Barry, B.i. v Lake Jindabyne Reservation Centre Pty Ltd

[1985] FCA 398

Re: BRUCE IAN BARRY and REBECCA BARRY
And: LAKE JINDABYNE RESERVATION CENTRE PTY. LIMITED (1985) 8 FCR 279
No. NSW G213 of 1984
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.(1)

CATCHWORDS

Trade Practices - claim by applicants trading as Jindabyne Resort Centre that respondent trading as Jindabyne Reservation Centre engaging in misleading or deceptive conduct - whether in circumstances names descriptive of business carried on by parties - effect of some confusion only in minds of public - relevance of intention of parties - whether any misrepresentation - whether name distinctive of either business carried on by parties.

Trade Practices Act 1974 ss.52, 53

Business Names Act 1962 (N.S.W.)

Trade Practices - Misleading or deceptive conduct - Names having some similarity - Descriptive words - Accurate description of each business - Use of name giving rise to mere uncertainty - Trade Practices Act 1974 (Cth), ss 52, 53.

HEADNOTE

The applicants, who operated in Jindabyne under the registered business name "Jindabyne Resort Centre" alleged that the respondent, by the use of the name "Jindabyne Reservation Centre" or "Lake Jindabyne Reservation Centre" in connection with its business, had misled and deceived the public into believing that that business was associated with the applicants' business or that the services and business of the respondent were that of the applicants or had an affiliation with them and had thereby infringed s 52 of the Trade Practices Act 1974 (Cth). Breaches of s 53 of that Act and passing off were also alleged. Upon findings that:

(i) the nature of the two businesses were different and the names were descriptive of the respective businesses,

(ii) the applicants' business name had not become distinctive of the services it provided,

(iii) the clientele and marketing techniques of the two businesses were different, and

(iv) the similarity in names had given rise to uncertainty in the minds of some persons,

Held: There was no contravention of s 52 of the Trade Practices Act 1974.

Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd (1982) 149 CLR 191; Taco Company of Australia Inc v. Taco Bell Pty Ltd (1982) 42 ALR 177; Abundant Earth Pty Ltd v. R. & C Products Pty Ltd (1985) 7 FCR 233; Dairy Vale Metro Co-operative v Brownes Dairy (1981) 54 FLR 243; Burswood Management Ltd v. Burswood Casino Motel/Hotel Pty Ltd (1985) 7 FCR 186, referred to.

HEARING

Sydney, 1985, July 17-18; August 21. #DATE 21:8:1985
APPLICATION

Application alleging contraventions of ss 52 and 53 of the Trade Practices Act.

T S Hale, for the applicants.

B Morris, for the respondent.

Cur adv vult CMH

ORDER

1. The application is dismissed.

2. The applicants pay the respondent's costs of the application.
   
   Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

Application dismissed

JUDGE1

The applicants and the respondent each carry on business at Jindabyne, a popular ski resort in New South Wales.

The applicants, who are husband and wife, operate under the registered business name of Jindabyne Resort Centre. The respondent is incorporated in the name of Lake Jindabyne Reservation Centre Pty. Limited but, in the course of its activities, it commonly uses the name Jindabyne Reservation Centre. The respondent has sought registration of that name under the Business Names Act 1962 (N.S.W.). Registration has been refused because of an objection taken by the applicants by reason of their proprietorship of the business name Jindabyne Resort Centre.

The applicants claim that the use by the respondent of the name Jindabyne Reservation Centre, the name Lake Jindabyne Reservation Centre or any name in which those words appear constitutes misleading conduct within s.52 of the Trade Practices Act 1974. They further contend that the use of either name by the respondent is a contravention of s.53 of the Act and amounts to passing off at common law. In opening his clients' case, counsel for the applicants conceded that if they failed to make good a case under s.52 it was unlikely that they would be able to do so on either of the other bases relied upon. Conversely, if the applicants succeed in establishing a contravention of s.52, they do not need to rely on s.53 or any common law cause of action.

Evidence was adduced on affidavit. There was cross-examination of some deponents. Questions of fact and of law arise for determination.

The statement of claim pleads that the applicants carry on the business of providing holiday accommodation and that they are engaged in the management of holiday resorts, "all of which are in close proximity to the snow fields and to Lake Jindabyne". It is the applicants' case that the name Jindabyne Resort Centre has been widely advertised and promoted to the public and to travel and booking agents and that, in consequence, they have acquired a reputation in and by the use of that name. The statement of claim further recites that the respondent carries on business in Jindabyne "in providing holiday accommodation in Jindabyne in close proximity to the snow fields and to Lake Jindabyne". It alleges that since 1983 the respondent has traded under the names Jindabyne Reservation Centre and Lake Jindabyne Reservation Centre and that this conduct was calculated to deceive and mislead and did deceive and mislead the public into believing that the respondent's business was associated with the applicants or that the services and business of the respondent were that of the applicants or had an affiliation with them. I am not satisfied that the respondent has used the name Lake Jindabyne Reservation Centre as opposed to Lake Jindabyne Reservation Centre Pty. Ltd. though no point was taken on that ground by the respondent.

The claims of deceptive and misleading conduct, false representation and passing off were put squarely in terms of the respondent's use of the offending names. The applicants did not contend that any other conduct of the respondent constituted a cause of action under the Trade Practices Act or at common law. It was not the applicants' case that the respondent had deliberately set out to capture customers of the applicants, actual or potential. Their case was put quite simply that the respondent's use, particularly of the name Jindabyne Reservation Centre, misled the public and caused damage to the applicants because of a belief thereby engendered in the minds of the public, at any rate those interested in skiing in the country around Jindabyne, that if they dealt with the respondent they were dealing with the applicants.

By its defence the respondent denied the allegations in the statement of claim, other than formal allegations, and by way of further answer pleaded that since it had been served with the application and statement of claim it had "taken all precautions to trade and continue trading only under its corporate name and style".

The nature of the respective businesses of the applicants and the respondent lies very much at the heart of this matter. The applicants contend that their business is both the management of holiday resorts and the provision of holiday accommodation, in other words that they are both a resort and a reservation centre. It is for this reason, they say, that the respondent's use of a similar name is likely to mislead. On the other hand, the respondent argues that there is an essential difference between the two businesses. It says that it is not concerned with the management of holiday premises and that its business is what its name suggests, that of making reservations for facilities in and around Jindabyne. And, it says, those facilities are not confined to accommodation. The booking of travel to and from Jindabyne and nearby resorts and of facilities associated with skiing such as chair-lifts and equipment is a vital part of its business. It specialises in holiday packages and is a licensed travel agent. In effect the respondent argues that its name and the shortened version Jindabyne Reservation Centre are merely descriptive of its business, that the applicants' name is merely descriptive of their business and that in those circumstances there can be no question of a contravention of the Trade Practices Act.

Some reference to the history of the respective businesses is advisable. The applicants' business name, Jindabyne Resort Centre, was registered on 21 July 1981. The original proprietors of the name were Bruce Ian Barry (one of the applicants), Graeme John Garthon and Daryl Malcolm Garthon. The nature of the business was shown as "holiday accommodation management services" and its location as the corner of Kosciusko Road and Kalkite Road, Jindabyne. A resort centre was built on the site and it became known as Alpine Gables. It comprises 45 split level units, a bar and restaurant, guest lounge, games room, spa and sauna. The centre is owned by Ajat Pty. Limited, a company in which the applicants have no interest. At the outset the applicants wished to manage the bar and restaurant and also the resort. They could not afford the management fee for both and so entered into negotiations with a Mr. and Mrs. Shmeissing. The applicants and the Shmeissings bought a shelf company, Cockrums Holdings Pty. Limited, and that company entered into a management agreement with Ajat Pty. Limited in respect of both aspects of the business. The name Jindabyne Resort Centre was transferred to Cockrums Holdings on 31 March 1982. In January 1982 the applicants began to have brochures and stationery printed in the name of Jindabyne Resort Centre, opened bank accounts in that name, obtained an entry in the telephone directory and advertised the name. These steps were taken in preparation for the opening of the resort for the 1982 skiing season. In fact Alpine Gables was opened on 10 June 1982.

In December 1982 the applicants agreed to sell to the Shmeissings their interest in Cockrums Holdings on the basis that the company would continue to manage the bar and restaurant and the applicants would manage Alpine Gables. As part of that arrangement the business name was transferred to Cockrums Holdings. However in August 1983 it was re-transferred to the applicants and they remain the registered proprietors of that business name. A sign Jindabyne Resort Centre stands outside Alpine Gables though, since the beginning of the 1985 snow season, the sign has been entirely covered by a banner bearing the words "Skiing Galore's 85 Jetset Tours Thredbo". The banner was placed there as part of an arrangement between the applicants and the company running the tours.

The applicant Bruce Ian Barry swore two affidavits in support of the application. In the first affidavit, sworn 9 October 1984, he deposed that in 1981 Anchor Projects Pty. Limited bought land on Kosciusko Road directly opposite Alpine Gables. Mr. Barry referred to negotiations with Anchor Projects for the applicants to manage what was to be known as "The Lakeside Chalet". In his affidavit he said that the resort centre was "ready to start" and was due to open in 1985. In his oral evidence Mr. Barry explained that "ready to start" was a reference to construction not to the operation of the centre. In fact there has been no construction on the site and, in Mr. Barry's words, the owners "are still determining what is going to be built on that land".

In the same affidavit Mr. Barry mentioned an arrangement whereby, in January 1984, the applicants obtained the right to manage "Maddox Apartments" in Jindabyne. The correct name is Mattox Apartments. In an affidavit sworn in answer to Mr. Barry's affidavit of 9 October 1984, Derry Michael Weis who is a director of the respondent deposed to attending the site of the Mattox Apartments and ascertaining "that there were no completed apartments on the premises and the building was still in the course of construction". This discrepancy was explained by Mr. Barry in a later affidavit in these terms:

" . . . Maddox Apartments were constructed approximately seven to ten years ago. They are presently being renovated and that is why they are in the state described in Mr. Weis' Affidavit. They should be ready for letting again by the next winter season. We have been renting accommodation in the Maddox Apartments for one year and Wellmore Real Estate have rented Maddox Apartments for several years".

Speaking generally, I found Mr. Barry a credible witness but I must say that, in relation to The Lakeside Chalet site and the Mattox Apartments, his affidavit of 9 October 1984 was misleading. Infelicity of expression hardly affords an adequate explanation.

Mattox Apartments comprises four units. The owners live in two. The remaining two are available for letting. Mr. Barry claimed that the applicants had the agency for the apartments but he agreed that, although the units were available for letting in late July 1985, the applicants had not booked any persons into the units.

The applicants now have an arrangement with Raine and Horne, a firm of estate agents in Jindabyne, to let eleven units in and around Jindabyne. They have exclusive management rights in the sense that, if Raine and Horne wish to let those units, they must first check their availability with the applicants. A brochure showing the units was tendered in evidence; it was prepared by the applicants in November 1984.

In the light of the entire evidence in these proceedings, I am satisfied that the business of the applicants is primarily and essentially the management of Alpine Gables. They have played no active part in the letting of Mattox Apartments and the letting of apartments made available by Raine and Horne is a very small part indeed of their business as are other activities such as the sale of ski-lift tickets. The name Jindabyne Resort Centre is an accurate description of their business.

I turn now to the respondent's activities. The respondent was originally a shelf company Pogulo Pty. Limited which changed its name to Lake Jindabyne Reservation Centre Pty. Limited on 9 April 1982. It thereupon began to conduct the business of providing holiday accommodation in and around Jindabyne. At first the respondent conducted its business from an office in Sydney and from Shop 2, Petamin Plaza in Jindabyne. In March 1983 its Sydney office was moved to Surry Hills and on 9 May 1984 its Jindabyne office was moved to Shop 6 in the Petamin Plaza. When the respondent was operating from Shop 2 in the Petamin Plaza, it used the name Ski Lodge Membership Exchange as well as the name in which it was incorporated. It also used the name Jindabyne Development Corporation though the evidence threw very little light on the nature of that business or the circumstances in which the name was used. It seems that the respondent only began to advertise its office as Jindabyne Reservation Centre after the move to Shop 6.

Petamin Plaza is, if not the only shopping complex in Jindabyne, the biggest. One meets it virtually on entering Jindabyne from Sydney. The front of the respondent's business premises is glass. The most prominent sign displayed there is a large wooden sign hung from the ceiling and bearing the words "Accommodation Centre". Mr. Weis deposed that he was the proprietor of the business name Jindabyne Accommodation Centre "which also conducts its business from the subject premises". Again the precise relationship between the business conducted by Jindabyne Accommodation Centre and the other activities of the respondent was not explained. Painted on the glass front of the respondent's premises, below the wooden sign, are the words Jindabyne Reservation Centre. Photographs of the premises show that above the word Jindabyne appears the word Lake and after the word Centre, the words Pty. Ltd. The added words are in smaller lettering and are quite clearly by way of after-though. Although Mr. Weis' affidavit refers to the words Lake and Pty. Ltd. as "painted", his oral evidence was that the words were stencilled on paper which was in turn pasted onto the window. Certainly the additional words have an air of impermanence. I am satisfied that they were added because of this litigation. I did not find convincing Mr. Weis' evidence that difficulties in obtaining a sign writer was his reason for failing to have the word "Lake" added to the sign Jindabyne Reservation Centre in the window. Equally I do not accept the defence that the respondent "has since being served with the Application and Statement of Claim herein taken all precautions to trade and continue trading only under its corporate name and style". The name Jindabyne Reservation Centre is the name by which the respondent is generally known and, not surprisingly, it suits it to use that name or to emphasise those words in its corporate name.

However the question remains - what are the implications for these proceedings of a finding that the respondent has done little to avoid the use of the name Jindabyne Reservation Centre? If the use of the name does not constitute misleading or deceptive conduct, the respondent's actions in that regard are virtually irrelevant. If the use of the name does constitute misleading or deceptive conduct, it is no answer to say that the respondent has made some efforts to avoid the use of the name. For the purposes of s.52 of the Trade Practices Act, the respondent's conduct is to be measured objectively and not by reference to the intentions of those who control its activities. Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. (1977-1978) 140 C.L.R. 216. Nevertheless it should be said that the respondent has continued to use the name Jindabyne Reservation Centre because that is the name by which it has become known and it suits it to use that name. It is not the case, and indeed this was not put on behalf of the applicants, that the respondent has used the name Jindabyne Reservation Centre to gain some benefit from the applicants' activities.

Mr. Weis was cross-examined extensively on a brochure prepared by the respondent in October 1984 in the name Jindabyne Reservation Centre. This was after the present proceedings had begun. The brochure is entitled Jindabyne Australia's Year Round Resort. It is in the form of an accommodation directory with photographs of hotels and motels, lodges, units and town houses in and around Jindabyne. There is no doubt that the intention of the brochure is to advertise accommodation available through Jindabyne Reservation Centre. The brochure carries, in separate form, a two page description of 1985 Ski Packages. Again this is in the name of Jindabyne Reservation Centre and, as the name suggests, it offers combinations of accommodation, tickets to ski resorts and tickets to chair-lifts. Mr. Weis was cross-examined in great detail about individual lodges, units and town houses with a view to showing that in a number of cases accommodation was in fact not available through the respondent. In addition the applicants called Mr. T.R. Barry, the holder of the Raine and Horne franchise for Jindabyne, to give evidence that in some cases the accommodation offered by the respondent in the brochure was not available because letting arrangements were held by others than the respondent. At the time of this cross-examination I expressed doubts as to its relevance, particularly in the detail in which it was being pursued. I still have those doubts. If the respondent advertised accommodation which it was not able to provide or at any rate had no certainty of provision (and I am satisfied that this is the case with some of the units offered), it does not seem to me to advance the applicants' claim. It does not detract from the fact that the respondent's operations are essentially those of a reservations centre though, as Mr. Weis not only acknowledged but was at pains to point out, the emphasis is on booking ski packages rather than individual components. I am satisfied that the name Jindabyne Reservation Centre is an accurate description of the respondent's business.

There is no doubt that some members of the public have been confused as to the relationship between the applicants' business and that of the respondent. The applicants adduced evidence of a letter received by them addressed to "Jindabyne Resort Centre, Petamin Plaza, Jindabyne N.S.W.", a letter from travel agents with whom they had no dealings. It was apparent that the letter was intended for the respondent. Other examples were given, such as telephone calls received by the applicants' receptionist intended for the respondent, an account received by the applicants from Sun Newspapers addressed to Jindabyne Reservation Centre Jindabyne, a payment advice addressed to Jindabyne Reservation Centre, Alpine Gables and also a letter addressed to Jindabyne Resort Centre enclosing a cheque for $300 in circumstances where the cheque was intended for the respondent. Some of these examples were simply cases of mis-delivery by the post office; others evidenced a belief in the mind of the writer that he or she was dealing with Jindabyne Resort Centre when in fact it was with Jindabyne Reservation Centre. Mr. Weis gave evidence that, to the best of his knowledge, the respondent had received no mail intended for the applicants. In his affidavit of 9 October 1984 Mr. Barry also mentioned an incident at the Brisbane Ski Show in March 1984 where both the applicants and the respondent had a stand. "During the course of the show at least one person said to me: 'Are you the same organization?' referring to Jindabyne Resort Centre."

In my view the cases of mis-delivery are no more than that. The other examples are of some confusion in the mind of the writer or speaker. It may be that the existence of two names, having some similarity, causes uncertainty in the minds of some persons wishing to organize a skiing holiday in the Jindabyne area. Conduct which merely causes uncertainty does not contravene s.52 of the Trade Practices Act Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1981-1982) 149 C.L.R. 191. Conduct is not misleading or deceptive unless it contains or conveys a misrepresentation. Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. (1982) 42 C.L.R. 177. In my view, the use by the respondent of the name Jindabyne Reservation Centre has done no more than give rise to uncertainty. Viewed objectively, the use of the name contains or conveys no misrepresentation by the respondent and does not constitute conduct that is misleading or deceptive or conduct likely to mislead or deceive.

A name which is on its face descriptive may become distinctive of the products of a particular manufacturer. See for instance Abundant Earth Pty. Ltd. v. R. & C. Products Pty. Ltd. (1985) 59 A.L.R. 211. But that is not the case here. Where a complaint of misleading or deceptive conduct relates to the use of a particular name by a respondent, the applicant must show an association in the minds of the relevant section of members of the public with that particular name, otherwise conduct is not likely to mislead or deceive. Dairy Vale Metro Co-operative Ltd. v. Brownes Dairy Ltd. (1981) 35 A.L.R. 494; Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. supra; Burswood Management Limited v. Burswood Casino Motel/Hotel Pty. Ltd. (unreported decision of Toohey J., delivered 13 June 1985).

There is no doubt that the respondent markets its services more widely and more aggressively than do the applicants. The respondent has a telex, a toll-free telephone to ensure its listing in every Australian telephone directory and entries in the yellow pages of the Jindabyne telephone directory. It has been involved in the production of a video tape, shown on television to advertise the attractions of the Jindabyne area and featuring as a sponsor Jindabyne Reservation Centre. The very nature of its business, that of travel agent engaged in the booking of ski packages, prompts the respondent to advertise widely. The respondent tends to look to individual members of the public. The applicants rely, to fill the rooms at Alpine Gables, largely on tour coaches (as is evidenced by the banner to which reference was made earlier in these reasons) and their contacts are therefore more confined. They have not established an association with the name Jindabyne Resort Centre that goes further than the management of Alpine Gables.

Jindabyne is not a big place and one can understand that the applicants resent the respondent conducting its business in a name rather similar to theirs. But that is not enough to support a claim under the Trade Practices Act. I am of the opinion that the use by the respondent of the name Jindabyne Reservation Centre or the use of those words as part of its name does not contravene any provision of the Trade Practices Act. I am of the same opinion in regard to the name Lake Jindabyne Reservation Centre. Equally such usage does not amount to a passing off of the respondent's business as that of the applicants. Indeed, while I did not find the evidence of Mr. Weis satisfactory in all respects, I accept that he has been at pains to avoid the respondent being linked in the minds of the public with the applicants. The respondent has nothing to gain by being so linked; its business is different from and bigger than that of the applicants.

This is a matter in which some co-operation on the part of the respondent might have avoided litigation. Consistent use by the respondent of the name Lake Jindabyne Reservation Centre rather than Jindabyne Reservation Centre would be less objectionable so far as the applicants are concerned. Although it would seem that feelings over the use of names have deepened, it may not be too late for some co-operation. However the fact remains that the applicants have failed to establish a cause of action against the respondent. Their application must be dismissed.