ACI Australia Ltd v Glamour Glaze Pty Ltd

Re: ACI AUSTRALIA LIMITED
And: GLAMOUR GLAZE PTY. LTD.; ALEX VASILJEVICH; STEVEN VASILJEVICH (SNR.);
STEVEN VASILJEVICH (JNR.) and SYLVIA VASILJEVICH
No. VG249 of 1987
Trade Practices - Passing Off

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Trade Practices - alleged contraventions of ss. 52, 53 of the Trade Practices Act - registration of business name - persons dealing with business on false bases - whether business name used by purchaser since acquisition of business - standing to restrain contravention of Div. V of Trade Practices Act - whether public interest considerations are relevant to grant of injunctive relief for contravention of ss. 52, 53.

Passing Off - Alleged tort of passing off goods and services as those of applicant - agreement for acquisition of business expressly excluded "goodwill" - whether transfer of all relevant rights constituting business to purchaser nevertheless carried goodwill of business - sufficient use of name and use of business assets established reputation in name.

Trade Practices Act 1974: s. 52, 53, 80 & 82.

HEARING

SYDNEY

#DATE 22:4:1988

Counsel for the Applicant: Dr. C.N. Jessup Q.C. with Mr. B. Caine

Solicitors for the Applicant: Arthur Robinson & Hedderwicks

Counsel for the Respondents: Mr. G.R. Anderson with Mr. S.J. Howells

Solicitors for the Respondents: O'Hara Sawmill & Co.

ORDER

The first respondent by itself its servants or agents be restrained from -

(a) carrying on business, or representing that it carries on business, under or by reference to the name "Yencken Sandy Glass Industries" or any name, word or words substantially the same as that name or deceptively similar thereto;

(b) using or causing to be used or allowing or permitting the use of the name "Yencken Sandy Glass Industries" or any name, word or words substantially the same as that name or decep- tively similar thereto in or in connection with any business which it carries on or with which it is associated;

(c) carrying on any business or representing that it carries on a business of or in connection with the manufacture, processing, distribution or sale of glass or glass products under or by reference to any name, word or words which consist of or include the word "Yencken" or the word "Sandy" or any word or words substantially the same as either such word or deceptively similar thereto;

(d) using or causing to be used or allowing or permitting the use of any name, word or words which consist of or include the word "Yencken" or the word "Sandy" or any word or words sub- stantially the same as either such word or words deceptively similar thereto in or in connection with any business which it carries on or with which it is associated, being a business of or in connection with the manufacture, processing, distribution or sale of glass or glass products;

(e) making any representation, in trade or commerce, in connection with the supply or possible supply of, or with the promotion of the supply or use of, glass or glass products, that or to the effect that it has the sponsorship or approval of, or an affiliation with, the applicant, Burns Philp and Company Ltd or the business that traded before 1st November 1985 as "Yencken Sandy Glass Industries", or that or to the effect that glass or glass products made, processed, distributed or sold by it originate from premises formerly occupied by the said business;

(f) representing that it has any association with the applicant or any of its businesses or with Burns Philp and Company Ltd or with the business carried on until 1st November 1985 by that company as "Yencken Sandy Glass Industries" or that it carries on such business or that its products or services or any of them are or are associated with the products or services of the applicant, of such company or of any such business.

The second, third, fourth and fifth respondents be restrained from aiding, abetting, counselling, procurring or inducing the first respondent to do anything which is restrained by Order 1.
The first respondent lodge forthwith with the Commissioner for Corporate Affairs of the State of Victoria a statement that it has ceased to carry on business in Victoria under the name "Yencken Sandy Glass Industries".
The first, third and fourth respondents lodge forthwith with the Registrar of Companies of the State of South Australia a statement that they do not and none of them does carry on business in South Australia, and that they do not intend and none of them intends to carry on business in that State, under the name "Yencken Glass" or the name "Yencken Sandy Glass".
The first respondent forthwith take all necessary steps within its power and do all such things as may be necessary and within its power to prevent the publication by each and every person or corporation with whom the first respondent has a contract, arrangement or understanding in relation to the publication or further publication in any telephone, business or other directory or any other publication of the name "Yencken Sandy Glass Industries".
The first respondent cause a sealed copy of this Order to be served on each of the persons and corporations referred to in Order 5.
Each respondent deliver up to the Court for destruction under the surveillance of the applicant or its nominated representative all cards, letters, sheets, forms, brochures, pamphlets, documents and other papers (excepting only the court documents in this application and documents brought into existence for the purpose of defending this proceeding) in the possession, power or control of that respondent upon which appear the words "Yencken Sandy" or the word "Yencken" or the word "Sandy".
Orders 1 to 7 inclusive shall commence to operate upon the expiration of fourteen days from today.
The applicant file and serve upon the respondents or their solicitors within 21 days a document indicating whether it wishes to pursue claims for damages pursuant to s. 82 of the Trade Practices Act in relation to the breaches of ss. 52 and 53 of that Act the subject of this proceedings and in relation to the tort of passing off, and in the events that no such document is filed within that period or that such document indicates that the claims for damages are not to be pursued, the applicant's claims for damages shall stand dismissed.
The respondents pay the costs of the applicant of this proceeding including any reserved costs.
Liberty is reserved to any party to apply on seven days' notice.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

ACI Australia Limited ("ACI") seeks to restrain Glamour Glaze Pty. Ltd. ("Glamour Glaze") and certain of its officers from carrying on business under the name "Yencken Sandy Glass Industries". Damages are also sought. ACI's claim is based on alleged contraventions of ss. 52 and 53 of the Trade Practices Act 1974 and on the tort of passing off.

The case has the novel twist that ACI became entitled to use the name "Yencken Sandy Glass Industries" in 1985 but it has chosen not to use it.
"Yencken Sandy Glass Industries" is a well-known name in the glass industry. Indeed, it is the combination of two separately well-known names "Yencken" and "Sandy". Edward Lowernstern Yencken founded the Yencken enterprise in Melbourne in the 1880's. He commenced carrying on the business of manufacturing, distributing and selling glass products under the name, or names which included the name, "Yencken". In 1892 a company, E.L. Yencken & Company Pty. Limited, was incorporated and Mr. Yencken became its chairman. It took over Mr. Yencken's business. In about 1897 E.L. Yencken & Company Limited changed its name to E.L. Yencken & Company Pty. Limited. The latter company was subsequently voluntarily wound up and a new company known as E.L. Yencken & Company Limited was incorporated to carry on the business, which it did. The name of the company was then changed to E.L. Yencken & Company Pty. Limited. Mr. Yencken's son, Edward, succeeded to the chairmanship of the company upon the death of his father in 1932. The Yencken business boomed after the Second World War and in about 1957 the company moved into premises at South Melbourne. In 1964 Mr. Edward Yencken Jnr. died and his son, also Edward Yencken, became chairman of the company. The company was not only in the glass business but was also a large distributor of builders' hardware, until in about 1968 the company discontinued trading except in the glass business.
In 1969 the company acquired a majority holding in Malvern Glass Industries Limited and the glass business was transferred to the lastmentioned company. The name of Malvern Glass Industries Limited was then changed to Yencken Glass Industries Limited. At about that time Yencken Glass Industries Limited took over Hamilton Glass Works Pty. Limited in Sydney and Crystal Glass and Mirror Co. Pty. Limited in Brisbane. In 1972 sixty-six per cent of the capital in Yencken Glass Industries Limited was acquired by Burns Philp & Company Limited ("Burns Philp") and in about 1976 the remainder of the share capital of the company was acquired by Burns Philp. The business of the company was then amalgamated with a similar business conducted by Burns Philp, namely, James Sandy & Co. Limited ("James Sandy"). James Sandy was a producer of glass as was well known in New South Wales. From 14 January 1977 until 1 November 1985 Burns Philp carried on the business of glass distribution and glazing contracting in New South Wales, Victoria, Queensland, South Australia and Western Australia under the name Yencken Sandy Glass Industries. By 1 November 1985 the Yencken Sandy Glass Industries business was large. It had many staff and the business operated at and from premises in various large centres in the states to which I have referred. During the period Burns Philp carried on business under the name Yencken Sandy Glass Industries the business and its products were extensively advertised throughout Australia.
By agreement dated 21 October 1985 between Burns Philp and ACI Australia Limited ("ACI") which took effect from 1 November 1985, ACI purchased from Burns Philp all the plant, equipment, furniture and fittings owned by Burns Philp and used in the Yencken Sandy Glass Industries' business; took from Burns Philp an assignment of all the rights of Burns Philp under leases of plant used in the business and purchased all the stock in the business. By that agreement Burns Philp also agreed to assign to ACI all registered business names under which it carried on the business and to assign to it all its right, title and interest in certain trade marks, patents and licences together with any copyright attaching to literature, designs, writings, logos and other material capable of being protected by copyright which was used in the business.
The sale and purchase agreement of 21 October 1985 between Burns Philp and ACI provides in clause 13:

"13.GOODWILL

13.1 The Vendor and Purchaser agree that:

(a) subject to (b) below and Clause 15 hereof the goodwill of the Business shall not pass to the Purchaser on completion;

(b) the Vendor shall assign any registered business name under which the Vendor carries on business in Australia to the Purchaser at the Completion Date."

The reason for Burns Philp and ACI agreeing that the goodwill was not to pass to ACI appear to derive both from the performance of the business at the time of sale and from accounting conventions in relation to the valuation of unprofitable businesses. Although Yencken Sandy Glass Industries had a fine reputation with the public, it appears that by 1985 its reputation with the trade had slipped a little, because it was known to the trade that the business was not trading profitably while the service was not as reliable as it had been earlier.
In the two years up to June 1985 Yencken Sandy Glass Industries had traded unprofitably in its glass division. Burns Philp was therefore concerned that ACI, as purchaser, may have felt that it was buying a profitable business, with the possibility that some claim might be made against Burns Philp if the business continued to be unprofitable. The assets of Yencken Sandy Glass Industries were sold to ACI at their written down book value at the date of sale and no amount was ascribed to goodwill except possibly a nominal amount.
After 1 November 1985 ACI carried on the business of the wholesale distribution of glass and of glazing contracting at and from the premises of Yencken Sandy Glass Industries.
By circular letter of 28 October 1985 which ACI sent to the existing known customers of Yencken Sandy Glass Industries, of whom there were about 3,600, those customers were notified that ACI had acquired the business of Yencken Sandy Glass Industries from Burns Philp and that it would continue to provide the products and services to which the customers had become entitled. The respondents asserted that this circular letter was inaccurate and misleading. This attack has not been made out. The letter was a commercial letter to be interpreted sensibly and I see nothing in it which is inaccurate or misleading. ACI also arranged for all telephone callers to the telephone numbers of Yencken Sandy Glass Industries to be automatically referred to Telecom Australia and thence by Telecom to the relevant telephone numbers of ACI.
At the time Yencken Sandy Glass Industries was acquired by ACI there were four national wholesale glass distributors operating throughout Australia, namely, Yencken Sandy Glass Industries, T & K Glass, Oliver Davey Glass Co. and O'Brien Glass Industries Limited. It is relevant here to note something of the history of T & K Glass, which gave rise to its present association with ACI.
For many years a wholesale glass distribution business had been conducted by Acmil Industries Pty. Limited in all States of Australia (except Tasmania) and the Northern Territory under names which included the letters and words "T & K Glass". The same company conducted the business in Tasmania under the name "S & B Stegbar". In April 1981 ACI acquired effective control of Acmil which then carried on the "T & K Glass" and "S & B Stegbar" business. In or about April 1986 ACI itself commenced to carry on these businesses under the name "T & K Glass" and in Tasmania under the name "S & B Stegbar".
It is plain that by 1 November 1985 the name "Yencken Sandy Glass Industries" had a substantial, valuable and widely recognised reputation within the glass industry in Australia which reputation was known to persons including retail glass merchants, glaziers, builders, architects, furniture manufacturers and the general public. That reputation involved association of the name with quality glass and glass products, including stained glass windows, being a reputation which was associated with the long established Yencken and Sandy Glass businesses.
Since 1 November 1985 it has been well known within the glass industry in Australia - again including retail glass merchants, glaziers, builders, architects, furniture manufacturers and the general public - that ACI had acquired the business of Yencken Sandy Glass Industries including the plant, equipment and stock of the business; that ACI occupied the premises of the business; that ACI was and is continuing to supply the needs of the customers of that business; that it had taken into its employ many of the employees of that business and that ACI's stated objective was to maintain the long established tradition of quality of product and service of the business and to improve it.
The respondent company, Glamour Glaze Pty. Limited ("Glamour Glaze"), was incorporated on 29 January 1986. The third respondent, Mr. Steven Vasiljevich (Snr), has at all material times been a director - and in practice appears to have probably acted as the chairman of directors - of Glamour Glaze. The second respondent, Alex Vasiljevich, and the fourth respondent Steven Vasiljevich Jnr., are sons of Mr. Vasiljevich Snr. The fifth respondent, Sylvia Vasiljevich, is the wife of Mr. Vasiljevich Snr. and the mother of the second and fourth respondents. They all work in the business. Mr. Vasiljevich Snr. has been involved in the glass industry in Australia since 1956 and has had his own business since 1958 in various places in Victoria. Previously the business associated with the Vasiljevich family had been conducted at premises at Gardenvale, but since 1983 the business has been located at Phillip Street and Flinders Street, Mentone. Since 1983 the business has been called "Mentone Glass" and advertised by that name. The business was named after Mentone in Victoria where the Vasiljevich's factory is presently situated. In August 1987 Glamour Glaze leased a large factory and office premises at 106 Centre Road, Clayton, Victoria. The premises abut the rear of the premises of T & K Glass in Carroll Street, Clayton. The Vasiljevich's business still uses the name "Mentone Glass" which is well known to the public and the trade in Victoria. Mentone Glass manufactures glass products. It and ACI are in the same general area of business.
On 29 January 1987 Glamour Glaze caused the name "Yencken Sandy Glass Industries" to be registered under the Business Names Act 1962 (Vic) and it has carried on business since then under that name. On 27 February 1987 one of the Vasiljevichs caused to be registered under the Business Names Act 1963 (SA) the names "Yencken Glass" and "Yencken Sandy Glass". In the Australian Capital Territory registration of "Yencken Sandy Glass Industries" was in the name of ACI but it ceased on 15 January 1988 when the name "Yencken Sandy Glass" was registered by ACI in all States and Territories except Victoria and South Australia.
Some time before the end of August 1987 Glamour Glaze commenced to carry on and has continued to carry on business as a processor and distributor of glass and glass products under the name "Yencken Sandy Glass Industries"; and from about the beginning of October 1987 its business has included the manufacture and distribution of mirrors under the name "Yencken Sandy Glass Industries". Mr. Alex Vasiljevich, as marketing manager of Glamour Glaze, has used a business card with the inscription "Yencken Sandy Glass Industries - a Division of Glamour Glaze Pty. Limited Aust. - Alex Vasiljevich - Marketing Manager". The 1987 White Pages telephone directory for Melbourne has an entry "Yencken Sandy Glass Industries - 10 Phillips Ment 584 7007" which was inserted by one or other of the respondents. Glamour Glaze caused a large advertisement to be placed in the 1988 Telecom Australia Melbourne Yellow Pages telephone directory under the name "Yencken Sandy Glass Industries" which bears amongst other things the words "One of Australia's largest mirror manufacturers".
Mr. Vasiljevich Snr. gave evidence. He was generally very frank. He said that after ACI acquired the Yencken Sandy Glass Industries business it ceased to use that name. He thought that there might still be some value for Glamour Glaze in the name "Yencken Sandy Glass Industries" so he took the step in 1986 of reserving the name under the Business Names Act 1962 (Vic) after ACI allowed the reservation of the name to expire in Victoria on 14 January 1986. He said that Glamour Glaze uses the name "Yencken Sandy Glass Industries" because it brings in business. The name has value because the name is well known in the industry although Mr. Vasiljevich Snr. asserted that in recent times the reputation of Yencken Sandy Glass had declined. Mr. Vasiljevich accepted in evidence that the name had an old reputation, and agreed that is why he wanted to use it. He accepted that Glamour Glaze used the name "to get some business out of the industry" that it could not otherwise obtain. He said that Glamour Glaze has had a good response to its entry in the telephone book from people telephoning who want to deal with "Yencken Sandy Glass Industries" and who have expressed pleasure on hearing that the name is trading again. He said that the name has a competitive and commercial benefit and that Glamour Glaze can derive an advantage from using it provided Glamour Glaze "work(s) for it". He wanted people to think that the Yencken Sandy Glass business was operating again. Mr. Vasiljevich in evidence described the commercial advantage that he wanted to derive from the use of the name as arising because it had been advertised for a long time and many people in the glass and building business knew about "Yencken Sandy Glass". He said that if Glamour Glaze gave customers proper service then it would keep their custom.

Mr. Vasiljevich said that if Glamour Glaze could not use the name then the expansion of its business would be in serious jeopardy because it would have to use a name that is not known. When asked about the name "Mentone" he said it was a very small operation. He said that if Glamour Glaze was prevented from using the name Yencken Sandy Glass he thought that the monthly orders for 30,000 square metres presently achieved by Glamour Glaze would be lost. Mr. Vasiljevich's evidence on these two lastmentioned matters was not convincing and the evidence about potential loss of orders was uncorroborated. Glamour Glaze has nine trucks of which seven were purchased after these proceedings commenced on 21 September 1987. None of the trucks have Yencken Sandy Glass Industries painted on the side, since Glamour Glaze has apparently awaited the result of these proceedings before attaching signs already in its possession.
ACI asserts that in these circumstances Glamour Glaze has represented that its products are those of or are associated with those of ACI or Burns Philp or the business traditionally known as Yencken Sandy Glass Industries; and has represented that Glamour Glaze has taken over and conducted that business and that it is part of or associated with either ACI or Burns Philp or both. These representations are said to be false because there never has been any connection or association between Glamour Glaze on the one hand and ACI, Burns Philp or the business Yencken Sandy Glass Industries on the other hand.
ACI claims that Glamour Glaze has contravened s. 52 of the Act by engaging in misleading or deceptive conduct. ACI claims that Glamour Glaze has also contravened s. 53 by representing that the company Glamour Glaze has the sponsorship and approval of or an affiliation with ACI or Burns Philp; by representing that it has an affiliation with the business Yencken Sandy Glass Industries; and by representing that its goods originate from premises formerly occupied by Yencken Sandy Glass Industries. ACI claims that each of the representations was made in connection with the supply or possible supply of and the promotion of the supply or use of glass and glass products produced by Glamour Glaze, that each of the representations was false and without foundation and that in the circumstances Glamour Glaze has made false representations in connection with the supply of or possible supply of or with the promotion of the supply or use of goods contrary to s. 53 of the Act. The personal respondents are said to have aided, abetted, counselled, procured or induced Glamour Glaze to engage in the conduct in contravention of the Act.
ACI asserts that the valuable and substantial reputation under and by reference to the name "Yencken Sandy Glass Industries" for the wholesale distribution of glass and for glazing contracting which Burns Philp had until 1 November 1985 passed to ACI on or about that date; and that since 1 November 1985 ACI has enjoyed a substantial and valuable reputation within the glass industry as carrying on the Yencken Sandy Glass Industries business. ACI asserts that Glamour Glaze has passed off its business as being associated with that of ACI and its products and services. It is asserted that ACI has suffered loss and damage by reason of the conduct of the respondents.
Injunctive relief and damages are sought. However it was agreed by the parties well in advance of the trial, and such agreement was endorsed by order of another Judge of this Court, that the assessment of damages should be tried separately from and later than the issue of liability. Hence it is the question of liability which the Court has to determine at this stage.
Division 1 of Part V of the Trade Practices Act ("the Act") is designed to protect the consuming public from unfair trading practices: Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (1978) 140 CLR 216; World Series Cricket Pty. Limited v. Parish (1977) 16 ALR 181. Section 52 prohibits corporations in trade or commerce engaging in misleading or deceptive conduct or conduct that is likely to mislead or deceive. Section 52A prohibits corporations from engaging in unconscionable conduct in connection with the supply of goods or services. Section 53 prohibits such corporations in connection with the supply of goods or services or their promotion from making false representations about the goods relating to their standard, quality, grade, composition, style, history, sponsorship approval, performance characteristics, uses or benefits and other matters. Other conduct that is proscribed includes use of physical force or undue harassment or coercion in connection with the sale of land (s. 53A); a corporation engaging in conduct that is liable to mislead applicants in relation to employment (s. 53B); bait advertising (s. 56); referral selling (s. 57); pyramid selling (s. 61) and various other practices to which Part V Division 1 of the Act is directed. Sections 52 and 53 with which this case is concerned are not intended to confer rights upon traders to protect their business interests as such, although the operation of the sections may incidentally have that effect: see Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (supra) per Barwick C.J. at 220, with whom Aickin J. agreed.
The names Yencken and Sandy Glass are old and well known names in the glass industry in this country and more recently their combined form of "Yencken Sandy Glass Industries" has also become well known to persons engaged at all relevant levels in the glass industry in various states and territories throughout Australia and the general public. Since 1977, when the amalgamated business of Yencken Glass Industries Limited, Burns Philp and James Sandy was carried on by Burns Philp under the name "Yencken Sandy Glass Industries" the name has become well known to the trade and public. The relevant part of the trade concerns those engaged in the manufacture, distribution and sale of glass and glass products including glass merchants, glaziers, builders, architects, furniture manufacturers.
Glamour Glaze has since before the end of August 1987 carried on business as a process and distributor of glass and glass products under the name "Yencken Sandy Glass Industries". The very name, and the combination of names within it, must inevitably be associated in the mind of the public and the trade with the businesses previously carried on under the name of Yencken Glass Industries or James Sandy & Co. Limited and more recently under the name Yencken Sandy Glass Industries. As I said earlier Mr. Vasiljevich Snr. was frank about why his company took steps to register "Yencken Sandy Glass Industries" as a business name in Victoria and in South Australia, namely, to get the benefit of the well known name and names associated with that title built up over many years by those who owned those businesses. In short, he hoped to attract custom from people who, when they got in touch with Glamour Glaze, assumed that they were dealing with the successor to those old businesses or someone having some trade association with them. It is an inference clearly available on the evidence that a considerable portion of the business developed by Glamour Glaze in recent months has been due to the trade and members of the public dealing with Glamour Glaze on a false premise or assumption. I draw that inference. Glamour Glaze is trading on the strength of the well known name.
This is not a case of mere confusion in the minds of the trade or the public which might be resolved upon their learning, if they ever did, that Glamour Glaze is not connected with the company or companies which previously carried on business as Yencken Glass Industries or James Sandy & Co Limited or Yencken Sandy Glass Industries. The use by Glamour Glaze of the very name "Yencken Sandy Glass Industries" has misled and will continue to mislead and deceive the public into believing that, when dealing with Glamour Glaze, they are in fact dealing with the company or companies that previously carried on business under that name or some variation thereof. It is not necessary that evidence be adduced to establish that conduct is misleading or deceptive, though it is admissible and may be persuasive in some circumstances: Taco Company of Australia Inc. v. Taco Bell Pty. Limited (1982) 42 ALR 177 per Deane and Fitzgerald JJ. at 202. The conclusion is plain from facts not in dispute. In any event there is evidence before the Court that corroborates this finding of misleading or deceptive conduct.
The conduct of Glamour Glaze plainly to my mind contravenes s. 52 of the Trade Practices Act. It also contravenes certain provisions of s. 53. Glamour Glaze is falsely representing to the public that its goods have the sponsorship and approval of and an affiliation with ACI or Burns Philp and that Glamour Glaze has an affiliation with the businesses previously carried on by those who from time to time have been entitled to use the words "Yencken" or "Sandy" or "Yencken Sandy Glass Industries" or some variation thereof. Thus sub-ss. 53(c) and (d) have been contravened.
The name "Yencken Sandy Glass Industries" has not been used by ACI since it acquired the business from Burns Philp in 1985. Even if it was intended by ACI when it made the acquisition not to use the name when it acquired it, it does not alter the fact that members of the trade and the general public are being misled and deceived by the conduct of Glamour Glaze. It is, of course, the interests of the public with which the section is concerned. It is well established that any person may bring proceedings to restrain a contravention of Part V of the Trade Practices Act. The applicant's standing is derived from the fact that his application secures the public interest of consumer protection. It is irrelevant whether any interest of his own is affected or not: Parish v. World Series Cricket (supra) per Bowen C.J. at 186-7, per Franki J. at 194; Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (supra); R. v. Federal Court of Australia; ex parte Pilkington ACI. (Operations) Pty. Ltd. (1978) 142 CLR 113 per Stephen J. at 120-121; per Mason J. at 128; per Murphy J. at 131; Phelps v. Western Mining Corporation Limited (1978) 20 ALR 183 per Bowen C.J. at 187, per Deane J. at 189.
It was argued on behalf of the respondents that injunctive relief should not be granted even if the Court finds established, as I do, contraventions of ss. 52 or 53, because the conduct or position of ACI or its associated companies in what was described as the ACI group of companies debars it from obtaining such relief. ACI appears to be in a dominant position in the glass industry in this country. Pilkington-ACI (a combination of the Pilkington companies of the United Kingdom and the ACI companies in Australia) control all but one of the major companies operating in the glass processing and distribution field, the exception being O'Brien Glass Industries Limited.
It was also argued that relief should be refused because ACI may have engaged in conduct constituting breaches of certain provisions of the Act including sub-s. 45(c) as to covenants in relation to prices; s. 46 in relation to abuse of market power; s. 47 as to exclusive dealing and s. 50 as to mergers which allow a corporation to be in a position to dominate a market. It was argued by the respondents that there were public interest considerations which should prevent the grant of injunctive relief.
The Court has a discretion to grant or withhold injunctive relief, although in Phelps v. Western Mining Corporation Limited (supra) Bowen C.J. at 187-188 left open the question whether the Court's powers under s. 80 of the Act included such a discretion. His Honour was there concerned primarily with the issue of standing under s. 80. I have real reservations as to whether the public interest considerations which the respondent asserts are relevant in deciding whether or not to grant or withhold injunctive relief under s. 80 for contraventions of ss. 52 or 53. After all, a finding that ss. 52 and 53 have been contravened necessarily involves findings that the respondents' conduct is misleading or deceptive and that the public must, at least prima facie, be protected from a repetition of that conduct: see Phelps v. Western Mining Corporation Ltd (supra) per Bowen C.J. at 188, where his Honour observed that in such circumstances, "it will often be in the public interest that an injunction under s. 80 be granted, whatever the interest of the applicant in bringing the suit". I prefer to leave this question open.
I am satisfied on the facts of this case that there is no warrant for withholding the grant of such relief. Certainly I do not think this case is appropriate for conversion to some mini-trial of complicated issues such as those which inevitably arise where breach of ss. 45, 46, 47 and 50 is alleged, especially when such breaches are not pleaded and only raised in the course of final address.
I am satisfied that each of the personal respondents to the proceedings has aided, abetted, counselled, procured and induced Glamour Glaze to engage in the contravention of the ss. 52 and 53. It was not asserted that any other conclusion was open if the primary finding was made as to the contraventions by Glamour Glaze.
It was also argued on behalf of ACI that Glamour Glaze had committed the tort of passing off its goods and services as those of ACI. The facts establish that ACI has, since November 1985, enjoyed a substantial and valuable reputation within the glass industry and among retail glass merchants, glaziers, builders, architects, furniture manufacturers and the public generally as carrying on the business previously carried on as "Yencken Sandy Glass Industries". ACI has enjoyed an associated reputation as a distributor of the same glass and glass products and as a provider of services in connection with those products as had been distributed and provided by that business. Glamour Glaze has passed off its business and services as being associated with ACI and its products and services.
It was argued on behalf of the respondents that, since ACI did not acquire the goodwill in the "Yencken Sandy Glass Industries" business from Burns Philp in 1985, it could not sue for passing off.
In 1985 ACI acquired the business of "Yencken Sandy Glass Industries" from Burns Philp. The Sale and Purchase Agreement had effect that the acquisition was of all the plant, equipment and fittings owned by Burns Philp and used in the business of Yencken Sandy Glass Industries; all the rights of Burns Philp under leases of plant used in the business; all the stock in the business; the right to occupy the premises of the business at various addresses in Victoria, New South Wales, Queensland, South Australia and Western Australia whether by lease, sub-lease, assignment of lease or licence; all registered business names under which it carried on the business; and Burns Philp agreed to assign to ACI all its right title and interest in certain trade marks, patents and licences together with copyright attaching to literature, design, writing, logo and other material capable of being protected by copyright which was used in the business.
It is true that clause 13 provided that, subject to the obligations of Burns Philp to assign registered business names under which it carried on the business in Australia to ACI at the completion date and to the assignment of trade marks, patents and licences and copyright rights, the goodwill of the business did not pass to ACI on completion. This is a curious provision but, as mentioned earlier, it was explained in evidence - which was not challenged - that Burns Philp did not want to give the impression to ACI that the business was profitable, lest it be open to suit from ACI.
Goodwill is itself a somewhat ephemeral notion. The classic definition of goodwill is that of Lord Linley in Inland Revenue Commissioners v. Muller Co's Margarine Ltd. (1901) AC 217 at 235 as:

"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."

Every other relevant proprietary right relating to the business conducted by Burns Philp appears to have passed to ACI except for "goodwill", the exclusion of which was for the reason given in evidence. It was argued by counsel for ACI that, notwithstanding the provisions of clause 13, ACI did in fact acquire the "goodwill" of the business because all the other things it acquired left nothing in Burns Philp to which goodwill could attach. In my opinion this argument is correct. The parties to the agreement of 21 October 1985 inserted clause 13 for a special purpose. Any "goodwill" in connection with the business of "Yencken Sandy Glass Industries" had no existence independently of that business, and passed to ACI when all relevant rights which constituted the business were transferred to ACI. Even if goodwill had not been assigned to ACI it would not matter for the purposes of this case. Every other right making up the business passed to ACI, and this is sufficient to allow ACI to claim the business and reputation attached to the name "Yencken Sandy Glass Industries".

It was argued on behalf of the respondents that since ACI has not used the name "Yencken Sandy Glass Industries" in its business since 1985 it cannot succeed in its claim for passing off. There are reported cases where the absence of the use of the relevant name or failure of the applicant for relief to continue to use the name has been fatal to success in establishing a case of passing off. Elders IXL Ltd. v. Australian Estates Pty. Ltd. (1987) ATPR 40-832 is one such case and it refers to others. They are cases which depended upon their own facts and do not bear upon the present case. Equally, there are reported cases where a failure to use the name in dispute, even over a period of some years' suspension of use, has been held not to deny relief in passing off: Ballarat Products Ltd. v. Farmers Smallgoods Co. Pty. Ltd. (1957) VR 104; Ad-Lib Club Limited v. Granville (1972) RPC 673. A case which assists the applicants, at least by analogy, is Fletcher Challenge Ltd. v. Fletcher Challenge Pty. Limited (1981) 1 NSWLR 196, where Powell J. held that the newly incorporated plaintiff could succeed in an action for passing off on the basis of an existing reputation in the jurisdiction, although it had not carried on business in the jurisdiction (at 205).
It is well known in the trade and amongst certain members of the public that ACI acquired the business known as "Yencken Sandy Glass Industries" from Burns Philp. Though ACI has not carried on the business which it acquired from Burns Philp under the name "Yencken Sandy Glass Industries", it continued to sell a number of products in the product range that bear brand names or product names involving the name "Yencken Sandy Glass Industries" or some component of it. Also, the arrangements made by ACI with Telecom are such that anyone telephoning the numbers previously used by "Yencken Sandy Glass Industries" will be informed of the telephone numbers of T & K Glass, which company is the vehicle for ACI's operations in the glass industry. At least fifty such telephone calls have been made since the end of October 1987. The statement that ACI no longer uses the name "Yencken Sandy Glass Industries" requires qualification in the light of these matters. Further, ACI used and continues to use in its business assets which it acquired from Burns Philp under the 1985 agreement and which were used in the "Yencken Sandy Glass Industries" business. These circumstances distinguish this case from cases such as Elders IXL Limited v. Australian Estates Pty. Limited (supra) with respect to the applicant's claim to relief in the action for passing off.

In my opinion Glamour Glaze has passed off its goods and services as those of ACI in relation to the business acquired by ACI in 1985 from Burns Philp notwithstanding that ACI does not presently use the name "Yencken Sandy Glass Industries".
I propose to grant injunctive relief. I said earlier that it was agreed before the hearing commenced, and an order made by consent by another Judge of this Court, that the assessment of any damages should be tried separately from the questions of liability. Sufficient evidence of damage or likelihood of damage has been established under s. 82 and under the law of passing off to support an order for an inquiry as to damages. However, discussion between counsel and the bench in the concluding stages of the argument established that if injunctive relief is granted it is unlikely that any claim for damages will be pursued by ACI. Hence, the form of relief which I propose to grant will give ACI an opportunity to make a final decision as to whether or not it seeks to prosecute its claim for damages, and if it does not prosecute such a claim, then the orders of the Court should become final. Otherwise, an outstanding inquiry as to damages would probably result in any injunctive relief being in the nature of interlocutory orders: see Computer Edge Pty. Ltd. v. Apple Computer Inc. (1984) 54 ALR 767 per Gibbs C.J. at 768.
During final addresses I discussed with counsel the appropriate form of orders to be made in the event that ACI should succeed. The orders mentioned below reflect that discussion. Order 8 is to be made because counsel for the respondents sought a period of fourteen days after the granting of any injunctions so that Glamour Glaze could re-arrange its affairs to enable it to comply with the injunctions. The period requested is reasonable.
I propose to make the following orders:-

1. That the first respondent by itself its servants or agents be restrained from -

(a) carrying on business, or representing that it carries on business, under or by reference to the name "Yencken Sandy Glass Industries" or any name, word or words substantially the same as that name or deceptively similar thereto;

(b) using or causing to be used or allowing or permitting the use of the name "Yencken Sandy Glass Industries" or any name, word or words substantially the same as that name or deceptively similar thereto in or in connection with any business which it carries on or with which it is associated;

(c) carrying on any business or representing that it carries on a business of or in connection with the manufacture, processing, distribution or sale of glass or glass products under or by reference to any name, word or words which consist of or include the word "Yencken" or the word "Sandy" or any word or words substantially the same as either such word or deceptively similar thereto;

(d) using or causing to be used or allowing or permitting the use of any name, word or words which consist of or include the word "Yencken" or the word "Sandy" or any word or words substantially the same as either such word or words deceptively similar thereto in or in connection with any business which it carries on or with which it is associated, being a business of or in connection with the manufacture, processing, distribution or sale of glass or glass products;

(e) making any representation, in trade or commerce, in connection with the supply or possible supply of, or with the promotion of the supply or use of, glass or glass products, that or to the effect that it has the sponsorship or approval of, or an affiliation with, the applicant, Burns Philp and Company Ltd or the business that traded before 1st November 1985 as "Yencken Sandy Glass Industries", or that or to the effect that glass or glass products made, processed, distributed or sold by it originate from premises formerly occupied by the said business;

(f) representing that it has any association with the applicant or any of its businesses or with Burns Philp and Company Ltd or with the business carried on until 1st November 1985 by that company as "Yencken Sandy Glass Industries" or that it carries on such business or that its products or services or any of them are or are associated with the products or services of the applicant, of such company or of any such business.

That the second, third, fourth and fifth respondents be restrained from aiding, abetting, counselling, procuring or inducing the first respondent to do anything which is restrained by Order 1.

That the first respondent lodge forthwith with the Commissioner for Corporate Affairs of the State of Victoria a statement that it has ceased to carry on business in Victoria under the name "Yencken Sandy Glass Industries".

That the first, third and fourth respondents lodge forthwith with the Registrar of Companies of the State of South Australia a statement that they do not and none of them does carry on business in South Australia, and that they do not intend and none of them intends to carry on business in that State, under the name "Yencken Glass" or the name "Yencken Sandy Glass".

That the first respondent forthwith take all necessary steps within its power and do all such things as may be necessary and within its power to prevent the publication by each and every person or corporation with whom the first respondent has a contract, arrangement or understanding in relation to the publication or further publication in any telephone, business or other directory or any other publication of the name "Yencken Sandy Glass Industries".

That the first respondent cause a sealed copy of this Order to be served on each of the persons and corporations referred to in Order 5.

That each respondent deliver up to the Court for destruction under the surveillance of the applicant or its nominated representative all cards, letters, sheets, forms, brochures, pamphlets, documents and other papers (excepting only the court documents in this application and documents brought into existence for the purpose of defending this proceeding) in the possession, power or control of that respondent upon which appear the words "Yencken Sandy" or the word "Yencken" or the word "Sandy".

That Orders 1 to 7 inclusive shall commence to operate upon the expiration of fourteen days from today.

That the applicant file and serve upon the respondents or their solicitors within 21 days a document indicating whether it wishes to pursue claims for damages pursuant to s. 82 of the Trade Practices Act in relation to the breaches of ss. 52 and 53 of that Act the subject of this proceedings and in relation to the tort of passing off, and in the events that no such document is filed within that period or that such document indicates that the claims for damages are not to be pursued, the applicant's claims for damages shall stand dismissed.

That the respondents pay the costs of the applicant of this proceeding including any reserved costs.

Liberty is reserved to any party to apply on seven days' notice.

[1988] FCA 139

22 APRIL 1988