Kovassy, L. v Target Hotels Bundoora Pty Ltd

[1987] FCA 646

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FOR LIMITED DISTRIBUTION

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JUDGMENT No. b.!&b,...$&+-

IN THE FEDERAL COURT OF AUSTRALIA	1 )
VICTORIA DISTRICT REGISTRY	) VG No. 402 of 1987
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GENERAL DIVISION	1

Between: LASLO KOVASSY

(Applicant)

m: TARGET HOTELS BUNDOORA PTY

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(Respondent)

Coram: Ryan J

Date: 28 October 1987

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M TEMPORE REASONS FOR JUDGMENT

The applicant in this matter has, since December 1975,

conducted a restaurant at Monbulk under the registered

business name "Bundy' S Tavern". The restaurant has always

specialized in Hungarian and central European dishes and has

been favourably noticed by good food guides and restaurant

critics in journals and newspapers as providing a good

example of that cuisine. The name "Bundy's Tavern" was

derlved from the name of the pet poodle of the applicant and

is a Hungarian	word roughly translatable as,
thing".

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In about August 1987, the applicant learned that the

respondent was conducting an establishment, within a hotel at

Bundoora, of a restaurant or eating room designated as

"Bundy's Bistro". The only evidence of possible confusion

as to whether the two premises are associated in any way is

that Mr. Kovassy was asked by a patron of hls restaurant

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patron had seen the respondent's restaurant known as "Bundy's

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Bistro".

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Mr. Kovassy's oral evidence was that e only advertises

his business once a year in the "Age" newspaper and that most

of his custom comes from persons who have earlier made

reservations. The hotel premises from which the respondent

conducts its business have, since they were opened about 17

years ago, been called the "Bundoora Hotel" and have for many

years been known locally as "The Bundy" or Bundy's Hotel".

Meals are served in the hotel lounge by means of a

servery . Those meals are not distinctively Hungarian or

central European in character, but are said to be typical of

those offered by surburan hotels in Victoria.

On 12 November 1984, the respondent became registered

under the Business Names Act 1962 (Vic.) as the proprietor of

the business names, "Bundy's Nite Spot" and "Bundy's Cellars". Apparently the respondent was unable to procure

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registration of the name "Bundy's Bistro", presumably because

! of the applicant's prior registratlon f "Bundy's Tavern".

There is evldence to suggest that the respondent has

used the name "Bundy's" in a distinctive script on its

letterhead, coasters and business cards in conjunction with

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the words, "Bistro Nlte Spot". The words, "Bundoora Hotel"

together with the address of that establishment have been

used as well in that printed material.

The name "Bundy's" has also been used standing alone In

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a similar script in the form of fluorescent lighting with I .

what appears to be a cocktail glass surmounting the letter

"U"	.	,.
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The applicant has alleged that the respondent has been ..

guilty of misleading or deceptive conduct in contravention of I

s.52 of the Trade Practices Act 1974 ("the Act") and has been

guilty of the common law tort of passing off. Accordingly,

the applicant has sought interlocutory relief by way of an injunction restraining: "the Respondent or its servants or

agents howsoever from operating, promoting, advertising or

conducting the business of a restaurant under the name

'Bundy's Bistro' ."

Mr. Isles for the applicant has sought to draw an

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analogy between this case and Taco Bell Ptv. Ltd. v. Taco

Company of Australia Inc. (1982) 4 ATPR 40-277. In that

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case Ellicott J. granted a final in~unction restraining the

respondent from operating a restaurant in the Sydney

metropolitan area under the name, "Taco Bell", or any similar

name, and from passing'off goods and services supplied at any restaurant in the Sydney metropolitan area not supplied by

the applicant	as, and for, goods and services supplied by the
applicant.

Essential to his Honour's reasoning in that case was

his conclusion of fact expressed as follows, at 43,492:- i

"On the basis of the flndlngs I have already made L '

there was, at that date and, in my view, there still is, a significant number of members of the

public in the Sydney metropolitan area who, in my

opinion, regard the name "Taco Bell' S Casa" as

denoting or meanmg the restaurant business

conducted by the applicant at Bondi and who would

on seeing that name or a name such as "Taco Bell"

used in connection with a restaurant elsewhere

within the Sydney metropolitan area believe that

it was a restaurant which had a business I

connection wlth the applicant's. Clearly enough ! ,

if the restaurant was not conducted by the

I applicant or had no such connection they would : ,

thereby be misled or deceived."

To similar effect it was observed at 43,497:-

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"Its restaurant is and has been conducted to

attract custom from people throughout the Sydney	'.
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metropolitan area and as a result there is, on
the evidence. in my view, a slgnificant section
of the public in Sydney who regard the name "Taco	.I

Bell's Casa" as representing the applicant's i

restaurant and who would, on seeing it or a name

such as "Taco Bell" used on another restaurant in

Sydney, believe that that restaurant had some	I .
business connection with the applicant's.

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In other words, there is a significant sectlon of

the public who would be likely to be misled or

i decelved by the use of the name "Taco Bell" by I .

the respondent in the manner proved by the ?,

evidence." (emphasis added)

A like conclusion was reached in the joint judgment of Deane

and Fltzgerald JJ. when Ellicott J.'s judgment went on appeal

to a Full Court of this Court under the name Taco Companv of

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Australia Inc. v. Taco Bell Pty Ltd. (1982) 4 ATPR 40-303.

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At page 43,753 of that report this passage occurs in the

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joint judgment:-

"If all that the U . S . company had done had been to

open one Mexican food restaurant in a Sydney

l	suburb under the name "Taco Bell", we entertain
some doubt as to whether it could properly be
held that the mere adoption and use of that name
in respect of another Mexican food restaurant in
a quite different part of a large metropolis like
Sydney could properly be seen as a representation
that the new restaurant business and the Bondi
company's restaurant business were connected.
It is not, however, necessary to form or express
any concluded view on that question. The U.S.
company's conduct involves far more than the mere opening of one suburban restaurant under the name "Taco Bell".
It is clear from the evidence that the U.S.
company's restaurants in Granville and central Sydney must be seen as part of a proposed chain
of Mexican food restaurants. The intentions of
the U.S. company in that regard are established
by the evidence and have been made known to the
public. In these circumstances, each of the
U.S. company's restaurants should and will be
seen as part of a chain of restaurants
established in Sydney and bearing the name "Taco
Bell". It is inevitable that some members of
the above-mentioned section of the public, who
are unfamiliar with the actual operations of both
the chain and the Bondi restaurant, already
Bondi company's restaurant is part of the chain.
believe or will in due course believe that the are likely to be disabused if they actually

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I attend the Bondi company's restaurant: for

reasons which we have already given, sec.52

contains no requirement that deception continue

to point of sale. "

In my view, the essential feature of the operations of

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the applicant and the respondent which permitted the

conclusion reached both by Ellicott J. and in the joint I /

judgment of Deane and Fitzgerald JJ. was that both operations

were centred on the supply of	a distinctive item of Mexican
food, the taco.

No such similarity can be discerned between the food or

service offered by the applicant in the present case and that

offered by the respondent.

Mr. Isles next submitted that even if I were not

satisfied that there is a serious question to be tried as to

whether the respondent's conduct is In contraventlon of 5.52

of the Act, I should be satisfied of the exlstence of such a

question in respect	of whether the respondent is guilty of
passing off.

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However, the essential elements of that cause of action

are that the class of goods or services to which the

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plaintiff's goodwlll attached be clearly deflned, and that t .

the plaintiff has suffered, or is really likely to suffer,

substantial damage to his property in the goodwill by reason

of the defendant selling goods	or services of the same class	!	:
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which are falsely described by the trade name to which the ! ,

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goodwill is attached. See Warnink v. Townend and Sons (Hull)

Ltd. C19793 A.C. 731 at 755 in the speech of Lord Fraser of

Tullybelton and Office Cleaninq Services, Ld., v. Westminster

Window and General Cleaners, Ld. (1946) 63 R.P.C. 39 where

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Lord Simonds observed at 42:

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"The real question is the simple and familiar one.

Have the Appellants proved that the use by the

Respondents of the trading style "Offlce Cleaning

Association" is calculated to lead to the belief . .

that thelr business is the business of the

Appellants? It is in these words "calculated to

lead to the belief" that the issue lies. It is I

a calculation often dlfflcult to make, as the

different estimates in the Court below in this

case indicate. The nature of the words which

are used In the trade name, the circumstances and

pecullarltes of the trade, the motives, proved or

presumed, of the trader who would use the words,

all these and many other factors must be

considered by the judge in determining whether a

Plamtiff can succeed in his claim. It is a i

question upon whlch the Judge who has to decide

the case has to bring his own mind to bear and

which he has to decide for himself (see per

Parker, J., in British Vacuum Cleaner Co., Ld. v.

New Vacuum Cleaner Co., Ld. C190711 2 Chancery 312

at p . 326) But instances of actual deceptlon

will be given their due weight."

In the present case,	it is clear that the services	I -
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provided	by	the	applicant	are	clearly	deflned	as the	I .
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provision of Hungarian and Central European dishes and that

he has established a considerable goodwill attaching thereto.

However, the evldence leads me to conclude that the services which the respondent describes by the name "Bundy's Bistro"

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are of quite a different class or type from those of the

applicant. Consequently, I do not consider that he has

shown a serious question to exist as to whether he has

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suffered or 1s likely to suffer damage by reason of the

respondent's use of the name "Bundy's Bistro".

Even if, contrary to the views just expressed, I were

able to find that a serious question exists as to whether the

applicant can make out either of the causes of action on

which he relies, I would consider that the balance of

convenience is against he grant of an interlocutory

injunctlon. There is no evidence that the applicant's . I

business has suffered any loss of patronage since the

respondent commenced, in July	1986,	to promote the use of	I
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part of its premises using the name "Bundy's Bistro".	Nor	!
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can I percelve any significant likelihood of future loss of

patronage being caused to the applicant by the respondent's

continued use of "Bundy's Bistro" in its present manner at

the existing Bundoora Hotel premises. I am reinforced in

that assessment by the delay of some two months from the time

when the applicant first learned of the respondent's use of	I. ;
the name until the institution of these proceedings.	2..

On the other hand, the respondent has incurred

considerable expense in printing "flrst a blrthday"

advertising brochure contaming a reference to "Bundy's

Bistro" and in the printing of stationery and promotional

material containing, amongst other things, the legend

"Bundy's Bistro Nite Spot". I infer that some significant

part of the benefit of that expenditure would be lost to the

respondent If I were to grant the interlocutory injunction

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sought by the applicant. It would be difficult to quantlfy

that loss if the respondent were compelled to enforce the

undertaking as to damages which would be extracted from the

applicant as a condition for grant of that injunction.

Accordingly, the motion f o r an interlocutory injunction

is refused. The applicant is ordered to pay the respondent‘s

costs of the motlon. The directions hearing in this matter

is adjourned to 27 November 1987 to enable the parties to

consider these reasons and what procedural directions are

required to facilltate an early trial of the substantive

application.

I certify that this and the eight (8) preceding pages are a true copy of the Reasons for

Judgment herein of hls Honour

Mr. Justice Ryan.