Bennett v Indoor Holdings Pty Ltd
[2006] WASCA 265
•26 SEPTEMBER 2006
BENNETT -v- INDOOR HOLDINGS PTY LTD [2006] WASCA 265
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASCA 265 | |
| THE COURT OF APPEAL (WA) | 05/12/2006 | ||
| Case No: | CACV:88/2006 | 19 SEPTEMBER 2006 | |
| Coram: | PULLIN JA BUSS JA | 26/09/06 | |
| 34 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed in relation to costs Appeal otherwise dismissed | ||
| B | |||
| PDF Version |
| Parties: | PETA JANE BENNETT INDOOR HOLDINGS PTY LTD (ACN 009 355 971) |
Catchwords: | Appeal Whether learned Judge erred in granting interlocutory injunction restraining appellant from using a particular business name Turns on own facts Costs Interlocutory injunction Whether costs should have been ordered to be in the cause |
Legislation: | Business Names Act 1962 (WA), s 5(1) Supreme Court Act 1935 (WA), s 60(1)(f)(ii) |
Case References: | Australian Associated Motor Insurers Ltd v Australian Automotive Motor Inspection Centre Pty Ltd (2003) 60 IPR 92 Australian Broadcasting Corporation v O'Neill (2006) 80 ALJR 1672 Australian Postal Corporation v Gray (1989) 98 FLR 468 Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 House v The King (1936) 55 CLR 499 OD Transport v Western Australian Government Railways Commission (1986) 13 FCR 270 Parfums Christian Dior (Aust) Pty Ltd v Dimmeys Stores Pty Ltd (1997) 39 IPR 349 Victorian Egg Marketing Board v Parkwood Eggs Pty Ltd (1978) 33 FLR 294 Virgin Enterprises Ltd v Virgin Star Pty Ltd (2005) 67 IPR 557 Whelan Rentals Pty Ltd v Australian Building Construction Employees' & Builders Labourers' Federation (1983) 46 ALR 339 Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 American Cyanamid Co v Ethicon Ltd [1975] AC 396 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Cayne v Global Natural Resources [1984] 1 All ER 225 Heywood v BDC Properties Ltd [1963] 2 All ER 1063 The State of Western Australia v Bond Corp Holdings Ltd (1991) 5 WAR 40 Wilson v Metaxas [1989] WAR 285 Woodford v Smith [1970] 1 All ER 1091 World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : BENNETT -v- INDOOR HOLDINGS PTY LTD [2006] WASCA 265 CORAM : PULLIN JA
- BUSS JA
- Appellant
AND
INDOOR HOLDINGS PTY LTD (ACN 009 355 971)
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : TEMPLEMAN J
File No : CIV 1664 of 2006
Catchwords:
Appeal - Whether learned Judge erred in granting interlocutory injunction restraining appellant from using a particular business name - Turns on own facts
(Page 2)
Costs - Interlocutory injunction - Whether costs should have been ordered to be in the cause
Legislation:
Business Names Act 1962 (WA), s 5(1)
Supreme Court Act 1935 (WA), s 60(1)(f)(ii)
Result:
Appeal allowed in relation to costs
Appeal otherwise dismissed
Category: B
Representation:
Counsel:
Appellant : Mr M J McCusker QC & Mr T Galic
Respondent : Mr M H Zilko SC & Ms P E Cahill
Solicitors:
Appellant : Galic & Co
Respondent : Cooper Legal Pty Ltd
Case(s) referred to in judgment(s):
Australian Associated Motor Insurers Ltd v Australian Automotive Motor Inspection Centre Pty Ltd (2003) 60 IPR 92
Australian Broadcasting Corporation v O'Neill (2006) 80 ALJR 1672
Australian Postal Corporation v Gray (1989) 98 FLR 468
Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464
House v The King (1936) 55 CLR 499
OD Transport v Western Australian Government Railways Commission (1986) 13 FCR 270
Parfums Christian Dior (Aust) Pty Ltd v Dimmeys Stores Pty Ltd (1997) 39 IPR 349
(Page 3)
Victorian Egg Marketing Board v Parkwood Eggs Pty Ltd (1978) 33 FLR 294
Virgin Enterprises Ltd v Virgin Star Pty Ltd (2005) 67 IPR 557
Whelan Rentals Pty Ltd v Australian Building Construction Employees' & Builders Labourers' Federation (1983) 46 ALR 339
Case(s) also cited:
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
American Cyanamid Co v Ethicon Ltd [1975] AC 396
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Cayne v Global Natural Resources [1984] 1 All ER 225
Heywood v BDC Properties Ltd [1963] 2 All ER 1063
The State of Western Australia v Bond Corp Holdings Ltd (1991) 5 WAR 40
Wilson v Metaxas [1989] WAR 285
Woodford v Smith [1970] 1 All ER 1091
World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181
(Page 4)
1 PULLIN JA: I agree with Buss JA.
2 BUSS JA: The appellant appeals against the decision of Templeman J to grant the respondent interlocutory injunctive relief and also against his Honour's decision to order the appellant to pay the respondent's costs of the application to be taxed.
3 On 19 September 2006, this Court heard the appeal. On 26 September 2006, Pullin JA and I ordered that the appeal be allowed in relation to costs, but otherwise the appeal be dismissed, with reasons to be published later.
The writ of summons and the statement of claim
4 By writ of summons CIV 1664 of 2006, the respondent, as plaintiff, commenced proceedings in the Supreme Court against the appellant, as defendant, claiming permanent injunctions, damages and other relief. The injunctions sought were as follows:
"A. An order that the defendant, whether by her servants, agents or otherwise, be permanently restrained from using the name 'Pharmacy 777' or any name including the name 'Pharmacy 777' whether by signage, stationery, advertising or otherwise in connection with any pharmacy business carried on by her within Western Australia.
B. An order that the defendant, whether by her servants, agents or otherwise, be permanently restrained from holding out in any manner directly or indirectly that the business conducted by her in Dower Street, Mandurah, has any connection with the Pharmacy 777 group of pharmacies."
5 A statement of claim was endorsed on the writ. It was pleaded:
"1. The plaintiff is a company duly incorporated under the Corporations Act 2001.
2. The defendant carries on and has at all material times carried on business as a pharmacist.
3. The plaintiff has since at least 1994 carried on business as a provider of marketing, administrative and wholesale services to retail pharmacies in Western Australia under
(Page 5)
- or by reference to the brand name 'Pharmacy 777' ('the Pharmacy 777 name').
4. Since at least 1994 the plaintiff has extensively promoted its business to members of the Western Australian public by reference to the Pharmacy 777 name.
5. For many years, and at least since the date of commencement of the defendant's conduct hereinafter pleaded, the Pharmacy 777 name, when used in relation to pharmacy retail businesses, has come to signify to the public in Western Australia pharmacy services and products of a high quality.
6. By reason of the matters pleaded in paragraphs 3, 4 and 5 the plaintiff has, and for many years has had, a valuable reputation and substantial goodwill in the Pharmacy 777 name throughout Western Australia.
7. At all material times the defendant has carried on business as a pharmacist at premises in Dower Street, Mandurah, Western Australia ('the premises').
8. Since about April 2006 in the course of her business the defendant has supplied retail pharmacy services and promoted those services under or by reference to the Pharmacy 777 name at the premises and by newspaper and radio advertising.
Particulars
- (i) Visible signage reading 'Pharmacy 777 Mandurah Carpark Chemist' on the front of the premises;
(ii) Newspaper advertisements referring to 'Pharmacy 777 Mandurah Carpark Chemist' during April 2006;
(iii) Radio advertisements on Coastal Radio referring to 'Pharmacy 777 Mandurah Carpark Chemist' during April 2006.
9. The defendant's name 'Pharmacy 777 Mandurah Carpark Chemist' is substantially identical with, or deceptively similar to, the Pharmacy 777 name.
(Page 6)
- 10. The conduct pleaded in paragraph 8 is conduct in trade and commerce within the meaning of the Fair Trading Act 1987.
11. By reason of the conduct pleaded in paragraph 8 and use of the name the defendant has represented to members of the public that the defendant has some connection in trade with the plaintiff or its business or, alternatively, that the defendant's services are services of the plaintiff.
12. Members of the public purchasing products from or otherwise acquiring the defendant's services have done so, alternatively are likely to do so, in the belief, induced by the defendant's conduct pleaded in paragraphs 8 and 9, that the defendant has some connection in trade with the plaintiff or its business, alternatively that the defendant's services are services of the plaintiff.
13. By reason of the conduct pleaded in paragraphs 8 and 9, the defendant has:
(a) passed off her business has having a connection in trade with the plaintiff's business, which it does not have;
(b) passed off her services as the plaintiff's services, which is not the fact;
(c) engaged in conduct that is misleading or deceptive, or likely to mislead or deceive, contrary to s 10 of the Fair Trading Act 1987.
14. By reason of the defendant's conduct the plaintiff has suffered and will suffer loss and damage.
Particulars
- The plaintiff is unable to provide particulars of its loss and damage until after discovery has been given by the defendant.
15. The plaintiff has requested that the defendant refrain from engaging in the wrongful conduct pleaded herein but the defendant has refused to do so.
(Page 7)
- The defendant has failed to comply with requests from the plaintiff's solicitors that she refrain from engaging in the wrongful conduct dated 11 May and 6 June 2006."
The application for interlocutory injunctive relief
6 By a chamber summons dated 26 June 2006, the respondent made application for interlocutory injunctive relief. The application was supported by an affidavit of Michael Anthony Dillon sworn 26 June 2006, an affidavit of Damian Keith Cooper sworn 4 July 2006, and an affidavit of Kimberley William Brotherson sworn 26 June 2006. The appellant, who opposed the application, relied on an affidavit of Ian Charles Hamilton sworn 6 July 2006.
The orders and reasons of the learned Judge
7 On 6 July 2006, the learned Judge heard and determined the application. After hearing oral submissions from counsel, his Honour made orders, relevantly, in these terms:
"1. Until after judgment in this action, or further order, the Defendant [Appellant], whether by herself, her servants, agents or otherwise, be restrained, and an injunction is hereby granted restraining her:
(a) from using the name 'Pharmacy 777' or any name including the name 'Pharmacy 777' whether by signage, stationery, advertising or otherwise in connection with any pharmacy business carried on by her within Western Australia; and
(b) from holding out in any manner directly or indirectly that the business conducted by her in Dower Street, Mandurah, has any connection with the Pharmacy 777 group of pharmacies.
2. …
3. The Defendant [Appellant] pay the Plaintiffs [sic] [Respondent's) costs of this application to be taxed."
8 The learned Judge's reasons for granting injunctive relief were these:
(Page 8)
- "The basis for the plaintiff's claim is an assertion that the defendant is passing off her business as that of the plaintiff and that she is engaged in conduct which is misleading or deceptive or likely to mislead or deceive contrary to section 10 of the Fair Trading Act.
The background to the matter is the establishment of a business having the name Pharmacy 777 by Michael Anthony Dillon at premises at 777 Canning Highway, Applecross, in 1967. Since that relatively small beginning, Mr Dillon himself, and through the medium of various companies and in partnership with various persons, has developed that business and businesses with the same name and has franchised the use of that name at various locations in Western Australia.
At some stage before 1991, Mr Dillon was in partnership with Ian Charles Hamilton in relation to the Pharmacy 777 business activities. There is some dispute about the circumstances in which Mr Dillon and Mr Hamilton ended their business relationship and went their separate ways, but there is no dispute that that happened in 1991 and that from then on Mr Hamilton conducted a Pharmacy 777 business in Mandurah pursuant to a licence agreement which he entered into with Mr Dillon on 1 April 1991.
The licence agreement is of crucial importance in this application. In that agreement Mr Dillon was described as the licensor and Mr Hamilton the licensee. Relevantly, it provided that in consideration of the payment of the sum of $10 by Mr Hamilton to Mr Dillon, Mr Dillon as licensor, and I quote subparagraph (a):
'Grants to the licensee the exclusive licence to use the business name in the conduct of a pharmacy business carried on by the licensee but limited, however, within the boundaries of the city of Mandurah in the state of Western Australia for so long as the licensee, or his successor or successors in title, shall so desire.'
Subparagraph (b) covenants, that is Mr Dillon covenants:
'Not to grant or agree to grant any licence or other right to any other person, persons or company to carry on business within the boundaries of the city of Mandurah in
- the state of Western Australia under a business name incorporating the word and figures 'Pharmacy 777' so long as the licensee or his successor or successors in title shall carry on the business of a pharmacy under the business name.'
- The balance of the agreement is not relevant for present purposes. It is important to note, in my view, that the licence, which was of course a personal right granted by Mr Dillon to Mr Hamilton, licensed Mr Hamilton to conduct a pharmacy business - that is clearly intended to be a sole, single pharmacy business - in Mandurah, and it certainly prohibited Mr Dillon from carrying on any such business himself in the city of Mandurah. It is also clear that although a personal right was granted by the licence to Mr Hamilton, it extended to the carrying on of a business by his successor or successors in title.
The defendant appears, from an affidavit filed by Mr Hamilton, to be in essence a protege of Mr Hamilton and his business partner Donna Lorraine Pearson. Mr Hamilton says that for some 10 years prior to commencing her own business, which was in January of this year, the defendant worked for Mr Hamilton and Ms Pearson.
Mr Hamilton went on to say that Ms Pearson and he had licensed the defendant to use the name Pharmacy 777 Mandurah at her pharmacy located at 7 Dower Street, Mandurah. That is the business bearing the sign Pharmacy 777 to which the plaintiff objects. The nature of the licence said to have been granted by Mr Hamilton and Ms Pearson to the defendant is not stated in Mr Hamilton's affidavit. However, I am told from the bar table that the licence was simply oral. I know nothing of the terms of the licence, nor is it clear why Ms Pearson is a party to it since the licence was granted only to Mr Hamilton.
The short point is that having regard to the terms of the licence agreement itself, there is no power in Mr Hamilton to grant any form of sublicence to the defendant and the defendant's right to carry on business under the Pharmacy 777 name in Mandurah pursuant to some sublicence from Mr Hamilton and/or Ms Pearson is therefore without foundation.
(Page 10)
- To that the defendant raises a number of defences. The first is that the plaintiff, which is a company known as Indoor Holdings Pty Ltd, is not the registered proprietor of the business name Pharmacy 777. That certainly appears to be the case having regard to the business name searches which have in fact been put in evidence by the plaintiff.
However, the evidence from Mr Dillon is that the holder or the registered proprietor of the business name, which is Pharmacy 777 (Aust) Pty Ltd, is a wholly owned subsidiary of the plaintiff. That being so, it seems to me that the Business Names Act has been complied with. Clearly there can be no objection to an arrangement of the kind which is in place here, so there is nothing in that point.
It seemed to me, having regard to the evidence given by Mr Hamilton in opposition to this application, that there might be some basis for a suggestion that the licence agreement between Mr Dillon and himself should be rectified on the basis that it did not reflect the true agreement between them. Mr Hamilton's evidence in paragraph 19 of his affidavit contains the following passage:
'In the separation of the business partnership with Dillon whereby I took Pharmacy 777 Mandurah, it was agreed that I would have exclusivity to use the name in the Mandurah region and that Dillon would not attempt to use the name Pharmacy 777 in the Mandurah region. This was agreed as part of the consideration for the settlement because the Mandurah business was worth less value than the Applecross business.'
What Mr Hamilton says there as his understanding of the basis on which he and Mr Dillon separated their business interest does seem to me to be reflected in the licence agreement. The licence agreement does give Mr Hamilton exclusivity to use the name Pharmacy 777 in the city of Mandurah. He has an exclusive licence to use it there. Equally, the licence agreement prohibited Mr Dillon from himself using the name Pharmacy 777 in the city of Mandurah.
So Mr Hamilton's understanding is perfectly correct. He did have exclusive use of the name, but that of course does not
(Page 11)
- permit him to sublicence the name, the use of which has been licensed to him personally, so that in my view, looking at the evidence at its highest, there would be no basis for rectification.
Counsel for the defendant asked me to have regard not only to Mr Hamilton's understanding of the basis on which he and Mr Dillon ended their business relationship, but also to the evidence about the way in which the business was built up before the separation because it is said that Mr Hamilton played a very substantial part in the way in which the Pharmacy 777 business enterprise was developed.
I can accept that, but what that means, I think, is simply that Mr Hamilton and Mr Dillon might, had they thought about it, have entered into a different agreement from the one in which they did in fact enter. The fact that Mr Hamilton was instrumental in the success of the businesses carried on under the Pharmacy 777 banner until 1991 cannot, in my view, be used as an aid to the construction of the licence agreement which is clear in its terms and which, as I have said, accords in any event with Mr Hamilton's understanding of what their agreement was.
In deciding whether to grant interlocutory relief of the kind sought by the plaintiff, I have to have regard to the question of whether there is a serious issue to be tried. At the moment I cannot see that there is a serious issue to be tried because it seems to me, on the evidence as it stands at the moment, that the defendant has no defence to the claim, and that is a factor which of course I am entitled to take into account in weighing up the balance of convenience. In other words, if the plaintiff's claim is a very strong one, the balance of convenience weighs less heavily in the overall balancing exercise which has to be undertaken in an application of this kind.
The defendant points to a lack of any evidence of actual prejudice or loss to the plaintiff as a result of her activities, and that is so, but this is a quia timet application and it is not necessary for damage to be proved. It is necessary that there may be a likelihood of damage to the plaintiff as a result of the defendant's activities.
(Page 12)
- That damage does not flow necessarily from the fact that the defendant is conducting her business in some unsatisfactory or unprofessional manner, but simply arising from the fact that the defendant is taking advantage of the goodwill enjoyed by the plaintiff in the Pharmacy 777 name to the plaintiff's detriment.
It is also said on behalf of the defendant that because Mr Dillon or his respective corporate entities could not himself or themselves be permitted to use the Pharmacy 777 name in Mandurah, the plaintiff could suffer no loss as a result of the use by the defendant of that name in that location.
I do not accept that argument. The evidence is that the Pharmacy 777 name is well known, certainly in the metropolitan area. Very large sums of money have been spent by the plaintiff or associated companies in promoting the name. That, it seems to me, is sufficient to provide a basis for the plaintiff's assertion that the additional use of the name in Mandurah would form a basis for passing off action or a contravention of the Fair Trading Act.
There is no evidence directly from the defendant who is out of the state, according to Mr Hamilton's evidence, and not expected to return for at least 10 days. However, it seems that Mr Hamilton has been in contact with the defendant because he says in his affidavit that he has been informed by the defendant that she will suffer enormous public and professional embarrassment if she is required to cease trading under the name Pharmacy 777 Mandurah, quite apart from the costs of removing the name itself.
He said he believed there would be tremendous loss of goodwill to her business if the name could not be used for, say, three years while the action progressed to trial and final determination, including the potential for appeals. He goes on to say that the defendant has, to his knowledge, established a reputation and identity for after-hours trading between the hours of 7 am and 10 pm and that he believes the defendant would suffer 'enormous financial hardship and cash flow losses if she is forced to rename her business and will be forced to lay off staff'.
(Page 13)
- Mr Hamilton says that the defendant has, to his knowledge, purchased a house in the Mandurah area and has gone to considerable personal expense to relocate there. She has recently become engaged and intends marrying and settling in the area.
I take all those personal matters into account, although I do not accept that the defendant would suffer enormous public and professional embarrassment if she was required to cease trading under the Pharmacy 777 Mandurah name. It appears that the defendant is establishing a reputation not simply because of the name but because she is providing a service which is not otherwise available, or certainly not from a Pharmacy 777 outlet, because she is open for those very long hours to which I have referred.
The cost of removing the name, from what I can see from the photographs of the defendant's premises, would not be great because apart from one substantial sign on which the name might have been painted, the name appears to be printed on large what appear to be fabric or plastic banners which it seems to me could be removed and replaced quite easily and at probably fairly minimal cost.
As to the suggestion that there might be enormous financial hardship and cash flow losses if the defendant was forced to rename her business, I would simply say there is no evidence from the defendant that that is the case. I emphasise that is not the defendant's evidence but Mr Hamilton's belief as to the defendant's position.
It seems to me, even having regard to the balance of convenience, that balance would fall very heavily in favour of the plaintiff, which it seems to me, on the evidence as it stands at the moment, has an extremely strong, if not unanswerable, case. Further, to the extent that the defendant might have suffered loss, it may well be the case - of course I simply do not know on what basis she entered into some sublicence with Mr Hamilton and Ms Pearson, but it may be that to the extent she suffers any loss, she should look to them for recompense.
For those reasons it seems to me that it is appropriate to grant the relief sought, subject to the cross-undertaking in damages
(Page 14)
- which is proffered and giving the defendant a reasonable opportunity to remove the signs and replace them."
9 The learned Judge's reasons for making the order as to costs were as follows:
"My reasons for awarding the costs to the plaintiff even though this is an interlocutory application is that it seems to me that I should have regard to the strength of the plaintiff's case and also to the fact that the plaintiff raised this matter through inter-solicitor correspondence or indeed in correspondence direct with the defendant initially and subsequently in correspondence with the defendant's solicitors and, as Mr Zilko says, were rebuffed.
Indeed, the plaintiff's own claim was ridiculed in the defendant's solicitor's responses. Furthermore, the plaintiff has attempted to confer sensibly with the defendant but those efforts have been in vain. So it's for those reasons that I consider that the defendant should pay the plaintiff's costs of the application … "
An appeal lies as of right
10 By s 60(1)(f)(ii) of the Supreme Court Act 1935 (WA), leave to appeal is not required where a primary Judge grants or refuses an injunction. An appeal lies as of right.
The role of this Court
11 However, the principles of law enunciated in House v The King (1936) 55 CLR 499 at 504 - 505, which regulate the circumstances in which an appellate court may review the exercise of a judicial discretion, apply to an appeal from a decision to grant an interlocutory injunction. In Australian Broadcasting Corporation v O'Neill (2006) 80 ALJR 1672, Kirby J said, at 1696 [98]:
"As was recognised in the Full Court by Blow J (who wrote the reasons of the majority) the issue for decision was not whether the Full Court would grant the interlocutory injunction on the same facts, if the application were presented to its Judges at first instance. Consistent with binding legal authority and principle, the issue was whether the ABC had demonstrated an error on the part of the primary judge that would warrant disturbance of his interlocutory order (Australian Broadcasting Corporation v O'Neill [2005] TASSC 82 at [50]). Such an error might involve
(Page 15)
- a misunderstanding of the governing law or a demonstration that the primary judge had acted on a wrong principle (House v The King (1936) 55 CLR 499 at 504 - 505) or had misstated facts or reached a conclusion that was 'plainly wrong' (Mace v Murray (1955) 92 CLR 370 at 377 - 378 citing Clarke v Edinburgh & District Tramways Co Ltd (1919) 1919 SC (HL) 35 at 37). But error was essential to intervention."
- Also see Australian Postal Corporation v Gray (1989) 98 FLR 468 at 474; Victorian Egg Marketing Board v Parkwood Eggs Pty Ltd (1978) 33 FLR 294 at 311 - 312.
Grounds of appeal
12 The grounds of appeal are these:
"1. The learned trial judge erred in law and fact in holding that the Appellant had no defence, that the Respondent had 'an extremely strong if not unanswerable case', and that therefore the balance of convenience favoured the grant of an interlocutory injunction. He should have held either that the Respondent's claim had little prospect of success, or (at the most) raised a 'serious issue to be tried'.
2. The learned trial judge erred in law in granting an interlocutory injunction, when the Respondent had failed to establish, and there was no finding or evidence, that unless the injunction was granted the Respondent would suffer loss for which an award of damages would not be an adequate remedy.
3. The learned trial judge erred in law and fact in failing to find, and take into account in determining where the balance of convenience lay, that
(a) the Appellant was likely to suffer substantial loss of business, inconvenience, and damage to her goodwill and reputation if the injunction were granted, which would be difficult if not impossible to quantify, whereas
(b) there was no evidence that the Respondent was likely to suffer any loss or damage whatever, if the Appellant continued to conduct her pharmacy
- business under the name 'Pharmacy 777 Mandurah Carpark Chemist' until trial of the action.
- 4. The learned trial judge erred in law by failing to give proper or any weight to the fact that to grant an interlocutory injunction would be, effectively, to grant final relief.
5. Further and in any event the learned trial judge erred in the exercise of his discretion, in ordering the Appellant to pay the Respondent's costs of the application. He should have ordered that costs be 'in the cause'."
Interlocutory injunctions
13 An applicant for an interlocutory injunction must satisfy the Court that:
(a) there is a serious question to be tried as to the applicant's entitlement to relief;
(b) the applicant is likely to suffer injury for which damages will not be an adequate remedy; and
(c) the balance of convenience favours the granting of an injunction.
- Those requirements were referred to by Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O'Neill at 1682 [19] as "the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed". Their Honours added:
"We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ (in Australian Broadcasting Corporation v O'Neill at [65] - [72]), and their reiteration that the doctrine of the court established in Beecham Group Ltd v Bristol Laboratories Pty Ltd ((1968) 118 CLR 618) should be followed."
(Page 17)
- Australasia (No 1) (1985) 5 FCR 464, where Woodward J (with whom Smithers and Sweeney JJ agreed) said, at 472:
" … an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises 'a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it."
Also see OD Transport v Western Australian Government Railways Commission (1986) 13 FCR 270 per French J at 272.
Ground 1
15 The parties to the licence agreement dated 1 April 1991 comprised Mr Dillon as licensor and Mr Hamilton as licensee. It was recited:
"A. The Licensor is or is entitled to be registered as the proprietor of the business or trading name registered under the provisions of the Business Names Act 1962 as amended in the State of Western Australia as 'PHARMACY 777 MANDURAH' (hereinafter referred to as 'the business name').
B. The Licensor has agreed to grant a licence to the Licensee to use the Business Name upon the several terms and conditions hereinafter contained."
- By cl 1, relevantly:
"1. In consideration of the payment of the sum of Ten Dollars ($10.00) by the Licensee to the Licensor (receipt of which is hereby acknowledged by the Licensor), the Licensor:
(a) GRANTS to the Licensee the exclusive licence to use the Business Name in the conduct of a Pharmacy Business carried on by the Licensee but limited however within the boundaries of the City of Mandurah in the State of Western Australia for so long as the Licensee or his successor or successors in title shall so desire;
(b) COVENANTS not to grant or agree to grant any licence or other right to any other person persons or company to carry on business within the
- boundaries of the City of Mandurah in the State of Western Australia under a business name incorporating the word and figures "PHARMACY 777" so long as the Licensee or his successor or successors in title shall carry on the business of a Pharmacy under the Business Name;
- (c) COVENANTS not by himself or upon trust to carry on the business of a Pharmacy within the boundaries of the City of Mandurah in the State of Western Australia under any registered business name incorporating the word and figures "PHARMACY 777" for so long as the Licensee or his successor or successors in title shall carry on the business of a Pharmacy within the boundaries of the City of Mandurah under the Business Name;
…"
16 The appellant submitted, relevantly, that:
(a) A "business names extract" in relation to the name "Pharmacy 777", which was annexed to Mr Dillon's affidavit, revealed that:
(i) between 21 April 1986 and 1 June 1992, Shevaroy Nominees Pty Ltd was registered under the Business Names Act 1962 (WA) as the entity carrying on business under that name;
(ii) between 1 June 1992 and 28 February 1995, Mr Dillon was registered under the Business Names Act as the person carrying on business under that name;
(iii) between 1 March 1995 and 30 April 1997, the respondent was registered under the Actas the entity carrying on business under that name; and
(iv) since 30 April 1997, Pharmacy 777 (Aust) Pty Ltd has been registered under the Act as the entity carrying on business under that name.
(Page 19)
- (b) A "business names extract" in relation to the name "Pharmacy 777 Mandurah Forum", which was annexed to Mr Dillon's affidavit, revealed that:
(i) between 21 February 1986 and 1 December 1991 Shevaroy Nominees Pty Ltd was registered under the Business Names Act as the entity carrying on business under that name; and
(ii) since 1 December 1991 no entity or person has been registered under the Act as carrying on business under that name.
(c) A "business names extract" in relation to the name "Pharmacy 777 Mandurah", which was annexed to Mr Dillon's affidavit, revealed that:
(i) between 1 December 1991 and 30 June 1995 Mr Hamilton was registered under the Business Names Act as the person carrying on business under that name; and
(ii) since 30 June 1995 Mr Hamilton and Ms Pearson have been registered under the Act as the persons carrying on business under that name.
(d) Notwithstanding recital A in the licence agreement, neither Mr Dillon nor the respondent has ever been the owner of the business name "Pharmacy 777 Mandurah".
(e) Since the name "Pharmacy 777 Mandurah" has been owned and used by Mr Hamilton in the Mandurah region for more than 15 years and was not, and never has been, owned by the respondent, which did not conduct a pharmacy business in the Mandurah region, the respondent's claim that the appellant has engaged in the conduct pleaded in pars 11 - 13 of the statement of claim is untenable.
(f) The respondent's business of "marketing the name 'Pharmacy 777'" commenced after 1997, and in the knowledge that Mr Hamilton had been conducting a pharmacy in the Mandurah region under the name "Pharmacy 777 Mandurah" since 1991.
(Page 20)
- (g) The respondent is not entitled, in those circumstances, to prevent the appellant from using the name "Pharmacy 777" in conjunction with her pharmacy business in the Mandurah region.
(h) Mr Hamilton is the only person who could permit the appellant to carry on her pharmacy business in the Mandurah region under the name "Pharmacy 777 Mandurah Carpark Chemist", and he has done so.
(i) The proper construction of the licence agreement, and whether the appellant is, for its purposes, a "successor" of Mr Hamilton (as the appellant will contend) will depend on an examination of the "factual matrix" at trial, but, irrespective of the proper construction of the licence agreement, the respondent is not entitled to use the name, or restrain its use, in the Mandurah region.
17 Recital A of the licence agreement records that Mr Dillon (as the licensor) "is or is entitled to be" [my emphasis] registered as the proprietor of the name "Pharmacy 777 Mandurah" under the Business Names Act.
18 On 1 April 1991, being the date of the licence agreement, Shevaroy Nominees Pty Ltd was registered as the owner of the business name "Pharmacy 777". As at 1 April 1991, Mr Dillon and his wife, Janet Dillon, were the directors of Shevaroy. Mr Dillon had been a director since 12 July 1976. His wife was appointed a director on 28 March 1991. Mr Hamilton had been a director of Shevaroy between 1 July 1977 and 28 March 1991. In other words, Mr Hamilton ceased to be a director of Shevaroy four days before the licence agreement was executed, and Mr Dillon's wife replaced Mr Hamilton as a director.
19 The history relating to the business name "Pharmacy 777", and other names incorporating or derived from that name, and the interest of Shevaroy, Mr Dillon and the respondent in the name "Pharmacy 777", is explained by Mr Dillon in pars 12 - 28 of his affidavit, as follows:
"12. To the best of my recollection, the business name Pharmacy 777 was originally registered in the name of the proprietors of the pharmacy at Applecross which, from 1967 included me and for sometime in about 1970, was only me. Annexed hereto and marked MAD-3is a true copy of a business name search of that name. It appears from that document, that in 1986 I transferred the
- name 'Pharmacy 777' to Shevaroy. Annexed hereto and marked MAD-4is a true copy of a business name search of the name Pharmacy 777 Mandurah Forum. It appears from that document that I caused Shevaroy to register the name 'Pharmacy 777 Mandurah Forum' from 1986 to 1991.
- 13. I always considered that the reputation and ownership in the business name Pharmacy 777 belonged to me or on my behalf, even after 1986 when I arranged to register it at the Ministry of Fair Trading as belonging to Shevaroy. I had always maintained control over Shevaroy. Whenever anyone came into partnership with me or in association with me, I permitted him to use the name until the association finished.
14. Shevaroy licensed other pharmacies to use the name Pharmacy 777. I cannot recall whether such licences were always in writing and I am unable to locate any written copies of such licences.
15. In 1991 I formally licensed the use of the Pharmacy 777 name to Hamilton exclusively for use in the city of Mandurah. Annexed hereto and marked MAD-5is a true copy of that Licence Agreement. At that time I considered that Shevaroy and I were one and the same for the purposes of control and ownership of the name.
16. During the time Shevaroy was registered as the owner of the name, it was receiving fees from other pharmacies, such as Farrington Fayre Pharmacy, to use the name Pharmacy 777.
17. In 1992 Shevaroy transferred the business name 'Pharmacy 777' to me. I continued to receive fees from pharmacies for using the name.
18. In 1992, in accordance with the Licence Agreement, Shevaroy deregistered the business name 'Pharmacy 777 Mandurah Forum' and Hamilton registered the business name 'Pharmacy 777 Mandurah'. Annexed hereto and marked MAD-6is a true copy of a search of the latter name.
(Page 22)
- 19. In 1994 I transferred the registration of the business name 'Pharmacy 777' to the plaintiff. I also assigned my interest in the name to theplaintiff. Annexed hereto and marked MAD-7is a true copy of a letter dated 3 April 1996 from the plaintiff's then accountant to the plaintiff's then lawyer indicating a formal assignment. I have not been able to locate copies of the documents referred to in the 4th paragraph of that letter. To the best of my recollection, the plaintiff paid me approximately $60,000 for the ownership and use of the name. It was then, and continues to be, a money-earning asset.
Business plans and operations
20. In and around 1995 and 1996 the plaintiff investigated the feasibility of franchising its expertise and the name 'Pharmacy 777' to other pharmacy proprietors. As part of a strategy to obtain increased protection for the reputation and ownership of that name, the plaintiff formed and registered a wholly owned subsidiary corporation in March 1996 for the purpose of holding the registration of the business name. That subsidiary is Pharmacy 777 (Aust) Pty Ltd (ACN 073 157 187) ('the subsidiary').
The plaintiff owns all of the capital of the subsidiary and the directorship of the subsidiary is identical to that of the plaintiff. Annexed hereto and markedMAD-8is a truecopy of a company search of the subsidiary.
21. In April 1997 the plaintiff transferred the registration of the business name 'Pharmacy 777' to the subsidiary and the subsidiary continues to hold the registration of that name.
22. The plaintiff's plans to franchise did not succeed primarily because it was unable to overcome the restrictions arising under the Pharmacy Act as to ownership of pharmacies.
23. The plaintiff has, since its registration, increased the breadth and range of its services to pharmacies and now provides such services to over 24 community pharmacies in Western Australia that trade under either the Pharmacy 777 banner or the Pharmacy Help banner. The number of
- pharmacies under each banner is normally about half and half and some of those pharmacies are owned by directors of the plaintiff. Pharmacy Help is a business name created and owned by the plaintiff. The registration of the business name 'Pharmacy Help' at the Department of Consumer and Employment Protection (formerly the Ministry of Fair Trading) is held by the subsidiary.
- 24. The plaintiff continues to provide marketing and administration services to those pharmacies which agree with the plaintiff to operate under a name incorporating one of the banners and the plaintiff agrees to procure the subsidiary to consent in writing to the registration of the respective business name by that pharmacy. The subsidiary then provides a letter consenting to the use of the name. Annexed hereto and marked MAD-9is a copy of a sample letter from the subsidiary.
25. The plaintiff has an active marketing program and employs 2 fulltime dedicated staff to attend to the promotion of the names Pharmacy 777 and Pharmacy Help. The plaintiff markets the names, amongst other ways, by advertising on radio in newspapers and has in the past, advertised on television. I refer to the affidavit of Kim Brotherson filed herein as to the expenditure on such marketing.
26. I consider that the Pharmacy 777 name has gained a reputation under its ownership by me and later by Shevaroy and then by the plaintiff. I base that opinion on the extensive sales achieved by the pharmacies that the plaintiff has licensed to use the name, the extensive investment that the plaintiff has made in marketing and advertising and the preparedness of pharmacy proprietors to pay the plaintiff, to use its services, including the use of the name.
27. The pharmacy businesses which obtain services from the plaintiff, including the right to use the name Pharmacy 777, pay an annual fee to the plaintiff that varies according to the size and complexity of the particular pharmacy but is in all cases between $10,000 and $60,000. That fee is separate from the charges paid
- by the pharmacies to obtain a licence to use the information technology developed and provided by the plaintiff but otherwise is all encompassing and includes the right to use the name.
- 28. In February 2006 I was approached by telephone by a Mr Syd Chesson on behalf of Hamilton. Mr Chesson attended my offices and asked if I would be interested in consenting to Hamilton using the name Pharmacy 777 at other premises in Mandurah. On behalf of the plaintiff I told Mr Chesson that I did not want Hamilton or anyone else to use the name in Mandurah other than as provided for in the Licence Agreement."
20 Mr Hamilton, in his affidavit, took issue with numerous of the averments in Mr Dillon's affidavit. He said, in pars 10 - 26 and 29 - 31:
"10. I have read the Dillon Affidavit and I do not agree that the matters stated as facts therein are correct. I will refer to each paragraph and attest to my knowledge of the facts.
11. The Business Name Extract 'MAD-3' doesnot record the full details of the origins of the business name Pharmacy 777 or its existence prior to April 1983 however I am aware that the business located at 777 Canning Highway Applecross traded as Pharmacy 777 for some considerable period of time prior to that date and prior to Mr Dillon joining the partnership which traded at that location in 1967.
12. I refer to paragraph 10 of the Dillon Affidavit. I was registered as a director of Shevaroy Nominees Pty Ltd ('Shevaroy') as from 1 July 1977. I am not registered as a shareholder from that date however I believe that I was or was entitled to be registered as a shareholder from the same date as I was appointed a director of Shevaroy. From January 1980 until March 1991 Dillon and I were the only two directors of Shevaroy. While Dillon and I were the only two directors of Shevaroy, we were partners in pharmacy businesses and we treated Shevaroy as a service company to the pharmacies. We shared the profits equally.
(Page 25)
- 13. I was still in partnership in business with Dillon up until I left resigned as a director of Shevaroy in March 1991.
14. Just prior to the dissolution of my partnership with Dillon we owned three pharmacies that traded under the banner of Pharmacy 777. The businesses and the business names that were used were Pharmacy 777 Applecross at 777 Canning Highway Applecross, Pharmacy 777 Booragoon at Garden City Shopping Centre Booragoon and at Pharmacy 777 Mandurah Forum at the Mandurah Forum Shopping Centre Mandurah. For pharmacy registration the business at Applecross was held by Dillon, Booragoon (Garden City) was held in Dillon's name and my name, and Mandurah Forum was held in my name.
15. In late 1990 Dillon and I determined to separate our pharmacy business interests. We sold the business at Booragoon to Lyndon Dyson. In order to separate our business interests amicably I took the business at Mandurah Forum and Dillon took the business at Applecross with some balancing of interests by way of adjustments or stock holdings.
16. At the time of separating our business interests it was agreed that we would continue to trade under the common banner of Pharmacy 777. Dillon would hold the business at Applecross and I would hold the business at Mandurah which at that time changed its registered name from Pharmacy 777 Mandurah Forum to Pharmacy 777 Mandurah.
17. I refer to paragraph 13 of the Dillon Affidavit. I was a director of Shevaroy in 1986 when the business name Pharmacy 777 was transferred to the company. It was never agreed or considered by me as a partner with Dillon and as a director of Shevaroy that the reputation and the ownership of the business name belonged to Dillon. To the best of my knowledge no other partner while I was a partner with Dillon ever agreed or considered the reputation and ownership of the business name belonged to Dillon. It was never agreed or considered by me or anyone else associated to the company that Dillon had control over Shevaroy. It was always considered that
- Shevaroy held the business name for convenience in trust for the benefit of all of the partners of all of the businesses that traded under the [sic] Pharmacy 777 up until January 1991.
- 18. As far as I am aware there was never at any time prior to 1991 any written agreement in respect of the use of the name Pharmacy 777. All arrangements at that time were informal and were operated in an air of co-operation and trust. Dillon and I investigated the potential to franchise the business under the business name of Pharmacy 777 however it was considered after taking legal advice that it was not (and remains not) feasible due to the provisions of the Pharmacy Act whichprovided that no pharmacist could have a pecuniary interest in more than two pharmacies.
19. I refer to paragraph 15 of the Dillon Affidavit and the License [sic] Agreement annexed to Dillon's affidavit and marked 'MAD-5'. In the separation of the business partnership with Dillon whereby I took Pharmacy 777 Mandurah it was agreed that I would have exclusivity to use the name in the Mandurah Region and that Dillon would not attempt to use the name Pharmacy 777 in the Mandurah Region. This was agreed as part of the consideration for the settlement because the Mandurah business was worth less value [sic] than the Applecross business. At the same time I resigned from Shevaroy and left it to Dillon as a vehicle to continue to provide services to his Applecross pharmacy and I set up my own service entity.
20. There has never been any formal arrangement in respect of trading or identification of the Mandurah store such that it would conform with Dillon's pharmacy business in any way. In fact I have at all times attempted to ensure that there has been some reasonable degree of differentiation between the signwriting and other identification of my Mandurah store to that used by Dillon.
21. I have remained in close contact with Dillon. I consider him to be a close friend. We have confided in each other
- and discussed business matters frequently over the years. Dillon has told me on several occasions that he intended to expand the use and influence of the Pharmacy 777 as a banner or brand name for a pharmacy group. I have told Dillon on several occasions including in and around 1995 and 1996 that he should attempt to sort out the matter of the use of the Pharmacy 777 business name between us before he embarked on a campaign to expand the use of the name. I have taken the opportunity to remind Dillon of this on many occasions since 1996. He has ignored my warnings and has continued to invest in expanding and publicizing the name Pharmacy 777 as a banner.
- 22. I have managed and promoted the Pharmacy 777 brand in the Mandurah Region on the basis that I and my successors have exclusive rights to the name in the Mandurah Region and on the understanding that the license [sic] agreement prohibits Dillon and his successors from using the name in the Mandurah Region.
23. I refer to paragraph 26 of the Dillon Affidavit. It is certainly not the case that Dillon has built a business name for Pharmacy 777 single-handed. Previous partners and I had a large input into building the brand. I have traded at Mandurah with the brand for over twenty years and have spent large sums of money (I estimate close to $2 million on advertising and promotional activity) in establishing and maintaining the reputation of Pharmacy 777 Mandurah.
24. I was consulted in respect of the contents of the letter annexed to Dillon's affidavit and marked 'MAD-14'.
25. I was consulted and instructed my lawyer to forward to the Department of Consumer and Employment Protection ('DOCEP) [sic]. Attached hereto and marked 'ICH-1' is a true copy of the letter from my lawyer to DOCEP. I am informed by Mr Galic that a copy of the reply to DOCEP was provided [sic] the solicitors for the Plaintiff.
26. I refer to paragraph 28 of the Dillon Affidavit. I have been informed by Mr Chesson, and do verily believe, that the conversations that he had with Mr Dillon are not truly
- represented by the statement made by Mr Dillon at paragraph 28 of the Dillon Affidavit.
- …
29. I have spent more than 20 years building the business and the brand name of Pharmacy 777 Mandurah. My partner and I have however been vigilant in ensuring that our customers know that we are not part of the Plaintiff's group of pharmacies. We have always done our own entirely separate advertising and operated with different lines and promotions to those of the Plaintiff. I believe that the reputation and name of Pharmacy 777 Mandurah is superior to that of the plaintiff.
30. Furthermore, as the Plaintiff is prohibited from trading in the Mandurah region by the License [sic] agreement to [sic] me, I believe, it is not possible that the trading by the Defendant will affect the turnover and patronage of the Plaintiff.
31. Pearson and I have consented to, and have authorized, the use of the business name by the Defendant in Mandurah."
21 In summary, Mr Dillon asserts in his affidavit, relevantly and in effect, that:
(a) When the licence agreement was executed he owned the business name "Pharmacy 777" and the reputation and goodwill in that name;
(b) In 1994 he assigned his interest in the business name "Pharmacy 777" to the respondent;
(c) In April 1997, the respondent transferred the registration of the business name "Pharmacy 777" to a subsidiary; and
(d) Since April 1997 the respondent has continued to carry on a business which includes the provision of marketing and administration services to pharmacies which operate under a name that includes the name "Pharmacy 777", the promotion of the name "Pharmacy 777" and the granting of franchises to operate under names including the name "Pharmacy 777" on the basis that the respondent will
- procure its subsidiary to consent to the use of the name in question.
22 I am satisfied, on the basis of Mr Dillon's affidavit and the terms of the licence agreement, that the respondent established, on the whole of the evidence before the learned Judge, that there were serious questions to be tried in relation to, relevantly:
(a) the nature and extent of the respondent's right to and interest in the name "Pharmacy 777" and names incorporating or derived from that name;
(b) whether a valuable reputation and substantial goodwill in the name "Pharmacy 777" and names incorporating or derived from that name have been established, at any material time, throughout Western Australia (including in the Mandurah region) and, if so:
(i) when the reputation and goodwill were established throughout Western Australia (including in the Mandurah region); and
(ii) the nature and extent of any right or interest of the respondent in that reputation and goodwill;
(c) the proper construction of the licence agreement including the nature and extent of any right or interest granted by Mr Dillon to Mr Hamilton under that agreement;
(d) whether the appellant has:
(i) passed off her business as having a connection in trade with the respondent's business, which it does not have;
(ii) passed off her services as the respondent's services, which is not the fact;
(iii) engaged in conduct which is misleading or deceptive or likely to mislead or deceive, contrary to s 10 of the Fair Trading Act 1987 (WA),
as alleged in the statement of claim;
(Page 30)
- (e) whether, by reason of the appellant's conduct complained of, the respondent has suffered and will suffer loss and damage, as alleged in the statement of claim; and
(f) whether the respondent should be granted injunctive or other relief as claimed in its prayer.
23 Although the respondent established, on the whole of the evidence before the learned Judge, that there were serious questions to be tried in relation to the issues I have mentioned, those questions could not be determined on the affidavits. There were conflicts in the evidence of Mr Dillon and Mr Hamilton which could only be resolved at trial. I consider that his Honour, with respect, overstated the strength of the respondent's case, on the evidence before him, in describing it as "extremely strong, if not unanswerable". I have no doubt that the respondent has a powerful argument (which is summarised in his Honour's reasons) in support of its contentions concerning the proper construction of the licence agreement, but, as I have mentioned, there are important issues of fact which can only be found after a trial. I do not, however, accept the appellant's submission that the respondent's claim has "little prospect of success".
24 The learned Judge's error in overstating the strength of the respondent's case does not, however, in my opinion, affect the correctness of his Honour's decision to grant the interlocutory injunction.
Ground 2
25 Where a plaintiff claims damage to, or interference with, its reputation and goodwill in a product or service, damages are usually not an adequate remedy in consequence of the difficulty of measuring damages in monetary terms. See Parfums Christian Dior (Aust) Pty Ltd v Dimmeys Stores Pty Ltd (1997) 39 IPR 349 at 354 - 355; Australian Associated Motor Insurers Ltd v Australian Automotive Motor Inspection Centre Pty Ltd (2003) 60 IPR 92 at 98 [34].
26 In my opinion, ground 2 is without merit.
Ground 3
27 The concept of the balance of convenience involves an examination of whether the injury which the plaintiff would be likely to suffer if an interlocutory injunction were refused outweighs or is outweighed by the injury which the defendant would be likely to suffer if the interlocutory injunction were granted. See Whelan Rentals Pty Ltd v Australian
(Page 31)
- Building Construction Employees' & Builders Labourers' Federation (1983) 46 ALR 339 at 341; Virgin Enterprises Ltd v Virgin Star Pty Ltd (2005) 67 IPR 557 at 560 [14].
28 In my opinion, the learned Judge was correct in deciding that the balance of convenience favoured the granting of an interlocutory injunction.
29 There was no evidence from the appellant as to any loss or damage which she would be likely to suffer if the interlocutory injunction were granted. Mr Hamilton deposed, in par 34 of his affidavit, that, in his opinion, the appellant would suffer "enormous financial hardship and cash-flow losses" if she was required to re-name her business. It is apparent that the learned Judge gave little or no weight to this opinion. I consider it was open to his Honour to conclude that Mr Hamilton's opinion was not based on any primary facts, and involved significant exaggeration. In any event, any loss and damage suffered by the appellant will be covered by the undertaking as to damages.
30 A "business names" extract in relation to the name "Carpark Chemist", which was annexed to Mr Dillon's affidavit, reveals that the appellant commenced carrying on business under that name, from the premises at 7 Dower Street, Mandurah, on 1 January 2006, the name having been registered under the Business Names Act on 28 November 2005. It appears, however, that the appellant did not commence trading under the name "Pharmacy 777 Mandurah Carpark Chemist" until some time between about February 2006 and about May 2006. See pars 28 and 30 of Mr Dillon's affidavit, par 7 of Mr Hamilton's affidavit and par 13 of Mr Brotherson's affidavit. On or about 10 May 2006, the respondent became aware that the appellant was advertising and marketing her business under the name "Pharmacy 777 Mandurah Carpark Chemist". It promptly demanded that the appellant cease using the name. The appellant refused. It is apparent, therefore, that:
(a) the appellant initially carried on business (apparently successfully) under the name "Carpark Chemist" for between about two and four months;
(b) the appellant then carried on business under the name "Pharmacy 777 Mandurah Carpark Chemist" for between about one and three months, until the respondent became aware of the situation and demanded that she cease using the name;
(Page 32)
- (c) the appellant did not carry on business under the name in question for a lengthy period before the dispute arose; and
(d) the respondent promptly asserted its claim.
31 It is true that the respondent did not adduce evidence before the learned Judge as to the amount of any loss or damage it would be likely to suffer if an interlocutory injunction were not granted. Mr Dillon did, however, state, in pars 35 - 38 of his affidavit:
"35. The plaintiff has for many years had plans, and continues to have plans, to expand the group of pharmacies using the name Pharmacy 777 and to exercise some control over the quality of the product and services provided by the pharmacies that are licensed to use the Pharmacy 777 name.
36. I believe that the reputation of the name Pharmacy 777 may be compromised if parties not licensed by the plaintiff use that name.
37. I further believe that it would be impossible, or at least extremely difficult, to repair any damage that might be done to the Pharmacy 777 name by parties using that name without licence.
38. I know from my experience as a retail pharmacy operator for 40 years, that a potential customer's purchasing decision with respect to which pharmacy he or she will attend, is greatly affected by that customer's trust in the integrity of the proposed supplying pharmacy."
- In my opinion, if the respondent succeeds in its claim at trial, it will necessarily have established interference with its reputation and goodwill in the name "Pharmacy 777" including any relevant names incorporating or derived from that name. Interference with intellectual property (including reputation and goodwill in a service) whether in the context of the tort of passing off, an action for contravention of s 10 of the Fair Trading Act or otherwise, is usually apt for protection by injunction. Measuring loss or damage in monetary terms is often difficult.
32 The learned Judge referred to the minimal cost and inconvenience to the appellant of removing the signs depicting the name in question. The
(Page 33)
- costs involved will easily be ascertainable, and covered by the respondent's undertaking as to damages.
33 The appellant contended before the learned Judge that there would be "tremendous loss of goodwill" to the appellant's business if the name in question could not be used for, say, three years while the action progressed to trial and final determination. There was no substance in that contention. An application should have been made promptly for an expedited trial. It is highly likely that expedition would have been ordered, and the action could have been tried within about three months after the issue of the writ. Neither party appears to have been interested in a prompt trial, presumably for tactical reasons.
34 Finally, in the context of the balance of convenience, I should refer to s 5(1) of the Business Names Act. It provides:
"(1) A person shall not either alone or in association with other persons, carry on business in the State under a business name unless -
(a) the business name consists of the name of that person and the name of each other person, if any, in association with whom that person is so carrying on business without any addition; or
(b) the business name is registered under this Act in relation to that person and each other person, if any, in association with whom that person is so carrying on business,
and where the business name is so registered unless such of the provisions of section 12 as are required to be complied with by or on behalf of the person or persons in relation to whom the name is registered have been complied with.
Penalty: $200. Default penalty."
- As I have mentioned, the appellant commenced trading under the name "Pharmacy 777 Mandurah Carpark Chemist" between about February 2006 and about May 2006. The learned Judge heard the application for interlocutory injunctive relief on 6 July 2006. There was evidence before this Court that the appellant did not become registered pursuant to the Business Names Act as a person carrying on business under the name
(Page 34)
- "Pharmacy 777 Mandurah" until 5 September 2006. She has never been registered in respect of the composite name "Pharmacy 777 Mandurah Carpark Chemist". Accordingly, when the application was heard and determined by his Honour, the appellant, in carrying on business under the name in question, was apparently contravening s 5(1). That was an important consideration affecting, adversely to the appellant, the balance of convenience.
35 The learned Judge did not err in his evaluation of the balance of convenience. Ground 3 fails.
Ground 4
36 In my opinion, the learned Judge did not err as alleged in ground 4. If the appellant had made application promptly for an expedited trial it is highly likely that expedition would have been ordered, and the action heard by about the date on which this appeal was heard. The granting of the interlocutory injunction would only be likely to determine, in a practical sense, the litigation as a whole, if, as was the case, neither of the parties was interested in expedition.
Ground 5
37 The usual order as to costs, when an interlocutory injunction is granted, is that the costs be in the cause. The reason is that until the action has been heard and determined, it will not be known whether the plaintiff's claim was meritorious. In my opinion, the facts and circumstances of the present case did not justify a departure from the usual order as to costs. His Honour's view was influenced, to a material extent, by his view that the respondent's case was "extremely strong, if not unanswerable". As I have mentioned, I consider, with respect, that his Honour overstated the strength of the respondent's case. The appellant has made out ground 5.
Conclusion
38 For these reasons, I decided that:
(a) the appeal should be allowed to the extent that the learned Judge's order as to costs should be set aside and, instead, there should be an order that the costs of the application before his Honour be in the cause; and
(b) otherwise, the appeal should be dismissed.
2
18
2