Fitzgerald v 33 South Pty Ltd

[2008] FMCA 1132

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FITZGERALD & ANOR v 33 SOUTH PTY LTD & ANOR [2008] FMCA 1132

TRADE PRACTICES – Application for damages pursuant to ss.52 and 53 Trade Practices Act 1974 (Cth) and for passing off – allegation of unauthorised exploitation of well-known surfing identity’s name, image and reputation – misleading and deceptive conduct – passing off – damages for loss of opportunity – injunction.

Trade Practices Act 1974 (Cth), ss.52, 53(c), 53(d), 80, 82, 87(1A)(b)
Federal Magistrates Court Act 1999 (Cth), s.18

WEA International Inc v Hanimex Corporation (1987) 77 ALR 456
Gould & Birbeck & Bacon v Mount Oxide Mines Limited (in liq) (1916) 22 CLR 490
Banque Commerciale SA, en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Hogan v Koala Dundee Pty Ltd (1988) 20 FCR 314
Wickham v Associated Pool Builders Pty Ltd (1988) 12 IPR 567
Fido Dido Inc v Venture Stores (Retailers) Pty Ltd (1988) 16 IPR 365
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union and Others (1979) 42 FLR 331
Sheen v Fields Pty Ltd (1984) 58 ALJR 93
Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553
Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) ATPR 40-303; (1982) 42 ALR 177
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216
ConAgra Inc v McCain Foods (Aust)Pty Ltd (1992) 33 FCR 302
Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403
Talmax Pty Ltd v Telstra Corp Ltd (1996) 36 IPR 46; [1997] 2 Qd R 444
Jones v Dunkel (1959) 101 CLR 298
Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451
Sterling v Trade Practices Commission (1981) 35 ALR 59
Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd (1984) 6 FCR 289
Hutchence v South Seas Bubble Co Pty Ltd (1986) 64 ALR 330
York v Lucas (1985) 158 CLR 661
Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1989) 89 ALR 48
Australian Woollen Mills Limited v F S Walton and Company Limited (1937) 58 CLR 641
Honey v Australian Airlines Ltd (1989) 14 IPR 264
Honey v Australian Airlines Ltd (1990) 18 IPR 185
Nixon v Slater & Gordon (2000) 175 ALR 15; [2000] FCA 531
Campomar Sociedad Limitida v Nike International Ltd (2000) 202 CLR 45
10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299
Festival Records Pty Ltd v International Direct Marketing Pty Ltd (1986) ATPR 40-664
Fletcher Challenge Ltd v Fletcher Challenge Pty Ltd [1981] 1 NSWLR 196
Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414
Henderson v Radio Corporation Pty Ltd [1960] NSWR 279
Erven Warnink BV v J Townend & Sons (Hull) Ltd (Advocaat case) [1980] RPC 31
Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 32 ALR 387
Poseidon Ltd & Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69
Finucane v New South Wales Egg Corporation (1988) 80 ALR 486
Kenny & Good Pty Ltd v MGICA (1992) Ltd (1997) ATPR 41-576
Surge Licensing Inc v Pearson (1991) 21 IPR 228

First Applicant: TERRY FITZGERALD

Second Applicant: HOT BUTTERED INTERNATIONAL PTY LIMITED (ACN 002 011 734)

First Respondent: 33 SOUTH PTY LTD (ACN 116 956 962)

Second Respondent: ANDREW JONES

File Number: SYG 748 of 2007

Judgment of: Nicholls FM

Hearing dates: 10, 11, 12 September 2007

Date of Last Submission: 21 December 2007

Delivered at: Sydney

Delivered on: 13 August 2008

REPRESENTATION

Counsel for the Applicants: Ms C Cochrane

Solicitors for the Applicants: Davies Collison Cave

Counsel for the Respondents: Mr R Killalea

Solicitors for the Respondents: City Law Pty Ltd

ORDERS

1. The first respondent, by itself, its directors, officers, servants, agents or otherwise be permanently restrained from, in trade or commerce, and without the licence of the first applicant selling, offering to sell or keeping for the purposes of sale or offering for sale, products that depict any of the following:

   (i)The name “Terry Fitzgerald”.

   (ii)The whole or a substantial part of any photograph of the first applicant.

   (iii)Any name substantially identical with or deceptively similar to the name “Terry Fitzgerald”.

2. The first respondent by itself, its directors, officers, servants, agents or otherwise be permanently restrained from, in trade or commerce, representing that any products sold or offered for sale by the first respondent or on its behalf is being sold by the first applicant or a company associated or affiliated with the first applicant or otherwise has the licence, sponsorship or approval of the first applicant or a company associated with the first applicants.

3. The first respondent by itself, its directors, officers, servants, agents or otherwise be restrained from reproducing or authorising the reproduction, without the licence of the first applicant, of the whole or a substantial part of any photograph of the first applicant.

4. The second respondent be restrained from being knowingly concerned in or a party to or from procuring any conduct of the first respondent prohibited by orders 1, 2 and 3 above.

5. The first respondent deliver up on oath within seven (7) days to the first applicant any material that would constitute a breach of these orders in the possession, custody or power of the first respondent, its directors, officers, servants and agents.

6. The respondents pay the applicants damages pursuant to s.82 of the Trade Practices Act 1974 set in the amount of $26,000. 

7. The respondents pay the applicants’ costs in the proceedings as agreed or assessed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 748 of 2007

TERRY FITZGERALD

First Applicant

HOT BUTTERED INTERNATIONAL PTY LIMITED (ACN 002 011 734)

Second Applicant

And

33 SOUTH PTY LTD (ACN 116 956 962)

First Respondent

ANDREW JONES

Second Respondent

REASONS FOR JUDGMENT

1. This is an application made under the Trade Practices Act 1974 (Cth) (“the Act”) on 5 March 2007 seeking damages for breach of ss.52 and 53 of the Act, and in an action asserting passing off.

Background

1. The first applicant (Terry Fitzgerald) claims to be a well-known surfing identity.  He owns and controls the second applicant (Hot Buttered International Pty Limited – “Hot Buttered”), and sells surfboards and surf-related products, including t-shirts, through the second applicant. 

2. The first respondent (33 South Pty Ltd – “33 South”) is a company that sells surf wear, including t-shirts. The second respondent (Andrew Jones) is, and was at all material times, the director of 33 South and is responsible for the carriage and control of the business.

3. It was common ground before the Court that 33 South had been marketing and selling a t-shirt in Australia (“the yellow 33 South t-shirt”) that features Mr Fitzgerald’s name and that this has been done without the licence of Mr Fitzgerald.  Nor was it disputed that the t-shirt also features the image of Mr Fitzgerald.

4. The applicants claimed that once the first applicant became aware that the yellow 33 South t-shirt was being offered for sale, the applicants, through their solicitors (Davies Collison Cave), requested the respondents stop selling these t-shirts, and the first applicant made this request of the second respondent personally.  The respondents continued to sell and advertise the t-shirts, and continued to do so after proceedings were commenced.

Grounds of the Application

1. The application filed on 5 March 2007 is as follows:

   “Application

   (Rules 4.01 and 40.02 Federal Magistrate Rules)

   (Application under the Trade Practices Act 1974 and associated matters)

   A.     DETAILS OF THE CLAIM

   On the grounds appearing in the accompanying Statement of Claim, the Applicants’ claim:

   1.An order that the First Respondent, by itself, its directors, officers, servants, agents or otherwise be permanently restrained from, in trade or commerce, and without the licence of the First Applicant selling, offering to sell or keeping for the purpose of sale or offering for sale, products that depict any of the following:

   a)    the name TERRY FITZGERALD

   b)    the whole or substantial part of any photograph of the First Applicant

   c)    any name substantially identical with or deceptively similar to the name TERRY FITZGERALD

   2.An order that the First Respondent by itself, its directors, officers, servants, agents or otherwise be permanently restrained from, in trade or commerce, representing that any products sold or offered for sale by the First Respondent or on its behalf is being sold by the First Applicant or a company associated or affiliated with the First Applicant or otherwise has the licence, sponsorship or approval of the First Applicant or a company associated with the First Applicant.

   3.An order that the First Respondent by itself, its directors, officers, servants, agents or otherwise be restrained from reproducing or authorising the reproduction, without the licence of the First Applicant, of the whole or a substantial part of any photograph of the First Applicant.

   4.An order that the Second Respondent be restrained from being knowingly concerned in or a party to or from procuring any conduct of the First Respondent prohibited in paragraphs 1 to 3 herein.

   5.An order that the First Respondent deliver up on oath within 7 days to the First Applicant any material that would constitute a breach of these orders in the possession, custody or power of the First Respondent, its directors, officers, servants and agents.

   6.Damages pursuant to s. 82 of the Trade Practices Act 1974.

   7.Further or other orders pursuant to s. 87 of the Trade Practices Act 1974.

   8.Damages or equitable compensation for passing off.

   9.In the alternative to paragraphs 6 to 8, an account for profits.

   10.Interest.

   11.  Costs.

   12.  Such further or other orders as the Court thinks fit.”

Representation

1. The parties were represented before the Court by Ms C Cochrane of Counsel for the applicants, and Mr R Killalea of Counsel for the respondents.

The Evidence Relevant to the Issues

1. The applicants have put the following affidavits before the Court:

   1)Affidavit of Terry Fitzgerald sworn 2 March 2007 (with annexures) (“ATF 1”).

   ·     No objections.

   2)Affidavit of Terry Fitzgerald sworn 21 June 2007 (with annexures) (ATF 2”).

   ·     Paragraph [8] (“Hot Buttered Australia” is different to the second applicant; no evidence of who “Hot Buttered” is): objection – hearsay: objection fails.

   ·     Paragraph [16], fourth line (“highest quality Indian 180gm cotton”): objection – opinion: lay opinion only; subject to weight, objection fails.

   ·     Paragraph [17] (“Consumers sometimes request that … their”): objection – form (indirect speech; hearsay): objection upheld – “Consumers sometimes request that … their” struck out.

   ·     Paragraph [17] (“They often request me to endorse Hot Buttered products so that they become collectable items”): objection – hearsay: objection upheld (entire sentence struck out).

   ·     Paragraph [26] (entire paragraph): objection – hearsay: lay opinion only; subject to weight; objection fails.

   ·     Paragraphs [38(a)], [38(b)] and [38(c)] (“A number of articles … extensive press coverage …”): objection – suggests more articles, but no proof of this; not extensive in context: subject to weight; objection fails.

   ·     Paragraph [42] (“Unique means the web surfers who spend several minutes on the site as opposed to just hits”): objection – hearsay: evidence should come from Blue Central; objection upheld.

   ·     Paragraph [55] (“… outlet not suitable”): objection – in the nature of a submission): objection withdrawn.

   · Paragraphs [57] and [58] (Product comparison): objection – opinion: paragraph [57] a lay opinion only, subject to weight, objection fails; paragraph [58], objection withdrawn.

   ·     Paragraph [59] (last four lines): objection – opinion: lay opinion only; subject to weight; objection fails.

   ·     Paragraph [60] (entire paragraph, but “the” in the first and last lines in particular): objection – in the nature of a submission; opinion: lay opinion only; subject to weight; objection fails except that “the” in the first and second lines are struck out.

   3)Supplementary Affidavit of Terry Fitzgerald sworn 12 July 2007 (“ATF 3”).

   ·     Paragraph [7] (references to the name “Terry Fitzgerald” in advertisements): objection – hearsay: lay opinion only; subject to weight; objection fails.

   ·     Paragraph [8] (from “I have observed …”, and “all” in ninth line): objection – opinion: lay opinion only; subject to weight; objection fails except that the “all” in the ninth line is struck out.

   ·     Paragraph [12] (entire paragraph): objection – opinion: lay opinion only; subject to weight; objection fails.

   4)Affidavit of Terry Fitzgerald sworn 5 September 2007 (with annexures) (“ATF 4”).

   ·     Paragraph [5] (entire paragraph): objection – in the nature of a submission; opinion: lay opinion only; subject to weight; objection fails.

   · Paragraphs [9] to [11] (reference to “Fitzy” range): objection – relevance: relevant to damages; admitted; otherwise subject to submissions on relevance.

   5)Affidavit of Allan Hunt sworn 21 June 2007 (with annexures) (AAH 1”).

   ·     Paragraph [5] (last four lines from “Further …”): objection – hearsay: objection as to last sentence upheld; otherwise not read.

   · Paragraphs [6], [7], [10] and [11]: objection – hearsay: objections withdrawn.

   6)Affidavit of Cheryl Prenter sworn 26 June 2007 (“ACP 1”).

   ·     No objections.

   7)Affidavit of Cheryl Prenter sworn 12 July 2007 (“ACP 2”).

   ·     No objections.

   8)Affidavit of Brad French sworn 26 June 2007 (with annexures) (“ABF 1”).

   · Paragraphs [4] and [7] (entire paragraphs): objection – hearsay: objections withdrawn.

   9)Affidavit of Brad French sworn 16 July 2007 (“ABF 2”).

   ·     No objections.

   10)Affidavit of David Epper sworn 26 June 2007 (“ADE 1”).

   ·     No objections.

   11)Affidavit of David Epper sworn 17 July 2007 (“ADE 2”).

   ·     No objections.

   12)Affidavit of Keith Curtain sworn 27 June 2007 (with annexures) (“AKC 1”).

   ·     Paragraph [4] (last three lines): objection – hearsay: objection withdrawn.

   ·     Paragraph [7] (second line to end): objection – opinion: lay opinion only; subject to weight; objection fails.

   ·     Paragraph [9] (fourth line): objection – opinion: objection withdrawn.

   ·     Paragraph [11] (second line to end): objection – relevance: objection withdrawn.

   13)Affidavit of Keith Curtain sworn 16 July 2007 (with annexures) (“AKC 2”).

   ·     No objections.

   14)Affidavit of Claire Elizabeth Ramsay sworn 5 September 2007 (with annexures) (“ACER”).

   ·     No objections.

   15)Affidavit of Rodney Malcolm De Boos sworn 5 September 2007 (with annexures) (“ARMDeB”).

   ·     No objections.

   16)Affidavit of Douglas McGregor Lees sworn 6 September 2007 (with annexures) (“ADML”).

   · Paragraphs [13], [14] and [15] (entire paragraphs): objection – relevance: admitted subject to relevance (to be considered by the Court if necessary (T 64); objection fails.

2. The applicants also put before the Court the following exhibits:

   1)“AE 1” – ASIC Historical Company Extract for Hot Buttered International Pty Ltd as at 10 September 2007 (T 70).

   2)“AE 2” – Profit and Loss Statement for Hot Buttered International Pty Ltd for the period June 2004 to June 2005 (T 71 and T 190).

   3)“AE 3” – Article about Terry Fitzgerald by Derek Hynd (T 72 to T 73).

   4)“AE 4” – Light Blue T-shirt from the Hot Buttered “Soul” range (T 73 to T 74).

   5)“AE 5” – The Australian Surfer’s Journal (Volume 1, No 2), pp.29-45 and 7 (T 88 to T 89).

   6)“AE 6” – Surfing World (Issue 281) at pp.60-67 (T 89).

   7)“AE 7” – Tracks (October 2006, Volume 10 of 12), at pp.14 and 64 (T 90).

   8)“AE 8” – Australian Surf Business: Australia’s Surf Industry Trade Magazine (Issue 8 October/November 2005) (T 90).

   9)“AE 9” – Australian Surf Business: Australia’s Surf Industry Trade Magazine (Issue 12 June/July 2006) (T 91).

   10)“AE 10” – Australian Surf Business: Australia’s Surf Industry Trade Magazine (Issue 18 June/July 2007) (T 91).

   11)“AE 11” – Tracks (May2007, Volume 5 of 12) (T 91).

   12)“AE 12” – Hawaiian Islands Vintage Surf Auction Brochure/Booklet July 2007 (T 142).

   13)“AE 13” – Morning of the Earth at pp.157-181 (T 168).

   14)“AE 14” – The Surfer’s Journal (Volume 15, No 2) at pp.48, 51, 57 and 59 (T 168).

3. The respondents have put the following affidavits before the Court:

   1)Affidavit of Andrew Jones affirmed 20 August 2007 (“AAJ 1”).

   ·     Paragraph [6] (“… as they were a great success to date and continued to receive excellent customer support and media attention.”): objection – opinion; best evidence rule (unsupported assertion): lay opinion only; subject to weight; objection fails.

   · Paragraphs [11] to [18] (entire paragraphs): objection – relevance (objective test): admitted subject to submissions of bad intention.

   ·     Paragraphs [22] (entire paragraph): objection – hearsay: objection upheld as to part: “as the retailer … to deliver”.

   2)Affidavit of Andrew Jones affirmed 24 August 2007 (with annexures) (“AAJ 2”).

   ·     No objections.

   3)Affidavit of Danielle Chapman affirmed 24 August 2007 (with annexures) (“ADC”).

   · Paragraphs [9] and [10] (entire paragraphs): objection – hearsay: objection upheld; both paragraphs struck out.

   4)Affidavit of Matthew Barnes affirmed 24 August 2007 (with annexures) (“AMB”).

   ·     Paragraph [3] (“The teeshirts (sic) were high quality”): objection – misleading or confusing; relevance; hearsay: lay opinion only; subject to weight; objection fails.

   ·     Paragraph [8] (“I presumed upon the quality of the teeshirts (sic) being high quality because (i) the Surfing World teeshirts (sic), previously sold to me by 33south, were of high quality and (ii) the Tracks teeshirts (sic) appeared to be of the same high quality.”): objection – misleading or confusing; relevance; hearsay: lay opinion only; subject to weight; objection fails.

   ·     Paragraph [10] (“On taking delivery of the teeshirts (sic) ordered from 33south, I observed that the quality of the teeshirts (sic), including the fabric, stitching and colour of the teeshirts (sic), and the presentation of the Tracks covers on those teeshirts, was high.”): objection – misleading or confusing; relevance: lay opinion only; subject to weight; objection fails.

   · Paragraphs [16] and [17] (entire paragraphs): objection – hearsay: objection upheld; both paragraphs struck out.

   ·     Paragraph [17] (entire paragraph) – not read.

   5)Affidavit of Phillip Adair affirmed 24 August 2007 (with annexures) (“APA”).

   ·     Paragraph [9] (entire paragraph): objection – hearsay: objection upheld; paragraph struck out.

   ·     Paragraph [10] (“The teeshirts (sic) are high quality.”): objection – misleading or confusing; relevance: lay opinion only; subject to weight; objection fails.

   ·     Paragraph [10] (“Buyers often say things like: I like the cotton, its (sic) thin, not cloying.”): objection – hearsay: objection upheld; last sentence struck out.

4. The respondents have also put before the Court the following exhibits:

   1)“RE 1” – 33 South Summer 2004 Buyers Catalogue (T 150).

   2)“RE 2” – 33 South Men’s First Summer 2005 Buyers Catalogue (T 151).

   3)“RE 3” – Draft License Agreement between Surfing World and 33 South Pty Ltd (T 155).

   4)“RE 4” – Agreement between the Copyright Group Limited and 33 South Pty Ltd dated 8 June 2006 (T 156).

   5)“RE 5” – 33 South Pty Ltd promotional DVD Tracks Vintage T-Shirt Collection (T 156).

   6)“RE 6” – Documents produced under applicant’s subpoena to 33 South Pty Ltd (T 158).

   7)“RE 7” – Tracks (April 2007, Volume 4 of 12) at p.100 (T 160).

   8)“RE 8” – 33 South Pty Ltd “Vintage Tracks” Collection comprising 10 t-shirts in total (T 167).

1. Legislation relevant to the consideration of this application is ss.52 and sub-ss.53(c) and (d) of the Act:

   “52   Misleading or deceptive conduct

   (1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

   (2)Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).”

   “53   False or misleading representations

   A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

   …

   (c)     represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

   (d)     represent that the corporation has a sponsorship, approval or affiliation it does not have …”

2. The applicants claim injunctive relief under ss.80, and damages under ss.82 and 87 of the Act.

Jurisdiction

1. This court has jurisdiction to hear the application arising in relation to ss.52 and 53 of the Act in that these sections are contained in Part V of the Act, and this matter arises under a part of the Act in circumstances where a civil proceeding has been initiated by a person (other than the Minister or the Commission, as defined in the Act) (see s.86(1A) of the Act). To the extent that the applicant also raises a claim of a “passing off” at general law, s.18 of the Federal Magistrates Court Act 1999 (Cth) confers jurisdiction on this Court given that, plainly, this is a matter associated with matters (ss.52 and 53 of the Act) in which the jurisdiction of this Court is being invoked.

2. In relation to the second respondent I note the Court’s power to make orders under the provisions of s.87(1A)(a) of the Act to the extent that the applicants assert that the second respondent was a person who was involved in the contraventions claimed pursuant to ss.52 and 53 of the Act.

3. Further, none of this was at issue between the parties, and I agree with submissions by the applicants that the second respondent’s liability in relation to the issue of “passing off” (if made out) would arise as a joint tortfeasor at general law on the basis that he procured or induced the impugned conduct, or acted in a common design, with the first respondent.  See WEA International Inc v Hanimex Corporation (1987) 77 ALR 456 at 465, per Gummow J:

   “It should be added that infringement of copyright statutes for long has been considered tortious, so as to make applicable the common law principles as to liability of joint tortfeasors.  However, those principles would not have provided an answer for plaintiffs in cases such as Sarpy v Holland.  This was because the circumstance that two or more persons assisted or concurred in or contributed to an act causing damage is not of itself sufficient to found joint liability; some common design is necessary: Morton-Norwich Products Inc v Intercen Ltd [1978] RPC 501 at 515–16.  The position in the United States as regards liability at general law for common design to effect infringement of copyright created by federal law is unsettled: Nimmer on Copyright §12.04 [A].

   Where the infringer is a corporation, questions frequently arise as to the degree of involvement on the part of directors necessary for them to be rendered personally liable. Those questions are not immediately answered by principles dealing with “authorization” or joint tortfeasance. Rather, recourse is to be had to the body of authority which explains the circumstances in which an officer of a corporation is personally liable for the torts of the corporation: Polaroid Corp v Sole N Pty Ltd [1981] 1 NSWLR 491 at 498; C Evans and Sons Ltd v Spritebrand Ltd [1985] 1 WLR 317; Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd (1985) 84 FLR 101 at 127; cf Yorke v Lucas (1985) 158 CLR 661 ; 61 ALR 307.  The present is not such a case.  Nor is there any issue as to vicarious liability of an employer for the torts of an employee.”

   (Citations omitted)

Relief Sought

1. In written submissions made after the hearing in this matter (see paragraphs 59 to 63), the respondents submit that sub-ss.53(c) and 53(d) have not been pleaded outside the context of s.52 of the Act. (See also paragraphs 6 to 9 of the respondents’ written submissions.) In short, therefore, the respondents submit that given that a breach of s.52 only was pleaded as the basis for the damages sought (the submissions are silent as to injunctive relief), and that therefore the respondents, having understood the pleadings as such, read the pleadings as being a claim for damages in respect of a breach of s.52 only.

2. In reply, the applicants asserted:

   1)With reference to paragraph 19 of the statement of claim attached to the application, it is clear that the proceedings were brought pursuant to sub-ss.53(c) and 53(d), in addition to s.52 of the Act.

   2)Any grievance with the pleadings should have been raised earlier and preferably at an interlocutory stage, and in particular, by way of a strike out application, or a request for particulars.

   3)In any event, the applicants made it clear in opening and closing submissions that they intended to pursue claims under s.53 of the Act, and submissions were clearly made in relation to both relevant sub-sections of that section.

   4)The respondents have not asserted, let alone put forward any evidence, that they were taken by surprise as to the case to be met.

   5)Referred the Court to Gould & Birbeck & Bacon v Mount Oxide Mines Limited (in liq) (1916) 22 CLR 490 at 517, per Isaacs and Rich JJ, and as applied by Dawson J in Banque Commerciale SA, en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 293:

   “Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are.  That is their function.  Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars.  But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.”

3. The respondents’ complaint in this regard, as best understood (see paragraph 6 of respondents’ written submissions of December 2007), are derived from paragraph 19 of the applicants’ “pleadings” (the statement of claim attached to the application) which is in the following terms:

   “19.By reason of the aforesaid the First Respondent has engaged in conduct which is misleading or deceptive or which is likely to mislead or deceive in contravention of sections 52, 53(c) or 53(d) of the Trade Practices Act 1974.”

4. The respondents complained that the references to “misleading or deceptive conduct” refers only to s.52, and is expressly stated in that section, and is not so stated in s.53.

5. Focusing only on this paragraph in the statement of claim, I note and agree with the applicants’ reference (see paragraph 13 of the applicants’ subsequent submissions of 21 December 2007, and the reference to Millers Annotated Trade Practices Act (2007) ((28^th edn.) [1.53.5])) that s.53 of the Act supports s.52 by “enumerating specific types of conduct which, if engaged in by a corporation in trade or commerce in connection with the promotion or supply of goods or services, will give rise to a breach of the Act”.

6. I understood the applicants’ position therefore to be that notwithstanding that the words used at the impugned paragraph 19 of the statement of claim (“misleading or deceptive conduct”), they are also, when read in the context of the statement of claim as a whole, and the relevant assertions made there, matters relevant to sub-ss.53(c) or 53(d). Further, that such sub-sections are to be read in support of s.52, in that s.53 enumerates the types of conduct which would give rise to breaches of the Act.

7. Further, that the relevant pleadings did rely on sub-sections of s.53, and that the respondents would have been aware of that. Noting of course that in any event the matter proceeded through hearings and subsequent submissions in that light.

8. I agree with the applicants’ submissions in this regard.  But in my view there is a further reason that the respondents cannot succeed in this charge.  That is with reference to the actual application made to this Court, to which the statement of claim was annexed.

9. I note first that the applicants commenced proceedings in this Court by way of application (to which the statement of claim was annexed) in compliance with the relevant Rules of this Court:

   “4.01    Application

   (1)Unless otherwise provided in these Rules, a proceeding must be started by filing an application in accordance with the form of application set out in Part 1 of Schedule 2.”

   I note also r.4.02 of the Rules:

   “4.02    Content of application

   An application must precisely and briefly state the orders sought and (if the application is for a general federal law proceeding) the basis on which the orders are sought.”

10. The form used by the applicants complies with that requirement.

11. The respondents take no issue that s.52 was not pleaded. In my view, any plain reading of item two in the application itself makes it clear that sub-ss.53(c) and (d) of the Act were also being invoked.

12. The references in paragraph 2 clearly direct the respondents to the issue that orders are being sought, in relation to the first respondent, and with reference to order four the second respondent, from representing that items being sold or offered for sale by the first respondent, or on its behalf, is being sold by the first applicant (sub-s.53(c) of the Act), or otherwise has the sponsorship or approval of the first applicant (sub-s.53(d) of the Act).

13. The application itself makes it very clear that damages pursuant to ss.82 and 87 of the Act are being sought.

14. In light of the above, the respondents’ complaint in this regard does not succeed. 

Relevant Background: The Parties

1. From the evidence before the Court, the following of relevance can be discerned.

2. The first applicant, Mr Terry Fitzgerald, is a director of Hot Buttered International Pty Limited (“Hot Buttered”), the second applicant in these proceedings (see ATF 2 at [1] (see also ATF 1 at [2])).  The second applicant was at all relevant times a company duly incorporated in Australia (see paragraph 2 of the statement of claim, annexed to ATF 1).  Since 1980, Hot Buttered has been in the business of developing, marketing and distributing surfboards, and surf-related products (see ATF 2 at [8]).  It was Mr Fitzgerald’s evidence before this Court that he had carriage and control of Hot Buttered.

3. Mr Fitzgerald commenced surfing in 1969, and during the 1970s he appeared in a number of documentaries and movies about surfing, and through success in competitions in his professional surfing career, has achieved recognition for his surfing achievements, including an induction into the “Surfing Hall of Fame in 1995”.  He was awarded an “Australian Sports Medal” by the then Prime Minister of Australia in 2000.  He has been active in the surfing world in Australia, including the organisation and promotion of professional surfing competitions.  

4. I am satisfied on the evidence before the Court that Mr Fitzgerald has such a profile in the surfing world in Australia (at least those parts relevant to these proceedings), and is known and respected and recognised by this community (see in particular ATF 2 at [2]-[6], [38]-[40]). (See also generally applicants’ document entitled “Amended Table of Articles and Adverts in Applicants’ evidence on Terry Fitzgerald and Hot Buttered” (“Amended Table of Articles”) provided by way of aide memoire to the Court.) (See AAH at [4], ABF 1 at [4], and ABF 2 at [5], ADE 1 at [2], ADE 2 at [4], and ADML at [5]. See in particular, APA at [12].)

5. Hot Buttered has used Mr Fitzgerald’s name, image and reputation for commercial purposes.  See in particular ATF 2 at [11]-[13], [19]-[23], and [43], and see also Amended Table of Articles.  See also AAH at [7] and [10], ABF 1 at [2]-[5], ABF 2 at [3]-[4], and evidence given by Mr French during the hearing before the Court that many Hot Buttered products were marketed with reference to Terry Fitzgerald, and further of the relationship between the first and second applicants. 

6. The first respondent is 33 South Pty Ltd (“33 South”).  It was not in dispute between the parties that 33 South is a company, that according to the second respondent’s evidence (see AAJ 1 at [3]) originated in a commercial sense in April 2003 when the second respondent created what he described as his “own surf wear label” – “‘33south’ in Sydney”.  

7. In oral evidence before the Court, Mr Jones, the second respondent, stated that 33 South was a “wholesale business”, and “not a retail business”.  Although he also gave other evidence that 33 South products were also sold through at least one outlet which he owned.  While it is clear on the evidence that at the relevant and material times, 33 South has been involved in marketing and selling t-shirts in Australia, it was difficult to discern from Mr Jones’ oral evidence before the Court what part of the wholesale t-shirt market 33 South operated in.  In any event, what was not at issue between the parties was that at all relevant and material times Mr Jones, the second respondent, was a director of 33 South, and responsible for the control and carriage of its business (see the evidence of Mr Jones).

8. Mr Jones appears to have had extensive experience in the design and production of various clothing items, including, and relevantly, t-shirts (see AAJ 1 at [A] and [C]).  In oral evidence before the Court, Mr Jones sought to demonstrate at some length the technical and other experience he had gathered over some years, and which was applied and incorporated in the design and manufacture of the “33 South t-shirt”.

The Yellow 33 South t-shirt

1. What is also not in dispute between the parties is that in the second half of 2006, 33 South caused to be produced and distributed in Australia a range of t-shirts featuring ten different selected designs.  These were described as having a “vintage look” (Mr Jones’ evidence-in-chief before the Court), and featured covers taken from issues of a particular surfing magazine” “Tracks” (see also AAJ 1 at [10]-[18]).  It appears that this was done as a result of a licensing agreement with the publishers of Tracks (EMAP) in about June 2006.  (See AAJ 1 at [9], and also generally oral evidence given before the Court by Mr Jones.)

2. It was also not in dispute between the parties that one of these selected designs featured a cover from an issue of Tracks magazine in 1975 which included, amongst other things, a photograph taken by a Mr Devine (see both the evidence of Mr Fitzgerald and Mr Jones before the Court) which depicted Mr Fitzgerald performing a particular surfing manoeuvre.

3. One of the impugned t-shirts is before the Court as exhibit RE 8.  A description of the t-shirt assists in understanding the issue before the Court. 

4. The t-shirt is yellow in colour, and on the front is reproduced the front cover of a Tracks magazine of June 1975 (TF 23).  There are three panels depicted from this photograph on the t-shirt. 

5. The first, at the top, is approximately 21cm x 16cm.  Across the top of the panel appears the word “Tracks” blocked out in yellow.  The remainder of the panel appears to be some palm-laden tropical scene. 

6. The middle panel is 21cm x 2½cm, and contains the words “Fantasy Issue”. 

7. The third and bottom panel is approximately 21cm x 13cm.  At the top it contains the words “Australian Titles – Terry Fitzgerald Interview”.  At the bottom are the words “Saga of Cindy and Brad – A surf romance”.  In between is a “grainy” (newsprint type) reproduction of a surfing scene depicting a surfer on a surfboard with one arm outstretched. 

8. Above the top panel appear the words “Registered for posting as a periodical category B”.  On the right-hand side “June 1975 $0.40”.

9. Just under the collar hem at the top and back of the t-shirt is a red label stitched to the t-shirt bearing the words:

   “33 South”

   “M

   Made in

   China”

   Affixed to that tag by way of safety pin and looped chord is a larger cardboard tag bearing the words “33 South”.  On the back appear the words:

   “Sydney

   Plus 33°54 minutes S Australia

   >

   One each of all the t-shirts in the range were before the Court, including the yellow 33 South t-shirt.  (For the photograph see statement of claim.  For the yellow 33 South t-shirt see RE 8.)

10. It was not in dispute between the parties that Tracks was in the 1970s, and remains now, a well-known magazine about surfing.  Evidence given by Messers Adair, French and Epper before this Court would all support the proposition that it has a high reputation in the surfing world in Australia. 

The Applicants’ Complaints

1. The applicants’ claim that the respondents have, by the distribution for commercial purposes of the t-shirt bearing Mr Fitzgerald’s name and his image, misappropriated his name (which is said to be one of some celebrity), his image, and reputation, for material gain, and that this was done without the license, authority or even knowledge of Mr Fitzgerald, or Hot Buttered at the relevant time.  That once Mr Fitzgerald became aware of the yellow 33 South t-shirts bearing his name and image being offered for sale, he requested that the respondents to stop such sales.

2. The applicants submit that the right to use a personality or a character as an aid in selling products is of great value and should be protected, and that this has been recognised by the courts (see in particular Hogan v Koala Dundee Pty Ltd (1988) 20 FCR 314 (“Hogan v Koala Dundee”), Wickham v Associated Pool Builders Pty Ltd (1988) 12 IPR 567 (“Wickham”), Fido Dido Inc v Venture Stores (Retailers) Pty Ltd (1988) 16 IPR 365 (“Fido Dido”).)

3. The applicants assert a breach of s.52 of the Act. This section proscribes conduct by a corporation (and in the circumstances of the association, of Mr Jones) in that it shall not engage in conduct that is “misleading”, “deceptive” or “likely to mislead or deceive”. The Act itself does not provide definition for these terms.

4. The relevant test of whether conduct is misleading or deceptive is an objective test and involves a question of a finding of fact to be determined in light of the evidence of the impugned conduct. 

5. The applicants submit that the impugned conduct of the respondents was misleading, was deceptive and was likely to mislead or deceive, and that it is for the Court to objectively decide whether this was so (see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 (“Parkdale Custom Built Furniture”)).

6. I note authorities that the term “likely to mislead”, for the purposes of s.52 of the Act, was said to mean “… a real or not remote chance or possibility, regardless of whether it is less or more than 50 per cent” (Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union and Others (1979) 42 FLR 331 at 346, per Deane J. See also Sheen v Fields Pty Ltd (1984) 58 ALJR 93.).

7. In relation to s.52 specifically, the applicants submit that the issue for the Court is whether a reasonable member of the relevant class of consumers would be misled into believing that the applicants had produced the yellow 33 South t-shirt, or that a commercial arrangement had been concluded between the applicants, either one or both, on the one hand, and the respondents, either one or both, on the other, under which the applicants had agreed to the use of Mr Fitzgerald’s name and/or image on the yellow 33 South t-shirts (see Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553 (“Pacific Dunlop v Hogan”), and Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) ATPR 40-303; (1982) 42 ALR 177 (“Taco Company v Taco Bell”).

1. Clearly, in relation to s.52 of the Act, for a breach of that section to be found, the conduct complained of must convey a misrepresentation. The applicants say that the misleading or deceptive conduct conveying such a misrepresentation was that (relevant) consumers would be misled into thinking that the yellow 33 South t-shirts had been produced by Mr Fitzgerald and/or Hot Buttered, or that a commercial arrangement had been concluded between the applicants and the respondents under which the applicants agreed to the use of Mr Fitzgerald’s name and image on the 33 South t-shirts.

2. The applicants rely in this regard on Pacific Dunlop v Hogan per the majority (Beaumont and Burchett JJ, Shepherd J dissenting).  Pacific Dunlop v Hogan was a case involving conduct said to constitute passing off, and secondly said to be misleading conduct contrary to s.52 of the Act.

3. In essence, this case concerned a commercial advertisement (some posters were also used) using a “send-up” of a widely known character played by an actor in a movie, to promote the sale of a particular type of shoe.  At first instance, amongst other things, the Court found (per Gummow J) that the objective of the advertisement was that a substantial number of viewers in the target audience would take away a favourable impression held by the movie character, and the actor playing the movie character, in connection with the brand of shoe.  

4. The Full Court said, as summarised by Beaumont J at 577:

   “a substantial number of viewers in the target audience would, as a matter of real, not remote, likelihood have responded to the advertisement ‘on the footing that in accordance with general or normal practice’, permission would have been sought for the advertisement from the first respondent, the film makers or both, and that they had ‘some association of a commercial nature with’ the production of the advertisement, or, more generally, with ‘Grosby Leatherz’ shoes.  His Honour made similar findings with respect to the posters.”

5. At first instance, the Court held that both passing off and misleading conduct contrary to s.52 of the Act had been made out. The Court found that in relation to the conduct complained of, that is, the conduct of the advertisers of the shoes, that the advertisers had passed off the shoes as goods with which the relevant actor had a commercial association, and had therefore engaged in conduct contrary to s.52 of the Act.

6. The principle to be drawn from that case, for present purposes, is that the relevant question (in relation to a contravention of s.52 and passing off) was whether the relevant section of the public would be misled into believing, contrary to the fact, that a commercial arrangement had been concluded between the parties before the Court such that there was a mistaken belief that the person whose image or persona was used in the advertisement had agreed to the advertising (see Beaumont J at 581, and per Burchett J at 583).

7. While the question was essentially one of fact as to whether such conduct amounted to a misrepresentation, in Pacific Dunlop v Hogan Beaumont J said (at 581): “…in the present case, because the representation alleged was not made in express terms, the resolution of the issue turns on the proper inferences to be drawn from the … conduct, that is, the case depends upon secondary, rather than primary facts.”

8. In relation to sub-s.53(c) of the Act, the relevant test is whether the t-shirts amounted to a representation, again contrary to fact, that the t-shirts had the “sponsorship” or “approval” of either of, or both, the applicants.

9. The relevant test under sub-s.53(d) of the Act is whether the t-shirts amounted to a representation, again contrary to fact, that 33 South who was the manufacturer and distributor of the t-shirts, had the “sponsorship” or “approval”, or had some “affiliation” with, either or both of the applicants.

10. In Taco Company v Taco Bell the Full Court of the Federal Court “… established propositions affording guidance” as to whether conduct falls within s.52 of the Act (at 202):

    1)The relevant section of the public needs to be identified such that the Court can then test whether the conduct is misleading or deceptive, with reference to this section of the public.

    2)The issue is then to be considered by reference to all who come within this group.  I note the reference in the applicants’ submissions to Parkdale Custom Built Furiture (at 93, per Lockhart J: “including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations”).

    3)Evidence that a person (within the group) has formed an erroneous conclusion may be persuasive, but is not essential, but is admissible in that context.  That is, admissible for consideration in that context, noting that such evidence does not conclusively establish that such conduct is misleading or deceptive.

    4)There is a necessity to enquire why the proven misconception has arisen (see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216 (“Hornsby Building Information Centre”) at 228). In this way the evidence of those who say they have been misled can be evaluated to see whether they have been confused because of the misleading or deceptive conduct on the part of the respondents (see Taco Company v Taco Bell).

11. I note also that for the purposes of s.52 of the Act, there is no need for the applicants to prove some mental element of intent, nor even to prove that members of the relevant section have actually been misled or deceived for the conduct to nonetheless fall within the ambit of s.52. Noting of course that at the heart of the requirements of s.52 is that the impugned conduct cannot be categorised as misleading unless it contains, or conveys, a misrepresentation (Taco Company v Taco Bell), and noting that the test is objective (Parkdale Custom BuiltFurniture at 197-198, and 216.

12. In relation to passing off, the applicants referred the Court to ConAgra Inc v McCain Foods (Aust)Pty Ltd (1992) 33 FCR 302 (“ConAgra v McCain Foods”) at 355 where what was described as the “classical trinity” of reputation, misrepresentation and damage was emphasised. Noting also that in Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403 (at first instance) Gummow J found that for passing off to be made out the Court had to be satisfied that there was a reasonable likelihood that a substantial number of persons would have formed the impression that the applicant in that case and the respondents had some commercial association.

13. The conduct complained of then is that by depicting the name and image of Mr Fitzgerald on a particular t-shirt that was produced, or caused to be produced, by the respondents, and offered for sale, both directly and indirectly at retail outlets by the respondents, that such conduct caused persons in the relevant section of the public to form an erroneous conclusion that the applicants (and at the very least Mr Fitzgerald) had some commercial connection with the product being offered for sale. 

14. The applicants submit that the relevant class of consumers in this matter is purchasers of surfboards and surf-related products in Australia, and that such a group is predominantly composed of surfers.

15. In this regard the applicants rely on the evidence of Mr Jones given by way of affidavit, and orally before the Court, that 33 South is a “surf wear label”, and that the t-shirts were designed with the “surf market in mind”. 

16. See in particular:

    1)AAJ 1.

    2)Exhibit AJ 5 in particular the statement on the cover of the 33 South promotional CD (RE 5): “33south was established in Sydney in 2003 to create authentic surf wear”.

    3)The 33 South t-shirts were sold by 33 South to what were described as shops that only sell surfboards and surf-related products (ATF 4) and to other shops in areas that surfers frequent.  (See ACER at [9]-[10], ADML at [17], ATF 4 at [3]-[4], and Mr Jones’ evidence in cross-examination where he gave evidence that he “did design for the surf market”, and “being able to target much more accurately the surf shops”.  He described his customers, that is, the retail stores to which the 33 South t-shirts were sold, as “some of them are surfers”.)

    4)Noting also the evidence of Mr Barnes in cross-examination even though his shop “Underdog Music and T-shirts” focuses on music and t-shirts and does not sell surfboards, but nonetheless “… yes, I do target surfers”.

    5)The evidence of Mr French and Mr Epper that they purchase surf-related products such as t-shirts, and had seen the 33 South t-shirt for sale and/or being worn on the street in areas close to surf beaches.  See in particular ADE at [1]-[4], and ABF 1 at [2] and [6].

    6)The 33 South t-shirts were brought to Mr Fitzgerald’s attention by a young surfer, Kieron Prenter, who received a t-shirt as a present from his mother (see in particular ACP 1 at [2]-[3], and ATF 2 at [55]).

    7)Advertisements featuring the 33 South t-shirts were placed in both the April and May 2007 editions of Tracks magazine which is a surfing magazine, a matter which is not in dispute (see exhibits TF 35 and AJ 6).

The Respondents’ Position

1. In submissions in reply the respondents do not appear to directly take issue with the applicants’ characterisation of the section of the public relevant to the test the Court is required to apply in this matter.

2. I note that at [67(iii)] in written submissions (although apparently directed to the issue of misrepresentation and misleading conduct and damages) reference is made that a finding of misrepresentation might be made based on a narrow view of a reasonable member of “the relevant class of consumers”, but that in respect of the same representation, such a finding might not be made on the view of a section of the public comprising a “substantial” number of persons.

3. To the extent that the respondents make reference to Talmax Pty Ltd v Telstra Corp Ltd (1996) 36 IPR 46; [1997] 2 Qd R 444 (“Talmax v Telstra”) at 550 (line 50) and 451 (line 3) it may be said that there is some implicit assertion that as to the section of the public relevant to this case that this should be seen as the “general public”.

4. That case involved a well-known Olympic swimmer being featured in an advertisement in which the applicant claimed that this implied a connection between him and Telstra (the respondent), a connection which did not exist, and in which the applicant failed.  In relation to the question of what is the relevant class in this case, and as to whether regard should be had as to whether the relevant class is the “general public”, this case does not assist the respondents.  In Talmax v Telstra the Court held (at 446) that the advertisement in question was: “directed to the general public by inclusion in a newspaper with a wide circulation.” This is plainly not the situation in this case.

5. In the current case, I am satisfied on the evidence before the Court that the relevant section of the public is not the “general public”, but that class of consumers who are purchasers in a retail context of surfboards, and surf-related products in Australia, and while this group is predominantly comprised of surfers, it also includes those who purchase such products for surfers (as in the case of Ms Prenter who purchased the t-shirt for her son who is a young surfer).  That is, the class of consumers of surf-related products.

Mr Fitzgerald’s Reputation

1. Underlying the applicants’ claims, and indeed their complaint about the respondents’ conduct, is the applicants’ reliance on Mr Fitzgerald’s reputation, and that such reputation is a “saleable commodity”, relevantly, in the surfing community because he is well-known in his own right and through his association with Hot Buttered. (For reputation see generally ATF 2 at [2]-[6], the Amended Table of Articles, AAH at [4], ABF 2 at [5], ABF 1 at [4], ADE 1 at [2], ADE 2 at [4a], ADML at [5].)

2. The evidence before the Court is that Mr Fitzgerald began surfing competitively in 1969 and won a number of professional titles, has received public recognition for his surfing achievements, and has been inducted into the Surfing Hall of Fame in 1995, and awarded the Australian Sports Medal in 2000 (see generally the Fitzgerald affidavits).  

3. As to Hot Buttered, the evidence reveals this was established in 1971 by Mr Fitzgerald for the purpose of selling his surfboards, and that at least since 1980 has been in the business of developing, marketing and distributing a broader range of surf-related products using, to a large part, Mr Fitzgerald’s name and image, and on occasion licensing other companies to do the same (see generally the affidavits of Mr Fitzgerald, and further ABF 1 at [3] and further note at [4]: “[h]e is still well-known among surfers in Australia, and would be considered iconic”).

4. The applicants also submit that many articles, movies and advertisements have been published in Australia describing Hot Buttered and Mr Fitzgerald, and featuring Hot Buttered trade marks, and that Mr Fitzgerald’s name or his image are used extensively.  The applicants rely on samples of these articles, movies and advertisements as contained in the range of items annexed to advertisements to the applicants’ evidence. 

5. The respondents’ submissions do not appear to directly attack the applicants’ evidence and submissions in this regard.

6. At paragraph [4] of the written submissions, the respondents say that: “Terry Fitzgerald was known to a number of persons as a renowned surfer in and about 1975”.  This appears to be consistent with evidence given by Mr Jones before this Court in examination-in-chief when he referred to Mr Fitzgerald’s “notoriety” as being in the “halcyon days” of “20 years ago”. 

7. Mr Jones’ evidence was also that he had only “vaguely heard of Mr Fitzgerald” and “had heard of” Hot Buttered.  (See also AAJ 1 at [19] as to “vaguely heard of Terry Fitzgerald as a surfing identity”, and [20], “I had heard of Hot Buttered in my youth and had gathered that it was a good surfboard”.)  

8. I note further that the other possible reference relevant to this question appears in the respondents’ submission under the heading of “Whether Misleading/Deceptive Conduct – Other Witness Evidence” where it is asserted that:

   1)Mr Matthew Barnes gave evidence that he had not heard of Terry Fitzgerald or Hot Buttered prior to the Court proceedings (AMB at [19]), and gave “unchallenged oral evidence” before the Court that he had not heard of Terry Fitzgerald or Hot Buttered.

   2)Ms Danielle Chapman also did not know of Mr Fitzgerald prior to the Court proceedings, and knew only of Hot Buttered as a “surf brand” (ADC at [14]).  

9. Importantly, the respondents did not refer to this evidence in the context of Mr Fitzgerald’s (and for that matter Hot Buttered’s) reputation, but in the context of arguing that persons who had not heard of Terry Fitzgerald or Hot Buttered could not have been misled into thinking that Terry Fitzgerald or Hot Buttered had sponsored, endorsed or supported the sales of the yellow 33 South t-shirt (see in particular [52] to [56] of the respondents’ written submissions). 

10. Focusing solely, at the moment, on the issue of reputation, I agree with the applicants’ submissions that these references to these particular pieces of evidence do not assist the respondents in seeking to challenge the reputation or notoriety of Mr Fitzgerald (in at least the Australian surfing world).

11. There is no dispute between the parties that Mr Fitzgerald was of renown at least in 1975.  There is clear evidence before the Court that with reference to surfers (the relevant section of the public in this case) he continues to have reputation and renown.  

12. The evidence of Mr Barnes, that prior to the Court proceedings he had not heard of Terry Fitzgerald or Hot Buttered, and the evidence of Ms Chapman that prior to the Court proceedings she had not heard of Terry Fitzgerald and only knew of Hot Buttered “as a surf brand”, does not assist the respondents in relation to this question.  On their own evidence, neither Mr Barnes, nor Ms Chapman, fall within the relevant group.  That is, neither described themselves as surfers or even persons who purchased surf-related products for surfers.  

13. It was Ms Chapman’s evidence that her shop: “stocks smart casual mens (sic) and womens (sic) wear aimed at persons in the 30+ age bracket” (ADC at [2]).  While she sold 33 South t-shirts (both the “Surfing World” t-shirts (see [214] below) and the “Tracks” t-shirts), and even though her shop was in a beachside suburb (Mona Vale, New South Wales), it was not a surfing shop.  Further (and in support of the proposition that the section of the public relevant to this case are surfers and those who purchase surf-related products for them), she gave evidence that she sold the “Tracks” t-shirts to women as gifts for husbands, brothers and sons who were surfers. 

14. Plainly, Ms Chapman does not come within the relevant group, and her association with the group appears to have been “second-hand”, with relatives of surfers.  Mr Lees’ evidence (given for the applicant) (see ADML at [9]) was that Ms Chapman’s shop was in a popular surfing area, and as such it was implausible that she did not know of Terry Fitzgerald, particularly as she was selling a t-shirt with his name and image on it.  Her evidence however, is consistent with someone who professes no knowledge of, or interest in, surfing beyond selling surfing t-shirts to the relatives of surfers.  As a measure therefore of Mr Fitzgerald’s reputation and renown (and that of Hot Buttered by association with him), her evidence that she had not heard of him prior to these proceedings does not in all the circumstances above assist the respondents. 

15. Similarly, the evidence of Mr Barnes also does not assist.  Mr Barnes also is a shop proprietor, and manager of the business: “Underdog music and teeshirts” in a beachside suburb (Bondi, New South Wales).  

16. Mr Barnes did not give any evidence that he was a surfer, or that had any association with surfers (beyond selling these t-shirts).  His evidence was that he saw “surfers wandering up and down” on the street where he conducted his business and, given that the displays in his shop included surfing t-shirts, and to that extent he did target surfers.  (Again relevant to the issue of the relevant section of the public.)  

17. However, I did not understand his evidence to say that his interest in surfing extended beyond that.  His evidence was also that the focus of his business was on “music and t-shirts”, and did not sell surfboards or related products (beyond the t-shirts).  That he had not heard of Terry Fitzgerald and Hot Buttered again does not assist as he plainly is not a member of that section of the public relevant to the issue in these proceedings. 

18. Mr Phillip Adair also gave evidence on behalf of the respondents.  While Mr Adair is, as the proprietor of “retro antiques”, in the business of selling “retro” goods, and operates in a beachside area which “attracts beach-goers” (see APA at [1]), it was his evidence (although clearly given for a different purpose, that is, that he did not think that: “Terry Fitzgerald or Hot Buttered in any way sponsor[ed], endorse[d] or otherwise support[ed]” the 33 South t-shirt”), nonetheless importantly, that he has been “a casual and constant surfer for 25 years” (at [2]) and has known “for many years” of “Terry Fitzgerald, and of Hot Buttered, as surfing identities” (at [12]).  In contrast to those who professed not to be surfers.

19. In all, therefore, on the evidence before the Court I am satisfied that the section of the public relevant to consideration of this matter is the purchasers of surfboards and the purchases (even for relatives) of surf-related products in Australia, and is predominantly composed of surfers.  Further, that amongst this group, Mr Fitzgerald is well-known, as is his association with Hot Buttered.

The Reputation of Hot Buttered

1. I should just note that in submissions the respondents (at [35iii]) submitted that there was no evidence that Hot Buttered was a “significant brand” in the surf wear clothing market in Australia, contrary to the assertion of the applicants that both Mr Fitzgerald, but relevantly Hot Buttered, were “marketable brands” in the market for surf wear.

2. At first it must be noted that the respondents’ submissions in this regard are put in answer to the applicants’ submissions generally under the heading of: “The Intention of the Respondents”, and dealing for the respondents’ part with the assertions of lack of credibility in the evidence of Mr Jones (the applicants assert that it seems unlikely that Mr Jones would not have been aware of Mr Fitzgerald and Hot Buttered and the marketability of both brands in the market for surf wear).  It is in this context that the respondents asserted that the applicants gave no evidence that they were a significant brand in the surf-wear clothing market in Australia.

3. As to the issue of credibility see further below.

4. Putting that issue to one side, I have difficulty in accepting the respondents’ submission that the applicants gave no evidence that they were a significant brand in the surf wear clothing marketplace in Australia.  The respondents rely on two small parts of Mr Fitzgerald’s evidence in ATF 2 at [43]: “Hot Buttered Australia have developed the Hot Buttered ‘Soul’ range”, and at [48] “Hot Buttered ‘Soul’ Australian retail sales are around $160,000 for the summer of 2005-2006”.  The respondents submit that it may be assumed that the “manifestly low returns” for 2005-2006, and the lack of returns for 2006-2007, indicate that Hot Buttered “Soul” was not a significant brand.

5. I have difficulty in accepting this part of the respondents’ submissions.  In my view, the two parts of Mr Fitzgerald’s evidence relied upon are highly selective and ignore the large amount of evidence that supports the proposition to the contrary. 

6. For example, see generally the evidence of Mr Fitzgerald in ATF 1 at [7]-[13]. In addition the evidence that the annual revenue of Hot Buttered for the financial year ending 30 June 2005 was over $2 million, and for the financial year ending 30 June 2006 was over $1.8 million. (See [19]-[23] as to the advertising, marketing and promotion of Hot Buttered, and the sponsorship by Hot Buttered of many Australian surfing events – see [31]-[37], and the number of magazine articles that have featured, in addition to Mr Fitzgerald, the Hot Buttered trademarks (remembering that there is evidence before the Court to support the proposition that Terry Fitzgerald and Hot Buttered are associated ([38]-[39]).)

7. I do appreciate that the respondents’ point is focused solely on one aspect of Hot Buttered’s activities, that is its development of the “Soul” collection launched in 2005 (see ATF 1 at [43]).  It was what was said to be the low returns for this particular collection that led to the submission (“it may be assumed”) that Hot Buttered “Soul” was not a significant brand such that Mr Jones would have noticed them in the marketplace.

8. First, again as this submission relates to the credibility of Mr Jones see further below.

9. Second, however, what this submission ignores, as it goes to the issue of what Mr Jones knew or did not know when carrying out the impugned conduct, is that intention is not an element that must be proved in order to establish contravention of s.52 of the Act. As already set out above, the test is an objective test.

10. Further, the applicants submit in response that it is not open for the respondents to ask the Court to draw such an inference, because it is not reasonably probable that this is the only possible explanation for that result (that is, the low returns), and second, the respondents failed to cross-examine Mr Fitzgerald on this point (with reliance on Jones v Dunkel (1959) 101 CLR 298 at 305 and 308).

11. I agree with these submissions.  But what in my view is of importance in dealing with the respondents’ submission is that these submissions ignore the test the Court is required to address, which involves an assessment of whether the conduct of the respondents is misleading or deceptive, or likely to mislead or deceive, with reference to the relevant section of the public to whom the question falls to be tested. 

12. In this regard, focusing on one aspect only (and from the evidence it would appear to be a small part of Hot Buttered’s activities), notwithstanding that it is involved with surf wear clothing is misleading.  The issue here is whether Hot Buttered, as a whole, and with reference to all of its activities (not just one part), would be recognised by surfers as being a “significant brand” in the market for surfboards and, relevantly, surf-related products, including t-shirts.  The evidence before the Court indicates that this is the situation. 

13. On the evidence, therefore, I am satisfied that Hot Buttered, with reference to the relevant group, does have the profile as asserted by the applicants. 

Mr Jones: Credibility

1. In submissions, the applicants invite the Court to find that Mr Jones was not a truthful witness, and was evasive, argumentative and appeared intent upon giving self-serving evidence in respect of all topics upon which he was cross-examined.  In particular, the applicants asked the Court not to accept his evidence as truthful in relation to his denials as to the accuracy of the evidence given by Mr Fitzgerald, Mr DeBoos and Mr Lees (in particular paragraphs [50], [51], [52] and [53] of the applicants’ written submissions).

2. In response the respondents submit that Mr Jones is a credible witness and that his evidence ought to be accepted (see [37] of the respondents’ written submissions).  The respondents’ submissions also deal with each of the points raised by the applicants (see [35] and [36]). 

3. It is not necessary at this point to go into details as to each of the matters where the applicants assert a lack of credibility on the part of Mr Jones’ evidence and the respondents’ response.  (Where necessary these are dealt with below.)  For now I note that these matters were:

   1)Mr Jones’ account of a telephone call with Mr Fitzgerald in January 2007.

   2)Mr Jones’ credibility and explanation for the level of knowledge he had in relation to the issue of sponsorship.

   3)His evidence that he had only “vaguely” been aware of Mr Fitzgerald and Hot Buttered.

   4)His explanation of the meaning of a statement which he made on the cover of the 33 South promotional CD (exhibit AJ 5).

   5)Mr Jones’ denials as to the accuracy of the evidence given by Mr Lees.

   6)Mr Jones’ evidence about his telephone conversations with Mr DeBoos.

4. The Court had the opportunity of observing both protagonists (Mr Fitzgerald and Mr Jones) give their evidence and be cross-examined in the witness box.

5. As a general observation, Mr Fitzgerald gave his evidence in a forthright and straightforward manner.  His answers to questions in cross-examination were responsive, and when he was unable to answer a question he plainly said so.  For example, when he was asked as to how conversant with surfing a person would need to be to be able to recognise him surfing on a wave (with obvious reference to his style of surfing, and with reference to the evidence that Mr Fitzgerald developed a particular manoeuvre known as the “bottom turn”). 

6. By contrast, Mr Jones’ evidence was punctuated by obvious difficulties in giving a simple or clear answer.  In part, I did find some of Mr Jones’ evidence to be evasive.  At one point in cross-examination while being asked of the need to know who rival manufacturers are in the clothing industry, his answers were particularly unresponsive and at one point, elicited the statement: “I’m not trying to be evasive”.  Despite his protestations in this regard, I did not regard the subject matter, nor the very clear question, to have warranted an inability to supply a clear answer.  It is difficult not to conclude that even Mr Jones himself recognised that he was being evasive, thus necessitating a statement to the contrary. 

7. It is clear that if the outcome of this case were to depend solely on the manner of the giving of evidence before the Court as between the two protagonists, Mr Fitzgerald and Mr Jones, then the applicants would succeed. 

The Test, Mr Jones’ Credibility and Celebrity Endorsement

1. But this is not the test that this is Court is required to apply in this matter.  The test clearly, as set out above, is whether the conduct of the respondents was such that a reasonable member of the relevant class of consumers would be misled or deceived, or could be likely to be misled or deceived, that some commercial arrangement existed between the applicants and respondents to use Mr Fitzgerald’s image or name on the 33 South t-shirts.

2. In this regard, the applicants rely on, in particular, Fido Dido and Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451 (“the Duff Beer Case”) to submit that a reasonable consumer in the relevant class (of surfers) would be aware that celebrity endorsement or approval of products is widespread in the surfing community.  

3. In this regard, Mr Fitzgerald’s evidence was that a significant portion of Hot Buttered’s marketing budget was spent on endorsements of surfers, and the sponsoring of surfing events, because in his view, the people who buy the Hot Buttered products link the credibility, market acceptance and legitimacy of a brand to celebrity endorsement.  In short his evidence, based on his observation of the consumers in the relevant class (of which I understood him to assert to be also a member) was that if a surfer appeared in a photograph featured with Hot Buttered products, that there was some relationship between Hot Buttered and the surfer, and further that this is an established practice in the surfing community.  

4. His own practice of endorsing products and approving products, for example, by signing his own surfboards or appearing at Hot Buttered sponsored events, further reinforces this view.  (See generally ATF 2 at [6] and [8], and further, evidence given in cross-examination (which remained unchallenged) that the industry “norm” involved licensing agreements with surfers (“athletes”) in connection to the marketing and promotion of commercial products.)  (See also AAH at [7], and in particular [9]-[11], AKC 2 at [5]-[6], ABF 1 at [5], and evidence given during cross-examination by Mr French and Mr Epper to the effect that many Hot Buttered products are marketed by reference to Mr Fitzgerald, and the evidence of Mr Epper during cross-examination where he: “always considered that Hot Buttered and Terry Fitzgerald were synonymous”.) 

5. The applicants also seek to rely in this regard on evidence given by Mr Jones under cross-examination to assert that even he appeared to accept that many surf wear companies sponsor professional surfers in order to benefit the image of the company and its products (see [43] of the applicants’ written submissions).

6. I have difficulty in accepting the applicants’ submission that Mr Jones appeared to accept that “many” surf wear companies sponsor professional surfers.  Mr Jones was asked about the time when he was employed by “Hot Tuna”.  (See also AAJ 1 at A: “2002-2003 – AJ was head of design for Hot Tuna.  AJ designed board shorts, T-shirts, walk shorts, jeans, woven shirts, printed shirts, polos, drawstring pants.  AJ surfed frequently”.  But this was qualified in cross-examination before the Court: “yes, but head of design by way of consultant.  There was no head office”.) 

7. When he was asked as to whether Hot Tuna was a major supporter of pro-surfing events and sponsored surfers by the use of endorsements, his evidence was that he was involved in the design side of this business, and not on the marketing side.  He appeared to give evidence that he lived in Sydney at the relevant time, while the business operated out of Melbourne.  His evidence was ultimately (and it must be said with some qualification, and even some obfuscation): “… it would be fair to guess that many surf wear companies sponsor surfers so I presume they do so because it’s going to benefit their company somehow”).  

8. The applicants also submit that a reasonable person in the relevant class would be aware that Mr Fitzgerald as a surfing identity would protect his reputation by limiting the number and type of products with which he was associated (see in particular ATF 2 at [12]-[13], ATF 3 at [5]-[8], ATF 4 at [9]-[12], and oral evidence in this regard given by Mr Fitzgerald).

9. They further submit that the relevant consumers would understand that Mr Fitzgerald is selective about what he agrees to sponsor or approve (see in particular ADB 1 at [5], ATF 4 at [7], and ADML at [11]-[12]).  In reply, the respondents do not appear to take issue with the evidence or submissions in this particular regard. 

10. The Court is therefore left with evidence to support the proposition (unchallenged) that endorsement of products is widespread in the surfing community, that the relevant consumers in the class would comprehend that if a surfer appeared in a photograph with a product, that it is the norm in the surfing community that they would be sponsored by this product, and further, that a (reasonable) person in the relevant class would be aware that surfing identities, or those with some profile in the surfing community, would protect their reputation by being selective in the number and type of products with which they are associated. 

Evidence of Actual Deception

1. I note that actual evidence that some person has in fact been misled by the conduct of the respondents is admissible for the purposes of consideration of the relevant issue, and may even be persuasive, but clearly it is not essential for the applicants to establish such evidence given that the test is an objective one (Sterling v Trade Practices Commission (1981) 35 ALR 59 at 69, and Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd (1984) 6 FCR 289).

2. The applicants referred to the following evidence as supporting their claim that a number of consumers have been misled into believing that the respondents produced the yellow 33 South t-shirts, and sold these t-shirts with the approval of the applicants in return for a financial benefit. 

3. Mr French gave evidence that he had seen a t-shirt with the name of Mr Fitzgerald, and a photograph of him on it in stores in Newport.  He had seen people wearing these t-shirts in the streets around this suburb.  He gave evidence that he would recognise the photograph of Mr Fitzgerald which appeared on the t-shirt because: “it has the Terry Fitzgerald ‘bottom turn’ which I recognised as being a particular surfing style performed by Terry Fitzgerald”.  He further gave evidence that he assumed that the t-shirt was a Hot Buttered t-shirt, and that it had some association with Mr Fitzgerald, and would not have bought the t-shirt if he had known otherwise (see in particular ABF 1 at [3]-[8]).  In cross-examination before the Court Mr French confirmed when shown the 33 South t-shirt put before the Court (TF 34) that this was the style of shirt that he saw being worn around the streets of Newport. 

4. In cross-examination, however, Mr French also gave evidence that in shopping he was interested in the look and quality of the product, and that if a product (in context, this clearly included surfing t-shirts) looked attractive to him, but he did not recognise the brand, he would take such an item “off the rack and look inside at the tag”, and find out what brand it was.

5. The respondents’ submission in this regard, in answer generally to the applicants’ position, is that Mr French did not stand to be misled as a consumer of the yellow 33 South t-shirt because the label on the t-shirt would have disabused him of any idea that the product was approved or licensed by Terry Fitzgerald or Hot Buttered.

6. The respondents’ position therefore is, with reference to the label on the yellow 33 South t-shirt (see [47] above), that Mr French did not stand to be misled as the 33 South label would clearly disabuse of the idea that the product was approved or licensed by Terry Fitzgerald or Hot Buttered. 

7. Ms Cheryl Prenter also gave evidence that she purchased the yellow 33 South t-shirt in a shop called “Cotton Wool”, for her son, who is a surfer and “a big fan of Terry Fitzgerald”, because she recognised his name on the t-shirt and his image on the t-shirt as being one of Mr Fitzgerald, and while she noted the label on the t-shirt containing the words “33 South”, would have, if she had thought about it, assumed that 33 South had permission from Mr Fitzgerald to use his name and image (see in particular ACP 1 at [2]-[5], and ACP 2 at [3]).

8. The respondents refer the Court to the actual words used by Ms Prenter in her affidavit evidence (ACP 1 at [4]):

   “If I had thought about it, I would have thought the company that printed the t-shirt must have been given permission by Terry Fitzgerald to use his name and the photograph.  I would not have bought it had I known that Terry Fitzgerald had not given such permission.”

9. The respondents submit that her evidence does not go so far as to say that when she bought the yellow 33 South t-shirt she was actually misled into thinking that Mr Fitzgerald had given permission to 33 South for the production of the t-shirt, that her evidence goes no further than a suggestion that if she had asked herself that question, and been informed that Terry Fitzgerald had not given permission, she would not have purchased the t-shirt.  

10. The respondents submit that the “critical issue” therefore is whether Ms Prenter was misled given that she did not raise that relevant question as to whether Mr Fitzgerald was paid for the use of his name or image.  They suggest that the reason she did not ask that question was because it never crossed her mind that Terry Fitzgerald might not have given his permission.  Noting of course that Ms Prenter says nothing about Hot Buttered.  The submission therefore is that Ms Prenter has not even suggested that she was misled in any material way in respect to either of the applicants. 

11. Putting to one side the issue of the label for the moment, the difficulty for the respondents’ submission in this regard is that whatever question may or may not have been posed in the mind of Ms Prenter at the time of purchase, the evidence, that she gave in the same affidavit, clearly shows that she was induced to buy the t-shirt because the t-shirt had on it the name of Terry Fitzgerald and his photograph taken from a 1970s magazine.  She recognised his name, and the photo as “a younger version of Terry Fitzgerald”, and specifically selected and purchased that t-shirt for her son because she knew that her son was: “a fan of Terry Fitzgerald” (see ACP 1 at [3]).

12. It is clear that Ms Prenter was induced to buy the t-shirt because of what she saw as being the representation on the t-shirt of Mr Fitzgerald.  Her evidence clearly is that this was the prime factor in selecting and purchasing this particular t-shirt for her son.  The problem with the respondents’ submission is that it calls for a high degree of speculation as to what else may or may not have crossed her mind at the relevant time.  Speculation which could lead to a number of other possible conclusions, including the opposite to that which is asserted by the respondents.  I note that no objection was taken to the affidavit of Ms Prenter and no cross-examination was conducted.

13. What the Court is left with then in relation to the evidence of Ms Prenter is that she was clearly induced to buy the t-shirt because of what she saw as being the association with Mr Fitzgerald, that is, an association between the manufacturer and distributor of the t-shirt, and the use of Mr Fitzgerald’s name and image.  That she did not think about the specific issue of whether Mr Fitzgerald had given permission for the use of his name, and image, at the time of purchasing the t-shirt does not diminish the situation that at the time of the purchase she believed she was purchasing an item with which Mr Fitzgerald had some association, or alternatively an item which was associated with Mr Fitzgerald. 

1. In any event, the evidence is that Mr Fitzgerald has authorised the use of his name ‘in some circumstances”, and does not stand for the proposition, as put forward by the respondents, that there was some general assignment of his interest in his name to Hot Buttered or some other person.

2. In any event, what the respondents’ submissions fail to appreciate, to the extent that they appear to argue a distinction between Mr Fitzgerald and Hot Buttered and the loss of opportunity is that of Hot Buttered, and not necessarily that of Mr Fitzgerald alone, is, as the applicants submit, immaterial, because both are applicants in the proceedings.  

3. Further, the evidence before the Court has clearly established a clear commercial relationship between Mr Fitzgerald and Hot Buttered, with the latter being the vehicle (to a large extent, but not exclusive) through which Mr Fitzgerald sold surfboards and surf-related products featuring his name and image (and signature), and relying on this name and image (see ATF 1 at [7]-[9], [14], [16] for the use of Mr Fitzgerald’s name on Hot Buttered t-shirts, and as to the relationship between the two applicants in a commercial setting see ABF 1 at [5]: “many Hot Buttered products are marketed by reference to Terry Fitzgerald”; ABF 2 at [3]-[4], ADE 1 at [3]: “… I became aware of the Hot Buttered brand and came to know Hot Buttered merchandise as Terry Fitzgerald’s merchandise.  In my mind, Hot Buttered is Terry Fitzgerald”; AKC 1 at [3], [9], [11]; AKC 2 at [5], [6]; ADML at [6]).

4. The applicants’ position is that the respondents have provided no answer to their contention that they are entitled to loss of opportunity to exploit a commercial advantage (of at least $20,000). Implicit in the applicants’ position is that there is advantage to be found in a name of repute in a business context, and that this is capable of damage by a misleading or deceptive representation that is a contravention of s.52 of the Act.

5. In this context, I understand the applicants to argue that in the circumstances of this case there exists the damage to Mr Fitzgerald’s (and by association Hot Buttered’s) reputation in the breach of s.52 by the respondents in the sense of a diversion of sales away from them (see Sellars v Adelaide Petroleum). I understand the applicants to be seeking redress for the loss of opportunity arising out of the conduct of the respondents which I found to be in breach of s.52 of the Act (and for that matter sub-ss.53(c) and (d) of the Act).

6. The respondents caused to be manufactured and offered for sale a product (the impugned yellow 33 South t-shirt) which used the name and image of Mr Fitzgerald without his licence or authority.  In these circumstances, there was in my view a loss of opportunity to Mr Fitzgerald (and Hot Buttered) to exploit Mr Fitzgerald’s reputation, a reputation which, on the evidence, has some high level of commercial value (particularly in the relevant market) through the sale of the impugned t-shirts carrying his name and image, but without his authority. 

7. As to the exact amount, the applicants have not attempted to prove a particular loss of opportunity (given Talmax v Telstra this is not necessary).  In view of such authorities as Talmax v Telstra, I agree with the applicants that an amount of $20,000 is in the circumstances a best estimate of the value of the opportunity lost to Mr Fitzgerald to exploit his reputation, an exploitation which the evidence shows he has otherwise pursued commercially in the manufacture and sale of surfboards and surf-related products (including t-shirts) for many years.  In view of this I will make the order as sought by the applicants. 

Loss of Reputation

1. The applicants also seek an amount of $20,000 on the basis of loss of reputation as a result of the conduct of the respondents. 

2. The applicants submit that Mr Fitzgerald’s and Hot Buttered’s name and image have been damaged by association with:

   1)Products sold at shops that were not shops dedicated only to selling surf clothing and surf-related products (see ATF 4 at [4]).

   2)Products of a lower quality than the applicants’ products (that is, that the 33 South t-shirts were of a lesser quality).

3. The applicants referred the Court to Surge Licensing Inc v Pearson (1991) 21 IPR 228, a case which concerned the reproduction on t-shirts of the characters “Mutant Ninja Turtles”. They were shown smoking marijuana on the t-shirt. The applicants in that case held exclusive rights to market “Teenage Mutant Ninja Turtle products”. The applicants were awarded damages of $10,000 for loss of reputation, even in circumstances where there was no evidence that anyone had actually been misled or deceived, and this activity only took place for a short period of time.

4. The Court found (at 233-234):

   “The promotion of an illegality under the guise of someone else’s products would undoubtedly have the potential to damage that person's reputation ….  Assessment of damages of this kind is essentially intuitive. Having regard to the amounts awarded in other cases and doing the best I can in this regard, I fix damages in the sum of $10,000 and order that the respondents pay that sum to the applicants.”

5. In relation to the sale of the impugned t-shirts bearing Mr Fitzgerald’s name and image at retail outlets other than “core surf shops”, the applicants submit that the use of Mr Fitzgerald’s name and image without permission on a t-shirt sold in such shops, which are nonetheless located in beachside areas that persons in the relevant class (surfers or those who purchase surf-related products for surfers) are likely to visit, does affect Mr Fitzgerald’s reputation in a negative way.  The applicants rely on Mr Fitzgerald’s evidence (ATF 2 at [55], and ATF 4 at [5]).

6. The evidence relied on, in effect, is that “the retail outlet concerned is not of the type or image that best represents my name or credibility” (ATF 2 at [55]), and also that “the use of my name and image without permission on a t-shirt that is sold in shops other than surf shops in beachside areas that surfers are likely to visit affects my reputation in the surfing industry negatively” (ATF 4 at [5]).

7. The applicants also submit that a number of the shops to which Mr Jones sold 33 South t-shirts are in areas close to the beach, and therefore are likely to be visited by surfers, are not core surf shops (the evidence of Mr Jones and Mr Barnes), and that the loss of reputation is “amplified” because of the location of the shops, and that surfers would be aware that t-shirts featuring Mr Fitzgerald’s name and image are being sold in non-core surf shops.  The applicants also submit that at least one of these non-core surf shops in this regard targets surfers (the evidence of Mr Barnes). 

8. The respondents submissions are silent on this issue. 

9. Notwithstanding this I have some difficulty with the applicants’ argument in this regard.  It is clear that Mr Fitzgerald has some reputation and (positive) notoriety in the surfing world in Australia.  The evidence before the Court establishes the recognition level of his name and image.  

10. The difficulty that I have with the applicants’ argument in regard to this issue, however, is the absence of any explanation as to why Mr Fitzgerald’s reputation would be adversely affected by the sale of t-shirts bearing his name and image in shops, other than those that deal exclusively with surf-related products.  

11. In addition to there being no explanation by the applicants, there was no evidence whatsoever put before the Court that members of the relevant class, that is surfers and those who purchase surf-related products for them, would form an adverse view of Mr Fitzgerald’s reputation simply because they would have seen a t-shirt bearing his name and image in an outlet that was not exclusively devoted to selling surf-related products.  There was no evidence before the Court that these outlets were of such ill repute, or of the type of “bargain” or “cheap” selling shops or otherwise, such that it would create an impression that Mr Fitzgerald was associated with products sold in an outlet that may be described as “down market”.  

12. In my view, the weakness in the applicants’ argument is revealed if one has regard to the argument being applicable to the sale of such t-shirts in an “up-market Department store”, which could also be described as a “non-core surf shop”.  There is no evidence before the Court (let alone any evidence from which the Court could draw any such inference) that surfers would think any less of Mr Fitzgerald (or those who buy surf-related products on their behalf) simply because a t-shirt bearing his name and image was offered for sale in a “non-core” surf shop.  In my view, there is no relevant distinction to be drawn between Mr Fitzgerald and Hot Buttered’s focus on producing surf boards and surf-related products (to the exclusion of non-surf related products), and the sale of such items in what have been described as “non-core surf shops”.  

13. Nor is there evidence before the Court that Mr Fitzgerald and Hot Buttered only sell their products (or that products bearing Mr Fitzgerald’s name and image produced or licensed by other businesses) in “core surf shops”.  (This may be the case but the applicants have not referred the Court to any evidence in this regard.)  

14. Ultimately, I am not persuaded by the evidence relied on by the applicants in this regard that a loss of reputation is occasioned to Mr Fitzgerald simply by the t-shirts being offered for sale in “non-core” surf shops.  Mr Fitzgerald’s evidence, for example, that Ms Prenter found the impugned t-shirt on sale at a menswear outlet in Mona Vale and that “the retail outlet concerned is not of the type or image that best represents my name or credibility” (see ATF 2 at [55]) is unpersuasive in the absence of any other evidence.  Mr Fitzgerald’s evidence that “the retail outlet concerned is in the same shopping area as our own retail outlet Raised by Wolves” (at [55]) does not assist in this argument.

15. For the reasons set out above, I am not persuaded by the applicants’ submissions in this regard, and would not make any order relating to the damages for loss of reputation in this regard.

16. The applicants, however, also rely on there being an effect on the applicants’ reputation because of what they submit to be a difference in quality between the impugned 33 South t-shirts, and the quality of Hot Buttered t-shirts. 

17. The applicants submit that Mr Fitzgerald’s and Hot Buttered’s reputation in relation to quality is properly measured by the quality of the Hot Buttered t-shirts, and that the presence in the market of 33 South t-shirts, and the effect that it has on those reputations, is measured by the difference between the quality of the respective t-shirts.

18. In this regard the applicants say that Mr Fitzgerald was the only witness who gave evidence about the difference in quality between 33 South t-shirts and Hot Buttered t-shirts (ATF 2 at [57]-[58], ATF 3 at [12], and evidence in cross-examination).  (I should note that ATF 3 at [12] was admitted into evidence as Mr Fitzgerald’s opinion and belief only.)  The applicants submit that Mr Fitzgerald’s opinion is based upon his experience, and that the 33 South t-shirts are of lower quality because they were made in China, are made of a lighter weight cotton than the Hot Buttered t-shirts, and that the “prints” appeared to use less colours.  

19. The applicants submit that it is not in dispute that the 33 South t-shirts are made of lighter cotton than the Hot Buttered t-shirts (130 grams per square metre to 180 grams per square metre), and that Mr Jones gave evidence that the images used to create the prints on the 33 South t-shirts were low in quality because the Tracks covers that they came from were very grainy in appearance in the first place.  (In this regard see ATF 3 at [12], AAJ 1 at [14], and Mr Jones’ evidence in examination before this Court.)  

20. The applicants also submit that the effect of the quality of the 33 South t-shirts on Mr Fitzgerald’s reputation (as relevant in the relevant marketplace) is his concern to ensure that “his name and image are only used on good quality and innovative products” (see ATF 4 at [9]).  The applicants pointed to an example of this as being in the agreement that Mr Fitzgerald has with the “Sole Surfer” where he agreed to endorse a range of footwear products which are described as quote “innovative”.  That Mr Fitzgerald has been selective about the company or person with whom he chooses to make an agreement is said to be exhibited with reference to the evidence of Mr Lees (see ADML at [12]). 

21. In response the respondents submitted:

    1)In reference to Mr Fitzgerald’s evidence that he compared 33 South t-shirts with Hot Buttered t-shirts (see ATF 2 at [57]-[58], and ATF 3 at [12]), and that in his opinion in relation to the comparison “Hot Buttered products are of a higher quality”, the respondents submit that Mr Fitzgerald gave no evidence of relevant expertise to be able to speak of “quality”.

    2)Mr Fitzgerald identified the weight of the cotton in the Hot Buttered t-shirts as being “150 and 180gms” (given in cross-examination), and about a “traditional surf shirt is 150-180gms”, and that relatively speaking 33 South t-shirts were lighter than Hot Buttered t-shirts.

    3)Mr Jones’ evidence, which was unchallenged, was that cover art from the oldest editions of Tracks was selected to further enhance the vintage look, and that the relevant t-shirts were made from the highest quality 130 grams per square metre pure cotton, and finished with “an enzyme silicon and washed” to give the garment a very “soft hand feel”, and to make the print fade even further to make it look like it was an original vintage garment from the actual era (see AAJ 1 at [14]-[15]).

    4)Mr Jones gave detailed evidence concerning the production of cotton t-shirts (I understood it to be put in answer to Mr Fitzgerald’s assertion that the 33 South t-shirts were of inferior quality because they were made in China), and that `production processes in China are “world-class”, and that 33 South in production of its t-shirts always “sources” a long staple cotton which is “a fine quality category”, and that ultimately the Tracks t-shirts produced in China were subject to “a rigorous approval process by Tracks magazine”.

22. The respondents submit, given his academic studies and relevant experience, that Mr Jones is an expert in the field of design and production of clothing (although the respondents concede that he is not qualified as a Court expert in this matter), but that nonetheless on his uncontroverted evidence the Tracks t-shirts are made of high quality cotton, produced on high-quality machines and provide a sound basis for the assertion that the Tracks t-shirts are of high quality.  The respondents also submit that that this is supported by other evidence before the Court given by Mr Barnes that the 33 South t-shirts that he sold were “very good quality shirts”, and were better quality than his own t-shirts which he also sold in his shop.

23. By contrast the respondents submit that Mr Fitzgerald professed no expertise in the design and production of cotton clothing, but that in any event that the factors referred to in Mr Fitzgerald’s evidence to assert that Hot Buttered t-shirts were of higher quality do not establish that conclusion.

24. In respect of the applicants’ reliance on Mr Lees’ evidence, I cannot see that it is relevant to the issue of quality.  That Mr Fitzgerald may be selective with whom he chooses to enter into agreements is one thing, but the implication in the applicants’ submissions that Mr Lees’ evidence supports their arguments in relation to “quality” is not borne out by any plain reading of that evidence.  Mr Lees gave evidence as to why Mr Fitzgerald withdrew from negotiations proposing the use of his name on Mr Lees’ products.

25. Mr Lees’ evidence is plainly: “the reason Terry gave for changing his mind was that he was trying to promote his own ‘Hot Buttered’ label and he saw authorising the use of his name and image on other t-shirts as a conflict of interest”.  There is nothing here to show that Mr Fitzgerald did not proceed with Mr Lees’ approach to give his permission to use his image on t-shirts produced by Mr Lees for any reason relating to quality.  The reason plainly had to do with what he perceived to be a “conflict” with his desire to promote the Hot Buttered brand.

26. I also have some difficulty with the applicants’ submission and reliance on what was said to be Mr Jones’ admission that the images he used to create the prints on the 33 South t-shirts were low in quality because the “Tracks covers they came from were very grainy in appearance”, to support their argument that the 33 South t-shirts were of lesser quality than Hot Buttered t-shirts.

27. While some aspects of Mr Jones’ evidence did give rise to some doubt, Mr Jones’ evidence in relation to the particular look that he wanted to give to the range of t-shirts of which the impugned t-shirt was a part was in my view clear and plausible.  He sought to create a “vintage look”.  He was clear in his evidence that his intention was to portray that what was being depicted was from a “magazine cover”.  That the relevant artwork was “newspaper print from the 1970s”, and the prints “were very grainy anyway”, was consistent with the look that he wished to project.  It is in my view a misrepresentation of Mr Jones’ evidence in this regard (evidence which I found plausible), to suggest that because the images used to create the 33 South t-shirt prints were “low” in quality, that somehow meant that the t-shirts themselves were low in quality.  I do not accept this submission made by the applicants. 

28. First, while I have some difficulties with Mr Jones’ evidence in other respects, his evidence in relation to this issue was generally given in a straightforward manner (somewhat in contrast to the manner in which he gave some other evidence), and was highly plausible, noting that his unchallenged experience and expertise in matters of design and manufacture, and the attributes of the relevant of fabric used, in the manufacture of t-shirts. 

29. The applicants rely on the submission that Mr Fitzgerald was the only witness who gave evidence as to the comparative difference in quality between the impugned t-shirt and the applicants’ t-shirts.  I do not see this as being determinative of this issue.  The applicants seek damages on the basis of what was said to be the effect on the applicants’ reputation of the quality of the 33 South t-shirts.  I do not see a comparison of the relative quality of both sets of t-shirts as being ultimately determinative of this issue.  Even if the applicants’ assertion can be made out that the Hot Buttered t-shirts are of “better” quality than the impugned t-shirt (and in this regard I prefer Mr Jones’ evidence as being stronger, although in saying this I do not reject Mr Fitzgerald’s evidence, but accept on balance the strength of Mr Jones’ evidence), the applicant would still not succeed.  

30. In my view the issue as to the effect of loss of reputation, in relation to quality, is whether the impugned t-shirt was of such poor quality that the applicants’ perceived association with it would affect their reputation.  Even on the basis, for the sake of argument, of accepting the applicants’ perception of the higher quality of the Hot Buttered t-shirts, this does not mean that simply by this comparison with the impugned t-shirt that it was of poor quality (even though it maybe said to have been of lower quality).  

31. There is a distinction to be drawn between a comparison of “lower” quality and “poor” quality.  In my view, for the applicants to have succeeded on this issue the Court would need to be satisfied that the impugned t-shirt was of such quality (poor or otherwise) that there would have been an effect on the applicants’ reputation.  This is not made out on the evidence.  Importantly, Mr Fitzgerald’s evidence in comparing the two products was not that the impugned t-shirt was of poor quality, but simply of “lower” quality to his own very “high” quality t-shirt.  In all, what I gather from the relevant evidence is that even if Hot Buttered t-shirts were of higher quality than the 33 South t-shirt it was also of high quality, but even if of some lesser standard, nonetheless not such as to adversely affect the applicants’ reputation.  

1. For these reasons, and for the reasons immediately above, I do not accept the applicants’ contention as to a loss of reputation and will not make an order as sought by the applicants in this regard. 

Conclusion

1. In all, having found that by their conduct the respondents breached s.52, sub-ss.53(c) and (d) of the Act (and that the applicants were successful in their assertion of the tort of passing off), I am satisfied for the reasons given above, that the applicants are entitled to the injunctive relief that they seek, and entitled to some of the damages that they seek pursuant to s.82 of the Act. I note that the applicants did not pursue an account of profits, and nor did their submissions (both sets of written submissions) press any order as to interest.

The Proposed Orders

1. In all, therefore, the orders that I propose to make in this matter:

   1)The first respondent, by itself, its directors, officers, servants, agents or otherwise be permanently restrained from, in trade or commerce, and without the licence of the first applicant selling, offering to sell or keeping for the purposes of sale or offering for sale, products that depict any of the following:

   (a)The name “Terry Fitzgerald”.

   (b)The whole or a substantial part of any photograph of the first applicant.

   (c)Any name substantially identical with or deceptively similar to the name “Terry Fitzgerald”.

   2)The first respondent by itself, its directors, officers, servants, agents or otherwise be permanently restrained from, in trade or commerce, representing that any products sold or offered for sale by the first respondent or on its behalf is being sold by the first applicant or a company associated or affiliated with the first applicant or otherwise has the licence, sponsorship or approval of the first applicant or a company associated with the first applicants.

   3)The first respondent by itself, its directors, officers, servants, agents or otherwise be restrained from reproducing or authorising the reproduction, without the licence of the first applicant, of the whole or a substantial part of any photograph of the first applicant.

   4)The second respondent be restrained from being knowingly concerned in or a party to or from procuring any conduct of the first respondent prohibited by orders 1, 2 and 3 above.

   5)The first respondent deliver up on oath within seven (7) days to the first applicant any material that would constitute a breach of these orders in the possession, custody or power of the first respondent, its directors, officers, servants and agents.

   6)The respondents pay the applicants damages pursuant to s.82 of the Trade Practices Act 1974 set in the amount of $26,000. 

2. The applicants have sought costs in these proceedings in the event that that they were to be successful.  Neither party has made submissions on this issue.  It is appropriate that the parties be given the opportunity to make such submissions on this issue should they choose to exercise it, at the handing down of this judgment. 

I certify that the preceding three hundred and sixty-nine (369) paragraphs are a true copy of the reasons for judgment of Nicholls FM

Associate:  A Douglas-Baker

Date:  13 August 2008