ACI Australia Ltd v Glamour Glaze Pty Ltd

IN THE m m a L COURT OF AUSTRALIA )

VICTORIA DISTRICT REGISTRY

)

V. No. G 249 of 1987

)

l .>

GENERAL DIVISION

)

BETWEEN:

Applicant

AUSTRALIA

LIMITED

ACI

and

GLAMOUR GLAZE PTY.

LTD. and

OTHERS

Respondents

COURT: NORTHROP J.

: 2 OCTOBER 1987

PLACE:

MELBOURNE

j	MINUTES OF ORDER

THE COURT ORDERS

THAT:-

1. The interlocutory orders sought be refused.

2. The respondents' costs be reserved.

(Settlement and entry

of Orders is dealt with in 0.36 of the

Rules of Court.

)

FEDERAL COURT OF

IN THE FEDERAL COURT

OF AUSTFALIA )

)

VICTORIA	DISTRICT	REGISTRY	)	V. No. G 249 of 1987
)

DIVISION	GENERAL	)
BETWEEN:

ACI AUSTRALIA LIMITED

Applicant

and

GLAMOUR GLAZE PTY.

LTD. and OTHERS

Respondents

COURT: NORTHROP

: 2 OCTOBER 1987

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The

applicant

seeking

interlocutory

from carrying on business or representing that it carries on

business under or by reference to the name "Yencken Sandy

injunction restraining the respondent Glamour Glaze Pty. Ltd. the same or deceptively similar thereto. Variations of that

interlocutory injunction are sought

as well as consequential

orders all applying to Glamour Glaze

Pty. Ltd. and the other

respondents who are officers

of or connected with Glamour

Glaze Pty. Ltd..

It must be remembered

that

these

are

interlocutory proceedings with

the result that the facts have

not been fully investigated and no final view has been formed

on the facts or the law.

!'.	'
I

- 2 -

The applicant is the

ma~or manufacturer of glass

products in Australia. Prior to the year

1985,

the four

major glass distributors and glazing contractors in Australia

were Yencken Sandy Glass Industries,

& K.

Glass Co.,

Oliver Davey Glass	Co. and O’Brien Glass Industries	Ltd.. At	., I
I .

the present time the applicant controls the largest share of

the glass contracting and dlstribution market in Australia.

In particular, the applicant controls T. & K. Glass Co. and

Oliver Davey Glass Co..

It carries on the business of glass

contracting and distributlon under each of those names.

The name

“Yencken“

has been well known in the

Australian wholesale hardware and glass industries for a very

long time - some 100 years.

The name “Yencken” continued to

form part of a name used in the business of glass. In

1972,

Burns Philp & Co. Ltd. acquired that business which was then trading as “Yencken Glass Industries Ltd.” Thereafter, Burns

Philp & Co. Ltd.

carried

the

business

glass

distribution and glazing contracting under the name “Yencken

Sandy

Glass

Industrles.

Burns

Philp

& Co. Ltd.

was

registered as carrying on that business under that name in

the States of Victoria, New South Wales, Queensland and

Western

Australia. The position

the

other

parts

Australia is not clear.

- 3 -

By an agreement in writing dated 21 October

1985,

Burns Philp

Co. Ltd. agreed to sell and the applicant

agreed

purchase

parts

the

business

glass

distribution and glazing contracting then being carried on by

Burns Philp &

Co. Ltd.

at premises in Victoria, New South

Wales,

Queensland

and

Western

Australia.

The applicant

purchased

plant,

equipment

and

stock

and

the

agreement

provided for the applicant to have the use of the premises then being used by the business sold. Clause 13 of the agreement is set out:-

"13.

GOODWILL

13.1 !I!he Vendor and the Purchaser agree thac:

(a)

subject to

(b) below and to Clause

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 the Business in Australia to the Purchaser at the Completion Date."

Clause 15 relates to the transfer of trademarks and patents and was not relied upon in the present proceedings.

Clause 13,

on its

face, appears

to be somewhat

unusual since the applicant did not acquire, pursuant to the

agreement, the reputation

or goodwill attached to the name

"Yencken

Sandy

Glass

Industries."

The

clause,

however,

illustrates the reality of the position. On all the material

before me. and for the purposes of the interlocutory orders

sought, I am satisfied that the applicant had no intention

to, and in fact did

not,

carry on the business

glass

distribution and glazing contracting under the name "Yencken

Sandy

Glass

Industries"

any

name,

word

words

substantially the same

similar thereto. The applicant

intended to and did merge the plant, equipment and stock it

had acquired from Burns Philp & Co.

Ltd. into that part of

its business which

carried on under the name

"T. &

Glass Co."

and concentrated its business wlthin its

own

premises

some only of the premises it took under the

agreement. The true position is illustrated by

circular

letter forwarded by the applicant

some

3,200

former

customers of

Yencken Sandy Glass Industries in New South

Wales, Queensland and Western Australia and some	400-500
former customers in Victoria. The names and addresses of

those customers were supplied by Burns Philp

Co.

Ltd.

pursuant to the terms of the agreement. The form

the

circular letter produced at the hearing is dated

28 October

1985 and is on the lecterhead

"T. & K. Glass Co. (N.S.

) A

Unit of Acmil Industries

Pty. Ltd. (Inc. in N.S.W.)." In his

affidavit in support

of the interlocutory injunctions, the

General Manager of T. & K. Glass Co. deposes as follows:-

"T & K Glass has been in business for approximately

24 years. Until April,

1986, it was carried on by

Acmil

Industries

Pty.

Ltd.,

wholly

owned

subsidiary of Acmil Limited. ACI acquired control

of Acmil Limited in April 1981, and has carried on

business under the name 'T & K Glass' since April

1986. I'

- 5 -

That is consistent with the letterhead appearing on

the

copy

circular

letter.

all

material

times

the

applicant controlled T. & K. Glass Co.. The circular letter

is set out:-

"We wish

to announce that

A.C.I. Auscralia acquired

tine business of Yencken Sandy Glass Induscries

from the 1st November,	1385, and will be merged
with T & K Glass Co.

We write to

your (sic) because we

think it is most

important thac the people and customers involved in

any acquisition situation should

be considered from

the very outset, these are the people, on boch

sides,

who

will

make

any

eventual

merger

successful.

We shall continue jointly,	to provide the products	, -
' 7

listed overleaf and services

you are accustomed to

receiving, except now, with a much broader range of

products to offer and with our experienced combined

sales and production personnel, we will be able to

continue to offer service, unequalled.

We hope that

you

will continue to purchase your

requirements as previously, and we intend to visit

you shortly,

to further foster our goodwill and

intentions to all parties concerned.

In the meantime please continue

to call any of

the

sales offices

you are familiar with."

I do not find

it necessary to refer to the evldence

glven

this Issue. It is sufflcient to say that the

applicant

was

merging

the

activities

theretofore

being

conducted by

Burns Philp

Co. Ltd. into its activlties

conducted under the name

"T. & K.

Glass" and that in due

course the name "Yencken Sandy Glass Industries" would cease

to be used at all.

It is true that the applicant continued

- 6 -

I .

to distribute some pamphlets under the name "Yencken Sandy

Glass

Industries.

Division

Burns

Philp

Company

(Incorporated in N.S.W.)."

That itself may well constitute

misleading or deceptive

conduct

the

applicant.

This

distribution however, appears to be action more in the nature

using up existing pamphlets and not in the nature

carrying on the business under the name "Yencken Sandy Glass

Industries." Further, it appears to be contrary to clause	13
of the agraement. On the material before me, and for the

purposes of interlocutory

relief, I am not satisfied that the

applicant is carrying on the business of glass distribution

and glazing contracting under the name "Yencken Sandy Glass

Industries" or any name similar to

it.

In conformity with clause

of the agreement,

Burns Philp & Co. Ltd. assigned the registered business name

"Yencken Sandy Glass Industries" with respect to Victoria,

New	South Wales, Queensland and Western Australia to the

applicant. As a result, on 1 November 1985, the applicant was registered under the Business Names Act 1962 (Vic) as carrying on business in Victoria under the name "Yencken

Sandy

Glass

Industries."

That

registration

expired

effluxion of time on l4 January 1986.

On the material before

the Court, I make no finding on whether the registration was

allowed to expire by accident

or not. For the purposes

these proceedings, I will assume it was by accident.

For the

purposes of these proceedings. on all the material before

me,

i ,

- 7 -

!'i

I am satisfied that since 14 January 1986 the applicant has

not carried on business in Victoria under the name "Yencken	j. -.
:, '
Sandy Glass Industries."
!

The respondents filed

number of affidavits in

opposition to the granting of the interlocutory injunctions.

One affidavit was sworn

by the respondent Steven Vasiljevich

(Snr)

("Vasiljevich").

It is a

very

frank

affidavit.

Vasiljevich has been involved in the glass industry for many

years, first in Yugoslavia

and, since 1958, in Australia,

when he commenced to carry on business in Victoria. He and

his family carried on business in the glass business in a

small

way at Gardenvale until 1983. After that date, the

business was transferred to premises at Mentone. Vasiljevich

knew of the activities of Yencken Sandy Glass Industries,

& K. Glass Co.,

Oliver Davey Glass Co.

and O'Brien Glass

Industries

Ltd..

knew

that

1985,

the

applicant

acquired the business previously carried on by Burns Philp

Co. Ltd. in glass distribution and contract glazing under the

name

"Yencken

Sandy

Glass

Industries."

Thereafter,

from

observing what was happening with respect to the premises

previously occupied by Yencken Sandy Glass Industries and

from changes in name to

T. & K. Glass Co. , he formed the view

that the business of Yencken Sandy Glass Industries was no

longer being conducted under that name. For the purposes of	I .
I .

these interlocutory proceedings,

I am satisfied that there

" .

was material upon which Vasiljevich reasonably could come

t o

that view.

He caused enquiries to be made concerning the

- !

- 8 -

registration

the

business

name

"Yencken

Sandy

Glass

Industries."

He ascertained that the name was not registered

in Victoria and in South Australia.

He then took steps to

obtain the registration of that name or similar names in

Victoria and in South Australia in interests associated with

his family. To this end, Glamour Glaze Pty. Ltd., which was

incorporated in Victoria on 29 January 1986, registered the

business name "Yencken Sandy Glass Industries" in the glass

processing industry on

29 January

1987.

Since that date,

Glamour Glaze Pty. Ltd. has carried on business in	Victoria	t
!

under the name "Yencken Sandy Glass Industries."

that

end, it has purchased a mirror sllverlng machlne. The

only

two other similar

machmes

in Australia are owned by the

applicant. In August 1987,

it leased premises at Clayton in

which to carry on its business.

It continues CO carry on its

business

Mentone under the name Mentone Glass. In his

affidavit, Vasiljevic said that che name "Yencken Sandy Glass

Industrles" does have

a commercial value. In explanation of

what

did,

the

following

paragraph

appears

his

affidavit :

"It was my belief that the name Yencken Sandy Glass

Industries

had

acquired

reputation

the

industry and that even after a lapse of time when

business was not carried on, that some commercial

advantage may be derived from a glass distribution

and contracting business being carried on under

that name.

was my view that the applicant had

itself taken a commercial decision to continue its

own

glass distribution and contracting business

. .

under the name, more particularly

T & K Glass."

- 9 -

The applicant's

claim

founded

5.52 and

r .

paragraph 53(d) of the Trade Practices Act

1974 ("the Act").

Counsel for the applicant contended that the applicant had

acquired a reputation with respect to the name Yencken Sandy	:
Glass Industries and that its use by Glamour Glaze Pty. Ltd.,

was, contrary to

5.52,

misleading or deceptive in that it

suggested,

wrongly,

that

Glamour

Glaze

Pty.

Ltd.

was

connected with the applicant and further that its use was in

breach of paragraph 53(d) in that it represented that Glamour

Glaze Pty. Ltd. had	a sponsorship, approval or an affiliation
it does not have.

On the material before me,

I am not satisfied that

the applicant has established a serious question to be tried	!
!

sufficient for the purpose of

interlocutory injunction

insofar as it is based on any reputation

or goodwill of the

applicant in the name "Yencken Sandy Glass Industries." That

i '

reputation or goodwill was not transferred by Burns Philp	&	I '
I ,'

Co.

Ltd. to the applicant. The applicant does not carry on

business under that name.

is conducting all its glass

distributing	and	glazing	contracting	business	under	the	..
I

business

name "T. & K. Glass Co.

It has

allowed

the

registration of the name to expire.

The

applicant has

reputation or goodwill in the name to protect. In any event,	I
if the question of balance of convenience does arise, it

should be considered on the basis that

the issue to be tried

is not strong in favour of the applicant on this issue; cf.

- 10 -

Mama Allovs & Research Ptv. Ltd.

v. Coffev C1981J V.R. 23 at

p.28 which, with necessary adaptations, is applied to this

case.

Counsel for the applicant relied on

a second issue,

namely the interest of the public generally and particularly

the group of people who normally dealt with Yencken Sandy

Glass Industries when Burns Philp

& Co. Ltd. was carrying on

business under that name. "hose people included wholesale

merchants, retailers, builders, architects and groups of that

kind. On this issue, it was contended that the applicant did

not need to establish any special interest. He relied on

number of cases such as Warren Halloran v. Henry F.

Halloran

Co. Ptv. Ltd.

(1984) 5

F.C.R.

571. In that case, the

applicant

did

not

have

goodwill

reputation

which

required protection.

The respondent had advertised that it

. ,

was carrying on land developments which had been commenced in

1906 by the applicant's father. The trial Judge held that a	I -
reader of the advertisement would understand that he was	!-
dealing with a group of companies of substance with a long

and

successful

experience

of the

purchase

land

for

investment

purposes

and

that

the

message

was

one

stability, long experience, continuity, substance and wise

judgment, and that it inferred that the advertiser was the

continuation of the enterprise established by the applicant's

father; see Sheppard J. at p.579.

In that case, the Court

held that the conduct of the respondent contravened

5 - 5 2

and

sub-section 53A(1)

of the

Act

and granted interlocutory

injunctions.

The interest to be protected was that

the

.	.	.
,.

i . .

- 11 -

general public. Counsel

for

the appllcant in

the

present

case contended those principles applied to the present case.

It is

clear

that

registration.

or absence

registration, of a

name under State legislation, cannot be

determinative of issues arising under the Trade Practices

W ;

see

for

example

Tec

Tomas

(Bust) Ptv. Ltd.

Matsumiya Computer

Co. Ptv. Ltd.

(1984) 53 A.L.R.

167 and

Aspar Butobarn Co-operative Society Ltd.	v. Dovala Ptv. Ltd.	1.
,
(1986) 8 A.T.P.R. 47,935.	I .

On the facts of the present case,

I am satisfied

that a serious question arises to be tried

the second

issue but that the claim is not

a strong one in favour of the

applicant. Accordingly,

turn to consider the question

the balance

convenience. What is said on this issue

applies

t o

both issues raised by the applicant on

tine

I .

assumption a serious question arises on the first issue.

Under State law in Victoria, Glamour Glaze

Pty.

Ltd. is entitled to carry on business under the name "Yencken

Sandy

Glass

Industries."

Unlike

the

case

Halloran,

Glamour Glaze Pty. Ltd. does not by express words claim that

it was carrying

on the business previously carried

on by

I .

Burns

Philp & Co. Ltd.. It is

accepted

that

the

name

"Yencken" is associated with the glass processing business

but that cannot prevent that name being used in that type of

business for all time.

It is true that Glamour Glaze Pty.

Ltd. is attempting to gain

a commercial benefit from the use

- 12 -

of the

name

"Yencken" and its association with the glass

industry.

It is accepted that members of the public may be

confused by

a mistaken belief that Glamour

Glaze Pty. Ltd. is

. .,

in some way connected

with

Burns Philp

Co.

Ltd.,

possibly, if they

are slightly better informed, with the

applicant,

but

that

mistaken

belief

arises

from

their

I .'

misunderstanding of the true position;

cf. McWilliam's Wines

Pty. Ltd. v. McDonald's System of Australia Pty. Ltd. (1980)

49 F.L.R. 455 per Smithers J..

Glamour Glaze Pty. Ltd. is setting out to expand	;I.
I

its business.

has expended moneys in the leasing of

premises and the purchase of machinery. If an

interlocutory

injunction

granted

it will

affected

financially

adversely and to a serious extent.

It is true that to date

it has not made much use of the name for publicity purposes	i .~,
but that fact does not mean it should not use the name.
The appllcant commenced these proceedings promptly after it discovered what Glamour Glaze Pty. Ltd. was doing.
To some extent, it is trying to protect its major share of
the market in the glass distribution and glazing contracting

business.

It has no reputation or goodwill in the name.

cannot use that business name in Victoria. It has not used that business name in Victoria. It does not intend to use that business name in Victoria. There is much to be said for

the view that the applicant is seeking the interlocutory

injunctions to protect its strong market position in the

market against the entry of

small

competitor.

Having

- 13 -

regard to the policy behind other provisions of the

Act, it

is difficult to see

how it is in the public interest to

restrain the small competitor.

Counsel for the applicant contended that it would

be difficult to quantify damages suffered by the applicant if

Glamour Glaze Pty. Ltd. is not restrained but ultimately is

found to be in contravention

of the Act. This highlights the

nature of the claim. On this aspect, what is relevant

is the

I -

effect on the public generally. Any damages suffered by the

;

(

applicant arise from competition, not from a contravention of

the Act. Any adverse effect	on the general public would be
small.

On a consideration of all the facts of this case,

on the balance

convenience

find in favour of the

respondents.

the

result,

I refuse to make

the

interlocutory

orders

sought

and

would

reserve

the

respondents’ costs.

[1987] FCA 521

2 Oct 1987