Master Builders Association (SA) Inc v Master Builders Advice & Helpline PL No. Scciv-00-72

MASTER BUILDERS ASSOCIATION (SA) INC v MASTER BUILDERS ADVICE & HELPLINE PTY LTD
[2001] SASC 214
Civil

GRAY J This is an action for misleading and deceptive conduct and passing off.
The Parties
The plaintiff, Master Builders Association (SA) Inc[1] has about 1,600 members. Prior to 1970 membership mainly comprised commercial builders employing skilled and unskilled labour within the building industry. During the mid 1970’s membership was opened to subcontractors and individual trades people. Today members are general builders, contractors and subcontractors working in the commercial and house building industry. The plaintiff actively promotes the interests of its members.
[1] The South Australian Contractors and Builders Association was formed in June 1884 in an effort to develop an organization which would speak and act on behalf of contractors who wished to establish common wage rates and conditions of employment. The conditions of contract under which they worked varied such that there was need for better communication with the government and architects. In September 1890 the plaintiff changed its name by reversing the words ‘Contractors’ and ‘Builders’. The plaintiff was then known as the South Australian Builders and Contractors Association. In 1955 an amalgamation of members of a number of organizations into a single association was proposed. The Master Builders Association of South Australia was formed on 13 January 1957. It continues today.
The defendant was registered as Master Builder Advice & Helpline Pty Ltd on 15 June 1999. At that time its sole director and shareholder was a solicitor.[2] The records of the Australian Securities and Investments Commission (“ASIC’) record a change of name to Master Builders Advice & Helpline Pty Ltd on 18 June 1999. The solicitor ceased as a director and shareholder of the company on 1 December 1999. Angus Irwin then became the sole director and secretary of the defendant. The defendant accepted that at all relevant times Mr Irwin acted as its director and agent and that his conduct was the conduct of the defendant.
[2] A letter of 18 October 1999 from the defendant’s solicitor to the plaintiff’s solicitor provided the following information:
“I confirm that whilst I am a director and sole shareholder of the Company, I am only in that position representing Messrs Angus Irwin and Mij Looker. I would have resigned and transferred the shares had the difficulties not arisen following their meeting with Mr Callan on 8 July last. In the event of our discussions/negotiations breaking down then I will be immediately resigning as a director and transferring my shares.” The solicitor at an unspecified time commenced to act for the defendant in this case.
Hi Ho (SA) Pty Ltd (“Hi Ho”) became the beneficial holder of the two issued shares in the defendant. Mr Irwin and James Looker were shareholders of Hi Ho. Both had been involved in a number of other businesses.[3] Mr Irwin was the most active participant in the formation of the defendant. Mr Looker’s involvement was limited.
[3] Mr Irwin had formed a company called the Botanic Gardens Advice & Helpline Pty. Ltd. and Mr Looker had established a business called the Real Estate Information Advice and Helpline Pty. Ltd.
The Plaintiff’s Case
The plaintiff claimed that it had extensively promoted itself and its members to the general public by using the words “Master Builders”. The name had come to signify the plaintiff and its services at least as early as 15 June 1999. When dealing with the name “Master Builders” consumers expected and intended to acquire the plaintiff’s services and not those of another. The words had acquired a secondary meaning.
It was said that plaintiff had established and promoted a telephone referral service. This was achieved through a number of avenues including a television program Building Ideas, radio talk back programs and a display operated each year at the Home Show. The referral service was and remains free to consumers. The telephone number is listed in the white pages. A free call number is listed in the yellow pages. The yellow pages entry is headed “Master Builders Association” and the words that follow include “Free Independent referral service Master Builders member operated”. Consumers using the service are provided with the names of three builders who are members of the plaintiff. More than 1000 telephone calls are received annually. The plaintiff receives a fee from those members wishing to be included in the service. The resultant annual income is in the order of $30,000.
The plaintiff’s case was that the similarity between its telephone referral service and the defendant’s advice and helpline was such that consumers had been and would be misled. This resulted from the reputation and goodwill in the plaintiff’s name built up over many years within the building industry and the public generally. This in turn in part resulted from the extensive advertising and promotion undertaken since 1994 of the plaintiff’s name and in particular the use of the words “Master Builders”.
The plaintiff contended that the name listed by the defendant in the 1999 white pages “Master Builders Advice & Helpline” was substantially the same as or deceptively similar to the plaintiff’s name. It was said that by the use of the words “Master Builders”, the defendant represented to the industry and to the general public that its services were those of or were connected with the plaintiff. This occurred in trade and commerce. Anyone using the defendant’s advice and helpline would be likely to do so in the belief that such services were those of or connected with the plaintiff. This belief arose because of the reputation, goodwill and secondary meaning that had been established by the plaintiff and as a result of the defendant’s conduct.
It was said that the defendant had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974 (Cth). It was also claimed that the defendant passed off its services as the plaintiff’s services or as having a connection with the plaintiff or its services. It was alleged that the defendant intended to continue engaging in that conduct and refused to cease using the name. The plaintiff sought an order that:
“the defendant, whether by itself, its servants, agents or otherwise howsoever, be restrained from using the title ‘Master Builders Advice & Help Line’ or any variation thereof including the words ‘Master Builders’ in relation to the supply by it of its services or advice in and to the building and construction industry.”
Further relief was claimed. However as the defendant had not in any real sense commenced business this relief was not pursued.
David Callan, the plaintiff’s director of operations, gave evidence of a meeting with Mr Irwin, Mr Looker and Alex Cook, representatives of the defendant and of subsequent events. The effect of his evidence was that at the meeting the defendant’s representatives described an agreement that had been reached with the Botanic Gardens. They proposed a similar agreement. They sought a joint venture or association in which the plaintiff’s staff and members would be used and a fee paid. Reference was made to a royalty payment. Mr Callan indicated that the plaintiff was not interested. Mr Irwin then said that the name had been registered, he had obtained legal advice and that the defendant would proceed to establish and conduct the business under the registered name.
Mr Callan also spoke of his involvement with the plaintiff’s marketing strategies, its promotional activities and the way in which the referral service operated. Much of his evidence was directed towards the reputation and goodwill said to have been created in the plaintiff’s name. Mr Stewart, the plaintiff’s chief executive officer gave detailed evidence about the promotional activities undertaken by the plaintiff.
The plaintiff called builders, Neil Sarah and Peter Coutts. Their evidence was primarily directed towards the history and use of the plaintiff’s name. Rebecca Williams gave evidence about her experiences working as the plaintiff’s receptionist. She said that many members of the public had contacted her about the defendant’s advice and helpline. Wayne Mead spoke of how he attempted to call the defendant’s advice and helpline having assumed that it was operated by the plaintiff.
The Defendant’s Case
The defendant denied that it had engaged in any misleading or deceptive conduct or that it intended to do so. It denied that it had made any misrepresentation. The defendant proposed to offer advice. The defendant said that it would not provide referrals. The plaintiff’s service was a referral service and not an advice line. The defendant proposed to use a 1900 number that charged consumers by the minute. The plaintiff’s service was at no cost to the consumer. The service proposed was substantially different to that conducted by the plaintiff.
The defendant submitted that “master builder” and “master builders” were generic terms commonly used in the English language. It was said that the plaintiff did not have any goodwill in its name. It had built no reputation. No secondary meaning had been established. Alternatively, if there was a reputation or goodwill, the proposed service did not seek to make use of that reputation or goodwill. The defendant’s name was an accurate description of the service that it proposed to offer.
Mr Irwin gave evidence about his involvement with the Botanic Gardens, his idea of a building advice and helpline, his belief that he was entitled to use the name “Master Builders”, the formation and activities of the defendant, the meeting which took place and the follow up to that meeting. Mr Looker gave evidence about the defendant’s name, the proposed business and the meeting.
Additional evidence was given by builders David McAdam, Thomas Gannon and Graham Thompson about the use of the term “Master Builder”. Barry Temby, the previous manager of Hi Ho spoke of Mr Irwin’s approach to him about the business and the use of the term “Master Builder”. Christine Steele-Scott, the former marketing manager of the Botanic Gardens spoke of arrangements concerning its advice and helpline. Richard Catt a patent attorney engaged by the defendant gave evidence of inquiries made of him.
The Facts and Events
Botanic Gardens
Mr Irwin said that he became aware that the Botanic Gardens operated a free garden advisory service. He understood that it was to be closed. He offered to run an advice and helpline.
Mrs Steele Scott gave evidence that the Botanic Gardens’ advisory service had been a non-profit service. That service was discontinued in 1998. About a year later the Botanic Gardens asked Mr Irwin to submit a proposal. Mrs Steele-Scott conducted negotiations with Mr Irwin. She first became aware of the Botanic Gardens Advice & Helpline:
“… when I received a phone call from Mr Irwin saying that he’d been having a meeting with someone about the operation of 1900 numbers and they had decided to form the company to protect the name and had done so through a company of solicitors. He rang to inform me because he realised he’d done it without getting approval from the Botanic Gardens and gave me his reasons for doing so.”
This telephone call followed earlier telephone contact. However this was the first occasion on which Mrs Steele-Scott became aware of the name Botanic Gardens Advice & Helpline or that Mr Irwin was doing anything with respect to that name. Apparently there was a level of understanding reached between Mr Irwin and the Botanic Gardens prior to this time. Mr Irwin understood that he could place an entry in the white pages. Mrs Steele-Scott said:
“Q.Did you discuss with Mr Irwin putting an entry in the White Pages telephone book for the Botanic Gardens advice line.
A. Yes. During our long negotiations for agreement for the operation of the advice line we realised that for the number to appear in the 2000 White Pages it would have to be lodged in June of the previous year, ’99, and although a formal agreement hadn’t been signed we agreed that it could go in and I was given his assurance that if a formal agreement hadn’t been approved by the board of the Botanic Gardens the line would be abandoned or handed over to the Botanic Gardens.”
Mr Irwin’s evidence included:
“Q.Did you obtain the consent of the Botanic Gardens to use those words in your company’s name.
A.Yes, we did.
Q.Why did you do that.
A.I think in South Australia, we basically agreed with them that the Botanic Gardens was – we agreed to disagree but we still agreed – in the sense that there is only one Botanic Gardens, and we recognised that people recognised the one Botanic Gardens was over on North Terrace. We were conciliatory anyway and sponsored the Botanic Gardens. It was always a business we were going to go into with their consent, if at all.”
In cross-examination Mr Irwin initially denied that he had registered the name Botanic Gardens Advice & Helpline before reaching agreement with the Botanic Gardens:
“Q.You believed you had the right to use it because you had gone ahead and registered –
A.No, that’s totally incorrect.
Q.Had you not registered the company name with the words ‘Botanic Gardens’ in it before the agreement –
A.No, that’s totally incorrect.
Q.Before the agreement with the Botanic Gardens was finalised.
A.No, totally incorrect.”
Mr Irwin later accepted that he had arranged for the registration of the company with the name Botanic Gardens Advice & Helpline Pty Ltd on 18 December 1998, before the agreement with the Botanic Gardens was entered into.
On 5 August 1999 agreement was reached. The parties were the board of the Botanic Gardens of Adelaide and Green Thumb Fertiliser Warehouse Pty Ltd. (“Green Thumb”). Green Thumb was owned by entities associated with Mr Irwin. The agreement licensed Green Thumb to use the name Botanic Gardens. The new Botanic Gardens Advice & Helpline was to commence on 1 October 1999[4].
[4] The Botanic Gardens Advice & Helpline was not operational at the time of the meeting with the plaintiff’s representatives on 8 July 1999.
The recitals to the agreement included the following:
“The Licensee[5] acknowledges that members of the public of South Australia have come to know and refer to the Licensor[6] by the name Botanic Gardens (the “Name”) and have traditionally associated such name and the Licensor as being one and the same entity.
The Licensee proposes to conduct a botanical and horticultural advisory business providing a gardens advisory service to the general public in South Australia and elsewhere (the “business”).
The Licensor has agreed to grant a licence to the Licensee to use the Name for the Purpose upon the terms and conditions of this agreement.”[7]
[5] Green Thumb
[6] Board of the Botanic Gardens of Adelaide
[7] Ex P 46
Operative clause 2 provides:
“Scope of the agreement
Subject to the terms and conditions of this Agreement, and in consideration of the payment of the Licence Fee, the Licensor grants to the Licensee a non-exclusive licence to use the Name for the Purpose at the Location.”
“Purpose” is defined by item 3 in the schedule to the agreement:
“The conduct of a 1900 telephone gardens advice and helpline service providing a gardens advisory service to a national audience on a time-based, user pays fee.”
“Licence Fee” is defined by item 5 and included a cash payment and a percentage of call fees. “Location” is defined by item 6:
“Main administration building of the Botanic Gardens of Adelaide or such other venue as the parties may agree.”
Mr Irwin developed the Botanic Gardens Advice & Helpline to operate from telephones within the Botanic Gardens premises. Three or four qualified horticulturalists provided advice. Two of these worked for the previous advisory service and two were Botanic Gardens employees “on call”.
The Idea
Mr Irwin claimed that when developing the Botanic Gardens Advice & Helpline during 1998 he came up with the idea of a building advice and helpline. He said the business would be conducted over the telephone. He envisaged consumers dialling a 1900 number. They would be charged per minute for the advice. The telecommunications provider would then pass the proceeds to the defendant. The idea was to utilise master builders to answer the calls.
Mr Irwin discussed his idea with Mr Cook, a builder and business associate. At this time a joint venture was also being discussed between a company controlled by Mr Irwin and Mr Looker and a company controlled by Mr Cook. If the joint venture proceeded it may have included the proposed building advice and helpline. Ultimately the joint venture did not proceed. However Mr Cook was involved in discussions about the advice and helpline and attended the meeting with the plaintiff’s representatives.
Mr Irwin said that he understood the term master builder to mean a “builder that does everything, basically”. He accepted that the words had a connotation of “standard and quality”. He said he chose the name Master Builder Advice & Helpline because:
“…I didn’t see there was any other, frankly. I guess I pride myself on coming up with pretty good names for things. Reality is when you talk to the public, if you are looking for a name that sums up a builder that does everything, I don’t think there is anything else that you can come up with that also offers credibility, and I guess, you know, if you want to analyse any of the names, there is always a meaning that attaches itself to it; ie ‘Botanic Gardens’ obviously offers a fair bit of credibility… ”
Mr Irwin gave the following evidence:
“Q. Did you see potential for that business.
A. I saw enormous potential.
Q. In what way.
A. Just in the fact of giving advice. The operation of being able to set up a call centre, a log-on wherever you like, and the utilisation of master builders to run that service just in the straight call room was substantial, once again on a national basis.”
Formation of the Defendant
Mr Irwin claimed that he did not set out to use the name and reputation of the plaintiff. He said that he thought up the name for the company quickly and then approached his solicitor to effect registration. However Mr Irwin acknowledged that when he made the application to register the defendant he was aware of the existence of the Master Builders Association. He knew of the acronym MBA and that is stood for Master Builders Association.
Mr Irwin also acknowledged that he had a concern about being able to use the name Master Builder Advice & Helpline. He said his mind was put at rest by ASIC’s acceptance of the application for registration and from advice obtained from two trademark attorneys that the name could not be registered as a trade mark.
As earlier observed on 15 June 1999 Master Builder Advice & Helpline Pty Ltd was registered. At about the same time an application was made to have the company entered in the white pages. This entry differed to the registered name. The company was listed in the white pages as Master Builders Advice & Helpline Pty Ltd.[8] The plural “Builders” was used rather than the singular “Builder”.
[8] Entries were also listed in the interstate white pages.
There is conflicting evidence as to what happened. Mr Irwin said that the entry was made by Mr Looker. Mr Looker said that he did not place the entry. He thought that Mr Irwin had made the arrangements.
On 18 June 1999 the defendant’s name was changed to Master Builders Advice & Helpline Pty Ltd. Mr Irwin said that he did not think that any great significance attached to the name change. It was suggested that this prompt alteration may have been forced by the closing date for entries in the white pages.

Mr Irwin claimed that he had become aware of the plaintiff’s referral service through Mr Cook. It was decided to seek a meeting with the plaintiff. Little preparation took place. Mr Irwin gave evidence of having an idea and concepts but of no detailed business plan. He saw opportunity and possible synergies.
The Meeting
On 8 July 1999 following the defendant’s registration, the listing in the white pages and the change of name, Mr Irwin, Mr Looker and Mr Cook on behalf of the defendant met with the plaintiff’s representatives, Mr Callan and Ian Gore. Although there was considerable common ground about the nature of the meeting and the discussions that occurred there is some dispute.
Mr Irwin said that the meeting was opened by Mr Looker. It was said that Mr Irwin had thought of the idea of a master builders advice and helpline. Mr Irwin then spoke of his arrangement with the Botanic Gardens:
“Q. What did you say about the arrangement with the Botanic Gardens.
A.I said that we had been approached by the Botanic Gardens after approaching them some years before to set up an advice and help line for the Botanic Gardens, and that we approached Botanic Gardens back in 1997. At the meeting with the Botanic Gardens, they raised various issues that they had concerns about in running an advice and help line, and also in running a private one. I then went through how we went through the negotiation process of overcoming those various objections and setting up a structure so that it could operate with both sides being happy with the arrangement.
…
I think I gave a brief overview of my background with the Botanic Gardens and the advice help line and really went through how that operated. Not a lot more than that, really, apart from we set up the Master Builders Advice & Helpline company, and we really added on to [Mr Looker’s] opening words we were examining what possibilities might exist with doing something with Master Builders Association.
…
Q. In your outline of the proposed business, did you tell him anything about who would be providing advice.
A. Once again, I went through with the - literally we touched on the Botanic Gardens advice line and how that had been set up. Obviously, all the same, if we run though all the same sort of standards – the level of advice of the person that runs it, I basically took a very conciliatory approach to say all those things can be negotiated and discussed. I certainly didn’t go in there with any hard and fast ideas, or any deal, or any standards. That wasn’t what was being proposed.”
Mr Irwin explained how a 1900 number worked. He said that advice and help would be given over the telephone on a user pays basis. He said:
“Certainly as far as the name of the business, it was very important that master builders ran it… I said that we had in our mind that we, perhaps, would be utilising master builders to run our advice and help line.”
It was the defendant’s case that the meeting was an exploratory exercise to investigate business possibilities. It was held to investigate potential and to identify possible synergies between the plaintiff and the defendant’s advice and helpline. There was the possibility of a joint venture. Mr Irwin considered that some sort of arrangement with the plaintiff would be to the defendant’s advantage. The defendant hoped to use the plaintiff’s infrastructure and its readily available technical knowledge, office reference material and retired master builders. Mr Irwin said that with his
“background in all of the various business operations I have run in this area, the Botanic Gardens or Gardening Australia, I have always felt that one should investigate business possibilities. We certainly had an infrastructure situation that we needed to rectify and the Master Builders, in reference material and the like, did offer some opportunity there.”
He had thought little about who would answer the phones and had not considered the inherent likelihood of an advice and helpline giving rise to the need for referrals.
Mr Irwin said that he was met with immediate aggression from Mr Callan. Mr Callan told him that the plaintiff owned the name “Master Builders” and that the defendant could not use that name. Mr Irwin told Mr Callan that he had received legal advice that the defendant could use the name “Master Builders Advice & Helpline” regardless of whether the plaintiff consented. He denied that he told Mr Callan that he had obtained the opinion of a “QC”. Mr Callan explained that the plaintiff operated a referral service and that it generated income for its members through that service. Mr Irwin explained that the defendant did not propose to operate a referral service.
Mr Callan’s account was that Mr Irwin confronted the plaintiff with a proposal. Mr Irwin was determined to go ahead with the business and said “Whether we liked it or not it was going to happen”. Mr Callan’s evidence included the following:
“A. He presented a proposal whereby they had set up – and it was a fait accompli, they had set up the Master Builders help and advisory line where members of the public or whoever would ring this line, there would be an expert, and he alluded to the fact that we would provide that expert, who would answer the telephone, inform the person on the other end that it was going to cost so much per minute, and income would be derived by electronic transfer from a credit card per minute, of which we would receive a small percentage and the added benefit that the work would flow through to our members.
Q.     As to the percentage, what percentage did he say, if any.
A.     A minimal percent, up to 10% I think from memory.
Q.     Did he say why he proposed to pay that amount to Master Builders.
A. To use the name, Master Builders, and for us to provide an expert on the end of the phone. I remember him saying it could be a retired builder. He had set up a similar system with the Botanic Gardens.
...
Q. You mentioned some reference to another business that had been set up along similar lines. What did he tell you about that.
A. That was one of the initial stages. He explained how they had set up this business with the Botanic Gardens, and the Botanic Gardens had acquiesced to what they required and provided volunteers of Friends of the Botanic Gardens and retired horticulturalists that answered phones, and again it was done on an electronic transfer of funds, so you talk for 20 minutes and you’re up for $50 sort of thing.”
In cross-examination the exchange included:
“Q. No I suggest to you he put no specific suggestions as to how the two associations might co-operate or join together, it was just an opening gambit to see whether there was any interest on your part.
A. He used the model of the Botanic Gardens in saying ‘This is the way we would do it with retired builders or with members of your association providing the advice.’”
…
Q. I suggest he hadn’t referred to any aspect of your referral line or whatever you call it in his outline of what he proposed.
A. It very much was the fact that with that referral the advice line would then be referred on to our members and that was the benefit the Master Builders’ members would receive and that would be a flow-through to them.
Q.     Are you sure that he put that to you, the referral aspect to it.
A. I’m sure that they said that that would be the – when challenged about what would be the benefit to our members, because I worked for members, it was that that work would flow through to them.”
Mr Callan told Mr Irwin that the proposed service was already part of the plaintiff’s business operations and had been for many years. Any form of payment by consumers was seen as a barrier. The proposal was an unwarranted obstacle and the plaintiff was not likely to be interested. Mr Callan was informed by Mr Irwin that he had received advice from a “QC” that the defendant was entitled to use the name “Master Builders”.
Follow up from the Meeting
On 14 July 1999 under the letterhead of Hiko Construction Mr Irwin wrote to Mr Callan:
“Attention: Mr D Callan
Marketing Manager
Master Builders Association
Fax: 8231 5240
Dear David
RE: National User Pays 1900 Master Builders Advice & Helpline Service
Thank you for the time that both you and Ian afforded Mij, Alex and I on Thursday 8/7/99. The purpose of our approach and subsequent meeting was to initially raise with the MBA our idea of developing and establishing the abovementioned service. We believe that a significant opportunity exists at a national level and, as such, we would prefer to develop this opportunity in conjunction with the MBA. We fully appreciate that there are advantages to both parties by doing so.
Obviously it is in both our interests that the standard of advice passed onto consumers is maintained at the highest possible level and to this end any user agreement would reflect such. By the same token, we recognise that your members’ benefits must also be sustained.
In very basic terms, we would propose that this service is owned and operated by us (including any set up costs), with an ongoing royalty being paid to the MBA. This royalty would be in consideration for being able to state “approved by the MBA” etc. Should the MBA decide to proceed with our proposal, the actual operating procedures would be subject to agreement between the parties.
Thank you once again for you time and I look forward to hearing from you.
Yours sincerely
Angus Irwin”[9]
[9] Ex D 38
This letter is important. It confirms that the defendant was advancing a proposition. The defendant was seeking an association with the plaintiff. The letter referred to the defendant’s preference “to develop this opportunity in conjunction with the MBA”. The proposal included the payment of “an ongoing royalty” in consideration for the defendant being able to publicise the plaintiff’s approval of its service. The letter confirmed the defendant’s recognition “that [the plaintiff’s] members’ benefits must also be sustained”.
The preparedness to pay a royalty implied that the defendant recognised value in publicising the approval of the Master Builders Association (SA) Inc to the Master Builders Advice & Helpline. The inference that arises is that the defendant recognised that the plaintiff had a reputation and goodwill of value. The coincidence of the words “Master Builders” in the two names is striking. The defendant was seeking much more than the use of the plaintiff’s infrastructure.
Mr Irwin said:
“Q.Towards the end of that letter, you talk about paying a royalty to the MBA, in consideration for being able to state ‘Approved by the MBA’. Did you see that to be a benefit to your company, if that approval were given.
A.Well, look, obviously, I stuck it in this letter. I think it depends on the level of royalty as to what value it is. It depends how long a bit of string is. If we were paying a 1% royalty, I’d suggest, perhaps, it was. If it started getting up at the higher end of the scale, I’d suggest it wasn’t. I think that’s a very subjective question, and it depends on what other things they were going to throw into the pie, I suppose. So, if we were going along to get an endorsement from the MBA, my answer to that question would be totally based upon the level of royalty.”
The reference in the letter to sustaining the plaintiff’s members’ benefits is also significant. The only benefits to the members from the plaintiff’s telephone referral service was the referred work. If the defendant’s advice and helpline was to be operated to sustain these benefits it follows that the defendant anticipated that its operation would lead to referrals. This is direct confirmation of Mr Callan’s evidence of matters discussed at the meeting. It conflicts with Mr Irwin’s account.
There does not appear to be a direct reply to Mr Irwin’s letter but the plaintiff’s solicitor wrote to the defendant on 23 August 1999:
“Dear Sir
MASTER BUILDERS ASSOCIATION of SOUTH AUSTRALIA INC
We act for the Master Builders Association which, for over a hundred years, has been providing advice to members of the general public concerning building matters.
It has spent considerable resources and money in being able to provide to the public advice which is accurate and reliable. In addition, it has developed, over the years, an enviable reputation and is highly regarded. Generally speaking, members of the public repose great confidence in the Association and in the advice it gives and in the services it provides.
To a certain extent, the name Master Builder is something of an anachronism. That you have chosen such a name, in present circumstances, raises strong suspicion of a deliberate attempt to pass off our client’s name. Master Builder is no longer a name used generically to describe a sector of the building industry.
Indeed, it is apparent you recognise our client’s good name and reputation by meeting with its representatives in an attempt to negotiate a basis by which you could market your enterprise with the Association’s approval and endorsement.
It will be clear to you that your listing in the telephone directory will attract members of the public who believe they are dealing with the Master Builders Association (or one of its services). They will be diverted from contact with our client. It is likely they will assume your service is, in fact, a service endorsed, supported or provided by the Association.
In view of its reputation and the time and money it has spent on its public image over a century, our client will not allow its name to be used in the manner you propose.
Neither is it lawful nor reasonable to allow you, effectively, to profit from an authorised use of our client’s name and reputation...”
At this point the defendant’s solicitor took up correspondence with the plaintiff’s solicitor on 27 August 1999:[10]
“…I am presently waiting on further instructions. However in the meantime there are some points which I wish to raise on your letter:
1. The meeting referred to in paragraph 4 was arranged by persons associated with the Company for entirely different reasons to that alleged in your letter. At no time was there any suggestion by those who attended that meeting that they were seeking any form of approval or endorsement of the Association for the conduct of the Company’s business.
…
3. The use of the words “master builders” in the name of the Company has nothing whatsoever to do with any attempt to “affiliate” itself with the Association. The Company does not now and never has had any intention of being in any way “associated with” the Association”…[11]
[10] The defendant’s solicitor was the same solicitor who had registered the company and had been the sole director and shareholder of the company.
[11] Ex P 40
This correspondence is also significant. As earlier observed Mr Irwin’s letter of 14 July 1999 confirmed that the defendant was seeking an association with the plaintiff, that the defendant recognised the need to sustain the plaintiff’s members’ benefits and that a royalty payment would be made. The mention of sustaining members’ benefits was a reference to benefits from the referral service operated by the plaintiff. The mention of a royalty payment was a recognition that the plaintiff had a reputation and goodwill of value. The defendant wished to have the warrant or authority to publicise the plaintiff’s approval of its service. The defendant’s solicitor’s letter of 27 August 1999 is of a different character. It is in direct conflict with the letter of 14 July 1999. The suggestion that the defendant had never sought any form of approval or endorsement of the plaintiff is plainly incorrect.
No satisfactory explanation was provided for the defendant’s change of position. Mr Irwin acknowledged that he provided the defendant’s solicitor with instructions, possibly a draft of the letter of 14 July 1999 and an account of the meeting. When pressed to explain the statement in the solicitor’s letter Mr Irwin resorted to generality and avoided the issue.
The defendant’s only attempt to develop its business was through its approach to the plaintiff. When cross-examined Mr Irwin gave the following evidence:
“Q.Between the meeting with Mr Callan on 8 July 1999 and that letter of 23 August 1999, what did you do to promote the Master Builders Advice & Help Line, which you had established and entered into the White Pages.
A.We did very little, apart from discuss it - I must say, we were a bit taken back by the attitude at the meeting - apart from, very generally, discuss the type of person we may be able to utilise in the running of it.
Q.So, nothing to promote it, but some discussions about who might be able to run it.
A.Yes, that’s correct; well, it wasn’t open.
Q.Who did you have that discussion with.
A.Look, I think it was just general discussion around the office. I operated out of the Hi Ho office, so no doubt, probably, from time to time, with Mij. I mean, it really wasn’t a big - it wasn’t a major enterprise in our life at that time. We certainly weren’t - we were certainly set back by the meeting, and there was certainly no business plan being set up.
...
Q.Do I understand from your evidence that, having decided to embark on this particular project, if I can use that term, apart from speaking to people with whom you were connected - Mr Temby, Mr Cook and Mr Looker - the only other person you spoke to was the Master Builders Association.
A.Yes.”
The Witnesses
Mr Irwin
Mr Irwin was an unsatisfactory witness. Attempts by counsel to test his evidence in cross-examination were avoided. As a result those attempts were unsuccessful. On occasions this was a result of generality and vagueness. He frequently answered questions indirectly.
Mr Irwin generally summarised conversations rather than recounting what was said. He recalled being “dumbfounded” at Mr Callan’s reaction to the proposal but could not recount the exchange. He described Mr Callan’s response at the meeting as “cold and aggressive” but could not articulate the conversation that led to this conclusion:
“Q. What I suggest to you is simply this: that, in that meeting on 8 July, you did say to Callan that any referrals that came out of the advice line you proposed could be fed back to his members.
A.     I said that?
Q.     Yes.
A.I couldn’t deny or confirm that I said, but what I could tell you is the context of how it was said, and it was said as raising a number of various issues and giving an answer what could, perhaps, happen. Now, that doesn’t mean that was my opinion, or that is what happens, but that is a straight out attempt at seeing if we can find some common ground. That is a standard way of doing business.”
Mr Irwin was unable to recall details of important events. He was unable to recall when he spoke with Mr Cook about his “master builder idea”. Mr Irwin also attempted to distance himself from important events. He said:
“Q. [Mr Looker] says that you were really doing the active running on this idea; is that right.
A. Yes, but, once again, I looked at the overall concept of the business. Once again, I bring in the Botanic Gardens Advice & Helpline; I did the overall concept, but the running of it and the giving of information - I might have made a contribution, but, at the end of the day, that was sort of left up more to the experts that are needing to give the information. ”
As earlier observed, many of the answers given by Mr Irwin were non-responsive.
“Q. Did you talk to [Mr Temby] soon after you came up with the idea about how the line might work.
A.I must say Barry was somewhat – I was going to say scared – when we mentioned the Master Builders Association. Timid, I would suggest. He wasn’t that rapt in the whole concept.
…
Q. What about Mr Cook. Did you speak to him before you went to see Mr Callan.
A. We were having various meetings with him. Once again, not to any great degree. We didn’t have any preconceived ideas on what was going to happen. We knew there would be building advice, that was about it.”
Mr Irwin became irritated and defensive during cross-examination. Attempts to ascertain his plans and test his evidence were frustrated by unhelpful answers. He spoke of others having responsibilities and then of what “we” discussed. He spoke of thoughts, ideas and concepts in general terms. At times his evidence was so vague as to be of little use. The following are further examples:
“Q. …Did you give any thought to how you would select the master builder.
A.I think, as I said to you before, we really hadn’t gone down that track a hell of a long way, apart from putting the ball into Alex Cook’s court, to some degree, but I wasn’t involved in it.
Q. Other than finding persons who had held building licences, what other criteria were you going to apply –
A.     It hadn’t even entered my mind.
…
Q. How were you going to choose the people who answered the phone lines, so they were not just builders –
A. I’m assuming here – we would have looked for people who were master builders.
…
Q. Is it the case though you were going to look for builders who had referred to themselves as ‘master builders’.
A. I think once again it wasn’t – we really did not evolve this business, apart from a general thought of some of the more significant issues and I think getting down to that, I mean, I would imagine that is what we would have done. But I don’t think there was any great discussion and agreement upon that being the process.
Q. It was your focus, wasn’t it to find older style builders who referred to themselves as master builders.
A.     I would have thought that would have been the case, Yes.
…
A. When you say it was a focus, I think the concept generally come into my thoughts for about two minutes and we moved on.”
…
Q. …in your counsel’s opening, Mr Abbott explained that you contemplated retired builders because they would have been, as retired builders, disinterested with no active associations. Is that a fair description of why you had in mind…retired builders.
A.Once again, I don’t think there was any hard, fast set rule. I think     [Mr Looker] was the one that probably raised retired builders. I had not really got to the point of operations…There was not great thought into it.”

At times Mr Irwin appeared to consider that questions were of a comical nature. Some of his responses were flippant:
“Q. You thought the economic potential for this was enormous.
A. Yes, but it doesn’t matter what sort of advice you give, as long as it is long-winded –
Q.     Sorry?
A.     As long as the advice takes a long time.
Q.     Why do you say that.
A.     You get paid by the minute. It is no different to speaking to a lawyer.
Q. What was going to be the most important thing about retired builders, that they gave highly skilled advice, or they kept the person on the line.
A. I was being facetious. The whole purpose in business, be it any business, if you don’t offer a good service, you don’t get repeat clients. That’s part of the service we would have to have provided.
Q.Did you tell Mr Callan that that was part of the idea, the longer they were kept on the line, the more profitable it was for everybody.
A.     That wasn’t what I meant by that, and I have retracted that.”
Mr Irwin was evasive about his choice of the words “Master Builder” and “Master Builders”. He said that it had never entered his mind that there would be a problem using the words Master Builder. As earlier observed, he also said that the ASIC registration and advice from two trade mark attorneys “put his mind at rest”. He had also noted Mr Temby’s concern at the involvement of the plaintiff and that Mr Temby had not been “rapt in the whole concept”. Mr Irwin said that he knew that MBA stood for Master Builders Association and that a member of his family was an honorary life member but he claimed to have no knowledge of the plaintiff’s history:
“A. I saw the history of the Master Builders Association on Wednesday night; a book that was good enough to be given to my grandfather as an honorary life member.
Q. You hadn’t read it when you came up with the idea. Was your grandfather a life member of the Master Builders Association.
A.     Yes, apparently.
Q. Did you know that when you came up with the name Master Builders Advice & Helpline.
A. I woke up this morning, looked up. To my left was this thing hanging there. I looked around, there it was, signed by Neil Sarah. I nearly fell out of bed.
Q.     As at 8 July you were oblivious of the heritage.
A.     Yes”
I do not accept Mr Irwin’s evidence that he had not foreseen a problem with the use of the words “Master Builder” or “Master Builders”.
As earlier observed there were material differences between Mr Irwin’s letter of 14 July 1999 and the defendant’s solicitor’s letter of 27 August 1999. Mr Irwin’s letter offered a royalty in exchange for the defendant being able to publish the plaintiff’s approval. The offer of a royalty evidenced recognition by the defendant that the plaintiff had a reputation and goodwill of value. The plaintiff’s approval was valued by the defendant. It is apparent from other evidence particularly that of Mr Looker and Mr Temby that Mr Irwin’s intention from the outset was to associate the defendant with the plaintiff. The letter of 14 July 1999 was consistent with this intention.
Once it became apparent that the plaintiff was uninterested in the defendant’s proposal and was seeking to legally protect its name there was a marked change in the defendant’s attitude. Statements in the letter of 27 August 1999 asserting that the defendant did not seek any form of approval or endorsement of the plaintiff were false.
I do not accept Mr Irwin’s evidence that he came upon the idea of using the name Master Builder without any thought to the plaintiff’s name and reputation. I find that the defendant set out to capitalise on the plaintiff’s reputation and goodwill. The defendant sought to do this in a similar manner as had been achieved with the Botanic Gardens. As earlier observed, the defendant sought an association with the plaintiff, was prepared to sustain members’ benefits and make a royalty payment for its approval.
I do not consider Mr Irwin to be a credible or reliable witness. I am not prepared to act on his evidence unless it is independently supported.
Mr Irwin accepted that Mr Cook had been involved almost from the outset of the idea for a building advice and helpline. He accepted that Mr Cook had discussed with him the plaintiff’s referral service and acted as one of the defendant’s representatives at the meeting. The letter of 14 July 1999 was associated with Mr Cook[12]. The plaintiff’s case called on the defendant to explain the close similarities in the two names. The plaintiff’s evidence called for an answer. Mr Cook was a witness whom the defendant could have been expected to call. I am prepared to draw the inference that Mr Cook’s account of events would not have assisted the defence case. The inference is of some importance as Mr Cook, on the defence case was involved in a number of important events. I have not used the absence of Mr Cook to fill any gaps in the evidence or to convert conjecture and suspicion into inference.
Mr Looker
[12] The letterhead included a reference to W Cook Builders.
Mr Looker had been involved with Hi Ho since the beginning of 1998. He had discussions with Mr Irwin about the defendant but took no part in the arrangements to register the company or list it in the white pages. He said that the company had already been formed and that Mr Irwin had chosen the name. Mr Looker described his role as follows:
“I was not based at the company office. I used to call in on a casual basis, catch up on things. My role was very much a background role.
…
I think I have made it very clear that I have absolutely no specific recollection of dates or times. I don’t like saying that, because of the implications of what you are trying to show. I really have no recollection of dates and times and when discussions were made.
Mr Looker said that he thought the discrepancy between the registration of the defendant and the white pages listing was brought about because of error. He was unsure whether the white pages listing had been a mistake or whether the registration had been made in error. He was also aware that the name had been changed but he did not know when this occurred. He said that he was not a party to the change of name. He then added that he may have been involved in the discussions but that he had not physically made the arrangements:
“I believe I was told that the problem was fixed, or – I’m sorry, I would have to say I was told the problem was either to be fixed or it was fixed, and ‘fair enough,’ that was my -”.
A number of Mr Looker’s responses were prefaced by doubt and phrases like “I think” and “No. No I can’t say ‘No’ categorically”. As a result of his minimal involvement in the business he was unable to assist on critical issues. His poor memory made him unreliable on many matters.
Mr Looker’s evidence was in many instances general and vague. Initially he said that he did not place “the thing [listing] in the phone book”. When asked again he said:
“Q. Did I understand you to say that you weren’t involved in arranging for phone book listings.
A.No, I don’t think so. I don’t think I was. My recollection is a bit vague on it.”
…
Q. In any of the discussions with Mr Irwin, from the time he first raised the idea with you, did Mr Irwin say anything which indicated that he had any concern about the right to use the name that he had chosen.
A. I couldn’t say, I can’t give a specific example, I don’t have a recollection of it occurring or not occurring.”
He then continued, saying that Mr Irwin showed no concern about using the terms master builders. Mr Looker thought that it was
“more a positive thing, that it would be good to form an association with them [the plaintiff]…If that fell into place there could be some advantages to us, and them.”
When asked whether he knew if Mr Irwin had obtained legal advice about using the name Mr Looker replied “I can’t answer that. No, I don’t know anything, no.” He continued:
“Q. Quite specifically did Mr Irwin say that he had legal advice or a solicitor’s advice that he could use the name, even without the consent of the Master Builders Association.
A. Not that I remember.
Q.Do you remember him saying that he had the advice of a Queen’s Counsel that he could use the name ‘Master Builders Association’.
A.No, definitely I don’t remember that. That is something I would think would stick in my mind, but I’m not prepared to say he didn’t say it either.”
Mr Looker said that the meeting with the plaintiff’s representatives was arranged because he and Mr Irwin thought that there could be some benefit in associating the defendant’s business with the plaintiff and it was hoped that a good working relationship could be developed. He recounted how he had discussed with Mr Irwin the potential synergies that would result:
“Q.…What did he, Irwin say about the benefits that might flow to the Master Builders Association.
A.Specifically, I don’t know. My impression is that the benefits – it may be my thoughts – the benefits were that they could charge for a service if they could somehow join the two separate entities, us as a partner, it would give them the right to generate an income flow, or an opportunity to generate an income flow from a facility that they were running, that they were running for nothing, effectively. That was my rough impression of it.”
Importantly this answer confirms that a significant perceived benefit to the plaintiff was that it would receive an income flow from the facility it was already running that is the referral service.
When questioned further about the potential synergies Mr Looker said:
“…if the two businesses could work hand in hand, that there were some benefits to be had, or probably, specifically, by us, but you could – we could perceive that there may be some benefits to the Master Builders in a financial sense”
He said that it was thought that both parties could benefit from a joint arrangement. It was hoped that there would be economies of scale in utilising existing staff and that both the plaintiff and the defendant could have the telephone system “all in the one spot”. Mr Looker said:
“There was a perceived benefit in, we thought, to probably both groups, of running the operation together.”
Earlier in his evidence Mr Looker said that it was thought that builders would be on site and unavailable to answer the telephones but that retired builders were very senior
“we were keen to have that thread running through it; that we had senior people answering the phones and part of the professionalism of that would be that they had the time to deal with the necessary inquiries”.
As with Mr Irwin, Mr Looker was unable to recall precise conversations. He also asserted that Mr Callan was aggressive at the meeting but said “I don’t remember what he specifically said”.
It is unclear how much of Mr Looker’s evidence came from his own knowledge:
“QFor example, as to the change in name from Master Builder Advice & Help Line to Master Builders Advice & Help Line, you really don’t know how or why that change came about.
AI don’t remember it happening, but I have read some documents related to this that talks about how that came about.
QYour direct recollection of events and what people said at the time, you just can’t help us with that.
A No. I don’t recollect it. I’d love to help you.
QI think you said in evidence in chief that you thought that yourself and Mr Irwin held shares in Master Builders Advice & Help Line Pty Ltd directly.
AThe reason I said I think is I have never actually seen anything that says I do. I have just assumed that they were transferred at some stage to me.
QDid someone tell you that they had been transferred, that is a share or shares had been transferred to you.
AI have never questioned it and never asked. In some document I saw the other day, it was named that I was a shareholder, so I assumed that the transfer had taken place at some stage.”
I am satisfied that Mr Looker’s involvement in the defendant was limited and that most if not all of the plans for the business were determined by Mr Irwin. He acted primarily at the direction of Mr Irwin. Mr Looker’s evidence was of limited use as a consequence of his restricted involvement, poor recollection and general vagueness.
Other Witnesses
Mr Callan’s account of the meeting was supported on critical matters of dispute by Mr Irwin’s letter of 14 July 1999. His evidence concerning promotion of the plaintiff was amply supported by the documentary material. His evidence was generally consistent. He was a straightforward witness who was both credible and reliable. I also consider Mr Stewart to be credible and reliable. His evidence was directed to the plaintiff’s promotional activities and was supported by the documentary material. I accept Mr Callan’s account of the meeting. I accept his evidence and the evidence of Mr Stewart with respect to the promotional activities of the plaintiff. I accept the evidence of Ms Williams and Mr Mead. They were credible and reliable. Their evidence was not challenged.
The evidence of Mr Coutts, Mr Sarah, Mr McAdam, Mr Gannon and Mr Thompson was of limited relevance. All were credible and reliable witnesses. Mr Temby and Mr Catt were credible and reliable witnesses. However their evidence was peripheral.
The plaintiff did not lead any evidence from Mr Gore of his attendance at the meeting. No explanation of his absence was offered. However Mr Callan’s account of the meeting was directly supported by Mr Irwin’s letter of 14 July 1999. Accordingly I do not consider that Mr Gore was a witness whom the plaintiff could be expected to call.
Findings Concerning the Facts and Events
I find that from the outset the defendant recognised the plaintiff’s reputation and goodwill.
I am satisfied that Mr Irwin formulated his idea for a telephone building advice and helpline against the background of his business dealings with the Botanic Gardens. He saw an advantage in using the same modus operandi.
I am satisfied that Mr Irwin knew enough about the plaintiff and its operation to know that the defendant would be capitalising on the plaintiff’s reputation and goodwill. The choice of the defendant’s name was made with a view to identifying the defendant’s business with the plaintiff’s reputation and goodwill. The evidence does not allow precise findings to be made about the circumstances that led to the change of the defendant’s name. However the consequence was a closer match between the defendant’s name and the plaintiff’s name.
I find that the plan was to set up a telephone advice and helpline service similar to that being finalised with the Botanic Gardens. The defendant’s intention was to utilise the plaintiff’s members to answer the telephone calls and to provide building advice and help. It was anticipated that the need for referrals would arise and that those referrals would be made to members of the plaintiff. A royalty would be paid to the plaintiff.
I find that the defendant sought a meeting with the plaintiff’s representatives to discuss the proposal with a view to negotiating a joint venture in much the same way as Mr Irwin had with the Botanic Gardens.
I find that at the meeting the defendant proposed that the plaintiff and the defendant enter into a similar arrangement to that which existed between the defendant and the Botanic Gardens. The defendant said that members’ benefits would continue. A royalty payment was offered. These matters were then confirmed by Mr Irwin in his letter of 14 July 1999.
I find that the defendant intended to draw on the plaintiff’s name and reputation. The defendant intended to have members of the general public associate its service with the plaintiff. The defendant intended to benefit from the plaintiff’s approval. The use of the words Master Builders in the defendant’s name was designed to facilitate the above purposes.
In coming to these conclusions[13] I consider the following matters to be significant:
[13] My use of the phrases ‘I find’ or ‘I am satisfied’ indicate that I find or I am satisfied on the balance of probabilities. In coming to these conclusions I have acted on evidence that I consider to be clear and cogent. I have specific regard to the remarks of the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd - per Mason CJ, Brennan Deane and Gaudron JJ (1993) 110 ALR 449 - 450.
-Mr Irwin’s choice of the defendant’s name
-the inherent unlikelihood that it did not occur to Mr Irwin that there would be difficulty in using the name
-Mr Irwin’s awareness of the plaintiff and the meaning of the acronym MBA
-the change of the defendant’s name to include the word “Builders” in lieu of “Builder”
-the fact that Mr Irwin sought and received legal advice about using the name
-Mr Irwin’s inquiries with respect to registering a trade mark and the advice obtained from two trade mark attorneys
-the fact that Mr Irwin was concerned about the plaintiff’s name
-Mr Irwin’s attempt to replicate the business arrangements he had reached with the Botanic Gardens
-Mr Irwin’s immediate approach to the plaintiff following registration of the defendant’s name
-the initial correspondence following the meeting acknowledging the need to sustain the benefits that the plaintiff’s members received from the referral service and offering a royalty for the plaintiff’s approval
-the fact that Mr Irwin took no other steps in regard to the setting up of the business
Reputation
Counsel for the defendant submitted that the words “Master Builders” were descriptive. The plaintiff had not established a reputation in the name “Master Builders”. It was said that the plaintiff was more commonly known as the MBA or Master Builders Association. It was not known as and did not refer to itself solely as “Master Builders”.
Reliance was placed on Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd.[14] The competing names were “Solar Tint” and “Solartint. The court said:
“… The parasitic user appropriates the goodwill of the originator because its conduct gives rise to the inference in the minds of consumers that the two groups of goods or services are somehow related. The causative connection is reputation, an association in the minds of consumers between the originator’s designation and its goods or services. Merely descriptive words will not ordinarily affect such an association.
…
But even descriptive words may become distinctive of the business of a particular person and if the use of such words by another is calculated to deceive persons into believing that the business of their originator is carried on by the parasitic user and is likely to cause damage to the originator’s business, then a claim for relief for passing off may succeed: BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd.”
In Dodds’ case the plaintiff failed to establish a reputation or that these words were distinctive of the plaintiff’s business. Evidence was led by the plaintiff that a number of people were confused. However the court held:
“In our opinion this evidence, although uncontradicted and not the subject of cross-examination, was simply insufficient on its face to establish a distinctive or secondary meaning associated with the words ‘Solar Tint’ in connection with the appellant’s services and his Honour did not err in finding that the appellants had failed to establish the necessary reputation … Mere expressions of opinion that the use by another trader of the same name is surprising or confusing does not go anyway to establishing distinctive or secondary meanings for substantially descriptive words.”
In the present case it must be determined whether in fact, the plaintiff has established the necessary reputation in the words “Master Builders”
[14] (1992-1993) 26 IPR 261 at 269 and 271 per Gummow, French and Hill JJ

Evidence of extensive promotion does not of itself establish a reputation. However it does form part of the body of evidence from which a conclusion may be drawn that an entity has developed a reputation.
The referral service offered by the plaintiff formed an important part of its operations. The plaintiff provided a service to consumers. The plaintiff’s members received the benefits of the referred work. Mr Stewart said that consumers would:
“ring in, …detail the type of referral they were after – whether it was a builder or a tradesperson – and [the plaintiff] would then give the people, in writing, three members and the contact numbers for them to contact.”
The plaintiff’s receptionist would fill out a form for each inquiry. The name, address and a brief description of the inquiry would be noted. The form called the green form would then be passed on to a staff member who would run a computer search. This search would produce a list of suitable members who were appropriate to perform the task. The names of three members would be selected and recorded at the foot of the green form. This would then be faxed, sent in letter form or emailed to the consumer. The list of possible builders would be rotated so that the work was spread equally amongst the members.
Prior to 1994 other means including leaflets and stickers were used to promote the plaintiff’s referral service. However during 1994 restructuring occurred. A marketing plan was adopted to increase the profile of the plaintiff, promote its services and emphasise the value of its members. In August 1996 there was a resolution that the plaintiff cease using the acronym MBA. Mr Callan said that the plaintiff resolved:
“ … that we would not print or publish any material or have documents go out with MBA on them, that they would have Master Builders rather than MBA.”
He continued:
“Q.When you said in this document that we’re looking at now, that all communication, written and oral, should refer to the Master Builders not the MBA. Did you mean that the association should be referred to only by the words ‘The Master Builders’, excluding association.
A.No.
Q.Did you mean simply to say that the acronym should not be used.
A. Yes.
Q.And that the name that should be used should incorporate the words Master Builders.
A.That we would refer – my intent was that, was that we would refer to ourselves as the Master Builders Association or the Master Builders, and not refer to ourselves as the MBA because that caused confusion.
…
Q.There was never any marketing recommendation by you for a blanket abandonment in the publicity of the word ‘Association’.
A.No, I would never do that because we are incorporated under the associations and we are an association, but there are times in our marketing, particularly to consumers, where we would not use the term ‘Association’ particularly when I’ve got a TV presenter who has got a lisp.”
Public seminars were conducted by the plaintiff in an effort to raise its profile. A plan to assist consumers select a builder was developed and the plaintiff also promoted its referral service by this means. The seminars focused on the length of time that the plaintiff had been in existence and on its suggested history of excellence. The phrase which appears on the plaintiff’s letterhead was also adopted ‘Building South Australia since 1884’. Mr Stewart’s evidence included:
“We were talking about the heritage-type value of the longevity of the association.”
The plaintiff conducted an annual competition, the Building Excellence Awards for its members. Presentations were made to winners at an annual dinner. The dinners received considerable publicity and promoted the plaintiff, its services and its members. Since 1994 these dinners have been telecast by channel 9. As a result channel 9 was approached to develop the plaintiff’s television program. The series started in 1996 and was called Building Ideas. It initially began as 13 episodes and was screened at 4:30 pm on Sundays. The series is now an 18 part series broadcast on Saturday afternoons. It was designed to promote the interests of the plaintiff and its members. Mr Callan said that the program was linked with the awards dinners.
The plaintiff has taken part in radio talk back programs during the period of the year when its television program was not screening. The public would call and talk about issues or problems. These radio programs were another way in which the plaintiff promoted itself and its services. Mr Stewart said:
“We talked about the referral system and how it worked, and the benefits consumers could achieve from phoning the association.
…
It was a very similar theme in keeping with the marketing approach, talking about the referral service to consumers from the Master Builders Association and the use of its members.”
An internet website was designed in or about 1997 to make consumer access to the plaintiff and its services more widespread. Consumers are now able to access this information and the referral service at all times. The use of computer referrals was also further developed through the plaintiff’s participation in the Home Show. This exhibition is held every year at the Wayville Showgrounds over a three day period. The plaintiff’s exhibit was staffed by its members and promotional material was displayed. Episodes of the Building Ideas program were shown. A computer was available for the public to enter their details to effect a referral. The plaintiff has also exhibited at the Adelaide Expo which operates in a similar format over a five day period. The use of computer referrals through these displays and the internet has increased the extent of the plaintiff’s promotion.
Mr Callan said that these promotions were part of the plaintiff’s marketing plan. That plan was based on a “cross-marketing idea”. A magazine Building Ideas was developed in 1999 to follow on from the television program. The publication of this magazine further promoted the plaintiff and aimed to capitalise on the public awareness already generated. The plaintiff also regularly provided editorial inserts in the Sunday Mail new homes and lands section and continued to produce its bi-monthly industry based SA Builder magazine. For the past six years in the order of 2000 copies have been distributed each year to the plaintiff’s members and to education and training institutions, local and state government departments and libraries. Other forms of promotion such as material outlining information about the plaintiff was played whilst consumers were on-hold on the telephone.
As earlier observed green forms were completed by the plaintiff’s staff and relevant information recorded. Part of that information related to how the consumer became aware of the referral service - “TV, Radio, Yellow Pages, Word of Mouth and Other”. Nine hundred and eighty six referrals were sought during 1998. Two hundred and five resulted from consumers learning about the service via the yellow pages, 94 heard about it by word of mouth, 72 resulted from the exhibit at the Home Show, 28 from the radio talk back programs, 22 from the Building Ideas television program and 24 were from another source. Five hundred and twenty four consumers did not know or disclose their source of awareness.
No real challenge was made to this evidence or to its accuracy. The evidence demonstrates that the public were aware of the plaintiff and its referral service. The evidence further demonstrates the considerable success of the referral service. In addition Mr Callan said that of the plaintiff’s 23 staff members all but four had
“contact with members of the public, builders, people in the industry and word of mouth, people simply asking a question, not wanting to go into the system, people wanting advice, wanting it immediately over the telephone. As I said it’s unrecorded. The technical and training manager, the administration manager, myself, the membership officers, the marketing manager, the CEO etc would answer those calls almost daily in some form.”
The green form analysis demonstrates that the plaintiff’s promotion was successful and widespread. More than 20% of those consumers specifying a source identified that source as word of mouth. This is part of the body of evidence that shows that the plaintiff had a reputation. In addition it can be inferred from the large number of inquiries that did not specify a source that the plaintiff had considerable success in promoting its service amongst a variety of people over a wide geographical area.
The plaintiff promoted itself and its services in a variety of ways including through newspapers, magazines, television programs, radio talk back programs, written material, stalls at building exhibitions and the internet. These methods of promotion have addressed a significant audience. As a result members of the public have also spoken about the plaintiff and the nature of its services. A large number of referrals have resulted from ‘word of mouth’. A reputation of quality service, knowledge and skill has been developed. There is goodwill in the plaintiff’s name. The promotional activities undertaken particularly since 1994 have markedly increased that reputation and goodwill.
The Meaning of “Master Builder”
Dictionaries define a master builder as a person skilled in the design and construction of buildings, a self employed builder who employs labour[15] and a person who is qualified to contract for and supervise building construction.[16]
[15] Collins English Dictionary
[16] The Macquarie Dictionary (3rd Ed)
The words master builder had their origin in the guild, a system of training and industrial organisation in England. In the early part of the twentieth century the words were used to describe a master tradesman. The words were applied to one who had come through the building trade, possibly undertaken an apprenticeship, worked for a master and then through experience, capabilities and approval of his peers earned the title master builder. The words carried the connotation of a builder who was qualified and who exercised control over employed apprentices.
The Builders Licensing Act 1967 (SA) required persons carrying out building work to be licensed and qualified. There was provision for two types of licences, a general builders licence authorising the holder to undertake building work of any type and a restricted builders licence authorising the holder to undertake building work specified in the licence. The Act made it an offence in specified circumstances for a person to describe his or her trade as that of “master builder” unless that person was the holder of a general builder’s licence.[17] After this introduction of builders’ licences appropriately qualified builders referred to themselves as general builders or licensed builders. They also came to be referred to in this way.
[17] “Section 21(2) provides:
The Builders Licensing Act effected a significant change. Generally the evidence makes out a change in use in the words “master builder”. It was in this climate that it was said that the plaintiff developed a secondary meaning in the words “Master Builders”. This evidence was not generally contentious.
Mr Callan was cross-examined about his understanding of the words “master builder”:
“Q.What do you say the words ‘Master Builder’ mean today.
A.Today?
Q.To your understanding.
A.The only reference is a member of the Master Builders Association, there’s no trade qualification, there is no title that is awarded by any training institution. It’s purely in reference to members of the Master Builders Association. You can’t go to a trade school and get a qualification as a master builder, that doesn’t exist, never has existed for my mind in Australia.”
As earlier observed, both the plaintiff and the defendant called licensed builders to give evidence. Those called by the defendant considered that the words master builder referred to a builder who was qualified in his trade. However, the effect of the evidence was that few builders now refer to themselves as master builders. Those who do appear to be members of the plaintiff. None of the builders who gave evidence could identify a builder who used the words “master builder” to describe someone who was not a member of the plaintiff.
Counsel for the defendant submitted that as at mid 1999 the plaintiff was known as the MBA or the Master Builders Association, rather than Master Builders. Counsel for the defendant pointed to various parts of the evidence where the plaintiff had been referred to in this way.
The fact that the plaintiff at times referred to itself as Master Builders Association or used the acronym MBA does not deny its assertion that it had an established reputation and goodwill in the name “Master Builders”.
Conclusions about Reputation
A review of the evidence reveals that the promotional activities of the plaintiff were varied and extensive. I find that the plaintiff has succeeded in having itself generally referred to as Master Builders or Master Builders Association. The acronym MBA is still used at times. However it is used in most instances as an abbreviation. An example is Mr Irwin’s letter of 14 July 1999. The letter is addressed to Master Builders Association however in the body of the letter the acronym MBA is used as an abbreviation.
I find that the plaintiff has engaged in extensive advertising and promotional activities and as a result by mid 1999 had built a reputation and goodwill in the name “Master Builders”. The name “Master Builders” has acquired a secondary meaning. The public understood that when they were dealing with a business conducted by “Master Builders” they were dealing with a business conducted by the plaintiff. I find that as a result the public have understood and are likely to understand that the defendant’s business was a business conducted by the plaintiff. In making that finding I accept and act on the evidence of Mr Callan and Mr Stewart, the extensive documentary material tendered, the evidence of Mr Sarah and Mr Coutts and the evidence of Ms Williams and Mr Mead.
The defendant’s conduct confirmed the existence of the plaintiff’s reputation and goodwill. Without being exhaustive the following matters are relevant. The choice of a name closely similar to the plaintiffs followed by an immediate approach seeking an association or joint venture is telling. The inference to be drawn is that the benefits sought by the defendant included access to the existing reputation of the plaintiff. The offer in Mr Irwin’s letter of 14 July 1999 of a royalty for the right to publish the plaintiff’s approval is also significant. This offer allows the conclusion that the defendant saw an ongoing monetary value in the Master Builders Association’s approval of the Master Builders Advice & Helpline. I am satisfied that the conduct of the defendant involved a recognition of the reputation and goodwill of the plaintiff.
I find that by mid 1999, the time at which the defendant sought to establish its building advice and helpline, the plaintiff’s reputation and goodwill was significant and well established. As earlier observed I am satisfied that the defendant was aware of that reputation and goodwill. The defendant sought to use that reputation and goodwill to its advantage.
In summary I find that the plaintiff developed a reputation and goodwill in the name “Master Builders”. Its services are known to be provided by Master Builders or by the Master Builders Association. I am satisfied that there has been a misrepresentation by the defendant leading the public to believe that the telephone service offered by the defendant is a service of the plaintiff. I find that the operation of the defendant’s service, if not restrained, is likely to continue to lead the public to the same belief.
Misleading or Deceptive Conduct - Section 52
Section 52(1) of the Trade Practices Act provides:
“A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
Misleading or deceptive conduct has no statutory definition. Conduct is misleading or deceptive if it leads into error or is likely to do so [18]. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd[19] Gibbs CJ observed:
“The words of s 52 require the Court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive. Those words are on any view tautologous. One meaning which the words “mislead” and “deceive” share in common is “to lead into error”. If the word “deceptive” in s 52 stood alone, it would be question whether it was used in a bad sense, with a connotation of craft or overreaching, but “misleading” carries no such flavour, and the use of that word appears to render “deceptive” redundant. The words “likely to mislead or deceive”, which were inserted by amendment in 1977, add little to the section; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or mislead anyone. In McWilliam’s Wines Pty Ltd v McDonalds System of Australia Pty Ltd (1980) 49 FLR 455 it was rightly held by Smithers J and by Fisher J that to prove a breach of s 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern CrossRefrigerating Co v Toowoomba Foundry Pty. Ltd. (1954) 91 CLR 592 a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable. I need not add to what their Honours said on this subject (at 458-459). I agree too with those learned judges that the court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been mislead is not conclusive.”
Mason J said:
“Conduct does not breach s 52(1) merely because members of the public would be caused to wonder whether it might not be the case that two products come from the same source … Under s 52 the onus is on the plaintiff to show that the conduct is likely to mislead or deceive. Therefore conduct which merely causes some uncertainty in the minds of relevant members of the public does not breach s 52.”
No intention to mislead or deceive is required.[20] However proof of an intention to mislead or deceive will be of assistance when establishing intention.
[18] Weitmann v Katies Ltd (1976-1978) 29 FLR 336 at 343
[19] (1982) 149 CLR 191 at 209-10
[20] Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977-1978) 140 CLR 216
Whilst an action in passing off is similar to an action under section 52, courts have warned against the importation of passing off principles. In Taco Company of Australia Inc v Taco Bell Pty Ltd[21] Deane and Fitzgerald JJ said:
“Whilst, as was pointed out by Stephen J (Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 18 ALR 639 at 646; 140 CLR 216 at 227) the long experience in the courts in relation to passing-off should not be disregarded and some principles which have been developed in that context may be also applicable to s52, it is, in our opinion, important to heed his Honour’s emphatic rejection on the same page of any suggestion that s52 is no more than a statutory re-enactment of passing-off principles.…The backgrounds of s52 and of the law of passing-off are quite different. Their respective purposes and the interests which they primarily protect are contrasting. Their areas of operation do not coincide. The indiscriminate importation into s52 cases of principles and concepts involved in passing-off and the associated area of trade mark law is likely to be productive of error and to give rise to arguments founded on false assumptions.”
[21] (1982) 42 ALR 177 at 197

The relevant conduct must amount to more than mere confusion. There must be actual deception. Counsel for the defendant conceded that the defendant’s name may cause confusion. However it was submitted that any confusion arose because the plaintiff had chosen to use generic or descriptive words for its name and not because of the defendant’s conduct.
As earlier observed the plaintiff had developed a reputation and goodwill in the name. The defendant was aware of that reputation and goodwill. The defendant sought to make use of the plaintiff’s reputation and goodwill. This was well illustrated by the offer of the royalty payment.
The evidence of Ms Williams and Mr Mead forms part of the body of evidence supporting the plaintiff’s case on reputation, secondary meaning, confusion and deception.
The plaintiff’s receptionist Rebecca Williams gave unchallenged evidence. She said that she received about 10 telephone calls every week from consumers who had attempted to ring the defendant’s 1900 number believing it was a service of the plaintiff:
“Q.In any of the calls you took requesting building advice or referrals in the year that you worked as a receptionist, did any callers make reference to something called the ‘Master Builders Help and Advisory Line’.
A.Yes, they did.
Q. How may of your callers, in any given period – a day or a week – made reference to a line called something like that.
A.I didn’t keep an exact record, but approximately 10 calls per week; sometimes more, sometimes less.
Q.Did that remain the case – that is, that sort of frequency of reference by a caller to that line – throughout the year of your employment as a receptionist.
A.Yes.
Q.Can you recall now some of the things said by persons who you spoke to, when they made reference to that line; what did they say about it.
A.We had calls that would say ‘I’ve just rung your help and advice line and it’s not operational. There was a message on it that originally said it wasn’t operational until July of 2000’. They used to reference that to me, or they would ask or say they’ve just rung the master builders help and advice line and believed it was our advice line, it couldn’t help them, ‘What’s the problem?’, ‘It’s not working’; things along that line.
Q.Of the callers that made reference to that line – and you told us that it was up to about 10 a week – how many of them would say something along the lines of the statements that you’ve just recounted, which tended to suggest a link in that way between the Master Builders Association and that line that they had tried to call.
A.All of them. I would say all of them.”
Ms Williams continued to elaborate about the nature of the inquiries:
“Q. Of those persons who phoned, did they all want, in the end, a referral to a builder, or were they phoning about other things as well.
A.Most of the time, I could help them. Probably about 85% of the time, I could help them by saying ‘That’s not our line’ or whatever, ‘But we can offer you a referral service’ and we could help them that way.
Q.In those 85% of cases where you suggested the referral service, how many of the persons took it up and said ‘Yes, that’s what we want’.
A. All of them, and they were happy with that.
Q.Of the other 15%, what sort of queries were they and what did you say to those people.
A.In the others, I would say they were quite irate and then didn’t want the service, because they thought we’d let them down in the first place, by not being able to get through.”
Mr Mead also gave unchallenged evidence. He was a member of the public who had been experiencing structural problems with his home. He wanted someone to visit and assess the problem. He perused the yellow pages and saw a number of different organisations which he thought might have been able to offer him assistance:
“A. …I thought there’s so many different areas and I didn’t really know where was the best place to ring up first. So, I thought ‘Well, surely Master Builders Association could put me on the right track.’
Q. Were you aware of that association, prior to looking at the Yellow Pages.
A. I’ve heard a lot about it over the years, in papers and that sort of thing, yes.
Q. Was it your understanding that the association was able to provide advice to you about the problem you might have.
A. I didn’t know for certain, but I thought they may have been able to put me on the right track.
Q.     Did you ring the number.
A.     Yes, I rang, I think it’s Master Builders Advice Line.
Q.     Where did you find that number from.
A.     In the White Pages.
…
Q.You were telling me how that number was described in the White Pages; you were going on to say ‘Master Builders’ –
A.     Yes, Master Builders Advice and Helpline, or something like that.
Q.     What happened when you rang that number.
A.There’s a message stating that it wasn’t a valid number, and they gave a 1800 number for customer service.
…
Q.     What did you do then.
A.Then I just – the heading underneath that one was ‘Master Builders Association’, in South Terrace, so I rang that number.
…
Q.When you rang the first number, which was the Helpline and advisory service, who did you think you were ringing.
A.     Master Builders Association”
This evidence showed that a member of the public thought that the business being offered by the defendant was being conducted by the plaintiff. The similarity of the two names led to their juxtaposition in the telephone book. The confusion arose because of the use of the words Master Builders in both names in conjunction with the defendant’s conduct.
A further matter that is of relevance to a finding of misleading or deceptive conduct is the similarity of the field of activity. The plaintiff and defendant both offered services relating to the building industry.
The suggested distinction between a referral service and an advice and helpline is marginal at best and in any event insufficient to distinguish the two businesses.
I am satisfied that the operation of a building advice and helpline would lead to referrals. Part of the help may be a referral. Part of the advice may be the need for the referral and the making of a referral. This was recognised by Mr Irwin when he acknowledged in his letter of 14 July 1999 the need for the plaintiff’s members’ benefits to be sustained. Mr Irwin recognised that the proposed advice and helpline would lead to referrals and as a result the plaintiff’s members would receive those referrals. The existing benefits to the plaintiff’s members would be sustained as a consequence.
Common sense also suggests that members of the public telephoning for advice and help in regard to building matters would often be seeking a referral to an appropriate person or organisation. Inquiries about building problems may lend themselves to some form of discussion and then follow up or referral. Limited and superficial advice without referrals might be able to be provided by telephone but many inquiries by their nature would a need a referral. Much would depend upon the particular circumstances on site.
Mr Sarah considered that there were severe limitations on giving building advice over the telephone.
The plaintiff has established a reputation and goodwill in the name Master Builders. The defendant sought to have consumers associate its business with the plaintiff. The defendant sought to advantage itself by trading on the name and reputation of the plaintiff. Its conduct led consumers to believe that when telephoning the defendant’s number they were making contact with a service provided by the plaintiff. If the defendant had operated its service it is likely that consumers would be misled and deceived. The defendant has engaged in misleading and deceptive conduct in trade and commerce. The defendant has breached section 52 of the Trade Practices Act.
Passing Off
Before addressing passing off in this case it is important to recall a number of general and well accepted principles.
An action in passing off is a common law action. Historically the common law required that fraud be established, however an injunction could be granted in equity in the absence of an intention to deceive if the defendant’s actions would in fact result in deception. Common law courts maintained the requirement of fraudulent intent until the fusion of the courts of common law and equity. Subsequent judicial observations have maintained that passing off in the absence of fraudulent intent is actionable only in equity. Equitable principles underlie the grant of an injunction.
Three elements are required to establish an action for passing off. The plaintiff’s services must have acquired a reputation or goodwill in the market and be known by some distinguishing feature. There must be a misrepresentation by the defendant whether intentional or not which leads or is likely to lead the public to believe that the services offered by the defendant are the services of the plaintiff. The plaintiff must have suffered or be likely to suffer damage as a result of the erroneous belief engendered by the defendant’s misrepresentation.
Activities which take advantage of a plaintiff’s reputation and goodwill are not actionable in the absence of a defendant’s misrepresentation. A misrepresentation is a false representation that a defendant’s services are those of a plaintiff. It may arise by way of express statement but is more commonly implied by the defendant’s use of a trade name or get up with which the services or business of the plaintiff are associated in the minds of the relevant class of trade or public[22]. It must be material. It must be likely to influence the persons to whom it is made[23]. Representations that the defendant’s services are equivalent to or are a substitute for the plaintiffs, by the adoption of a similar get-up or advertising is not actionable if the services are sufficiently distinguished by other means[24]. There must be some deception. Intention to deceive is not required. All that needs to be established is that the misrepresentation would forseeably cause deception. The court places itself in the position of an objective average consumer.
[22] Birmingham Vinegar Brewery Co Ltd v Powell [1897] 1 AC 710 at 710
[23] Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873
[24] Fisons Ltd v EJ Godwin (Peat Industries) Ltd [1976] RPC 653 at 658; Tetrosyl Ltd v Silver Paint and Lacquer Co Ltd [1980] FSR 68, CA; Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] 1 All ER 213
An action in passing off is used to protect commercial reputation. It is an action in respect of a right of property. The property is the business or goodwill of a plaintiff. Goodwill has been defined as the benefit and advantage of the good name, reputation and connection of a business, the attractive force which brings in custom and the one thing which distinguishes an old-established business from a new business.[25]
[25] The Commissioners of Inland Revenuev Muller & Co’s Margarine Ltd [1901] AC 217
An action in passing off seeks to prevent misrepresentation which is likely to cause damage to a plaintiff. A defendant’s activities must cause substantial damage to a plaintiff’s business or goodwill or be likely to do so if continued.[26] Where a defendant is in competition with a plaintiff, damage may result through consumers purchasing or using a defendant’s service in place of a plaintiff’s. The quality of a defendant’s service and the kind of business undertaken are matters which may injure a plaintiff who is wrongly assumed to be so associated.[27] The similarity of fields, geographically and the type of business is relevant.
[26] Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873
[27] Ewing v Buttercup Margarine Co Ltd [1917] 2 Ch 1 at 13
It is possible that a word or phrase which is wholly descriptive of a service may become so associated with that service that its use by a defendant is capable of causing a misrepresentation.[28] In those circumstances although the primary meaning of the words is descriptive, they have acquired a secondary meaning which indicates that the service is that of a particular trader and no other. In Reddaway v Banham Lord Herschell summarised the relevant principles:
“The name of a person, or words forming part of the common stock of language, may become so far associated with the goods of a particular maker that it is capable of proof that the use of them by themselves without explanation or qualification by another manufacturer would deceive a purchaser into the belief that he was getting the goods of A. when he was really getting the goods of B. In a case of this description the mere proof by the plaintiff that the defendant was using a name, word, or device which he had adopted to distinguish his goods would not entitle him to any relief. He could only obtain it by proving further that the defendant was using it under such circumstances or in such manner as to put off his goods as the goods of the plaintiff. If he could succeed in proving this I think he would, on well-established principles, be entitled to an injunction.”[29]
[28] Reddaway v Banham [1896] AC 199
[29] Approved in Collitt v Borsalino Guiseppe E Fratello Societa Anonima (1913) 16 CLR 344 at 350-351
In Hornsby Building Information Centre Pty. Ltd. v Sydney Building Information Centre Ltd[30] the plaintiff was unable to show a distinctive reputation connected with the words “Building Information Centre”. Stephen J said:
“There is a price to be paid for the advantages flowing from possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind … The risk of confusion must be accepted, to do otherwise is to give one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.”
However in BM Auto Sales Pty. Ltd. v Budget Rent A Car System Pty. Ltd. [31] a car hire company was able to restrain the use of the word “Budget” in relation to car hire. Gibbs J said:
“The appellants very properly did not submit that the fact they were registered under the Business Names Ordinance as proprietors of the name Budget Rent A Car gave them any right to use the name in such a way as to pass off their business as that of the respondent. However, it was argued on behalf of the appellants that the word ‘Budget’ was an ordinary descriptive word in common use, and that there was no evidence sufficient to establish that the name Budget Rent A Car had become distinctive of the respondent’s business. It is true that ‘budget’ is an ordinary word, which nowadays is sometimes used to mean ‘inexpensive’. The phrase ‘rent a car’ contains three ordinary words, and is commonly used to describe a business of a particular kind. However, it is clear law that a name composed of descriptive words may become distinctive of the business of a particular person, and if a plaintiff shows that the name in fact distinguishes his business and that the use of the name by the defendant is calculated to deceive persons into supposing that the business carried on by the defendant is that of the plaintiff, and is likely to cause damage to the plaintiff’s business, he will be entitled to relief: see cases cited in Halsbury’s Laws of England 3rd ed, vol 38, par 1025, and Angelides v James Stedman Henderson’s Sweets Ltd. (1927), 40 CLR 43. In the present case there was ample evidence from which it could be inferred that the name Budget Rent A Car had become distinctive of the respondent’s business in various parts of Australia by the year 1968.”
[30] (1977-1978) 140 CLR 216 at 229
[31] (1977) 51 ALJR 254 at 257-258
Actions have been allowed where the plaintiff was an association representing members of a particular trade or profession. Although readily distinguishable the following cases illustrate the application of the law of passing off to professional and trade or business associations.
In Society of Accountants and Auditors v Goodway[32] the words “Incorporated Accountant” were considered to be distinctive of accountants who had joined the association and passed its exams. An injunction was granted against an individual accountant and rival association. Both claimed for its members the right to use the term. Warrington J said:
“That a body, however incorporated, has a right to prevent persons who are not members of it from representing themselves to be members of it.”
In The Society of Incorporated Accountants v Vincent[33] the defendant was restrained from using the initials FSAA to misrepresent that he was a fellow of the plaintiff society. In British Medical Association v Marsh[34] the defendant carried on business as a retail chemist. He sold imitations of patent medicines made up according to an analysis published by the plaintiff. The defendant used the initials BMA conspicuously on shops to give the impression that he was associated with the plaintiffs. An injunction was granted restraining the use of the initials.
[32] [1907] 1 Ch 489 at 502
[33] (1954) 71 RPC 325
[34] (1931) 48 RPC 565
The findings referred to earlier make out the plaintiff’s case in passing off. Those findings establish that the plaintiff has acquired a reputation and goodwill in the name “Master Builders”. The plaintiff is primarily known and recognised by the name “Master Builders”. The services that it offers are associated with that name. The words “Master Builders” have become so descriptive of the plaintiff and its services that the use of the words by the defendant amounted to a misrepresentation. The foregoing were all established by June 1999, the time at which the defendant was registered.
The defendant’s misrepresentation was likely to lead the public erroneously to believe that the services offered by the defendant Master Builders Advice & Helpline Pty Ltd were services of or services associated with the plaintiff Master Builders Association (SA) Inc. The misrepresentation led to this erroneous belief in the minds of consumers. The plaintiff is likely to suffer damage if the defendant is not restrained. The plaintiff is entitled to relief in passing off.
Conclusion
I am satisfied that the defendant has engaged in conduct in trade and commerce that is misleading and deceptive. That conduct breached section 52 of the Trade Practices Act. I am satisfied that the defendant has passed off its services as those of the plaintiff. Unless restrained it is likely to do so in the future.
If a restraining order is not made it is likely that the defendant’s conduct in the future would mislead consumers. Although the defendant’s conduct has not caused quantifiable damage to date its conduct in the future if unrestrained would be likely to cause the plaintiff damage.
The plaintiff has made out its claim for injunctive relief. An order for a permanent injunction will be made. I will hear the parties further as to the terms of that order and consequential matters.
CONTENTS
The Parties
The Plaintiff’s Case
The Defendant’s Case
The Facts and Events
Botanic Gardens
The Idea
Formation of the Defendant
The Meeting
Follow up from the Meeting
The Witnesses
Mr Irwin
Mr Looker
Other Witnesses
Findings Concerning the Facts and Events
Reputation
The Meaning of “Master Builder”
Conclusions about Reputation
Misleading or Deceptive Conduct - Section 52
Passing Off
Conclusion
LIST OF CASES CITED AS THEY APPEAR IN THE JUDGMENT
1 The South Australian Contractors and Builders Association was formed in June 1884 in an effort to develop an organization which would speak and act on behalf of contractors who wished to establish common wage rates and conditions of employment. The conditions of contract under which they worked varied such that there was need for better communication with the government and architects. In September 1890 the plaintiff changed its name by reversing the words ‘Contractors’ and ‘Builders’. The plaintiff was then known as the South Australian Builders and Contractors Association. In 1955 an amalgamation of members of a number of organizations into a single association was proposed. The Master Builders Association of South Australia was formed on 13 January 1957. It continues today.
2 A letter of 18 October 1999 from the defendant’s solicitor to the plaintiff’s solicitor provided the following information:
“I confirm that whilst I am a director and sole shareholder of the Company, I am only in that position representing Messrs Angus Irwin and Mij Looker. I would have resigned and transferred the shares had the difficulties not arisen following their meeting with Mr Callan on 8 July last. In the event of our discussions/negotiations breaking down then I will be immediately resigning as a director and transferring my shares.” The solicitor at an unspecified time commenced to act for the defendant in this case.
3 Mr Irwin had formed a company called the Botanic Gardens Advice & Helpline Pty. Ltd. and Mr Looker had established a business called the Real Estate Information Advice and Helpline Pty. Ltd.
4 The Botanic Gardens Advice & Helpline was not operational at the time of the meeting with the plaintiff’s representatives on 8 July 1999.
5      Green Thumb
6      Board of the Botanic Gardens of Adelaide
7      Ex P 46
8      Entries were also listed in the interstate white pages.
9      Ex D 38
10 The defendant’s solicitor was the same solicitor who had registered the company and had been the sole director and shareholder of the company.
11     Ex P 40
12     The letterhead included a reference to W Cook Builders.
13 My use of the phrases ‘I find’ or ‘I am satisfied’ indicate that I find or I am satisfied on the balance of probabilities. In coming to these conclusions I have acted on evidence that I consider to be clear and cogent. I have specific regard to the remarks of the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd - per Mason CJ, Brennan Deane and Gaudron JJ (1993) 110 ALR 449 - 450.
14 (1992-1993) 26 IPR 261 at 269 and 271 per Gummow, French and Hill JJ
15     Collins English Dictionary
16     The Macquarie Dictionary (3rd Ed)
17     “Section 21(2) provides:
On or after the appointed day a person shall not-
(a) assume, take or use as a description of his trade, occupation, or business the expression “Master Builder”, “Builder”, “Licensed Builder”, “Registered Builder”, “Building Contractor”, “Licensed Building Contractor” or “Registered Building Contractor”, or any other title or description likely to lead persons to believe that he is entitled, willing or able to undertake or carry out building work generally, unless he is the holder of a general builder’s licence;…”
18    Weitmann v Katies Ltd (1976-1978) 29 FLR 336 at 343
19 (1982) 149 CLR 191 at 209-10
20Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977-1978) 140 CLR 216
21 (1982) 42 ALR 177 at 197
22     Birmingham Vinegar Brewery Co Ltd v Powell [1897] 1 AC 710 at 710
23     Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873
24Fisons Ltd v EJ Godwin (Peat Industries) Ltd [1976] RPC 653 at 658; Tetrosyl Ltd v Silver Paint and Lacquer Co Ltd [1980] FSR 68, CA; Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1981] 1 All ER 213
25The Commissioners of Inland Revenuev Muller & Co’s Margarine Ltd [1901] AC 217
26     Reckitt & Colman Products Ltd v Borden Inc [1990] 1 All ER 873
27 Ewing v Buttercup Margarine Co Ltd [1917] 2 Ch 1 at 13
28     Reddaway v Banham [1896] AC 199
29 Approved in Collitt v Borsalino Guiseppe E Fratello Societa Anonima (1913) 16 CLR 344 at 350-351
30 (1977-1978) 140 CLR 216 at 229
31 (1977) 51 ALJR 254 at 257-258
32 [1907] 1 Ch 489 at 502
33 (1954) 71 RPC 325
34 (1931) 48 RPC 565

On or after the appointed day a person shall not-
(a) assume, take or use as a description of his trade, occupation, or business the expression “Master Builder”, “Builder”, “Licensed Builder”, “Registered Builder”, “Building Contractor”, “Licensed Building Contractor” or “Registered Building Contractor”, or any other title or description likely to lead persons to believe that he is entitled, willing or able to undertake or carry out building work generally, unless he is the holder of a general builder’s licence;…”

[2002] SASC 214

12 July 2002