is accompanied by a photograph of the premises showing the upside-down “Arthur’s Pizza” sign. The appellants’ solicitors made a complaint about the use of this image. The respondents’ solicitors replied that the photograph showing the upside-down sign was placed on the website in error and had been removed. The appellants’ solicitors also complained that the review dated 4 January 2005 had appeared on the website at during the tenure of the appellants’ business at the premises.

77 The fresh evidence established that the “Arthur’s Pizza” website had been withdrawn by no later than 23 January 2006. However, the appellants’ complained that, notwithstanding that the website appeared to have been withdrawn, it indicated an ability on the part of the respondents to conduct themselves in a manner which was misleading or deceptive in claiming that the business now conducted by them at the premises was a continuation of that previously conducted there by the appellants.

78 The appellants adduced further fresh evidence in the form of a postcard-sized advertisement which, it was submitted, continued to convey an impression that the pizza business had been conducted at the premises continuously over many years. The respondents declined to remove this advertisement when requested to do so.

79 The gravamen of the complaint about this advertisement rests on the following part of its text, which was included under the heading “Name”:

          “The name ARTHUR’S PIZZA belongs to the original current owner Arthur Premetis. Former tenants of the Oxford Street, Paddington restaurant challenge the ownership and rights to ARTHUR’S PIZZA in the Supreme Court of New South Wales, but Justice Ian Gzell ruled in favour of Arthur.”

80 It was submitted that the reference to the appellants as “former tenants” would leave in the mind of the ordinary reader the idea that the “former tenants” were operating the respondents’ business from the premises, as distinct from tenants running their own business. In my view there is no substance in this submission.

81 I would accept the proposition that it is well established that the use of indicia to persuade purchasers to believe that goods or services have an association which belongs, or would belong, to the goods and services of, or associated with, another or others is capable of being deceptive: Moorgate Tobacco Co Ltd v Philip Morris (No 2) (1984) 156 CLR 414 at 445; Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553 at 578 at 585.

82 It is also true that conduct is “likely” to mislead or deceive within the meaning of s52 of the TP Act if that is a “real or not a remote chance or possibility”: Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87; Domain Names Australia Pty Ltd v .au Domain Administration Ltd (2004) 139 FCR 215 at 220.

83 However, it is necessary to have regard to the respondents’ conduct as a whole and in context: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199 and Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 605 [39]. In Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 104 FCR 61 at 76-77 [54], the Court comprised of Beaumont, Tamberlin and Emmett JJ observed that:

          “The course of conduct must be looked at as a whole and it is not appropriate to analyse separate aspects of it in isolation.”

      Accordingly, the relevant conduct includes the changes made to the premises by them, which I have identified in [48] above.

84 Although no evidence was called by the appellants to show that any ordinary or reasonable consumer of pizzas was actually misled or deceived, it does not necessarily follow that no such persons were likely to be misled or deceived. However, the fact that no such person was called to give evidence of actually being misled is not entirely irrelevant to the determination of the matter in issue. The absence of evidence on this point does go to whether the respondents’ total conduct was such as to give rise to a not too remote possibility that ordinary or reasonable members of the public would be misled or deceived into thinking that the respondents had conducted the pizzeria business at the premises continuously from 1974 to 2005. Of course, the draft declaration sought by the appellants is one which, inter alia, declares that the respondents had engaged in conduct which was likely to mislead or deceive by:

          “representing that the pizzeria business conducted at the premises on and after 2 May 2005 was a business conducted at the premises continuously over the period 1974 to 2005 including the 1993-2005 Period.”

85 To some extent this draft declaration is ambiguous, for it is clear that a pizzeria business has been continuously conducted at the premises during the period referred to. On the other hand, the appellants’ complaint is that the respondents represented that the business had been conducted by the first respondent throughout this period, which was not in fact the case.

86 Such alleged representations were, of course, made against a particular factual background. The appellants had taken steps to inform its customers that it was moving its business from the premises to 180 Oxford Street. The respondents had also made some effort to differentiate their business from that of the appellants. When viewing the respondents’ conduct and representations in this context, I am drawn to the conclusion that, in the circumstances, the conduct complained of was not misleading or deceptive or likely to mislead or deceive. I am fortified in this view by my observations in [59] and [60] above.

87 Furthermore, in the current circumstances, I do not regard the so-called fresh evidence relied upon by the appellants as constituting a threat by the respondents to engage in conduct which is likely to mislead or deceive in the future.

88 I should add for completeness that the parties asked this Court, if it found that his Honour had erred in failing to give reasons and/or to address the relevant part of the appellants’ cross-claim, to determine for itself whether the respondents’ conduct was in contravention of the TP Act or the FT Act. Where a trial judge has erred by failing to give reasons, the usual course is the ordering of a new trial: Ensec Pty Ltd (in Liq) v Hawkins [2004] NSWCA 243 at [36]. However, in the present case, my view is that the factual determination is sufficiently clear as to provide an exception to that general rule so as to avoid the delay, cost and expense of a new trial which, on the evidence currently before the Court, the appellants would, in my opinion, inevitably lose.

89 Finally, I should note that the respondents submitted that the proper course in the present case would have been for the appellants to approach the primary judge and request that he provide reasons for dismissing the cross-claim, which it is alleged he failed to do. In some circumstances, it will be appropriate for an aggrieved party to take that course, but the taking of it cannot be regarded as a condition precedent to the institution of a competent appeal on the grounds that the trial judge failed to determine an issue or failed to provide any or any adequate reasons with respect to an issue. The appropriate course in the present case is for the matter to be dealt with by this Court and, if otherwise considered appropriate, for a new trial to be granted.

90 I should record that there is now some judicial support for the proposition that once an appeal has been instituted on grounds which include the failure of the trial judge to give reasons or adequate reasons, then the trial judge no longer has jurisdiction to reopen his reasons after judgment: Brew v Followmont Transport Pty Ltd [2005] QSC 030 at [11] per Jones J. However, it is not necessary to comment here on the correctness or otherwise of that decision. I simply note it in passing.


      The construction of the 1993 sale agreement

91 Finally, I turn to the appellants’ submission that the primary judge was in error in concluding that the 1993 sale agreement excluded the name “Arthur’s Pizza” from the transfer of goodwill which followed from the sale of the business.

92 The subject agreement was constituted by the 1989 edition of the Law Society of New South Wales and the Real Estate Institute of New South Wales’ printed form of Agreement for Sale of Business. The relevant Conditions of Sale were as follows:

          “On the date set out in B of the Particulars, the Vendors named in C of the Particulars agree to sell and the Purchasers named in D of the Particulars agree to buy the business as described in G of the Particulars and in accordance with the Particulars in B upon and subject to the following conditions:
          1. The Business includes the goodwill and all plant, fittings, chattels and fixtures used by the Vendors in connection therewith is set out in the Inventory and is sold free from encumbrances …”

93 The Particulars listed on the front page of the document under heading “G” were as follows:

          “G. THE BUSINESS:
              (a) Type of Business: PIZZA SHOP & RESTAURANT
              (b) Located at: 260 OXFORD STREET, PADDINGTON
              (c) Known as: “ARTHUR’S PIZZA’
              (d) Registered Business Name(s) & No.(s) (if any):”

94 Under Particular “H” the price of $90,000 was made up of $35,380 for goodwill and $54,620 for plant, fittings and chattels. The appellants argued that the proportion for goodwill indicated that the name “Arthur’s Pizza” must have been included in the goodwill.

95 As I have already observed, the primary judge held that the 1993 sale agreement did not include the name “Arthur’s Pizza” when the extrinsic evidence was taken into account. His Honour determined that this evidence was admissible pursuant to the three exceptions to the parol evidence rule referred to in [26] above. The appellants submitted that each of those exceptions had no application to the present case.

96 The primary judge held, firstly, that the extrinsic evidence was admissible to assist in ascertaining the subject matter of the contract. The appellants submitted that this exception had no application where the material relied upon would either alter or add to the written agreement. In the present case it was contended that the material relied upon by his Honour would alter the 1993 sale agreement by limiting what was, on its face, an unambiguous transfer of the whole of the “goodwill” including the name “Arthur’s Pizza”.

97 Second, the appellants challenge his Honour’s finding that the striking out of the words “Arthur’s Pizza” from the Particulars of “The Business” gave rise to ambiguity. Third, it was submitted that it was not open to the primary judge to find that there was collateral contract formed in relation to the name “Arthur’s Pizza”. It was argued that this was because any such contract would be inconsistent with the terms of the principal agreement, which unambiguously transferred the name as part of the goodwill business.

98 It is apparent from the appellants’ contentions that they tend to overlap in that they depend upon a finding that, notwithstanding the crossing out of the name “Arthur’s Pizza” from Particular G(c), the sale agreement unambiguously included that name as part of the goodwill of the business which was the subject of the sale.

99 However, in my opinion, no such finding can be made and the primary judge correctly declined to do so. Had the name not been crossed out, there could be little doubt that the business being transferred was the pizza shop and restaurant at 260 Oxford Street, Paddington known as “Arthur’s Pizza”. But crossing out the name, at the very least, resulted in an ambiguity as to whether that name was to be part of the sale. This being so, it was open to his Honour to have regard to the extrinsic evidence upon which he relied.

100 In any event, it was unnecessary, in my opinion, for the primary judge to have had regard to that evidence because, as a matter of construction of the sale agreement, the crossing out of the name “Arthur’s Pizza” from Particular G(c) made it clear that that name was not to pass as the part of the business (including its goodwill) which was the subject of the sale. Its crossing out from the Particulars of “The Business” to be sold could have no other purpose.

101 Furthermore, the appellants’ submission that the price paid for goodwill could (or would) not have been paid unless the goodwill included the ability to use the name runs into two difficulties. These are firstly that the appellants were licensed by the first respondent to use the name for as long as they wished during their tenancy, and secondly that they were obliged to use it until they had repaid the vendor finance.

102 The respondents contended that, in any event, the 1993 sale agreement was partly oral and partly written. The written part of the agreement was, of course, the printed agreement for sale. The oral part was contained in the first respondent’s evidence, which the primary judge preferred to that of the third appellant. At paragraph 51 of the first respondent’s affidavit of 19 May 2005, he recounted the following conversation with the second appellant, which took place some weeks prior to the signing of the agreement for sale:

          “He said: Can we change the name? [i.e. suggesting that he planned not to use the name ‘Arthur’s Pizza’]

          I said: The name is mine, if you don’t want to use the name, you don’t have to buy the business, you can leave right now!

          He said: That’s OK. I’ll leave the name. I like the shop, I want to buy it and I want you to help me buy it.

          I said: I can help you out.

          He said: How much do you want for the business?

          I said: $90,000.

          He said: I only have $50,000, can you help me with the rest?

          I said: I will give you finance for the $40,000 interest free for one year. We need to sign a proper agreement.”

103 In paragraph 32 of a further affidavit sworn on 17 August 2005, the first respondent deposed to the following conversation with the third appellant that took place in approximately May 1993:

          “Vladimir said: My solicitor told me he has received the documents from your solicitor.

          I said: That’s fine.

          Vladimir said: I am told by my solicitor that I must use your name [Arthur’s Pizza]. But I do not want to use your name.

          I said: As long as you owe me the money for the vendor finance the name stays there, and you cannot post another name there.

          Vladimir said: Alright.”

104 Shortly thereafter the first respondent went to the office of his solicitor, Mr Theodoridis. The latter called the third appellant’s solicitor and in the first respondent’s presence the following conversation took place:

          “Mr Theodoridis said: I am instructed to cross out the name on the contract for Sale of Business because your client does not want it. Your client cannot take down the sign with Arthur’s Pizza until he pays the vendor finance in full.
          Mr Theodoridis said that the solicitor for Vladimir agreed.
          I said: What did he [Vlad’s solicitor] say?
          Mr Theodoridis said: They said OK.”

105 On the same day, the first respondent deposed that he had a further conversation with the third appellant at the premises in words to the following effect:

          “I said: I’ve been to see my solicitors and I crossed out the name the way you want it, but when you pay me the money you owe me for the business you can put your own name on the business and the name always belongs to me.

          Vladimir said: I am happy with that. … I want it like this, because I already had problems with my previous partner ‘Rocky’ because when we split our partnership, the name ‘Rocky’s Place’ stayed with him and I could not take over the business because he had his name on it. So I don’t want the same thing to happen here, I want to be able to put my own name on the shop.

          I said: OK. As long as you pay me the money you owe me you can change the name, but the name is always is mine.

          Vladimir said: I will sign the papers with my solicitor and can exchange and settle as soon as possible.”

106 The fact that the first respondent was to provide vendor finance is confirmed by Special Condition 1 of the agreement for sale, which provided for the sum of $40,000 to be repaid by equal weekly instalments of $100 for 51 weeks, with one final payment of $34,900 on the first anniversary of settlement. No interest was payable for that year.

107 In my opinion, the first respondent’s evidence, which was accepted by the primary judge, established that the agreement for sale was partly oral and partly in writing. The oral part was that the sale did not include the name “Arthur’s Pizza” but that the second and third appellants were obliged to use the name until they had repaid the vendor finance provided for and in accordance with Special Condition 1 of the written part of the agreement.

108 Although the primary judge relied on this evidence as constituting a collateral agreement, in my opinion it would be more accurate to regard the agreement between the parties as an agreement which was partly oral and partly written. However, as I have indicated, in my opinion even if there was only a written agreement between the parties, on its true construction the crossing out of the name “Arthur’s Pizza” in the particulars of “The Business” dictated that the agreement did not include the name “Arthur’s Pizza” as passing with the goodwill of the business.


      Variations to Orders 2, 5 and 10 made by the primary judge

109 Orders 2, 5 and 10 made by his Honour were as follows:

          “2. The defendants, by themselves, their servants, agents or otherwise, be restrained from using the names ‘Arthur’s Pizza’, ‘Arthur’s’, ‘the Arthur’s Crew’ or ‘Arthur’s Paddington’ (including any use of the names represented in an upside down fashion), or any colourable imitation or variation thereof as the name of a pizzeria or restaurant business (including home delivery business) at or from 180 Oxford Street, Paddington or at or from any other location in the Eastern Suburbs of Sydney.
          5. The defendants forthwith take all available steps and do all things necessary to cancel the registration in the Plaintiff’s name of the domain name ‘arthurspizza.com.au’.
          10. The defendants, by themselves, their servants, agents or otherwise, be restrained from operating, using or publishing any material on any internet web site under or by reference to the domain name ‘arthurspizza.com.au’ and the domain name ‘arthurspaddington.com.au’ or any colourable imitation or variation thereof.”

110 With respect to Orders 2 and 10, the variation sought by the appellants was the deletion of the words “or any colourable imitation or variation thereof” and the insertion in lieu of the words “or any phrase including the word ‘Arthur’ or the word ‘Arthur’s’ . It was submitted that the basis of this variation was that the phrase adopted by the primary judge in those orders was too vague and could thus give rise to difficulties in the future, particularly if there was an allegation that the order had been breached.

111 It appears that after the primary judge delivered his substantive judgment on 8 September 2005, there was a dispute as to the orders which were to be made and which was the subject of argument before his Honour on 28 September 2005. We have been provided with a copy of his Honour’s ex tempore judgment of that date dealing with that dispute. With respect to Order 2, his Honour adopted the appellants’ draft, which apparently included the words now sought to be deleted. Furthermore, there was no complaint about what is now Order 10. In these circumstances, in my view it is not now open to the appellants to complain as to the terms of orders which they themselves proffered.

112 So far as Order 5 is concerned, the appellants did proffer a version which provided for the cancellation rather than the transfer of the domain name “arthurspizza.com.au”. His Honour considered that a transfer was appropriate as it was provided for in the Transfers (Change of Registrant) Policy published by the Australian Domain Name Administrator.

113 The appellants conceded that clause 20(c) of the 2000 lease prevented them from using the domain name “arthurspizza.com.au” but nevertheless challenged that part of the order that required the transfer of registration of that domain name to the first respondent. However, no reasons were provided either orally or in writing in support of that contention and I would therefore reject it.


      Conclusion

114 I would summarise my conclusions as follows:


      (a) Given the manner in which the appellants conducted their case before the primary judge, it is clear that their cross-claim alleging conduct on the part of the respondents which was misleading or deceptive or likely to mislead or deceive was fundamentally based upon their submission that the 1993 sale agreement included the name “Arthur’s Pizza” as part of the goodwill of that business which was transferred as part of the sale. It is apparent from his Honour’s judgment that that is how he understood the appellants’ case based on their cross-claim and that that understanding resulted from the manner in which the appellants conducted their case before him. Accordingly, it is not now open to the appellants to contend that the primary judge failed in his judicial duty to disclose his reasons for the dismissal of the cross-claim insofar as his Honour failed to address that part of the respondents’ alleged deceptive or misleading conduct which was unrelated to their use of the name “Arthur’s Pizza”.

      (b) In any event, in my opinion the conduct so alleged, even if considered independently of the respondents’ right to use the name “Arthur’s Pizza”, did not in the circumstances amount to conduct which was either misleading or deceptive or likely to mislead or deceive. This is particularly so when the respondents’ conduct of their pizza business at the premises from May 2005 is considered in the context of the steps taken by the respondents, and to a lesser extent by the appellants, to differentiate the business formerly conducted by the appellants at the premises from that proposed to be conducted by the respondents in the same location.

      (c) If the 1993 written agreement is taken as comprising the whole of the agreement between the parties, on the true construction of that agreement the deletion of the name “Arthur’s Pizza” from the Particulars of the business the subject of that sale resulted in the exclusion of that name from the sale.

      (d) In any event, if there was some doubt as to whether or not the name was excluded so that the agreement was ambiguous, it was open to the primary judge to rely upon the extrinsic evidence in the manner in which he did to construe the sale agreement as excluding the name “Arthur’s Pizza” from the sale.

      (e) Although the primary judge also relied upon that evidence as establishing a collateral agreement to the 1993 written agreement, the better view was that the sale agreement was constituted in part orally and in part in writing. The oral part of the agreement was the agreement between the parties that the name “Arthur’s Pizza” was excluded from the sale and continued to belong to the first respondent notwithstanding that the third appellant was licensed to use the name while a tenant of the premises, and was obliged to use it until he had repaid the vendor’s finance provided for in Special Condition 1 of the written agreement.

      (f) The variations of Orders 2, 5 and 10 sought by the appellants should be rejected on the basis that, in the case of Orders 2 and 10, the offending parts were in fact proffered by the appellants to the primary judge. In the case of Order 5, no reasons were advanced by the appellants as to why the primary judge was incorrect to order that there be a transfer of the domain name rather than its cancellation.

115 Accordingly, each of the challenges advanced by the appellants with respect to the primary judge’s decision have failed. In these circumstances I would propose that the appeal be dismissed with costs.

116 BASTEN JA: I agree with the orders proposed by Tobias JA and, subject to the following additional comments, with his Honour’s reasons.

117 As his Honour has noted, a major complaint made by the Appellants was that the trial judge “erred by disposing of the cross-claim without making any relevant findings or conclusions or exposing any reasons”: amended notice of appeal, par 22. In their written submissions, counsel for the Appellants identified the relevant legal principles involved in this contention as those relating to the obligation to give reasons for a judgment reached. Reference was made to the judgments of this Court in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 and Beale v GIO (1997) 48 NSWLR 430 and the reference in Ensec Pty Ltd (In liq) v Hawkins & Anor [2004] NSWCA 243 at [33] to this being “well travelled territory”. There is, however, an antecedent question, namely whether the territory should be entered upon at all.

118 An alleged failure to give reasons, as a ground of appeal, has become fashionable in the last 20 years in this jurisdiction. However, its historical roots may be found in two particular situations. As the judgments in Soulemezis demonstrate, one situation was where the Court was constrained to intervene only where error of law was discernable, and perhaps in part by way of reaction to the perceived rigours of the test of error of law enunciated in Azzopardi v Tasman UEB Industries (1985) 4 NSWLR 139.

119 The second area of operation is that illustrated by Beale, where indisputably the trial judge did, simply not advert to relevant material which, if not rejected, clearly supported the case of the losing party. In other similar cases, the trial judge may recount the relevant evidence, but reach a conclusion without saying whether it has been accepted or rejected.

120 The primary obligation of the trial judge is to determine those matters which have been presented by the parties for the Court’s consideration. The losing parties are entitled to a reasoned explanation as to why such a matter has been decided against their contentions. However, unless the matter has been presented as a separate issue, and not abandoned, no entitlement to reasons for rejection can arise.

121 Further, where an issue is properly raised for determination, the failure to provide a reasoned rejection in reaching an adverse conclusion may well lead to the inference that the trial judge has failed to address the matter. That in itself may constitute appealable error, but it is not usefully described as a failure to give reasons. Indeed, to do so will tend to distract attention from the substantive issue, namely whether the particular issue was in fact presented for determination, but not determined.

122 Where there has been a failure to make a finding of fact, which was apparently required to be made for a proper determination of the case, it may seem to matter little whether the trial judge made such a finding and failed to record it or failed to make the finding at all. Either way, such a finding must be made, on appeal, or on a retrial. A second possibility, however, is that the trial judge did not consider it necessary to make a particular finding and the issue on appeal will then be whether he or she was correct in that assessment. The third possibility, which arises in the present case, is that the trial judge has decided an issue on the same basis as another issue on which, rightly or wrongly, it was thought to depend. These possibilities indicate that complaint of a failure to give reasons will often obscure, rather than elucidate, the real issue to be addressed on the appeal.

123 Where, as in the present case, the complaint depends upon a demonstration that a separate and independent issue needed to be addressed and was not, the onus lies squarely on the Appellant to demonstrate that the separate issue was presented for determination. As Tobias JA has explained, the matter now complained of was not presented to the trial judge in a way which required separate consideration.

124 The fact that an issue was not so presented may not be an end to the matter, but it will focus attention on whether the Appellant is able to raise such a matter for the first time on appeal, in accordance with the principles established in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 and subsequent authority. No such question was raised in the present case.

125 Other consequences may also follow, depending upon the correct analysis of the alleged error. As noted by Tobias JA at [88], the Respondents argued that, if the trial judge had failed to deal with an issue properly presented to him, the proper course would have been for the complaining party to take the matter back to the trial judge for reconsideration. The opportunity to take that course, not availed of, may in some circumstances indicate that there has been no miscarriage of justice. However, it is not necessary in the present case to consider whether, and in what circumstances, such a submission would have substance.

126 While I agree with Tobias JA that questions of jurisdiction were not agitated and do not need to be determined, I do not read the comments of Jones J in Brew v Followmont [2005] QSC 30 as suggesting an absence of jurisdiction to reopen, once a notice of appeal has been filed. As a practical matter, time constraints often necessitate that a notice of appeal is filed before any application to reopen can be determined. Unless a relevant rule of court or other statutory provision suggests the contrary, the filing of a notice of appeal is likely to be but one amongst a number of considerations going to the discretionary exercise of the power. In Brew, Jones J stated that his discretion had been “effectively” removed by the appeal, but that appears to have been because, the notice of appeal raising a number of other grounds as well as that relied upon on the reopening application, “no useful purpose is served by my reconsidering that issue now”: at [12]. I do not read his Honour’s reasons as asserting an absence of jurisdiction.


      Use of name

127 In my view the 1993 Agreement is ambiguous in relation to the question of whether the name “Arthur’s Pizza” was included with the goodwill of the business, which was transferred to the Second and Third Appellants. The inclusion of the name in the space provided in the printed form of contract, followed by a ruling through of the name, rendered the contract, in that respect, “ambiguous or susceptible of more than one meaning” in the sense identified in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 (Mason J). In accordance with the general law parol evidence rule, evidence was admissible to clarify the intention of the parties. There is nothing in the Evidence Act 1995 (NSW) which provides otherwise, either expressly or by necessary intendment and hence the operation of the general law rule is not affected: Evidence Act, s 9(1). I agree that the primary judge did not err in his application of the rule or his conclusion as to the scope of the 1993 Agreement.

128 YOUNG CJ in EQ: I have read in draft the reasons for judgment of Tobias JA and I agree with it, but I would just make a few comments of my own.


      Goodwill and Business Names

129 In the 19th century the view was taken that a name or mark used in trade was an inseparable part of the goodwill and could not be alienated apart from the goodwill. Passing off cases were treated as cases of fraud in appropriating someone else's goodwill. However, as Lord Langdale MR said in Perry v Truefitt (1842) 6 Beav 66, 73; 49 ER 749 at 752, “it does not seem to me that a man can acquire property merely in a name or mark”. This was applied by Westbury LC in The Leather Cloth Company Ltd v The American Leather Cloth Company Ltd (1863) 5 De GJ & S 137, 140; 46 ER 868, 870; see also Pinto v Badman (1891) 8 RPC 181, 194-195.

130 However, it does not seem to me that this proposition has survived even into the last quarter of the 20th century. There are very learned judgments of Bowen CJ in Eq and Needham J in Alcock v Robb (1976) 2 BPR 9625 showing that whilst the right to use a partnership name is an element in goodwill, there may well be cases where a firm name may be sold apart from the sale of the goodwill: see page 9628.

131 I can see no problem in the instant case with a transaction in which the goodwill of a business is sold apart from the name.


      The Effect of Striking Words out of a Document

132 It seems to me that there has been a lot of words written about this very simple matter, not always consistently: see the discussion by Ormiston J in Centrepoint Custodians Pty Ltd v Lidgerwood Investments Pty Ltd [1990] VR 411 at 421-423.

133 The prime objection to looking to what has been struck out is that to encourage it would lengthen court cases by allowing a greater reference to negotiations before the contract was made than would be wise.

134 However it seems to me that, whatever the ambit of the rule, one can look at words struck out of a contract for certain purposes. In a case where there is an ambiguity, and that ambiguity can be resolved at least in part by looking to words struck out, it is permissible to do so. Accordingly, I agree with what Tobias JA has said on this point.


      Primary Judge's Failure to give Reasons

135 As Basten JA says, alleged failure to give reasons as a ground of appeal has become very fashionable. One sees notices of appeal which seem to suggest that a judge was in error by failing to give reasons in respect of every submission made by losing counsel. If he or she were to do so, however, judgments would get even longer than they are at the moment. A judge is only bound to give such reasons as are required for a proper determination of the case in the trial court and to enable a potential appellant and the appellate court to see clearly why the case was decided the way it was decided.

136 If a person considers that a judge has failed to deal with a vital point, then at least in an equity case such as the present, the procedure over many years is to go back to the judge and ask him or her to make additional findings.

137 In the instant case that practice was embraced by the respondent but used in a negative way in putting that because the appellant had not gone back to the trial judge it should not raise these matters on appeal.

138 The standard principle does not work that way. It is designed as a pragmatic solution to a problem to enable the parties to have a full decision on the points on which they reasonably require a decision. Failure to avail oneself of this procedure does not preclude an appeal on the ground that the judge failed to give reasons, but the appellant takes the risk that the Court of Appeal will decide that there was no requirement to give reasons on the particular points that the appellant now raises.

139 Both Tobias JA and Basten JA have drawn attention to the decision of Jones J in Brew v Followmont Transport Pty Ltd (No 1) [2005] 2 Qd R 354. Jones J in that case recognised the NSW practice, but held that once an appeal is lodged the raison d’être for approaching the trial judge for further reasons has disappeared and hence so has the power. As a practical matter there seems to be a lot of common sense in this, but I would be reluctant to state categorically that the power can never be exercised under such circumstances. It may be that the exercise of the power would allow an appeal to be withdrawn or that the additional reasons may assist the appellate court.

140 Accordingly I agree with Tobias JA and also with the additional reasons of Basten JA.

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