Hoover Co Australia Pty Ltd v Spackman

[1997] FCA 1055

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG732  of   1996

BETWEEN:	HOOVER COMPANY AUSTRALIA PTY LIMITED APPLICANT
AND:	SPACKMAN & ORS RESPONDENTS
JUDGE:		HEEREY J
DATE OF ORDER:		29 AUGUST 1997
WHERE MADE:		MELBOURNE

THE COURT ORDERS THAT:

1. The application for variation of the order made 16 July 1997 is dismissed.

1. The applicant pay the cost of the respondent Telstra.

1. The costs of the application to vary, including the costs payable to Telstra, as between the applicants and the 5th and 7th respondents be reserved.

1. The application to commit the 11th respondent for contempt of court is dismissed.

1. The 9th, 10th and 11th respondents pay the applicants’ costs of the contempt application.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG732  of 1996

BETWEEN:	HOOVER COMPANY AUSTRALIA PTY LIMITED APPLICANT
AND:	SPACKMAN & ORS RESPONDENT

JUDGE:	HEEREY J
DATE:	29 AUGUST 1997
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

The applicant has brought proceedings for contempt and also seeking variation of earlier orders.  Two quite separate issues are involved: first, the recorded message on some of the telephone numbers used in the course of the business of some of the respondents, and secondly, the change of name of the eleventh respondent.

In my order of 16 July 1997 I ordered that the seventh respondent, SS Appliances Pty Limited,

"Within 14 days, take all necessary steps within its power and do all such things as may be necessary and within its power to cause callers to the telephone numbers listed under the name 'Hoovex Washing Machine Repair Service' (including the number 03 9560 9133 and 03 9560 9733) in all telephone directories published and/or distributed in Australia to receive an answer to their calls a tape recorded message to the effect that:

(a)the number called is the number of Hoovex Washing Machine Repair Service;

(b)Hoovex Washing Machine Repair Service is not an authorised agent or distributor of Hoover, Admiral or Norge brand of products; and

(c)if authorised Hoover Services require Hoover Company (Australia) Pty Limited should be telephoned on 13 22 26.

Such recorded message to remain in place until the trial of this proceeding or further order of the Court."

What then happened was that a telephone call on behalf of the applicant to one of the respondents’ numbers received the recorded message already referred to but also a further message:

"For all other inquiries would you hold the line a moment, thank you.  We should not be long."

After hold music, the call was diverted and answered by an operator with words to the effect of "Hello, can I help you?".

The applicant then made a further application to the Court which I dealt with on 6 August.  The respondents did not appear on this application and I ordered, in effect, a variation of the order of 16 July to the effect that the phone numbers should, when called, provide a recorded message containing only the message in the terms already referred to.  The order, as varied, concluded:

"Such recorded message to contain only the words referred to above until the trial of this proceeding or further order of the Court."

Following that order, and upon obtaining counsel's advice, the relevant respondents arranged that the telephone calls to the number be diverted.  The applicants now seek an order which will have the effect that immediately following the tape-recorded message the calls are disconnected.  In the light of the evidence that the relevant respondents have obtained counsel's advice that both steps were not in breach of the relevant orders, counsel for the applicants elected not to proceed with the contempt application.

However, counsel did seek the variation I have mentioned.  This was opposed by counsel for the fifth and seventh respondents who argued, on the basis of affidavit material from Mr Stanley Spackman, the fifth respondent, that the variation would cause very great damage to the respondents' businesses.  The telephone numbers, the subject of the order, are also used by a number of other businesses of the same kind conducted by the relevant respondents, namely Home Laundry Care, Your Washing Machine Service, Mallhome Washing Machine Service, Mack Washer Service, Washing Machine Dishwasher and Clothes Drier Service and Spare Parts as well as the seventh respondent, SS Appliances Pty Limited.  In some instances the names of those businesses have been used for 30 years.

I am satisfied the proposed orders would indeed amount to a very substantial disruption of a business of this kind where the telephone number is a very important source of custom.

It does not seem to be any solution to this problem to require, as the applicants suggest, that notice be given to customers holding the benefit of warranties.  Not only would this be extremely burdensome and expensive, there being some 20,000 such customers, but also I think I can take judicial notice of the fact that in businesses like this there would be telephone numbers kept in homes and used as a source of reference for household repairs and maintenance quite unconnected with the holding of any warranty for a particular product.

Also this question has to be considered against the light of the undoubted fact that there is nothing unlawful in a repair business holding itself out as being prepared to repair a particular brand of product, as long as the repairer does not suggest that it is authorised by or connected with the manufacturer, if that is not the case.  The recorded message which was ordered on 16 July, which was of course in a form or put forward by the applicant, does not make that clear.

I do not think I should make any order, still less an order having the damaging effect on the respondents’ business as I have indicated, that would proceed on the assumption that people would irrationally ignore what they were being told, namely, that the respondents were not authorised agents or distributors of the relevant manufacturers.  So for those reasons, I decline to make the variation sought.

The next question is as to the failure to change the business name.

The explanation advanced for this by Mr Stanley Spackman, which was not challenged, was that he was seriously distracted from business affairs by the diagnosis of his wife with a serious illness, and he was late in forwarding the necessary papers to his brother, the tenth respondent Terence Spackman.  The documents were lodged as of 28 August and as such were 8 days late.

There has been non-compliance with the order for reasons which were no fault of the applicant.  I think the applicant was entitled to bring the contempt proceedings and should have their costs of it against those respondents, that is Terence Spackman and the ninth respondent, Hoover Access to Washing Machine and Clothes Dryer Service Tesco Pty Ltd and against the eleventh respondent.  In all the circumstances and in the absence of any material which would enable me to infer that the persons bound by this order acted with contumelious disregard of the Court's order, I think the applicant’s costs should be on the ordinary party and party basis.

The costs as between the applicants and the fifth and seventh respondents of the application to vary should be reserved.  The way the matter evolved really turned on a consideration of the merits of the applicant's claim.  While I have reached a conclusion that I should not make the variation sought on an interlocutory basis, the question it has not been finally resolved on the merits.  So I think I will reserve those costs.  The applicants do not oppose an order that they pay Telstra's costs and I so order Telstra’s costs be included in this reservation of costs as between the applicants and the fifth and seventh respondents.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

Associate:

Dated:            29 August 1997

Counsel for the Applicant:	Ms M Barker
Solicitor for the Applicant:	Norton Smith Gledhill
Counsel for the 1st, 5th, 6th & 7th Respondents:	Ms A Ryan
Solicitor for the 1st, 5th, 6th & 7th Respondent:	Hicks & Oakley
Date of Hearing:	29 August 1997
Date of Judgment:	29 August 1997