George and Australian Securities and Investments Commission
[2021] AATA 3615
•8 October 2021
George and Australian Securities and Investments Commission [2021] AATA 3615 (8 October 2021)
Division:Taxation and Commercial Division
File Number: 2021/1121
Re:Paulien George
APPLICANT
AndAustralian Securities and Investments Commission
RESPONDENT
AndPlay It Forward Australia Limited
OTHER PARTY
DECISION
Tribunal:Professor Ann O'Connell, Senior Member
Date:8 October 2021
Place:Melbourne
The decision of the Australian Securities and Investment Commission to register the business name, ‘Voices of Casey Choir’, on 5 August 2020 is set aside. In substitution, the Tribunal refuses the registration of the business name, ‘Voices of Casey Choir’.
........................[sgd]................................................
Professor Ann O'Connell, Senior Member
Catchwords
BUSINESS NAME REGISTRATION – Business names register – objection to registration of business name – name which is identical or nearly identical to registered business name – Business Names Registration Act 2011 – Business Names Registration (Availability of Names) Determination 2015 – objects of the Act – avoidance of confusion – misleading consumers – decision set aside and substituted
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Associations Incorporation Reform Act 2012 (Vic)
Business Names Registration Act 2011 (Cth)
Business Names Registration (Availability of Names) Determination 2015 (Cth)
Corporations Act 2001 (Cth)
Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth)Cases
Australian Appaloosa Association Ltd and Australian Securities & Investments Commission [2019] AATA 2195
B & L Whittaker Pty Ltd v Australian Securities and Investments Commission [2014] AATA 302
Boyce v Australian Securities and Investments Commission [2015] AATA 768
G C Swinburne and F J McFarlane v Australian Securities and Investments Commission and Child Psychology Services Pty Ltd (Joined Party) [2014] AATA 602
Hazeldine v Australian Securities and Investments Commission [2019] AATA 366
Perth Martial Arts Academy v Australian Securities and Investments Commission [2018] AATA 3664
Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Smith v Australian Securities and Investments Commission [2014] AATA 192Stanley-Hunt Earthmovers Ltd v Registrar of Companies (1997) 8 NZCLC 261
Stasiw v Australian Securities and Investments Commission and Anor [2015] AATA 328
The Paint Factory Ltd v Registrar of Companies [2000] 3 NZLR 220
Secondary Materials
Administrative Review Council, Automated Assistance in Administrative Decision Making Report No 46, 2004
ASIC Regulatory Guide RG 235 Registering Your Business Name (13 August 2013)
Australian Securities and Investments Commission webpage, Business Name Availability: Taxation Office, Modernising Business Registers, align="left">Dominique Hogan-Doran ‘Computer says 'No': Automation, Algorithms and Artificial Intelligence in Government Decision-Making’ (2017) 13 The Judicial Review 345
Explanatory Memorandum, Business Names Registration Bill 2011
Explanatory Memorandum, Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019Garry Downes, ‘Looking forward: administrative decision making in 2020’, Paper delivered to the Australian Corporate Lawyers Association Government Law Conference, Canberra, 20 August 2010
REASONS FOR DECISION
Professor Ann O'Connell, Senior Member
8 October 2021
BACKGROUND
Paulien George, the Applicant, is the manager of a community choir in the City of Casey in Victoria. Ms George registered the business name, ‘Voices of Casey’, on 12 September 2018. The choir commenced in 2015, initially as an unincorporated association but became incorporated under the Associations Incorporation Reform Act 2012 (Vic) in 2020. The incorporated entity, ‘Voices of Casey Inc’ is not a party to these proceedings as the business name is registered to Ms George personally.
In July 2020, following a dispute with a person who had been employed as the musical director of the choir, a new choir was formed and on 5 August 2020, the business name ‘Voices of Casey Choir’ (the Disputed Name) was registered with the Australian Securities and Investments Commission (ASIC) by a company associated with the former musical director, Play it Forward Australia Ltd (PIFA), a company limited by guarantee.
Ms George became aware of the registration of the Disputed Name and on 26 October 2020, lodged an application with ASIC seeking review of the decision to register the business name ‘Voices of Casey Choir’. On 25 November 2020, ASIC Informed Ms George that it had affirmed the decision to register the business name ‘Voices of Casey Choir’. Ms George seeks a review by the Tribunal of the decision to register the Disputed Name.
The parties agreed that the matter before the Tribunal should be determined on the making of written submissions. Following the filing of submissions, it became apparent that the company that registered the Disputed Name was a person whose interests might be affected by the decision of the Tribunal. The company was contacted and offered an opportunity to be heard. Mr Jonathon Welch, a director of PIFA, requested that the company be made a party and the order was so made.
ISSUE
The issue before the Tribunal is whether the Disputed Name was available to be registered under s 25 of the Business Names Registration Act 2011 (Cth). A business name is not available if the name is ‘identical’ or ‘nearly identical’ to a business name registered to another entity.
EVIDENCE
Ms George provided an affidavit and submitted details of the dispute with the former musical director of Voices of Casey. Although this explains why the Disputed Name came to be registered, and why Ms George is seeking to have that decision overturned, those details are not relevant to the matter to be determined by the Tribunal, namely whether ASIC should have refused to register the Disputed Name.
ASIC made submissions and filed an affidavit by Ruben Whitte, an analyst at ASIC at the time of the registration of the Disputed Name.
Mr Welch submitted a written statement on behalf of PIFA. Mr Welch provided some additional details about his dealings with Ms George, which as noted are not relevant to the matter under consideration, but essentially submitted that ASIC’s decision was the correct one and should not be overturned.
THE LEGISLATIVE FRAMEWORK
The issues raised in this matter require an appreciation of the relevant statutory scheme for the registration of business names and how its provisions interact.
In July 2008, the Council of Australian Governments (COAG) agreed to the development of a single national system for registering and regulating business names. This was said to be part of a reform agenda aimed at delivering a seamless national economy.[1] As a result, the Business Names Registration Act 2011 (Cth) (BNR Act) was enacted. The national registration scheme aims to ensure that any business that does not operate under its own entity name, registers its name and details on a national register. This registration enables those who engage, or propose to engage with that particular business, to determine the identity of the entity behind the business name and its contact details. It also allows businesses to register their names once, regardless of the number of jurisdictions in which they operate.[2] These objects are achieved by requiring an entity that intends to carry on a business under a business name to register the business name on a nationally established and maintained register.[3]
[1] Explanatory Memorandum, Business Names Registration Bill 2011, pages 3 and 4.
[2] Business Names Registration Act 2011 s 16(1) (‘BNR Act’).
[3] Ibid s 16(2).
The BNR Act sets out the provisions dealing with registration of business names on the national register, which since 2012 has been maintained by ASIC. Before considering those provisions, it is useful to consider s 16(3) of the BNR Act that sets out the following further objects of the Act, in addition to those objects that relate to the national scheme and the linking of registration to an ABN. Section 16(3) provides that the objects of the Act are also:
(a)to avoid confusion by ensuring that business names that are identical or nearly identical are not registered; and
(b)to ensure that business names that are undesirable (for example, because they are offensive) are not registered; and
(c)to ensure that business names that should be restricted for any other reason (for example, because they might mislead consumers) are not registered.
Section 16(4) states that those three objects are ‘achieved by rules dealing with the availability of business names’. The legislative provisions and rules dealing with availability of business names are considered below.
Two other provisions should be mentioned. Section 17 of the BNR Act sets out the consequences of registration of a business name. In particular, s 17(2) provides that:
an entity does not acquire property in a business name, or in a word or an expression that constitutes or is included in a business name, because the name is registered to the entity under [the BNR Act].
In other words, the registration of a business name does not mean that the person registering the name owns the name. Section 18 creates an offence if an entity carries on a business under a name, and the name is not registered to the entity as a business name.
This case is concerned with the decision by ASIC to register the Disputed Name. If ASIC registers a business name to an entity, an entity ‘in relation to whom there is a real risk of substantial detriment because of’ such registration may seek review of that decision (s 56, Item 1 in column 1 of the table). Such a ‘reviewable decision’ is then the subject of internal review by ASIC under s 57. Upon such review, ASIC must either affirm or vary the decision or set it aside and make a substituted decision under s 57(6). ASIC is not permitted to use computer programs to make decisions under s 57(6) - such decisions are expressly excluded from the scope of s 66(1) (discussed below). Section 58 provides for review, on application, by the Administrative Appeals Tribunal of decisions made or taken to have been made by ASIC under s 57 of the BNR Act.
Before considering the legislative provisions and rules dealing with registration it is perhaps worth noting that on 4 April 2021, the Commissioner of Taxation was appointed as Commonwealth Registrar of the Australian Business Registry Service (ABRS). This was as a result of amendments to the BNR Act and related legislation by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth). The ABRS when fully operational will bring together 31 ASIC business registers and the Australian Business Register operated by the Australian Taxation Office (ATO) into a ‘modernised registry system to be managed by the ATO’.[4]
[4] Explanatory Memorandum, Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019, [1.4].
On 4 April 2021, the Commissioner of Taxation was appointed as Registrar under the:
Business Names Registration Act 2011
Commonwealth Registers Act 2020
Corporations Act 2001
National Consumer Credit Protection Act 2009.
The ATO website dealing with registration states:
The Registrar's role is to lead and implement the [Modernising Business Registers] program and perform statutory registry functions and exercise powers under the relevant laws. Initially, this will also include assisting ASIC to perform statutory registry functions and exercise its powers as a delegate of ASIC. At a later stage the Registrar will assume primary responsibility for those functions under law.[5]
[5] Australian Taxation Office, Modernising Business Registers,
These administrative changes do not impact on the task of the Tribunal which is to review the decision by ASIC to register the Disputed Name. However, they are mentioned here to indicate that in the future the decisions about registration of, inter alia, business names will not be made by ASIC but by the Commonwealth Registrar (i.e. the Commissioner of Taxation). In any event, the task of the Tribunal is to assess the state of affairs that exist at the time the Tribunal makes its decision,[6] and although the decision-maker may change in the future or may have already changed, the legislation governing the making of the decision is unaltered.
[6] Shi v Migration Agents Registration Authority (2008) 235 CLR 286.
The provisions dealing with registration of business names are in ss 24-26 of the BNR Act. The application process is discussed below. Section 24 of the Act provides that ASIC must register a business name of an entity if satisfied that:
(a) the entity has an ABN; and
(b) the registration fee has been paid; and
(c) the name is available to the entity; and
(d) the entity is not disqualified.
Section 25 deals with the question of availability of business names. It relevantly provides that a business name is available to an entity if ‘the name is not identical or nearly identical’ to, amongst others, a business name registered to another entity. (Section 25 also deals with availability of business names where a name is reserved or registered under the Corporations Act 2001 (Cth) for another body (a company name); or where the name is undesirable; or where the name is constituted by, or includes, a restricted word or expression.)
Section 26 provides that the Minister may, by legislative instrument, make rules for determining whether a name is ‘identical’ or ‘nearly identical’ to another name.
The terms ‘identical’ and ‘nearly identical’ are defined in s 3 as follows:
“identical”: means identical under rules made by the Minister under section 26.
“nearly identical”: means nearly identical under rules made by the Minister under section 26.Section 3 indicates that there are two terms and not one composite expression that is being defined.
The rules referred to in s 26, and in the definitions of ‘identical’ and ‘nearly identical’, are in the Business Names Registration (Availability of Names) Determination 2015 (the Determination). This Legislative Instrument replaced an earlier one made in 2012. Part 2 of the Determination states that it contains rules for determining whether business names are identical or nearly identical to another name.
Part 2 of the Determination has two Divisions, the application of which depends on whether the business name in question is to be compared with another name other than a company name (Division 1), or with a company name (Division 2). That dichotomy flows from the fact that in considering availability of names, ASIC is required to consult both the Business Names Register and the companies register which it also currently maintains.
Division 1 of Part 2 of the Determination, which is relevant to this case, contains provisions that set out the process for comparing names, matters to be disregarded, and matters to be considered when comparing the business name with the other name.
Section 5A of the Determination provides that a business name is ‘identical or nearly identical to another name (other than a company name) if, and only if:
(a) after comparing the business name with the other name by:
(i) disregarding the matters set out in subsection 5(1); and
(ii) applying subsection 6(1);
the names are the same; or
(b) subsection 6(2) applies.
Section 5(1) of the Determination provides for certain matters to be disregarded:
(a) the use of the definite or indefinite article unless it is the whole name;
(b)the use of ‘Association’, ‘Co-operative’, ‘Incorporated’, ‘Limited’, ‘Ltd’, ‘No Liability’, ‘NL’, ‘Proprietary’ or ‘Pty’ in one or both names;
(c) whether a word is in the plural or singular number in one or both names;
(d)the size of characters, and the type and case of letters, any accents, spaces between characters and punctuation marks, used in one or both names;
(e) the order of words in the names;
(f)whether one or both names includes a host name such as ‘www’ or a domain extension such as ‘net’, ‘org’ or ‘com’.
Section 6 of the Determination provides that certain matters are to be considered:
(1) A word or expression in an item in Schedule 1 is to be taken to be the same as each other word or expression in the item.
(2) A business name is identical or nearly identical to another name if, despite the characters used in the name, it may be pronounced the same as the other name.
Schedule 1 contains a list of words and expressions that are taken to be the same under s 6. There are currently 299 items in the list and, it would appear, new items are added from time to time. No item in the Schedule refers to the words ‘choir’ or ‘voices’. Examples of items in the list include:
· music, music centre, music school (Item 204)
· institute, academy, school, college (item 263)
· wellbeing, wellness, wellness centre (Item 269)
· education, educational, education centre, education services, educational services (Item 279)
One of the matters to be decided by the Tribunal is whether the rules in the legislation and the Determination apply in such a way that ASIC does not have any discretion as to whether to register a business name. In this regard, it is important to note that the BNR Act contemplates that decisions concerning registration of business names may be made with the assistance of computers. Section 66 provides:
(1) ASIC may arrange for the use, under ASIC’s control, of computer programs for any purposes for which ASIC may make decisions under this Act …. other than a decision under subsection 57(6) of this Act.
(2) A decision made by the operation of a computer program under an arrangement made under subsection (1) is taken to be a decision made by ASIC.
The significance of s 66 in this case is discussed further below.
CASE LAW
Since the enactment of the BNR Act, there have been a number of cases before the Tribunal where third parties have challenged the registration of a business name by another entity. In each case, the issue has been whether the disputed name is ‘almost identical’ to an already registered name held by the third party, presumably because it will be abundantly clear whether a name is ‘identical’. Most of the cases have accepted that the requirements of the BNR Act and Determination are ‘prescriptive’ and ‘exhaustive’ and have affirmed the decision under review. Two cases however, both decided by Deputy Presidents, have set aside the decision under review, and so refused registration of the disputed names. A common feature of all the cases is that the Tribunal Members have commented on the absurdity of some of the results.
The first case to consider the matter was Smith v Australian Securities and Investments Commission,[7] decided in April 2014. Senior Member McCabe (as he then was) had to consider whether the disputed name ‘Central Coast Surf Academy’ was nearly identical to ‘Central Coast Surf School’. He accepted that the two names ‘are so similar they might confuse or mislead’[8] but then said, ‘that is not the test’.[9] He affirmed the decision under review but noted:
The decision-making process contended for certainly has the capacity to result in inconsistent and arbitrary outcomes.[10]
He also noted that under the Schedule to the 2012 Determination, the terms ‘dance academy’ and ‘dance school’ were equivalent, commenting:
It is not clear why dance academies merit special protection, for example, when any other sort of entity in the business of providing instruction – in languages, hobbies, sports or even surfing – will be forced to rely on costly remedies at common law or under other statutes to protect their names and avoid confusion.[11]
[7] [2014] AATA 192.
[8] Ibid [3].
[9] Ibid.
[10] Ibid [13].
[11] Ibid [12]. The 2015 Determination now includes ‘Item 263: institute, academy, school, college’ so that the result in that case would now be different.
The second case to hear an application for review by a third party was B & L Whittaker Pty Ltd v Australian Securities and Investments Commission,[12] decided in May 2014. Deputy President Hack had to consider whether the disputed name ‘Cairnscrete Pumping’ registered by a competitor of the applicant, was nearly identical to ‘Cairns Concrete Pumping’. What was particularly frustrating to Deputy President Hack was that because of Item 212 in the 2012 Determination, the words ‘crete’ and ‘concrete pumping’ were deemed to be identical but ‘crete’ and ‘concrete’ were not.[13] He affirmed the decision under review but noted:
As will appear, I am driven to conclude that the conclusion reached by the regulator, the Australian Securities and Investments Commission, was correct. It is neither a pleasing nor a sensible outcome. Additionally, I have considerable doubt whether the legislation, and its implementation, achieves one of its stated objects which is ‘to avoid confusion by ensuring that business names that are identical or nearly identical are not registered.[14]
[12] [2014] AATA 302.
[13] Ibid [16]. Item 212 of the Determination has now been amended so that ‘crete’ and ‘concrete’ are now deemed to be identical and so the result of the case would now be different.
[14] Ibid [2].
Deputy President Hack referred to the definitions in s 3 of the BNR Act and concluded that the effect was to make the rules in the Determination the sole test of what is identical or nearly identical.[15] But he also noted:
But there is a textual curiosity in the way the Determination works. The approach of deeming expressions to be identical to other expressions is understandable, as is the logic of using the substitution method to determine whether names are identical. But what work does the notion of "nearly identical" perform? On the Commission’s case it has no utility. The Act, by s 25, introduces the notion of nearly identical but the Determination renders it otiose. One possibility is that the application of a value judgment is called for once the process of substituting the deemed identical expressions has taken place.[16]
[15] Ibid [14].
[16] Ibid.
However, Deputy President Hack did not believe that approach was open. He concluded by commenting:
I have to say that the result which the legislation and the Determination dictate is quite absurd. Absent the statutory test I regard the two names as nearly identical and likely to produce confusion in the mind of consumers.[17]
[17] Ibid [16].
Two cases followed in which an alternative approach was adopted. G C Swinburne and F J McFarlane v Australian Securities and Investments Commission and Child Psychology Services Pty Ltd (Joined Party),[18] was decided in August 2014. Deputy President Alpins had to decide whether the business names, ‘Melbourne Child Psychology’ and ‘Melbourne Child Psychology Services’ should have been registered by ASIC, given that the business name ‘Melbourne Children’s Psychology Clinic’ had been registered to the applicants for some time. In that case, Deputy President Alpins considered the legislative context and the wording of ss 5 and 6 of the Determination (as they were then worded), including the reference to ‘when comparing’, and determined that although the rules in the Determination were ‘prescriptive’,[19] they were not ‘exhaustively determinative’.[20] In her view, the rules merely required that certain matters be taken into account in making the requisite comparison.[21]
[18] [2014] AATA 602.
[19] Ibid [59].
[20] Ibid.
[21] Ibid.
Deputy President Alpins also considered what she described as ‘the clear legislative intention’ regarding automated decision-making, noting that whether names are identical or nearly identical and therefore available for registration, would in many if not most cases be amenable to being made by a computer automatically upon online application.[22] However, she also noted that if ASIC’s contentions were accepted, that would mean not only that such decisions must be automated, but also that they must be automatic,[23] and that this would frustrate the object of avoiding confusion.[24] She concluded:
that both names in issue were ‘nearly identical’ to the applicants’ registered name for the purposes of s 25(a)(i) of the Act according to the ordinary meaning of that term having regard to its context and the legislative purpose.[25]
[22] Ibid [73].
[23] Ibid [72].
[24] Ibid [94].
[25] Ibid [142].
Stasiw v Australian Securities and Investments Commission and Anor[26] was decided in May 2015 by Deputy President Nicholson. In that case, the applicant, who was the sole director, secretary and shareholder of Solar Repairs Pty Ltd (‘the Company Name’) registered that name in 2003. In 2013 a person applied to ASIC to register the business name ‘Solar Repairs Perth’ pursuant to the BNR Act. ASIC registered that name on 9 October 2013. A company controlled by the applicant then registered a business name, ‘Solar Repairs’ on 13 October 2013, but the decision for the Tribunal was whether that name was identical or nearly identical with the company name registered some 10 years previously.
[26] [2015] AATA 328.
One difference between this case and the previous cases was that the issue was whether the disputed business name was identical or nearly identical with a registered company name. Deputy President Nicholson noted that the rules in the Determination were different where what was being compared was a business name with a company name. That is, the provision in the rules as it appears in Division 2 of the Determination, addresses only matters to be disregarded when comparing business names with company names and matters appearing in Part 1 of Schedule 6 of the Corporation Regulations are necessarily limited to the same type of matters:
The result is that when matters have been disregarded as these provisions require, the decision-maker has no further directive on further steps to be taken in terms of matters to be considered.[27]
[27] Ibid [39].
However, Deputy President Nicholson accepted the submission for the applicant that the Tribunal must prefer an interpretation of the terms ‘identical’ and ‘nearly identical’ which best achieves the purposes or objects of the BNR Act. This included, in particular, the object in s 16(3)(a) of that Act, i.e. to avoid confusion and to ensure that business names that might mislead consumers should not be registered.
Deputy President Nicholson also considered that the terms ‘identical’ and ‘nearly identical’ are separate concepts.[28] He concluded that:
due to the closely related services provided by the applicant’s business and the Other Party’s business and geographical proximity of the two, confusion is likely to arise for both consumers and suppliers due to a failure to distinguish between the applicant’s business and the Other Party’s business or by mistaking one business for the other or by mistakenly believing that the businesses are the same or are in some way related.[29]
On that basis, Deputy President Nicholson set aside the decision under review.
[28] Ibid [48].
[29] Ibid [53].
Following these two cases, the 2012 Determination was replaced by the 2015 Determination that inserted s 5A.
The next case to arise was Boyce v Australian Securities and Investments Commission,[30] decided in September 2015. The applicant operated a family plumbing business at Rainbow Beach in Queensland. The business was started by the applicant’s father in 1973. The business traded under the name ‘Rainbow Beach Plumbing’ until 1997, when ‘Rainbow Beach Plumbing Services Pty Ltd’ was incorporated with the applicant being the director and sole shareholder. In May 2014, another person also of Rainbow Beach, successfully applied to ASIC to register the business name ‘Rainbow Beach Plumbing’.
[30] [2015] AATA 768.
Senior Member Cotter started by noting the differences between the rules set out in the Determination (and the Corporations Regulations) when comparing a company name with a business name. He noted the difference between Division 1 and Division 2:
Where the Divisions depart is in the matters to be considered in comparing the names. Section 6 of Division 1 provides that in comparing a business name with another name (other than a company name) to determine whether they are identical or nearly identical, a word or expression in an item in Schedule 1 (being a list of some 148 words or expressions) is to be taken to be the same as each other word or expression in the item. Subsection (2) deals with names that, despite their appearance, might be pronounced the same. Significantly, Division 2 contains no such provisions; the rules are therefore completely silent as to what matters are to be considered in comparing a business name with a company name.[31]
[31] Ibid [27].
Senior Member Cotter disregarded the words ‘pty’ and ‘ltd’ and compared the names Rainbow Beach Plumbing with Rainbow Beach Plumbing Services. He then considered whether there was any scope for otherwise considering whether the names were identical or nearly identical and concluded that the rules in the Determination were exclusive and exhaustive:
Those rules are exclusive (by reason of the legislative intent signalled by s 16(4)) and exhaustive (by reason of the definitions in s 3 and the drafting of the rules, with their deliberate inclusion and exclusion of matters to be considered in undertaking the comparison).[32]
He continued:
I am strengthened in my view by the fact that this conclusion sits comfortably with the broader regime that ASIC has put in place for the administration and operation of the business names registration scheme which was contemplated, at least in a general sense, by the Act.[33]
[32] Ibid [47].
[33] Ibid [48].
Perth Martial Arts Academy v Australian Securities and Investments Commission[34] was decided in September 2018 by Senior Member Evans. In 2006, an individual registered the business name ‘Perth Martial Arts Academy’. In 2016, Brazilian Combat Pty Ltd made an application to ASIC to register the business name ‘Perth Martial Arts Centre’, which ASIC registered on 29 July 2016. Senior Member Evans agreed with the Respondent’s submission that the correct approach to interpreting the BNR Act and the Determination was the one adopted in Boyce: that the rules set out in the Determination were ‘both exclusive and exhaustive, such that it is unnecessary, and unwarranted, to make enquiries beyond their scope’.[35] Senior Member Evans also commented that the approach in Boyce is most ‘consistent with the language and purpose of all the provisions of the statute’.[36]
[34] [2018] AATA 3664.
[35] Ibid [33].
[36] Ibid [36].
Senior Member Evans then turned to the rules in the Determination. The relevant item in Schedule 1 of the Determination was Item 263, that listed the words ‘institute, academy, school, college’ as words which are taken to be the same, but, she noted, did not include ‘centre’. On that basis she concluded that the terms ‘academy’ and ‘centre’ were not identical or nearly identical. Senior Member Evans did note the inclusion of the words, ‘academy’ and ‘centre’ in Item 142 of Schedule 1 of the Determination which refers to ‘academy of dance, dance academy, dance centre, dance studio, school of dance, dance, dance school’. She noted that Item 142 was discussed by Senior Member McCabe in Smith (discussed above) where he pointed to the anomaly that an entity in the business of providing other types of instruction would be forced to rely on costly remedies at common law or under other statutes to protect their names and avoid confusion. Senior Member McCabe continued:
Mr Rosewarne [counsel for the Respondent] acknowledged that anomaly, but suggested it was open to any business to lobby the Minister to have words or names added to Schedule 1.[37]
[37] Ibid [38].
Senior Member Evans stated that a similar comment could be made about martial arts:
The teaching and practise of martial arts is an identifiable industry. It could even be regarded as a popular industry like dance, and yet, it has not been included in Schedule 1 of the Determination. The Applicant may wish to consider, as identified by Senior Member McCabe in Smith lobbying the Minister to have martial arts similarly added to Schedule 1 of the Determination. Additionally, as contemplated by s 17(1) of the BNR Act, there are other legal remedies available to the Applicant to remedy the use of a similar business name by a third party, including consumer law and passing off.[38]
[38] Ibid.
Hazeldine v Australian Securities and Investments Commission,[39] was decided in March 2019. Ms Hazeldine registered the business name ‘Northern Beaches Private Tutoring Service’ in September 2011. On 15 July 2017, the Respondent registered the business name ‘Northern Beaches Tutoring Services’. Deputy President Cowdroy considered the cases that had been decided by the Tribunal and said:
The legislative framework established by the BNR Act constitutes a complete code with respect to applications for registration of business names. Once the program has determined the availability of a new business name, and, provided the entity has an ABN and has paid the registration fee, it follows that the name is available to the entity making the application and ASIC has no discretion to refuse registration.[40]
[39] [2019] AATA 366.
[40] Ibid [41].
Deputy President Cowdroy also referred to criticism of the outcomes under such an approach and commented:
Such criticism, it is respectfully suggested, is predicated upon a misunderstanding of the purpose of the legislation. The legislative scheme introduced by the BNR Act was intended by Parliament to displace, as far as possible, subjective considerations as to the identity or near identity of names, and to introduce instead an objective, computer-driven system for the registration of business names, regardless of anomalies that may result. The legislation was introduced to achieve nationwide uniformity and to cope with the anticipated large volume of applications for registration of business names. The use of computer programs is essential to the operation of the system introduced by the BNR Act, a fact clearly envisaged by its proponents.
The Tribunal is precluded by the relevant, aforementioned provisions of the BNR Act and of the Determination from finding that the business names Northern Beaches Private Tutoring Service and Northern Beaches Tutoring Services are identical or nearly identical.[41]
Deputy President Cowdroy therefore affirmed the decision under review.
[41] Ibid [43]-[45].
The last case to come before the Tribunal was Australian Appaloosa Association Ltd and Australian Securities & Investments Commission[42] decided in July 2019 by Member Frost. The Australian Appaloosa Association Ltd is an incorporated entity that had been operating for 45 years. Following an acrimonious general meeting of the company, a member applied to register two business names ‘Appaloosa Association of Australia’ and ‘Appaloosa Australia’. The names were registered by ASIC on 3 April 2017.
[42] [2019] AATA 2195.
Member Frost considered the previous cases decided by the Tribunal and concluded:
Having regard to the line of authorities from the Tribunal, it is clear that the BNR Act is a prescriptive regime and ASIC has no discretion to refuse registration of a proposed business name if it is determined to be available by the Business Names Register maintained by ASIC and has met all of the legislative requirements, including not having the exact same name as another entity. Accordingly, business names that might mislead and confuse, given the existence of similar business or company names, can be registered by ASIC pursuant to the BNR Act.[43]
[43] Ibid [42].
Member Frost considered the operation of the rules in the Determination and under the Corporations Regulations and said:
The word ‘Australian’ is used in the Applicant’s Company Name, but not in the Business Name. The word ‘Australia’, used in the Business Name, is not considered under the Regulations to be an alternative for the word ‘Australian’, used in the Applicant’s Company Name.[44]
Therefore, the Business Name ‘Appaloosa Association of Australia’ is not ‘identical or nearly identical’ to the Applicant’s Company Name, ‘Australian Appaloosa Association Ltd’. On the proper application of the legislative regime, the two names are not ‘the same’, as required under the Determination for the business name to not be registered.[45]
…
The terms of the BNR Act and the Determination are highly prescriptive and provide ASIC with no discretion to refuse registration of a business name if all of the legislative requirements are met. Although one of the business names the subject of this review……plainly had the potential to mislead and confuse people regarding its standing in the equine industry and, as a consequence, the standing of the Applicant, under the legislative regime the Tribunal must apply, the Business Names are not ‘identical or nearly identical’ to the Applicant’s Company Name. Therefore, the Tribunal must affirm ASIC’s decisions to register both of the Business Names.[46]
[44] Ibid [47].
[45] Ibid [48].
[46] Ibid [53].
The cases that have been decided by the Tribunal to date demonstrate a difference of view about the objects of the BNR Act. The cases that have decided that ASIC has no discretion under the BNR Act focus on the use of computers and the need to register a large volume of business names every year. The two cases that have decided that ASIC (and so the Tribunal on review) has some discretion are more concerned with the object of avoiding confusion by the registration of business names that are nearly identical.
Before considering which approach is the correct one, it is necessary to consider the evidence concerning how ASIC makes decisions to register business names.
HOW REGISTRATION DECISIONS ARE MADE BY ASIC
As noted above, the administrative arrangements for registration of business names changed in April of this year. The evidence provided by ASIC appears to relate to administrative arrangements for the making of registration decisions by ASIC prior to that time, as the registration of the Disputed Name took place in 2020. ASIC provided evidence in the form of an affidavit made by Ruben Whitte, an employee of ASIC at the time the original decision was made. Under s 22 of the BNR Act, ASIC is charged with the responsibility for establishing and maintaining a Business Names Register (BNR), which may be kept ‘in any form that ASIC considers appropriate’[47]. The BNR, and the register for company names, are kept on secure software systems which are available for searching.
[47] BNR Act s 22(3).
In order to register a business name, a person or entity must make an online application. Entities can use the ABRS, ASIC’s online portal called ‘ASIC Connect’ or a private service provider that links to ASIC’s computer system. ASIC provides information on its website, and in a Regulatory Guide written in 2013,[48] to guide applicants through the registration process.
[48] ASIC Regulatory Guide RG 235 Registering Your Business Name (13 August 2013).
Ruben Whitte provided evidence that ASIC has developed 14 programmed system rules that apply the business name availability rules set out in the BNR Act and Determination to applications for registration. ASIC’s computer systems perform the task of determining the availability of a proposed business name by applying these programmed system rules.
Where a person uses the online business name application process, or where a person uses the ‘Check Business Name Availability’ search function, the system shows the availability of a proposed business name by the mechanism of a green, amber or red result, accompanied by text explaining the outcome. A green result means the business name is available for registration. An amber result means that a decision on availability is required by an ASIC officer. A red result means that the business name is unavailable. ASIC also stated that of the applications that are not automatically rejected at this stage, the programmed rules are applied to obtain a conclusive green result for approximately 90% of the remaining applications for registration.
ASIC provided statistics on registration applications and outcomes, including for the period 1 July 2020 to 11 June 2021:
61. Business Name applications
62. 455,346
63. Business Name registrations
64. 436,095
65. No of applications requiring review prior to registration
66. 46,558
67. No of applications refused
68. 7,127
69. No of applications for review of refusal decision
70. Affirmed
71. 707
72. Set aside
73. 760
74. No of decisions to register challenged by third parties
75. Affirmed
76. 124
77. Set aside
78. 16
These figures are consistent with the statement by Ruben Whitte that approximately 10% of applications require review by an employee of ASIC prior to registration. That indicates that the computer programs developed by ASIC are not able to provide an outcome in all cases. In other words, although the computer programs developed by ASIC are useful in making the vast majority of decisions about whether a name is available, there are some decisions that must be made by a human.
The statistics relating to applications for review of refusal decisions by the applicant, and by third parties where a name has been registered, are also of interest. Where an application to register a business name is refused, approximately 20% of applicants apply for a review of those refusals and just over half of those reviews result in the original decision being set aside. Only a small number of registrations result in an application to challenge the registration by a third party (140 in the relevant period) and only 16 of those resulted in the registration being successfully challenged. This very small number of third-party challenges suggests that the resources required to deal with them will also be quite small.
The statistics provided by ASIC do not indicate when an application will be forwarded to an officer for determination or on what grounds a review decision will be successful. ASIC’s Regulatory Guide 235 Registering Your Business Name[49] does give some indication as to when the initial application may be dealt with by an officer:
[49] Ibid.
In certain situations, we will not be able to tell you immediately if you can register the proposed business name (e.g. if the proposed business name contains words that are not in the Macquarie Dictionary). We may need to forward the application to an officer to review the proposed business name manually to determine whether the proposed business name is available for registration.[50]
[50] Ibid, RG 235.62.
ASIC’s website[51] also mentions that some applications will be referred to an officer, e.g. where proposed names raise issues dealing with pronunciation.[52]
[51] Australian Securities and Investments Commission webpage, Business Name Availability:
[52] Section 6(2) of the Determination provides that a business name is identical or nearly identical to another name if, despite the characters used in the name, it may be pronounced the same as the other name.
Section 66 of the BNR Act provides that ASIC may arrange for the use, under its control, of computer programs ‘for any purposes for which (it) may make decisions’ under the Act, other than a decision under s 57(6) of the Act (dealing with the review of decisions). Subsection (2) goes on to provide that a decision made by the operation of a computer program under an arrangement made under subsection (1) is taken to be a decision made by ASIC.
Use of computers in administrative decision-making is not new. Since at least 2004, questions have been raised about both the benefits of automated decision making and the problems that this might present for administrative review. A report in 2004 by the Administrative Review Council on Automated Assistance in Administrative Decision Making[53] contained best practice principles for the development and operation of expert computer systems used to make, or assist in the making of, administrative decisions. One of the matters considered in that report was whether the use of computers resulted in a decision-maker being given assistance or whether the computer became the actual decision-maker. The report noted that s 25 of the Administrative Appeals Tribunal Act 1975 (Cth) contemplates a person as the decision-maker. In relation to decisions made under the BNR Act, s 66 appears to contemplate that ASIC will have control over the use of computers but in any event states that all decisions made with the assistance of computers are taken to be decisions of ASIC.
[53] Administrative Review Council, Automated Assistance in Administrative Decision Making Report No 46, 2004.
Another issue that has arisen is whether the use of computers in administrative decision-making is consistent with principles of fairness and transparency, and the implications of these developments for administrative review. In 2010, then President of the Administrative Appeals Tribunal, the Hon Justice Garry Downes, anticipated some of the problems that automated decision-making could generate:
I have no doubt that in 2020 the unstoppable march of the computer will have continued. Its use in decision-making will have advanced considerably — at all levels, including tribunal and court adjudication. What is important is that this advance should not compromise good administrative decision-making and should not impede or challenge the steady march towards the greatest possible fairness and transparency in that decision-making.[54]
[54] Garry Downes, ‘Looking forward: administrative decision making in 2020’, Paper delivered to the Australian Corporate Lawyers Association Government Law Conference, Canberra, 20 August 2010.
Writing more recently, one commentator has noted that although automation has the potential to make decision-making more accurate, consistent, cost-effective and timely, and diminish the risk the decision will be invalidated due to improper motivations or bad faith, automated systems raise difficult questions about authorisation and reviewability of decision-making by a non-human agent.[55] Hogan-Doran warns there are difficulties applying legislation and resolving complexities and ambiguity; as well as the potential for coding errors.[56]
[55] Dominique Hogan-Doran ‘Computer says 'No': Automation, Algorithms and Artificial Intelligence in Government Decision-Making’ (2017) 13 The Judicial Review 345. The author notes that the phrase “Computer says ‘no’” refers to an attitude in customer service in which the default response is to check with information stored or generated electronically and then make decisions based on that, apparently without using common sense, and showing a level of unhelpfulness whereby more could be done to reach a mutually satisfactory outcome, but is not. The author also notes that the name gained popularity through the British TV sketch comedy Little Britain.
[56] Ibid.
The role of computers in relation to the registration of business names is significant for two reasons. First, it appears that the legislation and rules have been drafted to facilitate the use of computers, i.e. to remove discretionary requirements. Second, despite the drafting of the legislation and the rules in this way, practice by ASIC suggests that there will be situations where human decision-making, and presumably the exercise of discretion is required.
On the basis of the evidence provided by ASIC, it appears that the computer systems developed by ASIC are able to apply the rules and determine approximately 90% of applications for registration of business names. The remaining 10% of applications are dealt with by an employee of ASIC. A very small number of applications result in a third party seeking a review of the decision to register a name and some, albeit again a very small number, result in the decision to register a business name being set aside.
CONTENTIONS
ASIC contends that it was obliged to register the business name ‘Voices of Casey Choir’ because the requirements in s 24(1) of the BNR Act were satisfied. The substance of Ms George’s contention is that the requirement in s 24(1)(c) was not satisfied, because that name was ‘identical or nearly identical’ to the existing business name ‘Voices of Casey’.
In the case before the Tribunal, ASIC submitted that the Determination applies as follows, (although ASIC does not indicate whether this is as a result of the computer program or review by an ASIC officer):
1 The first step is to compare the two names in accordance with s 5A(a) of the Determination, which provides that the matters in sub-section 5(1) are to be disregarded. None of those matters are relevant to the present case.
2 As a result, the bolded words in the table below are the same or “taken to be the same” as each other:
91. Voices of Casey
92. Voices of Casey Choir
3 That leaves the word “Choir”. “Choir” is not a word that must be disregarded under s 5(1).
4 The second step is to apply sub-section 6(1) of the Determination. As noted above, the word "choir" does not appear in any of the items listed in Schedule 1.
5 Because the word “Choir” appears in the latter business name but not the former, the two names are not the same after applying s 5A(a). The third step is to consider s 6(2) of the Determination, which provides that a business name is identical or nearly identical to another if “it may be pronounced the same as the other name”. That does not apply here. It follows that, because the word “Choir” appears in one name but not the other, the two names are not “identical or nearly identical” for the purposes of the Act.
According to ASIC, the Disputed Name was therefore available and as a result, by operation of s 24 of the Act (given that the other requirements were met), ASIC was required to register the name ‘Voices of Casey Choir’.
Ms George essentially contends that the Tribunal should ultimately find the names were identical or nearly identical because they were confusing, and an object of the Act is to avoid confusion. Ms George also asserted that the holder of the Disputed Name was using that business name to deliberately gain an advantage of available funding and grants given by the local council to groups such as local choirs. Further, Ms George asserted that PIFA was using its business name incorrectly, to the extent of deliberately dropping the word ‘choir’ from the business name so as to purport to be Voices of Casey, particularly in advertising on social media platforms.
The Other Party, PIFA, essentially contends that the decision of ASIC to register the Disputed Name is correct and should be affirmed.
CONSIDERATION
As indicated in the earlier review of Tribunal cases, there are differences of opinion about the purpose of the BNR Act and about its application to determine whether a name that is ‘nearly identical’ (as that term would indicate if given its ordinary meaning) may be registered. A similar situation has developed in New Zealand where the High Court, differently constituted, has reached differing conclusions, albeit in relation to registration of company names. In Stanley-Hunt Earthmovers Ltd v Registrar of Companies,[57] Tompkins J considered whether the name Stanley-Hunt Earthmovers (1996) Ltd was almost identical to an existing company name, Stanley-Hunt Earthmovers Ltd. His Honour noted that the inquiry under the statute was narrower than had previously been the case. However, in his view, one of the purposes of the legislation was to ensure that the names are sufficiently dissimilar that persons can recognise that the companies are distinct. Tompkins J held that the two names were almost identical and ordered the second company to change its name.
[57] (1997) 8 NZCLC 261.
In The Paint Factory Ltd v Registrar of Companies,[58] the two names being considered were ‘The Paint Factory Ltd’ and ‘The Paint Factory (PN) Ltd'.[59] Ltd. Williams J referred to the Stanley-Hunt case and stated that he did not accept that the relevant test was whether members of the public would recognise the two companies as different entities or would think they were connected. He noted that the statutory task was to consider the whole name of each of the two companies in contest and form an objective view as to whether they are ‘almost identical’. He concluded that on the facts, the geographic marker ‘PN’ was enough to distinguish the two names so that they were not almost identical.
[58] [2000] 3 NZLR 220.
[59] Referring to Palmerston North where the company proposed to carry on business.
Those Tribunal decisions that have affirmed registration where the names are ‘nearly identical’ on ordinary concepts refer to the desired objectives of the BNR Act being consistency, certainty and reliability. As was said in Boyce:
A narrower, objective scope of inquiry … sits more comfortably with the effective and efficient maintenance of the Register. Any widening of the scope of inquiry would introduce greater uncertainty into the process, and necessitate far more manual involvement, which would undoubtedly slow down the registration process considerably, if not to a virtual halt.[60]
[60] Boyce v Australian Securities and Investments Commission [2015] AATA 768 [61].
The decisions that have set aside the registration of a disputed name have sought to interpret the reference to ‘nearly identical’ in the BNR Act and Determination in a way that gives effect to the object in s 16(3)(a) of that Act, i.e. to avoid confusion and to ensure that business names that might mislead consumers are not registered.
It is clear that the legislature wishes to allow for the registration of business names to become more automated. However, the use of computers to assist decision-making (or in some cases to automate decision-making) should not be achieved at the expense of fairness and accountability. It is salutary to consider the Commonwealth’s use of an automated debt-collection system between 2015 and 2019, colloquially known as the ‘Robodebt’ system, intended to recover social security payments that had been overpaid. The system was considered in Prygodicz v Commonwealth of Australia (No 2),[61] where Murphy J commented that ‘the proceeding has exposed a shameful chapter in the administration of the Commonwealth social security system and a massive failure of public administration’.[62] Although it is not suggested that the business name registration system is beset by the types of problems that plagued the Robodebt system, it is important to be vigilant in relation to the use of technology.
[61] [2021] FCA 634.
[62] Ibid [5].
The statutory scheme sets out the objectives of the BNR Act. This includes providing a registration system so that those who engage or propose to engage with a business can identify the entity carrying on that business and how the entity may be contacted; but also to avoid confusion by ensuring that business names that are identical or nearly identical are not registered. The scheme also includes separate definitions of ‘identical’ and ‘nearly identical’ that refer to rules made under the Determination. But the Determination itself only indicates when names are identical, i.e. the same or deemed to be the same by s 6(1) or where it may be pronounced in the same way (s 6(2)). The Determination does not address the situation where names may be nearly identical. As noted by Deputy President Hack in B & L Whittaker Pty Ltd:
The Act, by s 25, introduces the notion of nearly identical but the Determination renders it otiose. One possibility is that the application of a value judgment is called for once the process of substituting the deemed identical expressions has taken place.[63]
[63] [2014] AATA 302 at [14].
Although he declined to adopt such an approach, the exercise of such judgment is clearly a possibility although it is likely to be required in fairly limited circumstances. The way in which the rules have been applied by ASIC indicates that value judgments are in fact made. I also accept the statement by Deputy President Nicholson in Stasiw v ASIC that the terms ‘identical’ and ‘nearly identical’ are separate concepts[64] and that ‘the question of what is ‘nearly identical’ is a question of fact to be informed by the objects of the BNR Act, particularly that which relates to the avoidance of confusion’.[65]
[64] [2015] AATA 328 at [48].
[65] Ibid at [50].
ASIC contends that the names are not ‘identical’ or ‘nearly identical’ because ‘choir’ is not a word that must be disregarded under the Determination; the word ‘choir’ does not appear in any of the items listed in Schedule 1; and the names are not pronounced in the same way. In my opinion, this indicates that the names are not the same, i.e. they are not identical. It is still necessary to determine whether the names are ‘nearly identical’.
The rules contained in the BNR Act, and the Determination, clearly intend that the vast majority of the numerous applications for registration of business names can be dealt with expeditiously, by applying formula, including by programming computers. The statistics provided by ASIC indicate that almost half a million applications are made annually for a business name to be registered. As noted above, where an application to register a business name is refused, approximately 20% of applicants apply for a review of those refusals and just over half of those reviews result in the original decision being set aside. Only a small number of registrations result in an application to challenge the registration by a third party (140 in the relevant period) and only 16 of those resulted in the registration being successfully challenged. These statistics indicate that the computer does not always get it right and that an officer of ASIC will have to review some initial refusals to register and some challenges by third parties to decisions to register a business name. When a human makes a decision there is an expectation of common sense. Such a review requires a consideration of the two names and an objective consideration of whether they are ‘almost identical’.
A consideration of the two names in this case involves consideration of the relevant circumstances. As Deputy President Nicholson said in Stasiw, this includes consideration of the nature of the two businesses and the geographical proximity[66] – both are factors that are likely to result in confusion for those who seek to deal with the businesses, including for the purpose of making grants. In relation to the two businesses in this case, it is clear that both relate to choral singing, and both are based in the vicinity of the City of Casey. In my opinion, the additional word in the Disputed Name, ‘Choir’, is not sufficient to differentiate the Disputed Name as it merely reinforces the fact that both businesses involve a group of singers that come together to perform.
[66] Ibid at [53].
In considering the application of the BNR Act and the Determination, I am persuaded that the terms ‘identical’ and ‘nearly identical’ are separate concepts and that the term ‘nearly identical’ should be interpreted having regard to the stated objects of the BNR Act. I am also persuaded that the intention of the legislative scheme, and the way in which it currently operates is that decisions will be made by humans and not computers in more complicated assessments.
Ms George also asked the Tribunal to consider evidence that PIFA sometimes uses the name Voices of Casey rather than Voices of Casey Choir. Whether an entity carries on a business under a name that is not registered to it as a business name is a matter for ASIC. However, this evidence is not relevant to the matter before the Tribunal which is concerned solely with the decision by ASIC to register the Disputed Name.
CONCLUSION
On the basis of the review of decided cases, the statutory scheme for registration of business names, including the objects of the scheme, and how the scheme is, or has been, operated by ASIC, I find that the two names are nearly identical and that the decision under review should be set aside and substituted with a decision that the registration of the Disputed Name should be refused.
I certify that the preceding 107 (one hundred and seven) paragraphs are a true copy of the reasons for the decision herein of Professor Ann O’Connell, Senior Member
................[sgd]..................................
Associate
Dated: 8 October 2021
Date of hearing on the papers: 29 September 2021 Applicant: Self-represented
Advocate for the Respondent: Mr Aldo Paciocco Advocate for the Other Party: Mr Jonathan Welch
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