Commercial Dynamics Pty Ltd v Ad-Mag (SA) Pty Ltd

[1999] FCA 885

FEDERAL COURT OF AUSTRALIA

Commercial Dynamics Pty Ltd v Ad-Mag (SA) Pty Ltd [1999] FCA 885

COMMERCIAL DYNAMICS PTY LTD (ACN 001 821 156) v AD-MAG (SA) PTY LTD (ACN 079 592 046) and AD-MAG NO 3 PTY LTD (ACN 082 868 620)

S 31 OF 1999

MANSFIELD J
ADELAIDE
10 MAY 1999

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 31 OF 1999

BETWEEN:	COMMERCIAL DYNAMICS PTY LTD (ACN 001 821 156) Applicant
AND:	AD-MAG (SA) PTY LTD (ACN 079 592 046) and AD-MAG NO 3 PTY LTD (ACN 082 868 620) Respondents

JUDGE:	MANSFIELD J
DATE:	10 MAY 1999
PLACE:	ADELAIDE

REASONS FOR DECISION

HIS HONOUR:

1. I have before me a motion for interlocutory relief.  In effect, it seeks to restrain the second respondent from publishing within South Australia in any way a newspaper which contains within it certain phrases, namely the phrases “Free Ads Trading Post”, “Your New Local Trading Classifieds Post” or “Trading Post” or words to the like effect.  The critical feature of the orders sought is directed to the use of the words “Trading” and “Post” adjacent to, or in close conjunction with, each other.  It is not appropriate on this application to make any final decisions on matters of fact.

2. The parties are agreed as to the relevant principles: to determine whether there is a serious question to be tried that the second respondent is engaging in conduct in breach of s 52 of the Trade Practices Act 1974 (Cth) (“the Act”) by publishing its newspaper, in particular numbered issues 83 and 84, and if so whether on the balance of convenience it is appropriate to make the order sought. The respondents’ evidence indicates that it is the second respondent which is now the publisher of its newspaper. I shall call them together ‘the respondent’.

3. Issue 83, published on 28 April 1999, had at the heading of the front page the words “Your New Local Trading Classifieds Post”.  Issue 84, published on 5 May 1999, had at the heading the words “Free Ads Trading Post”, and in a considerably lesser print about a third of the way down that front page the sentence, “Ad-Mag is an independent paper and is not associated with the Weekly Trading Post or any other trading post paper that charge private advertisers.”

4. For many years prior to that date, the applicant has published a newspaper with a heading or title Trading Post, apparently on a background of timber railings.  It is published within the Adelaide area with the words “Weekly” preceding “Trading Post”, and in various regional areas with a regional geographic description preceding the words “Trading Post”.

5. I am satisfied that there is a serious question to be tried that the applicant, by the publication of its newspaper over a number of years, has gained a distinctive reputation within South Australia as a publisher of a form of classified advertisement newspaper under the name Trading Post or Weekly Trading Post, and in rural areas with a particular geographic location and the words “Trading Post”.  Until recently, the respondent has published a similar newspaper under the heading “Ad-Mag” but, as I have recorded, in the last few weeks has added to its title the additional words which I have described.  It is those words about which the applicant seeks interlocutory relief.

6. It is put by the respondent that the words “Trading Post”, either with the word “Weekly” before them or a geographic area word before them, are not distinctive, but are simply commonly used generic terms.  That may or may not be the case.  However, I think it is arguable in the sense that there is a serious question to be tried that the words “Trading Post” in conjunction with, or in relation to, a form of newspaper classified advertising in the form in which the applicant uses it is something more than simply a generic use of those words.

7. Accordingly, the question then becomes whether there is, on the material before me, a serious question to be tried that the respondent’s presentation of its classified advertising newspaper Ad-Mag, with the additional words recently added in its editions, may constitute misleading or deceptive conduct contrary to the Act. I have reached the view that it is arguable that it does so. Once the step is taken that the “Trading Post” presentation of the applicant may have a reputation attached to it, it becomes a matter for judgment by comparing the publications (and having regard to such other evidence as is adduced) to determine whether the respondent, by the use of the words complained of, may be engaging in conduct in breach of s 52 of the Act. There is, as counsel for the respondent pointed out, no evidence of actual deception or actual confusion, either on the part of any person proposing to advertise in the applicant’s newspaper or on the part of any person buying the applicant’s newspaper for the sake of finding what is advertised within it. Nor is there any evidence at present of any actual damage sustained by the applicant by reason of the two most recent issues of the respondent’s newspaper which contain the words complained of. I do not think that such evidence is necessary for the purposes of being satisfied that there is a serious question to be tried on the cause of action which the applicant seeks to maintain in these proceedings. I have also borne in mind that the newspapers of the applicant on the one hand, and of the respondent on the other hand, have a number of very significant differences. Those differences are set out at some length in par 13 of the affidavit of Mr Dash, which was tendered in evidence, not the least of which is, of course, that the respondent does not charge a fee for non-commercial advertisers inserting advertisements in its newspaper. There are many other differences. I have had regard to them. Despite those considerations, I do not think that the case falls into the category for which counsel for the respondent contended, namely that the applicant has no prospect or little prospect of success in the proceedings.

8. I have also had regard to the authorities to which I was referred.  In particular Commercial Dynamics Pty Ltd v M Hawke Nominees Pty Ltd (1996) ATPR 41-503 at first glance appears to have been decided on similar factual issues. The reasons of Jenkinson J (at 42311B) with whom Miles and Finn JJ agreed in the Full Court, and the reasons for decision of Higgins J at first instance in the Supreme Court of the Australian Capital Territory (in particular pars 31 to 34 of his Honour’s reasons) indicate that the use of the words “Trading Post” as the title to or part of the title to newspapers containing classified advertisements in the Australia Capital Territory had been in existence for some years prior to the particular publication there complained of. There were several such newspapers. The issue was in that case whether the addition of the words “Servicing the Canberra Region” to the words “Local Trading Post” in those circumstances were likely to mislead or deceive. It was on that factual issue that the case turned. Accordingly, I do not think it is of particular significance to the present case. It is not an authority which compels the conclusion that the applicant will fail on its application. The other case with apparent factual proximity to the present is Melbourne Trading Post Pty Ltd v Speedie and Others (Beach J, unreported, Supreme Court of Victoria, 8 May 1985). A publisher of the Melbourne Trading Post, a substantially circulated newspaper, sought to restrain publication within the Geelong area of the Geelong Trading Post, with a very considerably lesser circulation. Beach J compared the two newspapers, and in the result at interlocutory stage reached the view that an ordinary reader would not be likely to be deceived or confused into believing that the defendant’s paper was or was associated with the plaintiff’s newspaper. It was a decision on the particular facts. It was also a decision based on the law of passing off, rather than s 52 of the Act. Beach J also expressed the view that the balance of convenience in that case would not justify the making of the order sought in any event. That again is a matter to be decided in the circumstances of each particular case.

9. I have, for the reasons I have expressed, reached the view that there is a serious question to be tried whether the publication by the respondent of its newspaper with the words of which complaint is now made might give rise to a breach of s 52 of the Act.

10. On the balance of convenience, I accept that the status quo represents that which existed before the respondent’s most recent two forms of its publication.  Up to then, the applicant and the respondent had been competing in their particular markets using titles or descriptive words which did not contain words such as those of which the applicant now complains.  I accept that damages may well be an inadequate remedy to the applicant, if it is entitled to relief, because it will be very difficult for it to establish the extent to which, if at all, use of the words “Trading Post” together or in close proximity by the respondent precludes or inhibits advertisers from participating in its advertising, or will reduce the extent to which consumers – that is persons reading its classified advertisements – will look to its newspaper as distinct from the respondent’s newspaper, by reason of the fact that the respondent’s newspaper has the words “Trading Post” as part of its substantial lead presentation.  If the applicant fails in this action, and the respondent is entitled to use the form of presentation complained of, the respondent may have suffered some loss by the delay before that form of presentation can be used.  Any such loss is protected by the undertaking as to damages given by the applicant, but any such loss will also be very difficult to assess.

11. Counsel for the respondent did not contend that there were significant other considerations balancing the convenience for which the applicant contends the other way.  There is one significant exception to that proposition.  That is that the respondent contended that the applicant, in coming to the Court for ex parte orders in the first place had been less than frank in disclosing material to the Court which it ought to have disclosed to it.  That application for ex parte relief made on 4 May 1999 was not, ultimately, pursued.  That is a significant matter and, if it is made out, in my view it would weigh very heavily against the grant of the interlocutory relief which otherwise I am minded to grant to the applicant.

12. I have carefully considered the submission put by counsel for the respondent in the light of the evidence.  One matter is related to the failure to disclose to the Court the decision in Commercial Dynamics to which I have referred.  I have explained why I have regarded that case as not of immediate relevance to resolution of the present proceedings.  It is not appropriate, unless it is critically necessary to do so, to determine issues of credit on this proceeding, and it is sufficient for me to say that the fact that the applicant did not draw that decision to the Court’s attention at the time it sought interlocutory relief is not, in my view, of such a nature as to warrant the refusal of interlocutory relief which would otherwise be granted.  Another factor which was said to be significant and not to have been disclosed was the fact that in its 1995 accounts, apparently the last publicly available, the applicant has its goodwill at a zero value, whereas it now asserts in its affidavit that the name Trading Post is by far its most important asset.  I do not think that that material is of sufficient moment to the sort of application presently brought for me to treat it as material which the applicant ought to have disclosed when seeking ex parte interim relief on this application.  There are no other matters of significance, in my view, which the respondent has referred to which indicate that the applicant should be deprived of its entitlement to interlocutory relief which otherwise I have determined that it should receive.

13. Accordingly, provided that the applicant proffers the undertaking recorded in the terms of the order in par 1 of the minutes of order handed to me, I propose to make the order sought in those minutes, but with one additional limitation and subject to two discrete matters.  The additional limitation is to add after the word “newspapers” in line 2 of par 1 of the proposed order the words “within the State of South Australia”.  I also delete (as I have been asked to do by the applicant) subpar (c) of that paragraph, so that subpar (d) will become subpar (c) of the order.  Counsel for the respondent pointed out that the proposed order may be ambiguous by including within it the word “prominently” ahead of the word “feature”, and the words at the end of that paragraph, “or any other name substantially identical or deceptively or confusingly similar to the phrases” in subpars (a), (b) and (c) of those orders.  It is important that any order made by the Court be clear.  I propose, therefore, to delete from the proposed order the word “prominently”.  I propose also to delete the words after “other”, that is the words “name substantially identical or deceptively or confusingly similar to the phrases” and to substitute the following words:  “or any other combination of words which incorporate the words ‘trading’ and ‘post’ either adjacent to or in close proximity to each other”.  The balance of the text of that paragraph of the minutes remains.  I will reserve the costs of the notice of motion, in lieu of the order proposed in par 4.  I will also change in par 3, the period for any notice on the liberty to apply from 24 hours to 48 hours’ notice.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:

Dated:             30 June 1999

Counsel for the Applicant:	Mr M E Hoile
Solicitors for the Applicant:	Piper Alderman
Counsel for the Respondents:	Mr T A Gray QC and Dr R J Baxter
Solicitors for the Respondents:	Johnson Winter & Slattery
Dates of Hearing:	10 May 1999
Date of Decision:	10 May 1999