Cavalry Investments Pty Ltd and Minister for Revenue and Financial Services

[2018] AATA 3433

Cavalry Investments Pty Ltd and Minister for Revenue and Financial Services [2018] AATA 3433 (12 September 2018)

Division:TAXATION & COMMERCIAL DIVISION

File Number:           2017/7305

Re:Cavalry Investments Pty Ltd

APPLICANT

AndMinister for Revenue and Financial Services

RESPONDENT

File Number:           2018/1739

Re:Cavalry Investments Pty Ltd

APPLICANT

AndAustralian Securities and Investments Commission

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:12 September 2018

Place:Brisbane

The decisions under review are affirmed.

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Deputy President Bernard J McCabe

CATCHWORDS

BUSINESS NAME REGISTRATION – whether proposed business name undesirable – whether Ministerial discretion should be exercised to grant registration – whether business name likely to offend – implications of business name registration legislative scheme – decisions under review affirmed

LEGISLATION

Australian Securities and Investments Commission Act 2001 (Cth) – s 1

Business Names Registration Act 2011 (Cth) – ss 18, 25(d)(i), 27(1), 27(2), 27(d)

Business Names Registration (Availability of Names) Determination 2015 (Cth) – ss 8, 8(1)

REASONS FOR DECISION

Deputy President Bernard J McCabe

12 September 2018

INTRODUCTION

1. This case has something to offend almost everyone. Conservatives will be aghast at the coarsening of public discourse if the applicant succeeds in registering a business name that incorporates the word ‘slut’. Many liberals of a classical bent will be troubled by the attempt to regulate unseemly or ugly expression. They may prefer leaving that role to the judgment of the market where individual consumers can register their disapproval in language that businesses understand: by shopping elsewhere. Progressive types might see the attempted use of a misogynistic slur in a business name as evidence of the need for more stringent regulation of business practices that tend to excess, insensitivity and oppression.

2. The larger philosophical issues will not be resolved in these proceedings. I must focus instead on the question arising out of s 25(d)(i) of the Business Names Registration Act 2011 (Cth): is the proposed business name ‘of a kind that is undesirable’? If it is not undesirable, the business name must be made available to the applicant. If the business name is of a kind that is undesirable, the name is not available for registration unless the Minister for Revenue and Financial Services makes a determination that the name be made available pursuant to s 27(2).

3. The Australian Securities and Investments Commission (ASIC) decided the proposed business name was not available for registration because it was undesirable. The Minister, in turn, refused to make a determination under s 27(2). It follows the applicant is prohibited from trading under the business name: s 18. The applicant has asked the Tribunal to review both decisions. At the hearing, the applicant focused on whether the proposed business name was undesirable – that is, it focused on the reviewable decision made by ASIC. The applicant did not address any evidence or submissions to the Minister’s reviewable decision to refuse to make a determination in the applicant’s favour in the event I agreed with ASIC’s assessment of the business name.

4. I am satisfied the proposed business name is ‘of a kind that is undesirable’ within the meaning of s 27(d)(i) of the Act. I am not satisfied there is any good reason for making a determination that the name be made available to the applicant pursuant to s 27(2). I explain my reasons below.

   The criteria for deciding whether a proposed business name is ‘of a kind that is undesirable’

5. Section 27(1) authorises the Minister to publish criteria for determining the kind of names that are undesirable for the purposes of s 25(d)(i). Those criteria are contained in s 8 of the Business Names Registration (Availability of Names) Determination 2015 (Cth) (the Determination). The effect of s 8(1) and item 1 to the accompanying table in the Determination is that a proposed business name will be undesirable for the purposes of s 25(d) of the Act if:

   In the opinion of ASIC, it is likely to be offensive to:

   (a) members of the public; or

   (b) members of any section of the public

6. The words ‘likely’ and ‘offensive’ are not defined in the Act or the Determination. They are ordinary English words, albeit they must be interpreted in the context of the wider legislative scheme. The legislative scheme regulates the registration and use of business names. With that in mind, I would make a number of observations.

7. First, ASIC points out the Act obliges the registered owner of the name to display it in connection with the business in question, and to include the name in correspondence. It follows the owner is obliged to give the business name a degree of prominence and ubiquity that intrudes into public space where it cannot be ignored.

8. Second, a business name cannot be registered conditionally. The law does not authorise ASIC to permit registration on the understanding the registered owner will only use the name in particular circumstances, in a particular geographical area or in connection with a particular kind of business. ASIC must make its assessment of the name having regard to the likely reaction of members of the public, or members of sections of the public. (The expression ‘sections of the public’ presumably contemplates identifiable groups within society at large who might be defined by reference to, for example, demographic features like gender, age, ethnicity or religious persuasion.) It follows the offensiveness of the name cannot be assessed only having regard to the likely reaction of a subset of the public that appreciates or understands the joke in a particular context or locality. ASIC must look further and consider whether the rest of the public, or a section of it, would likely take a different view, particularly if the name came to be used in a different place or context.

9. Third, ASIC (and the Tribunal on review) is required to pursue the objectives of the Act but it also has its own objectives which inform the operation of the scheme. Those objects, set out in s 1 of the Australian Securities and Investments Commission Act 2001 (Cth), focus on ASIC’s role in regulating the financial system. They also exhibit a concern for regulation that is cost effective and which promotes the operation of open and accessible markets more generally. That mission would not be fulfilled if ASIC were required to obsess over business names that offered only trivial or largely theoretical offence. Good government would grind to a halt if ASIC were to work on the assumption that the public was intolerant or unduly precious. While it must be accepted that members of sections of the public might have particular sensitivities, ASIC should be wary of ceding a veto over business names to mere cranks. That tells us something about the magnitude of the offence which must be anticipated.

10. All that suggests the word ‘likely’ in the provision means ‘more probable than not’ rather than ‘real as opposed to remote’. For the conduct in question to qualify as ‘offensive’, there must be reason to believe it is likely to generate an adverse reaction that goes beyond mere discomfort, displeasure, distaste or aesthetic difference. The adverse impact should be closer to a more visceral sense of repugnance, affront or injury.

    The proposed business name

11. As it happens, even the applicant agrees the word ‘slut’ on its own is ‘of a kind that is undesirable’.  But the applicant says the use of the word ‘slut’ as part of a compound expression is a different proposition. The applicant wants to register the word ‘Eggslut’ for its café business. ‘Eggslut’ is a compound word of recent invention that does not appear in any mainstream dictionary. What might euphemistically be described as a ‘play on words’ is intended to highlight the fact the café specialises in serving a range of egg dishes. The applicant says the addition of the qualifier ‘Egg’ draws the misogynistic sting of the word ‘slut’. The applicant argues the expression is a cheeky way of referring (and appealing) to voracious consumers of eggs and egg-based dishes. The applicant acknowledges the compound word retains the capacity to startle. Presumably in the belief that most publicity is good publicity, the applicant expects the residual shock value in the business name will give it a marketing edge without really offending anyone.

12. Mr Coster, a director of the applicant, gave evidence at the hearing. He said there were a number of reasons for believing the community took a more relaxed approach to the use of the word ‘slut’ when it was used with a qualifier that changed the context. That evidence included:

    ·The outcome of an FOI request addressed to the ABC which confirmed it had not logged any audience complaints when the JJJ radio network featured a band called ‘Slutface’;

    ·A statement provided by David Astle, an English language expert and media commentator, who suggested the word ‘slut’ might be less exceptional if paired with a commodity, like coffee or eggs. Mr Coster noted that explanation was consistent with the definition of the word ‘slut’ in the Macquarie Dictionary. That dictionary included the following definition: ‘a person who is indiscriminate and voracious in their consumption of a specified commodity: a coffee slut’. It should be noted that this definition was cited as the fifth of five possible meanings.

13. Mr Coster also explained the genesis of the business name. He said he was aware of a successful business in the United States that used the same name. He acknowledged there may have been some controversy about the expression in that market but pointed out the business appeared to be successful. That evidence is problematic, not least because evidence of the impact of a business name on members of another community overseas does not assist greatly with my task. I would add ASIC also provided me with a story appearing in the Los Angeles Times newspaper reporting on the controversy generated by the name of that restaurant: exhibit 3 at pp 51-53. Closer to home, I was referred to a story in the NT News newspaper about a fuss when a local eatery hit upon the idea of using the expression ‘chocolate slut’ in relation to dessert items: exhibit 4 at pp 22-23. Mr Coster said his interest in using the name was piqued when he realised some of the patrons of an eatery in the Brisbane suburb of Lutwyche that served eggs were referring to the establishment  as ‘eggslut’. He explained local patrons were employing a form of shorthand that played on the café’s menu and location (as in ‘eggs-Lut[wyche]’). But the fact the proposed business name is at least partly the product of a local joke is irrelevant if the wider public, or sections of it, might not understand the humour. ASIC must take account of the possibility the name might subsequently be used in a different context – which can happen once it is registered.

14. In this case, there was objective evidence from Roly Sussex, an emeritus professor of applied language studies at the University of Queensland. The evidence came in the form of a quote he gave to a newspaper in 2011 when asked about the use of the expression ‘slutwalk’. The media report related to the protest movement that took the name ‘slutwalk’, partly, it seems, to raise consciousness about the risks of sexual assault. Professor Sussex said the use of the word ‘slut’ was “a slap in the face to everybody”. He explained:

    “It’s used principally by men about women, but also by women about women in the sense of moral standards. It’s a bad word that one should avoid…there’s very little to be said in favour of the word.” (exhibit 4 at pp 13-14)

15. I acknowledge the quote was reported in 2011 and that the meaning and acceptability of words can evolve. The word ‘tart’, which has similar antecedents, may be an example of a word that has lost some of its power to offend. Public figures and politicians with an appetite for publicity are now routinely described as ‘media tarts’ in popular discourse. And it seems likely there has been some evolution in the use of the word ‘slut’ – but it is possible that word has become even more offensive over time. While acknowledging it is a word with secondary meanings, it is difficult to look past the fact the word is primarily used as a nasty slur that is intended to hurt and shame those who are thought to transgress conventions of sexual morality.

16. Professor Sussex appears to have the relevant expertise to comment on the issue. His evidence provides an objective basis for the opinion that the use of the word ‘slut’, even in a compound expression where it is qualified, retains its capacity to offend at least a substantial section of the public – most obviously women, or many women, for whom it holds a strong pejorative sting that is not drawn through the use of a qualifier.

17. I am satisfied the word is also offensive in the sense it would likely prompt a sufficiently intense reaction of affront and injury amongst members of the public, or members of sections of the public. In reaching that conclusion, I acknowledge I am unable to point to clear objective evidence like opinion polls or market research surveys. I was not provided with any of that by the parties, but I am not sure it would have been of great assistance in any event. The forward-looking nature of the task demanded of ASIC by the legislation requires a degree of speculation. That speculation is informed by judgment and experience. Genuinely ‘objective’ evidence is hard to find in those circumstances. In that sense, the process of enquiry – and the means of proof - is similar to that required by a court considering whether conduct is misleading or deceptive for the purposes of the Australian Consumer Law.

18. Mr Coster was able to refer to a number of other business names using different but colourful words. While I acknowledge some of those business names might raise eyebrows, I can only deal with the business name in front of me. I also note the applicant has obtained a trademark in respect of the word ‘eggslut’ which entitles the applicant to use the word in connection with the supply of goods or services. The fact the applicant has succeeded in trademarking the expression does not mean it is inevitably entitled to a business name using the same word or words. The criteria which govern the grant of a trademark are different. Moreover the trademark is only available for use in relation to particular kinds of goods or services in a particular context.

19. I am satisfied ASIC’s decision should be affirmed.

    Should the Minister exercise her discretion under s 27(2) to permit the business name to be registered even though it is undesirable?

20. The Minister has the discretion to permit the business name to be registered notwithstanding ASIC’s assessment that it is undesirable. The most obvious example where the Minister might make an exception to the general rule is where there is a public interest in doing so. Mr Rogers, who appeared for the Minister, used the example of a welfare or public health organisation that might seek to use an offensive word in a business name as part of a campaign. Mr Rogers pointed out there is no public interest at stake here.

21. The applicant did not point to any good reason why an exception should be made in this case. As I explained at the outset of these reasons, the applicant conducted its case on the basis that the business name was not undesirable. It did not seriously press its case against the Minister.

    I am not satisfied there is a good reason for exercising the discretion in s 27(2) of the Act. The Minister’s decision must also be affirmed.

I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

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Associate

Date of hearing:	3 August 2018
Advocate for the Applicant:	Mr P Coster
Solicitors for the Minister for Revenue and Financial Services:	Australian Government Solicitor
Counsel for the Australian Securities and Investments Commission:	Ms C Schneider

Dated: 12 September 2018