Lelah, F. v Associated Communication Corporation of Australia Pty Ltd

[1985] FCA 107

Re: MR F. LELAH
And: ASSOCIATED COMMUNICATION CORPORATION OF AUSTRALIA PTY. LTD. and VICTORIA
ROBERTS
No. VG49 of 1985
Trade Practices
(1985) ATPR para 40 - 551 / 4 FCR 543

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J.(1)

CATCHWORDS

Trade Practices - misleading or deceptive conduct - advertisement in a newspaper for a business - use of identical phrases in the same newspaper in advertisement for a similar business - interlocutory injunctive relief.

Trade Practices Act 1974, s.52

Vagrancy Act 1966 (Victoria), s.11

Planning (Brothels) Act 1984, s.13

Meadows v. Ferguson (1961) VR 594

Mills v. Baitis (1968) VR 583

Trade Practices - Misleading or deceptive conduct - Use of identical phrases in same newspaper in advertisements for a similar business - Brothels - Trade Practices Act 1974 (Cth), s 52 - Vagrancy Act 1966 (Vic), s 11 - Planning (Brothels) Act 1984 (Vic), s 13.

HEADNOTE

A newspaper which publishes an advertisement which contains misleading or deceptive statements itself engages in conduct likely to mislead.

Universal Telecasters Qld Ltd v. Guthrie (1978) 32 FLR 360, applied.

There is a serious question to be tried as to whether the power of the court to prevent misleading and deceptive conduct ought to be exercised to eliminate misleading advertisements from the trade of operating brothels.

Cleaver v. Mutual Reserve Fund Life Association (1892) 1 QB 147; Mills v. Baitis (1968) VR 583; Meadows v. Ferguson (1961) VR 594; Beresford v. Royal Insurance Co Ltd (1938) AC 586, referred to.

HEARING

1985, March 22, 27. #DATE 27:3:1985
APPLICATION

Application for interlocutory injunction.

J E Frankom, for the applicant.

I F Turley, for the first respondent.

P J Kennon, for the second respondent.

Solicitors for the applicant: Forbes & Co.

Solicitors for the first respondent: Molomby & Molomby.

Solicitors for the second respondent: Davies & Gulquist.

GFV

ORDER

Orders accordingly

JUDGE1

Claims for interlocutory injunctive relief.

1. The applicant claims, in a statement of claim filed with the originating application, to have carried on since 1979 "business in Australia as a massage studio under the style of 'Exquisite Ladies invite you to Elegance'", and to have "advertised the said business throughout Australia under the said Style". He further claims that "the said Style has been known to the public as denoting and as being associated with the Applicant and his business". It is claimed that a distinctive "style of printing", by which is meant a particular print type, had been used in the applicant's printed advertisements. An example of such an advertisement, published in "Truth" newspaper, was both orthographically and typographically distinctive. It reads, in a cursive script type, as follows:
   
   

"Exqusitie Ladies invite you to Elegance

[phone]

Appt. only 10 am to 8 pm mon to fri"

1. In an affidavit filed in court on the day of hearing his claims for interlocutory relief the applicant deposes that what he calls his business name should be "spelt as follows : 'Exqusitie Ladies Invite you to Elegance'".

2. The respondent Victoria Roberts has caused to be published in the same newspaper advertisements in the same type, in the following terms:
   
   

"Exquisite Ladies invite you to Elegance

[phone]

Appt. only 10 am to 8 pm - mon. to fri."

1. It is alleged, and I think it likely to be found at trial, that members of the public who had before publication of Victoria Roberts' advertisement come to recognise the applicant's advertisement as an advertisement of a business known to them would be likely to be misled by Victoria Roberts' advertisement into the mistaken belief that the phone number published in the latter advertisement was that of the business they knew. It is likely, I think, that it will be found at trial that in causing her advertisement to be published in "Truth" Victoria Roberts had engaged in conduct likely to mislead and deceive those members of the public. Interlocutory restraint of such advertising by Victoria Roberts is claimed by the applicant.

2. The first-named respondent published Victoria Roberts' advertisement in "Truth", of which it is alleged to be the proprietor, and it is alleged that thereby the first-named respondent contravened s.52(1) of the Trade Practices Act 1974. There is no direct evidence that any servant or agent of the first-named respondent was aware, until a few days before this proceeding was commenced, that Victoria Roberts' advertisement might be likely to mislead or deceive. She has sworn that the first-named respondent required her to provide it with a copy of each of the certificates of registration, under the Business Names Act 1962 (Vic.), of the names "Ladies of Elegance" and "Exquisite Ladies". She had procured registration of those names on 5 December, 1984. It may be that the similarity of the applicant's advertisement and the advertisement proposed by Victoria Roberts for publication had been remarked by a servant or agent of the first-named respondent and that the requirement that she produce such certificates was imposed in consequence of his having made that observation. But the requirement may have been one which the first-named respondent imposed on any person who proposed publication of a particular class of advertisement. The evidence leaves me quite uncertain whether any servant or agent of the first-named respondent had noticed the similarity before it was pointed out to the first-named respondent's managing director in a letter dated 28 February, 1985 from the applicant's solicitors. The application by which this proceeding was commenced was filed on 7 March, 1985. Counsel for the first-named respondent has not suggested that the evidence before me raises the defence prescribed by s.85(3) of the Trade Practices Act 1974. If it be assumed that Victoria Roberts' advertisement was published in "Truth" by the first-named respondent without advertence by any of its servants or agents to the similarity of the applicant's advertisement, yet that respondent in my opinion thereby engaged in conduct that was likely to mislead and deceive. If the proprietor of a television station makes the misleading statements of which a televised advertisement of another's wares in part consists, so that the proprietor may by televising the advertisement contravene s.53(e) of the Trade Practices Act 1974, it is hardly to be doubted, in my opinion, that the proprietor of a newspaper or a television station who publishes a misleading advertisement engages in conduct that is likely to mislead : see Universal Telecasters (Qld.) Ltd. v. Guthrie (1978) 18 ALR 531.

3. The respondent Victoria Roberts has deposed, and the applicant has offered no denial, that his business is and always has been "the business of a brothel", which is presently conducted at premises in Garden Street South Yarra in the State of Victoria, and that no permit for the use of those premises as a brothel had been granted under the Town and Country Planning Act 1961 of that State. If those uncontradicted assertions be correct, the conduct by the applicant of that business would appear to involve contravention of s.11(1) of the Vagrancy Act 1966, which provides:
   
   

"11. (1) Any person who keeps or manages or acts or assists in the management of a brothel (not being premises in respect of which there has or have been issued, and is or are in force, under the Town and Country Planning Act 1961 such permit or permits as are required under that Act to authorize the use of the premises as premises to which people of both sexes, or of either sex, resort for the purpose of prostitution) shall be guilty of an offence.

Penalty: Imprisonment for two years."

1. Section 13 of the Planning (Brothels) Act 1984, which came into operation on 2 July 1984, provides:
   
   

"13. (1) The offence at common law of keeping a disorderly house shall not be constituted by reason only of the fact that a house is kept as a brothel.

(2) This section shall not affect any proceedings -

(a) instituted before the commencement of this section; or

(b) instituted after the commencement of this section and relating to an offence alleged to have been committed before that commencement.

(3) In this section 'brothel' means premises in respect of which there has or have been issued, and is or are in force, under the Town and Country Planning Act 1961 such permit or permits as are required under that Act to authorize the use of the premises as premises to which people of both sexes, or of either sex, resort for the purpose of prostitution."

1. It might be inferred from the whole of Victoria Roberts' affidavit that she is herself conducting the business of a brothel at premises in Richmond and that the advertisements of which she procured publication in "Truth" were intended to bring custom to that business. There is no evidence as to whether hers are premises in respect of which there has been issued any permit authorising that use.

2. In so far as the applicant's claim for interlocutory prohibition of Victoria Roberts' misleading advertising is based on his sworn assertions that her advertising is damaging the goodwill, and diminishing the profits, of his business, his claim may in my opinion be allowed a sufficient chance of success at trial to justify the conclusion that there is a serious question to be tried. In Meadows v. Ferguson (1961) VR 594 and in Mills v. Baitis (1968) VR 583 what was in question was the recoverability of earnings from the plaintiff's illegal activities as special damages in an action for personal injuries negligently caused by a defendant who, and in circumstances which, were wholly unconnected with those activities. In the former case the activity was illegal street betting, in the latter the conduct of a lawful trade in a place where it was unlawful, by virtue of planning legislation, to carry on that trade. Gowans J, in whose judgment Winneke C.J. concurred, observed ((1968) V.R. at 590-591):
   
   

"The public interest is not concerned to relieve the defendant wrongdoer. It directs its concern to the question of the deprivation of the plaintiff wrongdoer. Where the plaintiff's wrong-doing has had no causal connexion with the defendant's wrong-doing which has caused the damage, it is less probable that the purpose of the law will be to treat the plaintiff's wrong-doing as affecting the plaintiff's relief, than where there has been a causal connexion. Whatever may be the implications where the background wrong-doing on the part of the plaintiff is an offence at common law, where it is a statute which creates the offence, the statute should be regarded as providing an exhaustive statement of the purpose of the law. If all that the statute does is to take an activity which is ordinarily permitted and to prohibit it only in respect of a particular time or a particular place and to prescribe a penalty for a contravention, it should not be inferred, in the absence of any other expression of intention, that it was the purpose of the law that it should carry any other privative consequences.

There was in this case nothing but unlawful acts on the part of the respondent producing a prior state of affairs upon which the appellant's negligence operated, with no causal connexion between those unlawful acts and the negligence, and the provision in the Town and Country Planning Act 1961 is directed only at the place where the work was carried out, and gives no indication of an intention to disentitle an offender against the provisions of the Act from recovering compensation in full for personal injuries caused by that negligence. In these circumstances, it should not be accepted that it is part of the law that public policy requires that the respondent be denied the aid of the law to recover for loss of earning capacity which is otherwise established.

Whether this means that the same conclusion should have been reached in Meadows v. Ferguson, (1961) V.R. 594, where the statutory provisions were of a different character and the matter forbidden was not a mere incidental aspect of a lawful activity, may be left to some occasion when the same situation arises again."

1. On the other hand, in this case the damage alleged is impairment of the applicant's goodwill in the unlawful business, not merely impairment of his physical capacity to conduct the business. "It appears to me that no system of jurisprudence can with reason include amongst the rights which it enforces rights directly resulting to the person asserting them from the crime of that person." : per Fry L.J. in Cleaver v. Mutual Reserve Fund Life Association (1892) 1 QB 147 at 156, cited by Gowans J. in Mills v. Baitis and by Lord Atkin in Beresford v. Royal Insurance Co. Ltd. (1938) AC 586 at 596. And it may be still a question whether prostitution, in or out of a brothel, may lawfully be advertised. (Cf. Shaw v. D.P.P. (1962) AC 220).

2. If attention be directed to those members of the public who may be misled by Victoria Roberts' advertising, the question arises whether the power conferred by s.80 of the Trade Practices Act 1974 to prevent their being misled ought to be exercised to make straight the way to a brothel. It is in my opinion a serious question whether the exercise of that power should be directed to eliminating misleading advertisements from such a trade.

3. The respondent Victoria Roberts has deposed that since she began advertising her business on 2 February 1985 she has "endeavoured to convey to the reader that the business conducted by me is entirely separate from and not associated in any way with the business conducted by the Applicant but that the girls who are contracted to me are the same girls who were previously contracted to the Applicant". Victoria Roberts, who asserts that the brothel conducted by the applicant was and still is known as "Sophies", further deposes:
   
   

"10. Several of my advertisements are headed 'Ladies of Elegance'. As far as I am aware this name has never been registered by the Applicant and as previously deposed to the name has been registered by myself. Several other advertisements have used the words 'Exquisite Ladies invite you to elegance'. However, in all but two instances where this expression was used the professional names of the girls also appear prefaced by the words 'Ex-Sophies'. On the 26th and 23rd days of February, 1985 an advertisement using the words 'Exquisite Ladies invite you to elegance' without referring to the girls by their professional names and without the words 'Ex-Sophies' were placed. I was subsequently advised by my solicitor that these advertisements may lead the reader to believe that my business was the same or associated with that being conducted by the Applicant and these advertisements were subsequently withdrawn and will not be repeated."

1. The applicant does not seek to prevent Victoria Roberts from using the phrase "Ladies of Elegance" in connection with her business. The use of the phrase "exquisite ladies" or the use of the phrase "invite you to elegance" in advertisements of Victoria Roberts' business would in my opinion be likely to mislead persons familiar with the applicant's advertisements into the belief that her advertisements were advertisements of his business. She has not been advertising for so long a period that elimination of those phrases from her advertisements would be likely to diminish their effectiveness in attracting custom. The balance of convenience inclines to the granting of interlocutory relief.

2. I am not persuaded that use by Victoria Roberts of the same print type as has been used by the applicant is likely to mislead.

3. There will be an order, upon the usual undertaking by the applicant as to damages, that the respondent Victoria Roberts be restrained until the hearing and determination of the proceeding or further order from advertising any business in which she is engaged and which is similar to the business presently carried on by the applicant by words which include the phrase "exquisite ladies" or the phrase "invite you to elegance" or the phrase "invite to elegance".

4. I understand that the first-named respondent offers an undertaking in substantially the terms of the order I propose to make against the respondent Victoria Roberts. I will hear counsel concerning that.