Boyce v ASIC
[2015] AATA 768
•30 September 2015
Boyce and Australian Securities and Investments Commission [2015] AATA 768 (30 September 2015)
Division
Taxation & Commercial Division
File Number
2014/5473
Re
Murray Boyce
APPLICANT
And
Australian Securities and Investments Commission
RESPONDENT
And
Joel Badcock
OTHER PARTY
DECISION
Tribunal Senior Member A C Cotter
Date 30 September 2015 Place Brisbane The Tribunal affirms the decision under review.
...................................[Sgd]....................................
Senior Member A C Cotter
CATCHWORDS
BUSINESS NAME REGISTRATION – objection to registration of business name – availability of business names that are “identical” or “nearly identical” – legislation provides precise and exhaustive test for determining whether names are identical or nearly identical – no further enquiries outside legislative framework necessary or warranted – decision under review affirmed
LEGISLATION
Business Names Registration Act 2011 (Cth) ss 16, 17, 25, 22, 24, 25, 18, 26, 27, 28, 66, 3
Business Names Registration (Availability of Names) Determination 2012
Corporations Regulations 2001 (Cth) Part 1 Schedule 6
CASES
Smith and ASIC and Amee Donohoe trading as Central Coast Surf Academy (Joined Party) [2014] AATA 192
B & L Whittaker Pty Ltdand ASIC and Anor (2014) 106 IPR 361
G C Swinburne and F J McFarlane and ASIC and Child Psychology Services Pty Ltd (Joined Party) (2014) 144 ALD 397
Stasiw and ASIC [2015] AATA 328
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 29
Flight Centre (NZ) Ltd v Registrar of Companies (1994) 7 NZCLC 260
New Zealand Conference of Seventh-Day Adventists v Registrar of Companies [1997] 1 NZLR 751
Dr Rust Ltd v Registrar of Companies (1997) 8 NZCLC 261
The Paint Factory Ltd v Registrar of Companies [2000] 3 NZLR 220
Stanley-Hunt Earthmovers Ltd v Registrar of Companies (1997) 8 NZCLC 261
SECONDARY MATERIALS
Explanatory Memorandum, Business Names Registration Bill 2011 (Cth)
DC Pearce and RS Geddes, Statutory Interpretation in Australia (8th edition, LexisNexis Butterworths, 2014)
REASONS FOR DECISION
Senior Member A C Cotter
30 September 2015
INTRODUCTION
Murray Boyce has lived in Rainbow Beach for most of his life. For the last 29 years, he has worked there and in surrounding areas as a plumber, following in his father’s footsteps.
The family plumbing business was started by his father in Rainbow Beach in 1973. It traded under the name of Rainbow Beach Plumbing until 1997, when Rainbow Beach Plumbing Services Pty Ltd was incorporated. Murray is now the sole director and shareholder of that company. He says most clients still recognise the name Rainbow Beach Plumbing as being associated with the Boyce family.
In May last year, Joel Badcock, also of Rainbow Beach, successfully applied to the Australian Securities and Investments Commission to register the business name, Rainbow Beach Plumbing.
Mr Boyce subsequently learnt of that registration and applied to ASIC for a review of the decision to register. He was concerned that the similarity of the two names in a small community could be confusing or misleading; some of his customers asked if he had sold the business and Mr Boyce was worried that the newly registered business name could pose a real risk of detriment to his business.
Being satisfied that Mr Boyce’s company was an entity in relation to which there was a real risk of substantial detriment because of the registration of the business name, ASIC concluded that Mr Boyce was entitled to seek a review of the decision to register. Unfortunately for him, the decision was subsequently affirmed on review on the basis that the business name was not identical, or nearly identical, to the company’s name. Still dissatisfied with that decision, Mr Boyce has applied to this Tribunal for a review.
Earlier in the proceeding, Mr Badcock was joined as a party. However, when the matter came on for hearing, he failed to appear. Following inquiries, I was satisfied that he had been given adequate notice of the hearing and its venue. I also ascertained that a member of the Tribunal’s staff had phoned his mobile phone number a few days before the hearing. When he failed to answer, a message was left on his voicemail asking if he was proposing to attend the hearing. No response was received. After he failed to appear at the start of the hearing, I requested that another call be placed to his mobile phone. It was found to be turned off. In those circumstances and as ASIC (with which Mr Badcock’s position was aligned) was present and represented by counsel, I decided to proceed with the hearing in Mr Badcock’s absence.
At the hearing, Mr Boyce submitted that Mr Badcock’s business name should not have been registered as it means that similar names are being used in a small community. Feedback received from his customers was that the business name is confusing and misleading.[1] He said that he had been asked if he had sold his business or was not trading anymore. He did not think his business had declined as a result of registration of the business name, but gave examples of confusion, such as cheques being made payable to “Rainbow Beach Plumbing” rather than his company; he said, however, that he had nevertheless been able to bank those cheques. Mr Boyce said he understood that Mr Badcock had moved from the area and was possibly overseas; he had been unable to contact him for some time. He had previously spoken to Mr Badcock about changing or ceasing use of the name, and he had appeared cooperative. However, that seemed at odds with reports from some of Mr Boyce’s clients that Mr Badcock had told them that Mr Boyce was no longer working.[2]
[1] Applicant’s further submission, contained in Mr Boyce’s email to the Tribunal dated 26 July 2015.
[2] Applicant’s further submission, contained in Mr Boyce’s email to the Tribunal dated 26 July 2015.
Extensive submissions were made on behalf of ASIC. It also led evidence concerning the Business Names Register, its operation, and the process of registration and searching of business names through “ASIC Connect”, an online service for interacting with the registers maintained by ASIC.
While I appreciate Mr Boyce’s apprehension, I do not consider, employing the rules made under the relevant legislation for determining such questions, that the business name “Rainbow Beach Plumbing” is identical, or nearly identical, with the company name Rainbow Beach Plumbing Services Pty Ltd. As a result, I consider that ASIC was correct in registering the business name and that its decision should be affirmed. My reasons are set out below (particularly at paragraphs 63 - 66 as they relate specifically to Mr Boyce).
THE LEGISLATIVE FRAMEWORK
Because the questions raised in this matter require an appreciation of the relevant statutory scheme and how its provisions interact, it is important to pause to reflect on a number of those key provisions.
Historically, the States and Territories had responsibility for the registration of business names. However, as part of its reform agenda aimed at driving productivity growth and delivering a seamless national economy, the Council of Australian Governments agreed in July 2008 to the development of a single national system for registering and regulating business names. The scheme, which was to be operated by ASIC, was to allow businesses to register their names once, regardless of the number of jurisdictions in which they operated.[3]
[3] Explanatory Memorandum, Business Names Registration Bill 2011, pages 3 and 4.
Out of that reform process, the Business Names Registration Act 2011 (Cth) (“Act”) emerged. Its stated objects are several. The first mentioned object is to ensure that those who engage, or propose to engage, with entities that carry on business under a business name can identify the entity and how it may be contacted. It is also stated that the object is to remove the inconvenience caused by having to register business names under the law of more than one jurisdiction within Australia. Those objects are achieved by requiring an entity intending to carry on a business under a business name to register the name on a nationally established and maintained register of business names.[4] That simple statement belies how ambitious the scheme was, bringing together the registers of the six States and two Territories and establishing a reliable and efficient infrastructure for the future.
[4] ss 16(1) and (2) of the Act.
Section 16(3) of the Act set out the following further objects:
(a)to avoid confusion by ensuring that business names that are identical or nearly identical are not registered; and
(b)to ensure that business names that are undesirable (for example, because they are offensive) are not registered; and
(c)to ensure that business names that should be restricted for any other reason (for example, because they might mislead consumers) are not registered.
Subsection (4) of s 16 states that those three objects “are achieved by rules dealing with the availability of business names.”
Section 17(1) states that the registration of a business name does not affect the rights of any entity in relation to the business name, or a word or expression that constitutes, or is included in it, while s 17(2) relevantly provides that an entity does not acquire property in a business name, or in a word or expression that constitutes or is included in a business name, because it is registered under the Act.
The Act makes it an offence to carry on business under a name which is not registered. However, exemptions apply where an individual carries on business in his or her own name, or where a corporation carries on business under its name.[5]
[5] s 18 of the Act.
Under s 22, ASIC is charged with the responsibility for establishing and maintaining a Business Names Register (“BNR”), which may be kept “in any form that ASIC considers appropriate”. The BNR and the register for companies are kept on secure software systems. ASIC has a number of software programs that operate in conjunction with the register systems to facilitate operations such as access to the information in the registers.[6]
[6] Exhibit 2, Statement of Luke Keet, dated 30 June 2015, paragraph [2].
Section 24 of the Act provides that if ASIC is satisfied that the entity applying to register a business name has an ABN and is not disqualified; that the registration fee has been paid; and that the name is available to the entity, it must register the business name to that entity. In the present proceeding, there is no dispute that Mr Badcock had an ABN and was not disqualified, and that the registration fee had been paid. The issue here centres on whether the business name was available to him.
The question of availability of business names is dealt with by s 25. It relevantly provides that a business name is available to an entity if ”the name is not identical or nearly identical” to, amongst others, a business name registered to another entity or a name that is reserved or registered under the Corporations Act 2001 for another body.
Section 26 provides that the Minister may, by legislative instrument, make rules for determining whether a name is “identical” or “nearly identical” to another name. Those terms are in turn defined in s 3:
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.
The rules made under s 26 are clearly those referred to in s 16(4) as achieving the object in s 16(3)(a), to avoid confusion by ensuring that identical or nearly identical names are not registered.
Similarly, s 27 provides that the Minister may, by legislative instrument, determine the kinds of names that are undesirable, while s 28 states that the Minister may determine, also by legislative instrument, that a word or expression is restricted. Although (unlike s 26) they do not expressly refer to “rules”, ss 27 and 28 obviously correspond with the objects set out in subsections (3)(b) and (3)(c) of s 16, such that the legislative instruments made under each of them are intended (by virtue of s 16(4)) to achieve the respective objects.
In fact, the Minister dealt with all three topics in the one legislative instrument, the Business Names Registration (Availability of Names) Determination 2012 (“Determination”).[7] Part 2 deals with rules for determining whether business names are identical or nearly identical, while Part 3 deals with undesirable names and Part 4 with restricted words and expressions.
[7] Since the hearing, a new determination, Business Names Registration (Availability of Names) Determination 2015 (Cth), has been made, which commenced on 20 July 2015. As its operation is not retrospective, it does not affect my decision in this matter.
Part 2 has two Divisions, the application of which depends on whether the business name in question is to be compared with another name (other than a company name) (Division 1), or with a company name (Division 2). That dichotomy flows from the fact that, in considering availability of names, ASIC is required to consult both the BNR and the companies register which it also maintains.
While Division 1 is not applicable nor directly relevant in the present case, it is instructive to draw comparisons between it and the rules provided under Division 2.
Both Divisions contain a provision that sets out the matters to be disregarded when comparing the business name with the other name. Section 5 (in Division 1) states that when comparing a business name with another name (other than a company name) to determine whether they are identical or nearly identical, certain matters are to be disregarded. Without intending to be exhaustive, they include: the use of the definite or indefinite article unless it is the whole name; the use of words or abbreviations such as “Proprietary”, “Pty”, “Limited”, “Ltd”, ‘No Liability” and “NL”; the order of words in names; and whether a word is singular or plural in one or both names. The corresponding section in Division 2 imports the rules in Part 1 of Schedule 6 to the Corporations Regulations 2001 (Cth) which are used for determining, in the company context, whether names are identical. Importing them into the business names regime, s 7 says that in comparing a business name with a company name to determine whether they are identical or nearly identical, those imported rules “apply as if they had been made for s 25(a) (ii)” of the Act. The respective lists of matters to be disregarded are largely similar, although there are a few matters where they are different; those differences are not material to the consideration of the present matter.
Where the Divisions depart is in the matters to be considered in comparing the names. Section 6 of Division 1 provides that in comparing a business name with another name (other than a company name) to determine whether they are identical or nearly identical, a word or expression in an item in Schedule 1 (being a list of some 148 words or expressions) is to be taken to be the same as each other word or expression in the item. Subsection (2) deals with names that, despite their appearance, might be pronounced the same. Significantly, Division 2 contains no such provisions; the rules are therefore completely silent as to what matters are to be considered in comparing a business name with a company name.
Finally, returning to the Act, s 66(1) relevantly provides that ASIC may arrange for the use, under its control, of computer programs “for any purposes for which (it) may make decisions” under the Act, other than a decision under s 57(6) of the Act (dealing with the review of decisions). Subsection (2) goes on to provide that a decision made by the operation of a computer program under an arrangement made under subsection (1) is taken to be a decision made by ASIC.
ISSUES FOR THE TRIBUNAL
Prior to the hearing in this matter, questions of business name availability, and in particular, the means of determining whether names are identical or nearly identical, had been considered by the Tribunal on four occasions. The outcomes split evenly, with two matters[8] affirming ASIC’s decision to register the business name, and two later matters setting aside decisions to register business names on the basis that they were nearly identical to another registered business name,[9] and a company name.[10]
[8] Smith and ASIC and Amee Donohoe trading as Central Coast Surf Academy (Joined Party) [2014] AATA 192 and B & L Whittaker Pty Ltd and ASIC and Anor (2014) 106 IPR 361.
[9] G C Swinburne and F J McFarlane and ASIC and Child Psychology Services Pty Ltd (Joined Party) (2014) 144 ALD 397.
[10] Stasiw and ASIC [2015] AATA 328.
At the heart of that divergence is the approach to be taken in interpreting the terms, “identical” and “nearly identical”. In G C Swinburne and F J McFarlane and ASIC and Child Psychology Services Pty Ltd (“Swinburne”), the Tribunal thought that it was necessary to consider the meaning of those terms by looking at their ordinary meanings, but taking into account that they are employed “so as to avoid relevant confusion amongst the relevant class” of people who might reasonably be expected to engage, or propose to engage, with the business in question.[11]
[11] See (2014) 144 ALD 397, [136]-[137].
ASIC contends that the Swinburne approach is incorrect and should not be adopted in this matter.[12] It says that it is unnecessary to go beyond the Determination when performing the exercise of comparison in order to determine whether names are identical or nearly identical within the meaning of the Act. In doing so, it says that the Swinburne approach expands the scope of the term “nearly identical” in a manner that is inconsistent with the Determination.
[12] Exhibit 3, Respondent’s Statement of Facts and Contentions dated 3 July 2015, paragraphs [42] and [43].
Having regard to those differing views, the issues which fall for my determination can best be summarised as follows:
(a)Whether the rules set out in Part 2 of the Determination provide an exclusive and exhaustive code for determining whether names are identical or nearly identical, or whether there is still some residual scope to consider that question; and
(b)If there is some residual scope, what test should be applied? Is it simply an objective test focussing on the words themselves, or does it also include a subjective test, determined by reference to the broad range of people with whom the business engages?
I deal with those questions below, before dealing with their specific application to this matter.
CONSIDERATION
Are the rules exclusive and exhaustive?
I consider that the rules are both exclusive and exhaustive, such that it is unnecessary, and unwarranted, to make inquiries beyond their scope. I reach that decision based on my consideration of the legislative intent, derived from both my reading of the legislation as a whole, and the way in which the rules themselves are drafted in the Determination.
The objects of the Act
The starting point for this discussion is s 25(a), which relevantly provides that a business name is available if it is not identical, or nearly identical, to a business name registered to another entity, or a company name. It is clear that it anticipates a comparison being made between the respective names.
Section 25(a) gives effect to the object stated in s 16(3)(a), by ensuring that, in order to avoid confusion, identical and nearly identical names are not registered.
Section 26 then introduces the means by which the comparison under s 25 is to be carried out, by providing that the Minister may, by legislative instrument, make rules for determining whether a name is identical or nearly identical (as those terms are defined) to another name.
Section 16(4) completes the circle by providing that the objects in s 16(3) are “achieved” by such rules. Interestingly, the section does not speak of the rules, for example, assisting, facilitating or furthering the objects. Rather, the word “achieved” signifies that the relevant objects are being accomplished, carried through or brought about by the rules.[13] That deliberate and definitive statement by the legislature, in my view, signals its intention - that the rules are the means, the exclusive means, by which the relevant object, namely the avoidance of confusion by ensuring that identical or nearly identical names are not registered, is to be effected.
[13] See The Macquarie Dictionary.
In coming to that conclusion, I am acutely aware of the warnings that general statements of purpose or object in legislation need to be treated with caution. However, the specificity of the objects and the means by which they are to be achieved, and the clear and unequivocal language in which they are expressed, allay any concerns which I had in that regard.
In Stasiw and ASIC, the Tribunal did not read s 16(4) as “precluding the application of objects in areas of law lying beyond the provisions in the rules”.[14] With respect, I do not share that view; the clear and unequivocal language and the specificity of the object and its means of being effected, do not warrant a further exploration of the “mischief” to be addressed. While the plurality of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue acknowledged that the meaning of the text of legislation may require consideration of the context (including the general purpose and policy of a provision and in particular, the mischief it is seeking to remedy), they observed:
Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention.[15]
[14] [2015] AATA 328, [46].
[15] (2009) 239 CLR 29, 47, [47] (Hayne, Heydon, Crennan and Kiefel JJ).
In the present context, subsections 16(3)(a) and 16(4) provide that guide to legislative intention; it is unnecessary to look any further.
The drafting of the rules
Returning to s 26, it will be recalled that the expressions ”identical” and “nearly identical” are respectively defined to mean identical or nearly identical under the rules made by the Minister under that section. It is well settled that such definitions are intended to be exhaustive.[16]
[16] See DC Pearce and RS Geddes, Statutory Interpretation in Australia (8th edition, LexisNexis Butterworths, 2014) at [6.60] and the authorities cited there.
As mentioned already, the rules for determining whether a business name is identical or nearly identical to another name are set out in Part 2 of the Determination.[17] While they vary in their substance, the opening words of each of ss 5(1), 6(1) and 7 in the Part adopt the same formula of words in their openings:
When comparing a business name with [another name] to determine whether the names are identical or nearly identical…
[17] Section 4(1) of the Determination.
Each of those provisions contemplates a comparison being undertaken. There is nothing to suggest that the reference to identical or nearly identical is to anything other than their ordinary and plain meanings. The words are not defined in the Determination (even though there is a Definitions section), nor is there any suggestion that when used in that context they are to be given the meanings ascribed to them in the Act. The opening words serve as the link between s 25 as the operative provision, and the substantive rules which are set out in the Determination. The comparison between names is to be undertaken in accordance with the rules. Using those rules alone, a decision is then made as to whether the names are identical, or nearly identical; there is no other room for comparison.
What the substantive parts of the relevant sections of Part 2 of the Determination do, then, is impose rules which set the parameters by which the comparison is to be undertaken. In both ss 5 and 7, it expressly states what is to be disregarded in the process of making the comparison. Section 6 then prescribes what matters are to be considered when undertaking the comparison between the business name and a name other than a company name. Importantly, there is no corresponding provision in respect of undertaking the comparison of the business name with a company name. I appreciate the desire to harmonise the business names rules with the existing company rules. However, the draftsman’s deliberate omission of a provision prescribing matters to be considered in that situation is significant, in that it underscores the exhaustive nature of the rules. This stands in stark contrast to s 6, the clear implication is that nothing additional is permitted to be considered in Division 2 when the business name is to be compared with a company name.
In Stasiw and ASIC, the Tribunal considered that the absence of matters to be considered necessarily meant that the comparison had not taken place, or it was incomplete.[18] With respect, I disagree. The comparison is to be conducted using the rules. In undertaking that exercise, there is no licence to take into account extraneous matters; to do so would be to take into account irrelevant considerations.
[18] [2015] AATA 328, [44].
Exclusive and exhaustive
Where does that leave the rules? In particular, is there any residual scope, apart from the rules, for determining whether names are identical or nearly identical? I do not think so. The comparison envisaged by s 25(a) is to be undertaken by reference to the rules as set out in Part 2 of the Determination. Those rules are exclusive (by reason of the legislative intent signalled by s 16(4)) and exhaustive (by reason of the definitions in s 3 and the drafting of the rules, with their deliberate inclusion and exclusion of matters to be considered in undertaking the comparison).
Consistency with the legislative scheme
I am strengthened in my view by the fact that this conclusion sits comfortably with the broader regime that ASIC has put in place for the administration and operation of the business names registration scheme which was contemplated, at least in a general sense, by the Act.
ASIC has implemented computer programs and has developed a business name search engine which utilises algorithms to check the availability of names in accordance with the provisions of the Act and the rules contained in the Determination. The same algorithms are used by the automated system to test for availability of a proposed name for registration. The computer program and the associated algorithms work best with a clear set of programmable rules, such as those set out in the Determination.[19] Having regard to s 66 of the Act which anticipates the prospect of decisions being made by the operation of computer programs, that model was clearly contemplated by the legislature as a means of effectively and efficiently implementing the national scheme.
[19] See Exhibit 3, ASIC’s Statement of Facts and Contentions dated 3 July 2015, paragraph [44].
ASIC says the broad nature of the Swinburne approach and the departure from the rules would necessarily involve greater manual review and so render potentially nugatory the automated stage of the application process, or at least significantly diminish its scope and utility. It also says that approach would not only reduce the number of available names, but also reduce certainty for those wishing to register business names by reducing the utility of the automated business name search engine.[20]
[20] See Exhibit 3, ASIC’s Statement of Facts and Contentions dated 3 July 2015, paragraphs [43] and [45].
Mr Luke Keet of ASIC produced a summary of statistics relating to the operation of the system. That revealed that in 2013/2014, a total of over 5.4 million business name availability searches were conducted using the online system. Incomplete figures for the 2014/2015 year showed that close to 3.8 million searches had been undertaken in the year to date. The total number of business names registered in 2013/2014 was just under 300,000 and about 241,000 in the year to date in 2014/2015. Using the programmed system rules to determine name availability, conclusive results were obtained for 90% of the applications for registration.[21]
[21] Exhibit 2, Statement of Luke Keet dated 30 June 2015, paragraph 8 and Annexure F.
The sheer volume of inquiries and applications and the high “strike rate” achieved highlight the importance of the comparison of names being undertaken by reference to the rules to the exclusion of other tests; the rules engender consistency, certainty and reliability.
Other matters
Before I leave this discussion, I should address two further matters raised by Swinburne.
First, with respect, I believe that the approach adopted in Swinburne conflates the quite separate and discrete objects of the legislation, and in so doing, introduces added considerations which are not contemplated by the rules. That is best illustrated by the following passage, which specifically invokes the object set out in s 16(1)(a) in discussing the quite discrete object in s 16(3)(a), of avoiding confusion by refusing to register identical, or nearly identical, names:
In my view, the relevant confusion which is intended to be avoided by the refusal of registration of names that are identical or nearly identical to registered names is confusion first in the sense of a failure to distinguish between the business carried on by the entity carrying on business under a registered name and that carried on by another entity applying for registration of an identical or nearly identical name, either by mistaking one business for the other, mistakenly believing that they are both the same business or mistakenly believing that they are both carried on by the same entity. It also encompasses confusion in the sense of being uncertain as to which business one is engaging with or proposing to engage with or the identity of the entity carrying on such a business (see s 16(1)(a) of the Act).[22]
[22] Swinburne at [134].
In conflating the discrete objects, the approach introduces additional, unwarranted and unnecessary considerations to the comparison process provided for by the legislation.
Second, and as alluded to already, with the widening of the test to deal with matters beyond the rules, the Swinburne approach diminishes the efficacy and efficiency of the automated online systems that ASIC has put in place to administer the scheme (which was contemplated by s 66 of the Act). In that sense, the approach is at odds with the framework promoted by the legislation.
If there is a residual scope, what test is to be adopted?
In light of my conclusion on the first question, it is unnecessary to answer this question. However, for completeness and in the event that I am wrong on that issue, I set out briefly my views on this question.
In Swinburne, the Tribunal considered that the question which arises in determining whether a name is nearly identical to a registered name is whether it is nearly identical according to the ordinary meaning of that expression, ”but taking into account that it is employed so as to avoid relevant confusion amongst the relevant class.”[23] That class was described earlier as follows:
I consider that the class of persons within s 16(1)(a) to which I have referred comprises the full range of persons who might reasonably be expected to engage or propose to engage with the businesses in question.[24]
[23] Swinburne at [137].
[24] Swinburne at [136].
As I have said earlier, I believe such comments tend to confuse two, quite distinct objects. While the matters to which reference is made are clearly relevant to the object described in s 16(1)(a) (relating to ensuring that those who engage, or propose to engage, with the business can identify the entity carrying on the business and how it may be contacted), they are not specifically referable to the object in s 16(3)(a), which appears to be narrower in its scope. It seems to me that by conflating the objects, the proposed scope of inquiry is unnecessarily widened. In my view, s 16(3)(a) simply requires an objective comparison of names, and does not invite a wider consideration of the potential confusion created in the minds of that class of persons who might be expected to deal with the respective entities.
The New Zealanders confronted a not dissimilar issue some time ago, in the context of their Companies Act 1993. That was largely resolved in favour of the narrow line of inquiry. The thrust of those decisions was that the Registrar’s role is confined to checking for identical names. Names that were merely confusingly similar were not considered to be the Registrar’s concern;[25] disaffected persons had other remedies available to them, but not under the company laws. The same is the case here, with entities’ existing rights with respect to business names being expressly preserved by s 17 of the Act. I believe the approach adopted by the New Zealand courts has merit and should be followed in this context.
[25] See Flight Centre (NZ) Ltd v Registrar of Companies (1994) 7 NZCLC 260,612; New Zealand Conference of Seventh-Day Adventists v Registrar of Companies [1997] 1 NZLR 751; Dr Rust Ltd v Registrar of Companies (1997) 8 NZCLC 261,501; and The Paint Factory Ltd v Registrar of Companies [2000] 3 NZLR 220. Cf. Stanley-Hunt Earthmovers Ltd v Registrar of Companies (1997) 8 NZCLC 261, 403.
A narrower, objective scope of inquiry also sits more comfortably with the effective and efficient maintenance of the Register. Any widening of the scope of inquiry would introduce greater uncertainty into the process, and necessitate far more manual involvement, which would undoubtedly slow down the registration process considerably, if not to a virtual halt.
For those reasons, if (contrary to my earlier conclusion) there is some residual scope of inquiry beyond the rules, I consider it should be limited to a narrow, objective comparison of the relevant words, rather than requiring a wider and subjective inquiry by ASIC.
The present application
In the present case, the business name Rainbow Beach Plumbing is to be compared with the company name, Rainbow Beach Plumbing Services Pty Ltd, to consider whether they are identical or nearly identical within the meaning of the Act. Applying (by reason of s 7 of the Determination) the rules set out in Part 1 of Schedule 6 of the Corporations Regulation 2001, the words “Pty” and “Ltd” are to be disregarded, leaving a comparison between Rainbow Beach Plumbing and Rainbow Beach Plumbing Services. When the common words are eliminated from both names, the word “Services” remains in the company name.
Under the relevant rule in s 7 of the Determination, there is no provision for the consideration of other matters, such as the potential confusion which might be generated as a result of such similar names. The rules being exclusive and exhaustive, I do not believe it was open to ASIC to take such extraneous matters into account when determining the availability of the proposed name and in particular, whether it was identical or nearly identical to the name of Mr Boyce’s company.
While I appreciate the confusion identified by some of Mr Boyce’s customers, there are other remedies available to Mr Boyce, such as under the laws relating to passing off and misleading and deceptive conduct.
On the basis outlined above, the names are not identical or nearly identical. I therefore consider that ASIC was correct in registering the business name.
CONCLUSION
The decision under review is therefore affirmed.
I certify that the preceding 67 (sixty -seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member A C Cotter ................................[Sgd]........................................
Associate
Dated 30 September 2015
Date of hearing 13 July 2015 Date final submissions received 3 August 2015 Applicant In person Counsel for the Respondent Mr C Horan Other Party No appearance
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