B & L Whittaker Pty Ltd and Australian Securities and Investments Commission M & M Concrete Pumping Pty Ltd JOINED PARTY
[2014] AATA 302
[2014] AATA 302
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/5452
Re
B & L Whittaker Pty Ltd
APPLICANT
And
Australian Securities and Investments Commission
RESPONDENT
And
M & M Concrete Pumping Pty Ltd
JOINED PARTY
DECISION
Tribunal Deputy President PE Hack SC
Date 15 May 2014 Place Brisbane The decision under review is affirmed.
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Deputy President PE Hack SC
CATCHWORDS
INTELLECTUAL PROPERTY – registration of business names – unavailability of business names that are identical or nearly identical – comparison of ‘Cairns Concrete Pumping’ and ‘Cairnscrete Pumping’ – Determination provides precise and exhaustive mechanism to decide whether names are identical or nearly identical – decision under review affirmed.
LEGISLATION
Business Names Registration Act 2011 (Cth) ss 3, 22(1) 24(1), 25, 26, 56, 66.
Business Names Registration (Availability of Names) Determination 2012 ss 4(1), 5, 6(1)-(2), 7, Sch 1 Item 212.
CASES
Re Smith & Australian Securities and Investments Commission [2014] AATA 192
REASONS FOR DECISION
Deputy President PE Hack SC
15 May 2014
Introduction
The issue in this case is whether the business name "Cairnscrete Pumping" is "nearly identical" to the business name "Cairns Concrete Pumping". Intuitively, it seems to me that it must be, but an intuitive answer is no longer permitted. The answer, and in this case a counter intuitive answer, is determined by a statutory scheme which allows a computer operated by the regulator to determine what is, and what is not, identical or nearly identical.
As will appear, I am driven to conclude that the conclusion reached by the regulator, the Australian Securities and Investments Commission, was correct. It is neither a pleasing nor a sensible outcome. Additionally, I have considerable doubt whether the legislation, and its implementation, achieves one of its stated objects which is "to avoid confusion by ensuring that business names that are identical or nearly identical are not registered".
Background
The facts are not in dispute. The applicant, B & L Whittaker Pty Ltd (Whittaker), conducts business under the registered business name Cairns Concrete Pumping. That business name has been registered to Whittaker since May 1999. Its business, as its name suggests, is that of concrete pumping. More recently a competitor, M & M Concrete Pumping Pty Ltd (M & M), has set up a similar business. On 6 February 2013 M & M made an online application to the Commission, which now has responsibility for administering the national Business Names Register, to register the business name Cairnscrete Pumping. On 18 April 2013 the Commission registered the name Cairnscrete Pumping. The decision to register was made by the application of a computer programme rather than by the intervention of human agency.
The fact of registration of the name Cairnscrete Pumping came to the attention of the directors of Whittaker. On 18 September 2013 they sought a review of the Commission’s decision. On 4 October 2013 the Commission, on this occasion by a real person, affirmed the decision to register the name Cairnscrete Pumping.
Whittaker is dissatisfied with that decision. It seeks a review in this Tribunal.
The statutory scheme
Historically the States and Territories had responsibility for the registration of business names. In July 2008 the Council of Australian Governments agreed to the development of a single national system for registering and regulating business names. That agreement led to the Business Names Registration Act 2011 (Cth) (the Act). One of the objects of the Act is to ensure that business names that are identical or nearly identical are not registered, an object to be achieved, so the Act says, "by rules dealing with the availability of business names".[1]
[1] See s 16(4), Business Names Registration Act 2011 (Cth).
Section 22(1) of the Act requires the Commission to establish and maintain a Business Names Register. An entity intending to carry on a business under a name may lodge with the Commission an application for the name to be registered to that entity as a business name.[2] The Commission must register the business name to the entity if satisfied of various matters set out in s 24(1) of the Act including, relevantly, that "the name is available to the entity". Section 25 of the Act deals with availability of names. Only the first subparagraph of that section is relevant. It reads:
A business name is available to an entity if:
(a) the name is not identical or nearly identical to:
(i)a business name registered to another entity,
…
[2]See s 23(1), Business Names Registration Act.
Section 26 allows the Minister, by legislative instrument, to make rules for determining whether a name is identical or nearly identical to another name. For completeness, the terms "identical" and "nearly identical" are defined in s 3 thus:
identical: means identical under rules made by the Minister under section 26
nearly identical: means nearly identical under rules made by the Minister under section 26
Before dealing with those rules I should note that, by virtue of Item 1 of the table to s 56 of the Act, a decision to register a business name to an entity may be reviewed by an entity in relation to which there is a real risk of substantial detriment because of the registration of the business name. Such an entity may apply to the Commission for review of the decision.[3] The Commission may affirm or vary the decision or set it aside and make the decision in substitution for it.[4] Application may then be made to the Tribunal for review of a decision made by the Commission under this process[5].
[3]See s 57(1), Business Names Registration Act.
[4] See s 57(6), Business Names Registration Act.
[5]See s 58(1), Business Names Registration Act.
For completeness, I note that s 66(1) of the Act permits the Commission to arrange for the use of computer programs for the purpose of making decisions under the Act. A decision made by the operation of a computer program is taken, by s 66(2) of the Act, to be a decision made by the Commission.
The rules are set out in the Business Names Registration (Availability of Names) Determination 2012 (the Determination) made by the then Parliamentary Secretary to the Treasurer on 20 March 2012. The operative part of the Determination is s 4(1). It provides,
For section 26 of the Act, the rules for determining whether a business name is identical or nearly identical to another name are set out in Part 2.
Part 2 comprises ss 5, 6 and 7. Section 7 deals with the process of determining whether business names are identical or nearly identical to company names. It is not relevant to the present enquiry and can be disregarded. It is as well to set out ss 5 and 6 in their entirety given that, on the Commission’s case, they comprise the only basis for determining whether names are identical or nearly identical. They provide:
5Matters to be disregarded
(1) When comparing a business name with another name (other than a company name) to determine whether the names are identical or nearly identical, the following matters are to be disregarded:
(a)the use of the definite or indefinite article unless it is the whole name;
(b)the use of ‘Association’, ‘Co-operative’, ‘Incorporated’, ‘Limited’, ‘Ltd’, ‘No Liability’, ‘NL’, ‘Proprietary’ or ‘Pty’ in one or both names;
(c)whether a word is in the plural or singular number in one or both names;
(d) the size of characters, and the type and case of letters, any accents, spaces between characters and punctuation marks, used in one or both names;
(e) the order of words in the names;
(f)whether one or both names includes a host name such as ‘www’ or a domain extension such as ‘net’, ‘org’ or ‘com’.
(2)For paragraph (1) (e), each of the following is to be treated as a word:
(a)a character separated by spaces;
(b) a group of characters separated by spaces;
(c) an abbreviation;
(d)an acronym.
Examples for paragraph (b)
1 XYZ123 is a word.
2 XYZ 123 is 2 words.
6Matters to be considered
(1)When comparing a business name with another name (other than a company name) to determine whether the names are identical or nearly identical, a word or expression in an item in Schedule 1 is to be taken to be the same as each other word or expression in the item.
(2)A business name is identical or nearly identical to another name if, despite the characters used in the name, it may be pronounced the same as the other name.
Examples
1 ‘Creative@Work’ is the same as ‘Kre8tive at Work’.
2 ‘100% Cats’ is the same as ‘100 percent Kats’.
3 ‘Dollar Shop’ is the same as ‘$ Shop’.
(3)For subsection (1), each of the following is to be treated as a word:
(a)a character separated by spaces;
(b)a group of characters separated by spaces;
(c) an abbreviation.
The only matters in s 5(1) of the Determination of present relevance are the instructions to disregard "spaces between characters… used in one or both names" and to disregard the case (upper or lower) of letters. Section 6(1) incorporates Schedule 1 which sets out 148 items where each word or expression within the item is to be taken to be the same as each other word or expression in the item. The critical item is Item 212 which lists,
concrete pumping, concreting, crete, formwork
Curiously, the expression "concrete" is absent from that formulation. Section 6(2) requires that a business name is identical or nearly identical if, despite apparent differences, the expressions are pronounced in the same way.
The Commission submits that the application of the rules involves a comparison of the content of each name and the elimination of identical (actual or deemed) parts. If some part of one or other of the names remains then, by definition, the two names were not identical or nearly identical. The process in the present case works this way, according to the Commission’s argument. On a comparison of Cairns Concrete Pumping and Cairnscrete Pumping,
(a)the word Cairns, which is common to both names, is eliminated from both;
(b)the expression "concrete pumping" is removed from Cairns Concrete Pumping and "crete” is removed from Cairnscrete Pumping because the case of letters is to be ignored and because "concrete pumping" and "crete" are taken to be the same as one another since they are both found in item 212;
(c)nothing remains from Cairns Concrete Pumping but the word Pumping remains from Cairnscrete Pumping;
(d)the result is, so the Commission submits, that the names are not identical or nearly identical.
The lack of identity can also be demonstrated, according to the Commission, by the process of substituting expressions which are taken to be identical or nearly identical. Thus, because "crete” is taken to be identical to concrete pumping the substitution of concrete pumping for "crete” results in M & M’s trading name being read as Cairns Concrete Pumping Pumping, again, it is said, demonstrating the lack of identity.
Whittaker's submissions focus on the words "concrete" and "crete". The latter word, it points out, is a derivative from "concrete". So much may be accepted. It may also be accepted that on any sensible test Cairns Concrete Pumping and Cairnscrete Pumping are nearly identical. But for reasons that are not apparent to me, the word "concrete" does not appear in Item 212. Had it done so Cairns Concrete Pumping and Cairnscrete Pumping would, by definition, have been identical or nearly identical. However it is not open to me to treat Item 212 as if it did contain the word "concrete" despite it being readily apparent that "crete" is derived from "concrete".
The Commission's submissions point to the orthodox approach to the construction of the word "means" in s 3 of the Act. That approach holds that the word "means" is employed if the definition is intended to be exhaustive and conclusive.[6] The effect of that approach is to make the rules the sole test of what is identical or nearly identical and to exclude any other tests. But there is a textual curiosity in the way the Determination works. The approach of deeming expressions to be identical to other expressions is understandable, as is the logic of using the substitution method to determine whether names are identical. But what work does the notion of "nearly identical" perform? On the Commission’s case it has no utility. The Act, by s 25, introduces the notion of nearly identical but the Determination renders it otiose. One possibility is that the application of a value judgment is called for once the process of substituting the deemed identical expressions has taken place. I consider that approach cannot be regarded as being open having regard to the proper construction of the Determination. Section 3 of the Act sets out the exclusive method of determining identical or nearly identical. The Determination provides an exclusive code for that performing that task and leaves no room for the application of a value judgment.
[6]See e.g. Transport Accident Commission v Hogan [2013] VSCA 335 at [47]; Douglas v Tickner (1994) 49 FCR 507, 519; Pearce & Geddes, Statutory Interpretation in Australia, 7th ed., 2011 at 6.61.
The application of the Determination has the result that the two names are not identical or nearly identical with the result that Cairnscrete Pumping was available to M & M and with the further result that the Commission's decision was correct. It will be affirmed.
I have to say that the result which the legislation and the Determination dictate is quite absurd. Absent the statutory test I regard the two names as nearly identical and likely to produce confusion in the mind of consumers. The difficulties, as it seems to me, arise from the terms of the Determination. First, as I have observed, the expression "nearly identical" performs no work in the Determination. It is as if the drafter of the Determination was oblivious to the terms of the Act. But there are, as well, curiosities with the wording of the Items in the Determination. In Item 212, for example, the word "concrete" does not appear. It is impossible to comprehend why the most obvious simile was overlooked, all the more so when "formwork", a quite separate, albeit related, trade appears in the list. The result, if I have correctly grasped the application of the rules, is that, for example, Cairns Concreting would not be identical or nearly identical to Cairns Concrete but would be identical or nearly identical to Cairns Formwork. That is doubly curious given that formwork, as I understand the position, is a quite a different trade to concreting or concrete pumping.
In Re Smith & Australian Securities and Investments Commission[7] Senior Member McCabe pointed out that there is no reference in Schedule 1 of the Determination to school, academy or similar terms except in connection with the teaching of dance with the result, in that case, that Central Coast Surf Academy was held not to be identical or nearly identical to Central Coast Surf School. Why the interests of proprietors of dance institutions are preferred is not clear. Other examples abound. Item 194 comprises "butcher, butchery". Item 195 contains the expressions "fresh meats, meatmarket, meats, meat supply, quality meats". These groups of expressions are similar in fact but, because they are found in separate Items, expressions from different items cannot be regarded as identical or nearly identical. Thus the name John Smith's Quality Meats is not identical or nearly identical to John Smith's Quality Butchery. Yet, on any sensible consideration, it plainly is. The wording of Item 166 is such that Cairns Mats and Cairns Rugs would be regarded as identical or nearly identical but Cairns Carpets would not be identical or nearly identical to either of them. It would be tiresome to list further examples.
[7][2014] AATA 192.
It is not an answer to say, as the Commission did, that the legislation makes it clear that registration does not affect the rights of any entity in relation to names. Of course action may be taken to prevent passing off or misleading or deceptive conduct. But traders do not always read, or seek advice on, legislation. It is only natural for a trader to regard registration as the imprimatur of the government to trade using the chosen name. Closer attention to the detail of the Determination is warranted and might prevent unnecessary anxiety on the part of existing traders and litigation between old traders and new. It is all well and good to seek to save costs by using a computer program to determine the availability of names but the humans who draft the documents that inform the application of that program must give more attention to detail than is apparent from the terms of this Determination.
Given the results of the two cases that so far have reached the Tribunal it is highly desirable that further attention be given urgently.
1. I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President PE Hack SC
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Associate
Dated 15 May 2014
Date of hearing 30 April 2014 Solicitors for Applicant O’Reilly Stevens Bovey
Solicitors for the Respondent
Joined Party
ASIC Legal Services
Self-represented
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