Greyhound Pioneer Australia Ltd v Pioneer Motor Service Pty Ltd

[1997] FCA 831

FEDERAL COURT OF AUSTRALIA

INTELLECTUAL PROPERTY - passing off - misleading and deceptive conduct - interlocutory injunction refused despite strongly argued case - where applicant’s delay allowed respondent to establish a presence in the market and where early trial available.

Trade Practices Act 1974 (Cth) - s 52

Warnink v Townend & Sons [1979] AC 731

GREYHOUND PIONEER AUSTRALIA LIMITED v PIONEER MOTOR SERVICE PTY LTD
QG 51 of 1997

DRUMMOND J
BRISBANE
30 MAY 1997

IN THE FEDERAL COURT OF AUSTRALIA  No QG 51 of 1997
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:GREYHOUND PIONEER AUSTRALIA LIMITED
ACN 008 685 229

Applicant

AND:PIONEER MOTOR SERVICE PTY LTD
ACN 002 858 451

Respondent

MINUTES OF ORDERS

CORAM:  Drummond J
DATE:  30 May 1997
PLACE:  Brisbane

THE COURT ORDERS THAT:

1. The application for an interlocutory injunction be dismissed.

2. The costs of and incidental to the application be reserved to the trial judge.

NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA  No QG 51 of 1997
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

BETWEEN:GREYHOUND PIONEER AUSTRALIA LIMITED
ACN 008 685 229

Applicant

AND:PIONEER MOTOR SERVICE PTY LTD
ACN 002 858 451

Respondent

CORAM:Drummond J

DATE:30 May 1997

PLACE:Brisbane

REASONS FOR JUDGMENT

By an amended application, the applicant seeks an interlocutory injunction restraining the respondent from using, permitting or authorising the use of the word "Pioneer" as part of the respondent's trading name or style on the route between Brisbane and Sydney.

The elements of the tort of passing off are well established.  See the Advocaat case (Warnink v Townend & Sons) [1979] AC 731 at 742, a statement of principle frequently applied in this Court. There is evidence before me that the applicant, both by reason of its own activities in recent years and by reason of its being the successor in title to bus services operated by others, has a very well established reputation as a bus operator throughout Australia, including the Sydney to Brisbane run. An important element in its business reputation resides in its use of the name "Pioneer" as part of the name under which it trades and provides its passenger transport services.

There is also evidence that the respondent has long operated a passenger bus service between Sydney and various places on the New South Wales south coast and that it too has long used the word "Pioneer" to denote its own services.  However, until recently, its operations were confined to the regions south of Sydney.  From about June 1996, it embarked upon an expansion program and purchased the rights of two other bus operators to so much of their businesses as consisted of their Sydney to Brisbane runs.  During the latter half of 1996 until now, the respondent has made prominent use of the name "Pioneer" in that part of its business which consists of the provision of bus services running between Brisbane and Sydney.  The name appears on the coach work of its buses, on its timetables and tickets, and at desks at bus terminals, such as at the Transit Centre in Brisbane.

However, the respondent has made no attempt to suggest that the reputation it may well have in the name "Pioneer" as applied to bus services in the south coast region of New South Wales extends beyond that area and, in particular, into the area serviced by the one that operates between Sydney and Brisbane.  The respondent has made no attempt to suggest that its reputation in the name "Pioneer" had extended into this area north of Sydney before it commenced to service the area in the latter half of last year, nor has it put before me any evidence capable of supporting an inference that its activities, since it has commenced running buses between Brisbane and Sydney, have generated for it a business reputation in the area in the name "Pioneer".

The reputation of the applicant is such that the respondent must have been well aware of it before it commenced to use the name "Pioneer" in connection with its newly commenced bus services between Brisbane and Sydney.  Given the extent of the applicant's reputation in the word "Pioneer" as designating a particular bus operator in the Sydney to Brisbane region, as indicated by the evidence before me, the applicant, in my opinion, has a strongly arguable case that the respondent, by using the word "Pioneer" as it has done in connection with its Brisbane to Sydney run, misrepresented to that section of the public likely to make use of such services that its newly-commenced bus service is connected with the applicant's service.

It is also easy, in view of the evidence to which I have referred, for the applicant, in pointing to an arguable case of passing off, to say that the evidence is well capable of supporting an inference that it was a reasonably foreseeable consequence of the respondent's conduct in this regard, that that conduct was likely to cause injury to the business and goodwill of the applicant, even if the respondent's conduct was not, in fact, calculated to divert business from the applicant to itself.  There is a substantial body of evidence before me showing a significant number of persons seeking bus services on the Sydney to Brisbane run, moreover, have been misled into thinking that the applicant's business and the respondent's business, so far as they include that particular run, are one and the same, or at least that they are connected, and that this has resulted in actual damage to the applicant's business as well as the prospect of future damage in the form of loss of custom and some damage to the applicant's business goodwill.

I am satisfied that the applicant has a strong arguable case that the respondent is passing off its business of running passenger bus services between Brisbane and Sydney as that of the applicant.

Given what I have had to say about the evidence as to the respondent's activities causing confusion to consumers of bus services between Brisbane and Sydney, the applicant has also, in my opinion, shown a strong arguable case that the respondent has infringed s 52 the Trade Practices Act 1974 (Cth).

So far as the balance of convenience is concerned, if the injunction is refused, but the applicant succeeds at trial, the applicant will have to suffer the damage to its business, including some likely loss of custom, until trial and judgment.

The applicant does not suggest that the loss of income it says it is suffering from the respondent's activities is by itself sufficient to cause it any substantial hardship or prejudice.  It does point, however, to the ongoing damage to its reputation from the confusion to customers which the evidence indicates has occurred and is continuing.  The evidence in this regard does not perhaps suggest serious damage.  If it were otherwise, the applicant could be expected to have moved for the injunction long before it has.

The assessment of damages, if the applicant succeeds at trial, it must be said, may well not be a simple task.  But it is of significance that a trial can take place to commence on 18 August.  The harm the applicant is suffering, and which it says the respondent is liable to make good to it, is not of a severely prejudicial kind and will continue for only a relatively short time before the rights of the parties are finally settled.

If, on the other hand, the injunction is granted but the respondent succeeds at trial, the respondent will have to make substantial rearrangements to its business if it wishes to continue to operate on the run between Brisbane and Sydney in the quite short period between now and trial.  I cannot form any view on the magnitude of the costs involved, given the unsatisfactory way in which evidence on this matter has emerged.  But those costs are likely to be substantial, particularly since the respondent will, if restrained now, have to change not only its operations with respect to the run between Brisbane and Sydney, but some of its other operations at places outside this run.  The impact of such costs on the respondent's business is likely to be substantial also although, once again, just what those consequences will be cannot be identified with any precision.

The applicant offers to secure the undertaking as to damages which it will have to give if an injunction issues now to the extent of $50,000.  That obviously serves to reduce the harm the respondent is likely to suffer, if restrained now, but successful at trial.  However, as I have said, it is uncertain just what will be the magnitude of those losses, and they may well significantly exceed the figure offered by way of security.

The assessment of the damages the respondent will be entitled to recover under the undertaking to be given by the applicant, if an injunction issues now but the respondent ultimately succeeds, will also not be a simple matter.  The applicant has, as I have said, a strongly arguable case that its rights have been infringed.  But apart from the difficulties of proving up the damages it will have suffered, if no injunction issues now, I consider that damages are very likely to be sufficient to compensate the applicant for any losses it may have already suffered and which it may suffer between the filing of its application and trial, which is to take place soon.

I also take into account that the evidence is that the respondent commenced to operate on the run between Brisbane and Sydney and to use the name "Pioneer" in connection with those operations in June 1996, that the applicant was aware of the respondent's activities by late 1996 at the latest, and that the applicant demanded by its solicitor's letter of December 1996 that the respondent stop using the "Pioneer" name.  Discussions between the applicant and the respondent came to an end in early January.  Yet the applicant did not move against the respondent until early May.  That delay by the applicant is given added significance when there is to be a trial in about 10 weeks' time, or so.  It is, I think, likely that, in a competitive business, such as that in which the applicant and the respondent are competing on the Brisbane to Sydney run, the respondent may have established a presence in the market by May 1997, more substantial than that which it had achieved by December to early January 1997.  That is an advantage likely to be lost to the respondent if enjoined now.

I therefore propose to dismiss the application for an interlocutory injunction, provided satisfactory arrangements can be made with respect to the gathering and preservation of financial information as to the respondent's operations on the Brisbane to Sydney run between now and trial.

Provided that the respondent, by its counsel, is prepared to undertake to segregate, in its records, the information dealing fully with the financial effect of the operations of the Brisbane to Sydney run, and provided it is prepared to undertake to make such information available for inspection on reasonable notice by no more than two persons nominated by the applicant, then the injunction sought today will be refused.

The undertaking being given, the application for interlocutory relief is dismissed.

I certify that this and the preceding three
pages are a true copy of the reasons
for judgment herein of the Honourable
Justice Drummond.

Associate:

Date:30 May 1997

Counsel for the Applicant:	PA Hastie
Solicitor for the Applicant:	Corrs Chambers Westgarth
Counsel for the Respondent:	A Radojev
Solicitor for the Respondent:	Humphreys & Corish
Dates of Hearing:	30 May 1997