Mitolo Wines Aust Pty Ltd v Vito Mitolo & Son Pty Ltd
[2019] FCA 902
•13 June 2019
FEDERAL COURT OF AUSTRALIA
Mitolo Wines Aust Pty Ltd v Vito Mitolo & Son Pty Ltd [2019] FCA 902
File number: SAD 340 of 2016 Judge: BESANKO J Date of judgment: 13 June 2019 Catchwords: TRADE MARKS — where the applicants seek relief for trade mark infringement — whether the first respondent contravened s 120(1) of the Trade Marks Act 1995 (Cth) by using a mark that is deceptively similar to the applicants’ registered trade marks — consideration of the principles relevant to deceptive similarity in relation to a word mark — whether the use of a common surname would lead customers to have cause to wonder about the applicants’ products and the respondents’ products originating from the same source — whether it is necessary to consider surrounding circumstances — whether deceptive similarity is to be assessed having regard only to the registered owner’s actual use of its mark — whether the first respondent used its own name in good faith pursuant to s 122(1)(a)(i) of the Trade Marks Act — whether the respondents knew or understood that the use of the first respondent’s own name may well cause confusion
CONSUMER LAW — where the applicants allege contraventions of ss 18 and 29(1)(h) of the Australian Consumer Law — whether the first respondent engaged in conduct that is misleading or deceptive, or which is likely to mislead or deceive — whether the first respondent represented that it and the applicants are the same person — whether the first respondent represented that its wines were produced by or at the direction of the applicants — whether the first respondent represented that its wines have the sponsorship or approval of, or an affiliation with the applicants — consideration of the difference between confusion and error — where the applicants adduced evidence of confusion by customers and consumers
TORTS — where the applicants seek relief for the tort of passing off — consideration of the principles relevant to passing off — whether the applicants have established a reputation in connection with wines — whether the respondents represented that their wines were associated with, or approved or endorsed by the applicants
ESTOPPEL — whether the applicants are estopped from asserting trade mark infringement and contraventions of s 18 of the Australian Consumer Law — consideration of the principles relevant to promissory estoppel — whether the applicants made representations on which the respondents relied — whether such reliance was reasonable — whether the respondents suffered detriment in reliance on the representations
Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth)
Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) ss 2, 18, 29, 232, 236
Evidence Act 1995 (Cth) ss 59, 63, 64, 66A, 67
Trade Marks Act 1995 (Cth) ss 6, 10, 17, 120, 122, 126
Cases cited: Anchorage Capital Partners Pty Limited v ACPA Pty Ltd [2015] FCA 882; (2015) 115 IPR 67
Anchorage Capital Partners Pty Limited v ACPA Pty Ltd [2018] FCAFC 6; (2018) 259 FCR 514
Anheuser-Busch, Inc v Budejovicky Budvar, Narodni Podnik [2002] FCA 390; (2002) 56 IPR 182
Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968; (2004) 209 ALR 93
Australian Meat Group Pty Ltd v JBS Australia Pty Limited [2018] FCAFC 207; (2018) 363 ALR 113
Australian Postal Corporation v Digital Post Australia [2013] FCAFC 153; (2013) 308 ALR 1
Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641
Baume & Co Ltd v A H Moore Ltd [1958] Ch 907; (1958) 2 WLR 797; [1958] RPC 226
Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; (1973) 129 CLR 353
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
CA Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; (2000) 52 IPR 42
Coca-Cola Company v PepsiCo Inc (No 2) [2014] FCA 1287; (2014) 322 ALR 505; (2014) 109 IPR 429
Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; (2016) 118 IPR 239
Global Brand Marketing Inc v Cube Footwear Pty Ltd [2005] FCA 852; (2005) 66 IPR 19
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216
HP Bulmer Ltd and Showerings Ltd v J Bollinger SA and Anor [1978] 95 RPC 79
Hunter Douglas Australia Pty Ltd v Perma Blinds (1969) 122 CLR 49
Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348
Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 291; (2010) 183 FCR 450
MID Sydney Pty Ltd v Australian Tourism Co Limited (1998) 90 FCR 236
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357
Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCA 198; (2010) 86 IPR 1
Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCAFC 117; (2010) 87 IPR 464
New South Wales Dairy Corporation v Murray Goulbourn Co-operative Company Ltd (1989) 86 ALR 549; (1989) 14 IPR 26
Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; (2011) 197 FCR 67
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191
Parker-Knoll Ltd v Knoll International Ltd [1961] RPC 346
Parker-Knoll Ltd v Knoll International Ltd (No 2) [1962] RPC 265 (HL)
Ratten v R [1972] AC 378
S & I Publishing Pty Ltd v Australian Surf Lifer Saver Pty Ltd (1998) 88 FCR 354
Samuel Smith & Son Pty Ltd v Pernod Record Winemakers Pty Ltd [2016] FCA 1515
SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1027; (1999) 45 IPR 169
Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407
Smith & Nephew Plastics (Australia) Pty Ltd v Sweetheart Holding Corporation (1987) 8 IPR 285
Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1954) 91 CLR 592
Stone and Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820; (2016) 120 IPR 478
Sydneyside Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; (2002) 234 FCR 549; (2002) 55 IPR 354
Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387
Wellness Pty Limited v Pro Bio Living Waters Pty Limited [2004] FCA 438; (2004) 61 IPR 242
Dates of hearing: 5–7, 10–12, 14 September 2018 Registry: South Australia Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: Catchwords Number of paragraphs: 371 Counsel for the Applicants: Mr I C Robertson SC with Mr P Bullock Solicitor for the Applicants: Minicozzi Lawyers Counsel for the Respondents: Mr A Harris QC with Mr N Marshall (on 5–7 & 10, 14 September 2018) and with Mr D Panayotopoulos (on 11–12 September 2018) Solicitor for the Respondents: Georgiadis Lawyers
Table of Corrections 7 January 2020 In paragraph 22, the word “marks” has been added after the word “applicants’”. 7 January 2020 In paragraph 186, “2019” has been replaced with “2018”. 7 January 2020 In paragraph 365, the word “action” has been replaced with the word “notion”. ORDERS
SAD 340 of 2016 BETWEEN: MITOLO WINES AUST PTY LTD (ACN 089 233 312) AS TRUSTEE OF THE MITOLO WINE TRUST
First Applicant
MITOLO WINES PTY LTD (ACN 112 011 560)
Second Applicant
AND: VITO MITOLO & SON PTY LTD (ACN 166 447 605)
First Respondent
VITO MITOLO
Second Respondent
ANTHONY MITOLO
Third Respondent
AND BETWEEN: VITO MITOLO & SON PTY LTD (ACN 166 447 605) (and others named in the Schedule)
First Cross-Claimant
AND: MITOLO WINES AUST PTY LTD (ACN 089 233 312) AS TRUSTEE OF THE MITOLO WINE TRUST (and another named in the Schedule)
First Cross-Respondent
JUDGE:
BESANKO J
DATE OF ORDER:
13 jUNE 2019
THE COURT ORDERS THAT:
1.The applicants file and serve draft minutes of order reflecting the conclusions in these reasons within 14 days.
2.The respondents within a further seven days indicate by letter whether they agree with the applicants’ draft minutes of order, or, if they do not, file and serve their own draft minutes of order.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BESANKO J:
INTRODUCTION
This is a claim by the applicants for relief in relation to infringement of trade marks, contraventions of ss 18 and 29(1)(h) of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL)) and the tort of passing off. The respondents have brought a Cross-Claim in which they allege an estoppel and a contravention of s 18 of the ACL by the applicants.
The applicants to the proceeding are two companies, being Mitolo Wines Aust Pty Ltd (Mitolo Wines Aust) and Mitolo Wines Pty Ltd (Mitolo Wines). Mitolo Wines Aust brings this action in its capacity as the trustee of the Mitolo Wine Trust. The company is the owner of two registered trade marks which are said to be relevant in this action and those trade marks are identified below. The company has applied for the registration of two other trade marks and those applications are pending in the Australian Trade Mark Office. Those applications are also identified below (at [9]–[14]).
Between 3 September 1999 and 11 August 2003, Mitolo Wines Aust conducted a wine production and sales business. On 11 August 2003, it entered into a “Business Licence Agreement” with Mitolo Wines whereby it granted Mitolo Wines an exclusive licence to use the two registered trade marks and such further trade marks as the parties might subsequently agree to be subject to the agreement and an exclusive licence to carry on the wine production and sale business which until then had been conducted by Mitolo Wines Aust. Since 2003, Mitolo Wines has operated a family owned wine production and sale business. The sole director of each of the applicants is Mr Francesco (Frank) Mitolo.
The respondents to the proceeding are a company and two individuals. The first respondent is Vito Mitolo & Son Pty Ltd (Vito Mitolo & Son) and it was incorporated on 25 October 2013. The second respondent is Mr Vito Mitolo and he is the sole director and secretary of Vito Mitolo & Son and owns half the issued share capital of the company. Mr Vito Mitolo and Mr Frank Mitolo are cousins. The third respondent is Mr Vito Mitolo’s son, Mr Anthony (Tony) Mitolo, and he owns the other half of the issued share capital of Vito Mitolo & Son. The second and third respondents are and have been since 19 March 2016 involved in a restaurant business which trades under the name “Pizzateca” and which operates at 319 Chalk Hill Road, McLaren Vale, South Australia. Vito Mitolo & Son owns and operates a business of retail and wholesale services relating to the sale, distribution and marketing of wine and cellar door sales of wines.
On 12 November 2016, Vito Mitolo & Son became the owner of the registered business name “V. Mitolo and Son”.
The relief sought by the applicants is as follows: (1) declarations of the infringement of their trade marks and of contraventions of both ss 18 and 29(1)(h) of the ACL; (2) orders for delivery up or destruction of all infringing products and all packaging, purchase orders, invoices, catalogues, promotional material, advertisements, signage and other materials in any form which include or refer to the infringing products; (3) injunctions, damages or an account of profits under the Trade Marks Act 1995 (Cth) (s 126) or the ACL (ss 232 and 236); and (4) injunctions, damages or an account of profits for the tort of passing off. The tort of passing off was not the subject of a detailed pleading, but it was a claim pursued at trial.
The relief sought by the respondents in their Cross-Claim is as follows: (1) a declaration that the applicants have, by making certain representations, contravened s 18 of the ACL and damages, including damages pursuant to s 236 of the ACL. The Cross-Claim includes a plea by the respondents of an estoppel against the applicants.
An order was made prior to the trial that issues of liability be heard and determined before issues of quantum, including damages or an account of profits.
THE TRADE MARKS AND THE APPLICATIONS FOR REGISTRATION OF MARKS
The first registered trade mark is trade mark number 801717 “MITOLO”, which has a filing date of 27 July 1999 and is registered with respect to Class 33, being Wines. I will refer to this as the “Mitolo mark”.
The second registered trade mark is trade mark number 881421 “MITOLO”, which has a filing date of 3 July 2001 and which is registered with respect to Class 29. That class is as follows:
Class 29:Preserved, dried, cooked and frozen fruits, vegetables and herbs, including olives and pickles; jellies and jams; edible oils and fats including olive oil; preserves.
These goods did not feature in the evidence and this registered trade mark can, as I think occurred in the applicants’ closing written submissions, be put to one side.
The application for registration of the word mark “MITOLO” in relation to Classes 35, 41 and 43 has a lodgement date of 11 August 2016 and an acceptance date of 18 October 2016. Classes 35, 41 and 43 are as follows:
Class 35:Retail and wholesale services relating to the sale, distribution and marketing of alcoholic beverages; cellar door sales of wine; direct marketing in relation to the supply of wines including by mail order and by electronic means; promotion services.
Class 41:Arranging exhibitions and tasting events in respect of wine.
Class 43:Restaurant services; wine bar services; providing food and drink; temporary accommodation; rental of rooms for social functions.
The application for registration of the word mark “MITOLO WINES” in relation to Classes 35 and 43 has a lodgement date of 15 August 2016 and an acceptance date of 24 November 2016.
The two applications for registration are the subject of opposition proceedings by Vito Mitolo & Son. Vito Mitolo & Son made a request for an extension of time to file evidence in the opposition proceedings which was refused by a delegate of the Registrar of Trade Marks. Vito Mitolo & Son brought proceedings under the Administrative Decisions (Judicial Review) Act 1977 (Cth) in relation to the delegate’s decision. Reasons in that proceeding will be published on the same day as these reasons.
The other matter to note is that the applicants are not precluded from bringing proceedings on the two applications for registration, but they are not able to obtain relief until registration has taken place (Hunter Douglas Australia Pty Ltd v Perma Blinds (1969) 122 CLR 49 at 59 per Barwick CJ; Global Brand Marketing Inc v Cube Footwear Pty Ltd [2005] FCA 852; (2005) 66 IPR 19 at [6] per Goldberg J).
A SUMMARY OF THE PLEADED CASE
The applicants allege that V. Mitolo & Son from a date unknown to them has advertised, marketed, promoted, exhibited in public, exported and offered for sale and sold wine products using the sign “MITOLO” or a sign substantially identical with, or deceptively similar to it. These wine products are the infringing products.
The applicants allege that the infringing products have been advertised, marketed, promoted, exhibited in public, offered for sale and sold by the following means: through various websites; through Pizzateca; through the Chalk Hill cellar door; at an event known as the 2016 McLaren Carne Vale; on Facebook; on Instagram; on Twitter; through internet retailers; through retailers in the United States of America; and at an event known as the McLaren Vale Sea & Vines Festival 2017. The respondents admit many of the acts pleaded by the applicants as the acts of advertising, marketing, promotion, exhibiting in public, offering for sale and selling the infringing products.
The applicants plead that Vito Mitolo & Son has infringed the trade marks and applications for registration of trade marks and that it has contravened ss 18 and 29(1)(h) of the ACL. The applicants plead 17 particulars of instances or events they allege support their plea that the conduct of Vito Mitolo & Son has a tendency to lead members of the public into error, such that the conduct is misleading or deceptive, or is likely to mislead or deceive. There is a short plea of passing off.
The applicants plead that Mr Vito Mitolo and Mr Tony Mitolo were and are directly liable for the infringement of the trade marks and ss 18 and 29(1)(h) of the ACL, or as to the latter, persons involved in the contraventions (ss 2 and 236(1) of the ACL).
Finally, there is a plea of loss and a lengthy plea of intended future infringement and contravention.
The respondents raise various defences to the applicants’ claims.
First, they contend that there is no entity known at law as V. Mitolo & Son. The first respondent’s name is Vito Mitolo & Son Pty Ltd and the business name is V. Mitolo and Son (emphasis added).
Secondly, they contend that the use of Vito Mitolo & Son’s mark is not substantially identical with, or deceptively similar to, the applicants’ marks.
Thirdly, the respondents contend that if they have advertised, marketed, promoted, exhibited in public, exported and offered for sale and sold wine products using the sign “MITOLO” or a sign substantially identical with, or deceptively similar to it (which they deny), then such conduct was caused by the misleading and deceptive conduct of Mr Frank Mitolo. The conduct involves a number of messages on Facebook passing between Mr Frank Mitolo and Mr Tony Mitolo in July 2014. That conduct is described below (at [72]–[74]).
With respect to the plea that there was an infringement of the Mitolo mark by using as a trade mark a sign that is substantially identical with, or deceptively similar to the registered trade mark in relation to wines, the respondents plead that Vito Mitolo & Son’s unregistered mark is not substantially identical or deceptively similar with the Mitolo mark, and Vito Mitolo & Son’s use of its own name “Mitolo” in good faith does not amount to an infringement of s 120 of the Trade Marks Act. With respect to the plea that there was an infringement of the applications for registration and, in particular, application number 1789135, by using as a trade mark a sign that is substantially identical with, or deceptively similar to the marks the subject of those applications, and in particular, application number 1789135, in relation to cellar door sales of wines, direct marketing in relation to the supply of wines by mail order and by electronic means and promotion services, including arranging exhibitions and tasting events in respect of wines, which are Class 35 services in respect of which the services are registered, the respondents plead that: Vito Mitolo & Son’s unregistered trade mark is not substantially identical with, or deceptively similar to, the marks; Vito Mitolo & Son’s use of its own name “Mitolo” in good faith does not amount to an infringement of s 120 of the Trade Marks Act; the applicants have manufactured the infringing conduct of which they complain; and, in the event that Vito Mitolo & Son has infringed s 120(1) of the Trade Marks Act (which is denied), the conduct was caused by Mr Frank Mitolo’s conduct which was a misrepresentation and misleading and deceptive, and as a result, the applicants are estopped from asserting their rights under the Trade Marks Act.
With respect to the plea that by its conduct Vito Mitolo & Son represented that Vito Mitolo & Son and the applicants are the same person and the wines, being the infringing products, were produced by or at the direction of the applicants and thereby contravened s 18 of the ACL, the respondents plead that: Vito Mitolo & Son’s use of the unregistered trade mark is merely descriptive of its business which reflects the name of the producer of the wine; any tendency to mislead depends upon a misconception that the applicants and Vito Mitolo & Son are the same person and consumers who have been misled by their own misconceptions have not been misled by the conduct of Vito Mitolo & Son; any misleading effect is transitory and is immediately dispelled upon inspection of wine labels, website or cellar door; premium wine consumers are the relevant class and they are not likely to be misled by Vito Mitolo & Son’s conduct; and in the alternative, the relevant class of persons are not likely to be misled by Vito Mitolo & Son’s conduct.
With respect to the plea that by its conduct Vito Mitolo & Son represented that the infringing products have a sponsorship, approval or affiliation with the applicants or the applicants’ products, the respondents repeat their pleas to the previous allegation.
With respect to the plea that by its conduct Vito Mitolo & Son passed off and continues to pass off the infringing products as and for goods of, or endorsed, or approved by the applicants, the respondents plead that the allegations should be struck out as being embarrassing or not disclosing a cause of action or providing particulars of the first respondent’s deceptive conduct.
WITNESSES
The applicants called Frank Mitolo, Gemma Mitolo, Kirsty Czuchwicki, Melanie Minear, Joanna Hawkins, Damien Smith, Karen Stevens, Sally Bevan and Professor Lawrence Lockshin.
The respondents called Vito Mitolo, Tony Mitolo and Dr Stephen Downes.
Frank Mitolo, Vito Mitolo and Tony Mitolo are mentioned so frequently in these reasons that it is convenient (without intending any disrespect) to refer to them as Frank, Vito and Tony respectively.
There were a number of objections to the evidence. Many of these objections were resolved in the course of submissions with either the applicants not pressing evidence, or the respondents withdrawing their objection. I ruled on the remaining objections and my reasons for my rulings are set out in Annexure A to these reasons.
Frank was the main witness for the applicants and he was cross-examined at some length. He was an honest and reliable witness. It was suggested at one point in his cross-examination that he had let the respondents “go on” through 2014, 2015 and 2016 based on the Facebook Exchange (described below) and then lodged the first application for registration on the day before his solicitors sent a letter of demand. This plan was formulated so that the applicants could complain of further infringement. Frank denied this suggestion. I reject it entirely. There is no basis for it. I find that the applicants acted when it became clear to them that they needed to do so. Part of that was to protect their commercial interests as far as possible by lodging applications for registration of trade marks.
Vito and Tony were the main witnesses for the respondents. For reasons I will give when I address their evidence in detail, I did not find Vito’s evidence satisfactory in a number of respects. Tony’s evidence was less unsatisfactory, although even in his case, some of his evidence relating to financial matters was not reliable.
The other lay witnesses were honest and reliable witnesses and I accept their evidence. The expert evidence is dealt with in a separate section below.
THE APPLICANTS’ BUSINESS
The following section of my reasons is based on Frank’s evidence which I accept. It is also based on the large number of documents which Frank produced. It is necessary to consider the applicants’ business and wine products in some detail because one of the respondents’ arguments is that, in defence of the applicants’ claims, the applicants’ business and wine products were meeting the needs of a different market or section of the market than that of the respondents.
In or about 1999, Frank decided to start making wine commercially and he incorporated a company and registered the Mitolo mark for that purpose. He intended from the outset to use his family name and his desire was to produce red wines from single sites in McLaren Vale. He wanted the business to be family focussed and he wanted to leave a legacy for his children. The applicants’ business began and continues to buy their grapes from the Lopresti family. In 2001, Frank became a partner with Mr Ben Glaetzer, a winemaker from the reputable “Glaetzer” winemaking family. Frank and Mr Glaetzer decided that McLaren Vale would be the geographic focus of Mitolo Wines because they considered the grapes from the McLaren Vale region to be better suited to the style of red wine that Frank wanted to produce. The business grew between 2000 and 2008, consolidated from 2008 to about 2013, and thereafter has been in an expansion phase.
Mitolo Wines Aust was incorporated on 25 August 1999 as Mitolo Wines Pty Ltd and continued under that name until about late 2003 when a new entity known as Mitolo Wines was established and the company changed its name to Mitolo Wines Aust. The restructure was undertaken to segregate risk in the business and the new entity became the trading entity.
Frank is the sole director, secretary and shareholder of Mitolo Wines Aust and the company is the trustee of the Mitolo Wines Trust. The company is:
(1)the owner or finance lessee of plant and equipment used in the conduct of the business of the production and sale of wine;
(2)the registered owner, or applicant for registration, in certain jurisdictions, and beneficial owner in all jurisdictions of the trade marks used in the business of the production and sale of wine;
(3)the owner of the copyright, including the copyright in the trade marks and the packaging and promotional material used in the business of the production and sale of wine; and
(4)the owner of goodwill in the business of the production and sale of wine, including the wines produced and sold under the trade marks.
As I have said, under the Business Licence Agreement between Mitolo Wines Aust and Mitolo Wines executed on or about 11 August 2003, the former company granted the latter company an exclusive licence to: (1) carry on the business, which is defined as the production and sale of wine; and (2) use the plant and equipment used in the business and the trade marks. The term “Trade Marks” is defined in the agreement as follows:
Trade Marks mean all the trade marks referred to in Recital B(b), including those listed in the Schedule and such other trade marks as the parties subsequently agree shall be added to the Schedule or otherwise included in this definition.
The trade marks identified in the Schedule to the agreement include the two registered trade marks. Frank as managing director of both licensor and licensee has determined that the marks which are the subject of the applications for registration should be within the terms of the Business Licence Agreement.
As I have said, the applicants operate a wine production and sale business. This includes the cellar door/tasting room and restaurant at 141 McMurtrie Road, McLaren Vale, South Australia which opened to the public in October 2017. I will refer to this as the applicant’s cellar door/tasting room and restaurant at McMurtrie Road.
Mitolo Wines currently produces wines which can be divided into three broad ranges or categories as follows:
(1)Mitolo Jester Wines which are produced using a blend of grapes and are intended to be drinkable soon after release and are modestly priced compared to the applicants’ other ranges;
(2)The Mitolo Small Batch Series which are produced in smaller runs and are more expensive than the Jester range; and
(3)The Mitolo Single Vineyard Series which are premium wines each produced from grapes sourced from a single vineyard.
Mitolo Wines has a “Design Standards Manual” which it has used since about August 2006 and which contains criteria directed to how “Mitolo” is to be branded, including on wines, stationery, packaging materials, marketing material, websites, banners, clothing, merchandise and vehicles.
In his evidence, Frank produced wine labels falling within categories:
(1)for the Mitolo Jester Wines: red wines, Vermentino and Sangiovese Rose;
(2)for the Mitolo Small Batch Series: red wines, Vermentino and Grenache Rose;
(3)for the Mitolo Single Vineyard Series: G.A.M. Shiraz, Cantiniere Shiraz, Savitar Shiraz, 7th Son Grenache, Shiraz Sangrantino, Serpico Cabernet Sauvignon and Marsican Shiraz;
(4)“one-off” wines produced in partnership with retailers or for export. An example of the latter is an entry level shiraz wine called Junior produced exclusively for export to Canada and Sweden;
(5)photographs and printing profiles of labels used by Mitolo Wines over the years.
Most of the Mitolo Jester Wines bear the predominantly black label on the front of the bottle with the word “MITOLO” at the top in white text inside a rectangular border. An example of the front and back labels is shown below:
The Mitolo Jester Wines also include the Vermentino and Sangiovese Rose. These wines feature a white label on the front of a light-coloured bottle with the word “MITOLO” at the top in black text inside a rectangular border. An example of the front and back labels is shown below:
Red wines in the Mitolo Small Batch Series feature a black and white label on the front of the bottle with the word “MITOLO” at the top in white text. The word “MITOLO” is larger on these labels compared to the Mitolo Jester Wines and is not surrounded by a rectangular border. An example of the front and back labels of a red wine in the Mitolo Small Batch Series is shown below:
The Mitolo Small Batch Series also features the Vermentino and Grenache Rose. These wines feature a white label on the front of a light-coloured bottle with the word “MITOLO” at the top in black text. The word “MITOLO” is larger on these labels compared to the Mitolo Jester Wines and is not surrounded by a rectangular border. An example of the front and back labels of the Vermentino is shown below:
The Mitolo Single Vineyard Series features only red wines. Four of the wines in the Mitolo Single Vineyard Series bear similar labelling to the red wines in the Small Batch Series, including the word “MITOLO” in large white text at the top of the label. These wines are the G.A.M. Shiraz, the Cantiniere Shiraz, the Savitar Shiraz, the 7th Son Grenache, Shiraz Sangrantino and the Serpico Cabernet Sauvignon. An example of the front and back labels of the Savitar Shiraz is shown below:
The applicants also use a variety of other material to advertise their business. This includes packaging material, signs, banners, stationery, clothing, merchandise, vehicles and marketing material.
The applicants’ packaging material includes the cartons in which they ship their wine. An example of one of these cartons is shown below, featuring the word “MITOLO” and the words “purity”, “elegance” and “power’:
The applicants’ signs and banners are featured at the entrance to their cellar door/tasting room and restaurant at McMurtrie Road. The respondents tendered a number of photographs of the applicants’ premises. They show, for example, the word “MITOLO” in large white print on a black background.
The applicants also advertise their business through a variety of media. Ms Kirsty-Marie Czuchwicki is the applicants’ Brand Manager and is responsible for all of the applicants’ online marketing activities and for administering the applicants’ social media accounts.
The applicants have a website, which can be accessed via “ The website was first established in around 2002 or 2003 and has been redesigned on several occasions. It operates both as an online store for the applicants’ wine sales and as a platform for making reservations at the applicants’ restaurant at McMurtrie Road. Ms Czuchwicki has the ability to update the content on the website to reflect what is happening in the applicants’ business at any given time.
The applicants also have an Instagram account with the username “mitolowines”. It can be accessed via the website “ or via the Instagram app. The Instagram account was established in September 2012. The applicants use the Instagram account to share images of their wines, the cellar door/tasting room and restaurant at McMurtrie Road and other activities of the business, and to interact with members of the public who follow the applicants’ Instagram account. Ms Czuchwicki operates the Instagram account and generally uploads an image once or twice a day.
The applicants also have a Facebook page called “Mitolo Wines”. It can be accessed via the website “ or via the Facebook app. Ms Czuchwicki operates the applicants’ Facebook account. She uses it to generate public interest in the applicants’ brand. All of the images which Ms Czuchwicki uploads to the Instagram account are also automatically uploaded to the Facebook account. She also shares through the Facebook account various articles and reports that are relevant to the applicants’ brand.
The applicants also have a Twitter account which is presently inactive.
In addition to social media, Ms Czuchwicki creates and sends media releases to journalists and publications on the applicants’ media list. The media list includes wine magazines, journals, lifestyle magazines and online and print journalists.
In his evidence, Frank identified reviews of the wines produced by Mitolo Wines from time to time, including the following reviews:
(1)Wine Guide, Halliday;
(2)James Halliday in the magazine “Wine Companion”;
(3)Newspaper articles;
(4)Media Monitoring reports for Mitolo Wines, Press Review Sheets summarising the references in the press to Mitolo Wines; and
(5)Media articles about the wines, restaurant and cellar door of Mitolo Wines.
Mitolo Wines has from time to time supplied wine to airlines for consumption as part of their inflight service and those airlines include Qatar Airways and Qantas.
Frank gave evidence of the way in which the applicants have in the past promoted, and continue to promote, their business and their wine products to the public. They include the following: (1) operating a small tasting space in McLaren Vale in about 2012; (2) arrangements with a restaurant to sell the applicants’ wines in about 2014 or 2015; (3) the distribution of bookmarks to customers and trade customers domestically and internationally; (4) the provision to wholesalers for use by their sales representatives of sell sheets, brand introduction sheets and tasting notes; (5) the preparation of PowerPoint presentations for new customer demonstrations; (6) competitions where the prize is one of the applicants’ wines; (7) regular vineyard visits for both domestic and international trade customers; (8) preparation of professional photographs for use in sales and marketing activities of the applicants; (9) co‑hosting dinners at restaurants in Sydney and Melbourne; (10) the shipments of its wine in cartons marked “Mitolo”; (11) conducting events with providers of goods or services with well‑known brands; (12) billboard advertisements (13) participation in wine shows by way of a stand and the provision of tasting facilities; (14) participation in festivals such as the Sea & Vines Festival in McLaren Vale; and (15) in about 2014, Frank producing his own pasta sauce.
The marketing material of the applicants frequently refers to the Mitolo family and the district of McLaren Vale. The applicants’ wines are listed on many online wine retail websites.
As I have said, the business of the applicants presently includes the production and sale of wines and the operation of a cellar door/tasting room and restaurant at McMurtrie Road. The applicants’ wine is sold domestically to wholesalers and retailers, at the cellar door, through the website and mail order, and overseas in approximately 20 countries. The financial documents produced by Frank, which are the subject of a confidentiality order, show the operation of a reasonably successful business, both domestically and internationally. Sales and marketing staff travel both interstate and overseas.
I am satisfied that the applicants have and have had for a number of years a reputation as an established wine producer of good quality wines. The applicants’ wines have consistently received critical acclaim from a number of reviewers. The following reviews should be noted. Halliday, a prominent wine guide, describes Mitolo Wines as having had a “meteoric rise” and notes that it now “[e]xports to all major markets”. James Halliday, in a review of new wines published in the Wine Companion magazine, gave the 2016 Mitolo Jester a rating of “94 points”, indicating that the wine is “highly recommended” with “great quality, style and character [and is] worthy of a place in any cellar”. The Australian Gourmet Traveller described the 2005 Mitolo Serpico as the “emerging star” in Cabernet from McLaren Vale. Ralph Kyte-Powell, a wine writer and reviewer, gave the 2012 Mitolo 7th Son McLaren Vale Grenache Shiraz a rating of “90” in a review published in The Age newspaper in 2014. Fergus McGhie, in a 2008 article in The Canberra Times, gave the 2006 Mitolo Jester Shiraz a “five star rating” and described the wine as follows:
… this is pretty intense, typical of the Mitolo style. Lovers of big shiraz will not be disappointed…. This is a great example of the new Australia shiraz in a full-bodied style…. It’s capable of maturing well for a decade, but the generous flavours are so appealing now, there’s no need to wait.
Mitolo Wines has also received a number of awards for its wines. These are detailed in Frank’s first affidavit. The following awards should be noted. In May 2008, the 2006 Reiver Shiraz was awarded a “Gold Medal” at the 2008 International Wine Competition, a “Silver Medal” at the 2008 New Zealand International Wine Show and a “Silver Medal” at the 2008 International Wine & Spirit Competition. In July 2009, the 2007 Jester Cabernet Sauvignon was awarded a “Gold Medal” at the 2009 Japanese Wine Challenge. In May 2015, the G.A.M. McLaren Vale Shiraz and the 2013 Jester Cabernet Sauvignon were named in the “100 Best Australian Wines 2015/16” by Matthew Jukes. The G.A.M. McLaren Vale Shiraz was also awarded a “Gold Medal” at the 2015 Sommelier Wine Awards.
The applicants have also developed a reputation as targeting the “high-end” of the market. The visual impression of its labels — which, in the case of its red wines, feature the word “MITOLO” in white against a black background — convey a sophisticated and elegant image.
As I have said, the applicants’ cellar door/tasting room and restaurant at McMurtrie Road was opened in October 2017. The restaurant is one which provides fine dining and the food served combines traditional Italian and modern Australian cuisine. The restaurant is called “Bocca di Lupo”, which is an Italian idiom that has a similar meaning to “break a leg”. The restaurant has a well-regarded chef and the staff dress in a standard modern uniform. The restaurant offers the option of matching each course with the applicants’ wines.
As noted above, prior to 2012, the applicants’ business consisted of only the production, marketing and sale of wine. In that year, the applicants commenced the design and development of the cellar door/tasting room and restaurant at McMurtrie Road. In 2016, the applicants received a $557,000 regional development grant from the South Australian government in respect of the development. The development is said to have involved an overall cost of over $3 million.
The buildings comprising the development feature the use of 10 black shipping containers, polished wood and glass. It was designed with a “clean, sharp look” in mind that is intended to “solidify the brand’s premium mark”. It was featured in an article published in December 2017 in the Grapegrower and Winemaker Magazine titled “Clean and bold – Mitolo unveils its brand new cellar door and restaurant” with the following images of the exterior and interior:
THE APPLICANTS’ KNOWLEDGE OF THE ACTIVITIES OF THE RESPONDENTS IN SELLING WINE AND CONDUCTING A RESTAURANT
The starting point in this section is the exchange between Frank and Tony on Facebook in 2014.
In 2014, Tony lived in New York in the United States. Frank was his friend on Facebook. In early July 2014, Frank became aware that Tony was planning to sell wine in New York using a label which included the name “MITOLO”. Tony posted the following picture of the wine label on Facebook:
Frank saw the post and was concerned that Tony and Vito intended to sell wine commercially using branding which might be confused with the applicants’ products. The following exchange then took place on Facebook:
I will refer to the above as the Facebook Exchange.
Frank said that at the time of the Facebook Exchange he believed Tony was based in New York and was working as a musician and would only be selling the wine in New York City and, essentially, as a hobby. Frank gave the following evidence:
69.[Had] Tony given me any indication that he, or he and Vito, intended to sell wine commercially in Australia and around the world, and operating a physical premises in McLaren Vale, I would never have agreed to the use of the word “Mitolo” in association with wine, or indicated that I was happy with [the] revised label. Because none of those things were raised with me I did not desire to prevent Tony (or Tony and Vito) from doing a small run of wine to sell in New York as a hobby. I did not believe that in doing so that I was abandoning Mitolo’s interests in protecting its brand against unauthorised use by a competitor. If Tony had said to me that [the] intended to do what he has since done, then I would have refused to consent to the use he proposed and I would have taken steps to protect the Mitolo brand.
As at October 2014, Frank was aware that Vito had been selling wine into China under a label called “Governor’s Choice”. He saw Vito at the “Bushing King Festival” at McLaren Vale and they discussed winemaking. They discussed Vito’s purchase of a property at Oakley Road and Frank’s purchase of and plans for the property at McMurtrie Road. The property at Oakley Road is approximately three and-a-half kilometres from the property at McMurtrie Road. The conversation, according to Frank, was along the following lines:
70.1. I said words to the effect that:
“I am building a tasting room and restaurant.”
Vito did not tell me about his plans for a cellar door and restaurant at Chalk Hill Rd or at Oakley Rd:
70.2 He said words to the effect that:
“I needed to buy a vineyard to give my business legitimacy in the eyes of my customers in China.”
70.2. I said words to the effect of “Who is making your wine?”
70.3. He said words to the effect of “Scarpantoni Wines are making it.”
I will return to make findings about this conversation at the Bushing King Festival after I have examined Vito’s evidence.
In or about mid-2015, Frank began hearing of the promotion of the V. Mitolo & Son website “ and an associated Instagram account, Facebook page, and a website “>
Vito Mitolo & Son promoted an event described as the “V Mitolo & Son 2016 McLaren Carne Vale” through the “websites and “ the Facebook account and the Instagram account. On one of the websites there is a reference to enjoying “V.Mitolo & Son wines”. The event was held on 6 February 2016.
Frank became aware of Pizzateca in approximately 2016 and at that time he understood it to be a “pop up” food vendor which sold pizza out of a booth at a McLaren Vale winery called Alpha Box and Dice. Frank became aware that in approximately mid-2016, Pizzateca moved into permanent premises at 319 Chalk Hill Road, McLaren Vale. That is approximately six kilometres from the McMurtrie Road property. The Chalk Hill Road property is the address for the V. Mitolo & Son cellar door.
Frank produced menus and wine lists obtained from the Pizzateca website. He has observed A-frame and fence signs near the Pizzateca restaurant referring to Pizzateca and V. Mitolo & Son. As set out below (at [143]), Tony produced a number of photographs showing the use the respondents have made of “V. Mitolo and Son”.
The McLaren Vale Sea & Vines Festival 2017 is a festival in which local food and wine producers in McLaren Vale participate. In 2017, the festival took place between 10 and 12 June. Vito and Tony participated in the festival.
THE RESPONDENTS’ BUSINESS INCLUDING ITS SALE OF WINE AND THE FACEBOOK EXCHANGE
Vito was born in Adelaide in 1957. He described himself as working in the wine industry part time in addition to having interests in car detailing, transport and panel beating. I have previously described his interest in Vito Mitolo & Son. Vito is shown as not holding his shares in the company beneficially. He said in cross-examination that he had never been of the belief that he held his shares on behalf of another person. I found his evidence about this topic vague and confusing.
Tony is Vito’s son. He was born in Mount Gambier in 1982. In 2014, Tony worked full time as a musician. He has been involved in the production of wine with Vito Mitolo & Son. His main role in the company was described by Vito as being in the marketing, label design and public relations of the brand.
Although Vito and Frank are cousins, Vito said that he does not have a close relationship with Frank.
Vito said that he began working in the wine industry in 2014. In October 2014, he purchased a vineyard at 135 Oakley Road, McLaren Vale (the Oakley Road property).
In 2016, Tony was involved in the establishment of the Pizzateca restaurant at 319 Chalk Hill Road, McLaren Vale (the Chalk Hill Road property) and he now works full time at the Pizzateca restaurant.
Vito said that Vito Mitolo & Son was established by Tony for the purpose of producing and selling wine. At the beginning of 2014, Tony, who was then living in New York City, had a conversation with Vito about the idea of selling wine in New York City. Vito agreed and Vito Mitolo & Son was incorporated and import licences were obtained for the company in the United States. Tony started a Facebook page for the company and commenced designing labels for the production of the wine. On 14 September 2015, a Producer’s Licence was issued by the Liquor and Gambling Commissioner for V. Mitolo and Son. Vito Mitolo & Son is the owner of the Producer’s Licence.
Vito said that Vito Mitolo & Son has produced wines from the vineyard at the Oakley Road property as the producer V. Mitolo and Son since 2014. The company has produced wine for export to the United States, China (under the label of Royal Governor) and for sale in the domestic market (under the modified WAVEFORM label) since 2014.
In June 2016, Vito Mitolo & Son opened a cellar door at the Chalk Hill Road property and Tony commenced operating the Pizzateca restaurant at the property. The intention was to sell and offer tastings of the company’s wines.
Vito was aware that Frank started Mitolo Wines in 1999. Vito recalls conversations with family members whereby he learnt that Mitolo Wines Aust had bought a property at McMurtrie Road where it intended to construct a cellar door. Vito was aware that the applicants did not produce all their own grapes and that the business purchased the majority of their grapes from a business known as Lopresti Wines. Frank had previously advised Vito of that fact.
Vito was aware of the Facebook Exchange in July 2014 between Tony, and Frank. Tony, who was living in New York City at the time, contacted Vito to inform him of his discussion with Frank and to discuss what was to be done with their label. Vito instructed Tony to redesign the label to make the word “MITOLO” less prominent. He did so because he did not want to “cause any dramas”. Vito was aware of the subsequent exchanges.
Vito Mitolo & Son produced three varieties of wine, being Shiraz, Shiraz Grenache and Cabernet Sauvignon. Following the Facebook Exchange, the company bottled 14,000 bottles. The first batch of WAVEFORM was bottled by Scarpantoni Wines in October 2014 and Vito said that the label was in the form approved by Frank. The grapes used in this bottling were purchased from Scarpantoni Wines, as well as other grape growers. Vito said that very little of this wine was sold on the domestic market as Tony was in the United States at the time and the company decided to focus on that market.
Vito said that he had no discussions with Tony along the lines of Vito Mitolo & Son’s operations in New York City being a hobby, or limited only to that area.
Vito provided details of the costs incurred by Vito Mitolo & Son in designing and redesigning labels, printing labels, advertising, travel costs to and from New York, accommodation in New York over a three month period and internal travel expenses. The figure he provided was $78,000.
On 31 October 2014, there was a wine show in the McLaren Vale area which was known as the Bushing King Festival. Vito sat near Frank and he gave an account of a conversation he had with Frank. He said that they discussed the wines each of them were producing, where their grapes were coming from, their plans for the future, their respective properties in the McLaren Vale area and the export of wines overseas, in particular, to China. He said that Frank asked him about the purchase of the Oakley Road property and that he confirmed that he had purchased the property. Frank asked him how big the property was and Vito said approximately 12-and-a-half acres. Frank asked him why he had chosen the Oakley Road property. Vito explained that the investors and customers of Vito Mitolo & Son included Chinese clients and he was keen to “give my business legitimacy in the eyes of my customers in China”. Frank asked Vito how much wine the company was selling into China and Vito said that the company had sold two shipping containers which equated to 1,200 cases, or approximately 144,000 bottles of Royal Governor wine. Vito asked Frank whether he sold wine in China and Frank said that he did not. Vito invited Frank to come with him to China to meet his contacts for that market.
Frank told Vito that he was busy with renovations to his house and the building of his cellar door. Frank talked about his purchase of the vineyard at the McMurtrie Road property and his plans to commence operation of a cellar door and restaurant at the property. Frank asked about Vito’s plans for the Oakley Road property and Vito told him that he was planning to operate a cellar door from the property and that he wanted to open a restaurant focused on rustic provincial cooking. Frank asked Vito about Vito Mitolo & Son’s sale of wine in New York City and Vito responded by saying the company’s wine was due to reach New York City and the United States market in January 2015. Vito gave evidence that Frank said words to the effect of “don’t worry, I didn’t think you were gonna tread on our toes”.
Vito said that at the same festival, he spoke to Frank’s architects and that during the discussions he was provided with their business cards as they offered to design the cellar door that he had discussed with Frank.
In December 2014, Tony returned to Australia. At that time, Vito instructed Tony to continue to market Vito Mitolo & Son’s wine through both Facebook and Instagram, and he was told by Tony that the company and its associated label was included in all marketing material online.
On 6 February 2016, Vito Mitolo & Son held an event called the “McLaren Carne Vale” at the Oakley Road property and the event included a five course Italian feast with the company’s wines being showcased alongside Italian beers. Vito said that before the event, Tony marketed the event heavily through both Vito Mitolo & Son’s Facebook page and Tony’s personal Facebook page. An event page was set up by Tony on Facebook through the company to specifically market the event and to allow for the purchase of tickets. On 27 December 2015, Vito recalls that Tony changed his profile picture on Facebook to advertise the event by Vito Mitolo & Son. Vito said that the event was a great success and that 150 people attended, including many family members. He spoke to a number of the Mitolo family members, including a number of members who were Frank’s first cousins.
In or around February 2016, and following the success of the McLaren Carne Vale event, Tony decided to open a permanent restaurant called “Pizzateca” at the Chalk Hill Road property. From 18 May 2016 onwards, the opening of Pizzateca was advertised on Vito Mitolo & Son’s Facebook page and on Tony’s personal Facebook page. In June 2016, Tony and his business partner, Mr Tim Anderson, commenced operating Pizzateca at the Chalk Hill Road property. Pizzateca is owned by Tony as to 85% and Mr Anderson as to 15%. The restaurant is open three days per week and serves mainly pizza and wine to approximately 140 guests. I note that later in his evidence, Vito said that the cellar door, including Pizzateca, was open four days a week. This apparent inconsistency was never clarified, but at the same time, was not an issue. The restaurant is open for lunch and dinner. Pizzateca has sold Vito Mitolo & Son’s labelled wine at its premises since 2016. It has also sold wines from Alpha Box and Dice, Oliver Taranga, Chalk Hill Wine and Chapel Hill Wine.
Pizzateca and Vito Mitolo & Son’s cellar door is also located on the same premises. Vito said that the wines available for purchase at the cellar door prior to 8 August 2016 were as follows:
(1)the WAVEFORM Series being 2013 Shiraz, 2013 Shiraz Grenache and 2013 Cabernet Sauvignon;
(2)the V. Mitolo & Son Pizza Rosso NV Shiraz; and
(3)the V. Mitolo & Son 2016 Grenache, and V. Mitolo & Son 2016 Barbera.
The wines currently available at the cellar door are as follows:
(1)the 2015 V. Mitolo & Son OZTALIA Shiraz and 2015 V. Mitolo & Son OZTALIA Shiraz Grenache;
(2)the V. Mitolo & Son 2016 Grenache; and
(3)the V. Mitolo & Son Pizza Rosso NV Shiraz;
(4)the V. Mitolo & Son OZTALIA Gamay Rosé.
Vito said that the cellar door, including Pizzateca, is open four days per week and has patronage of approximately 1,200 people over those four days.
Vito said that, based on records of Vito Mitolo & Son since the Facebook Exchange in July 2014, the company’s sales of wine from the cellar door has been $120,000 as at 3 February 2017 and $50,000 as at 8 August 2016.
Vito said that as at 8 August 2016, Vito Mitolo and Son has used the following labels:
(1)V. Mitolo & Son WAVEFORM — in the United States and Australia;
(2)Royal Governor — in China only; and
(3)V. Mitolo and Son — in Australia only, being the Pizza Rosso red collar pizza base logo and the Triangle label “known as the V. Mitolo & Son Malocchio”.
Those labels are as follows:
Vito said that as at January 2018, V. Mitolo and Son have the following brands of wine for sale, being OZTALIA Shiraz, Rose, Shiraz Grenache and Grenache. He produced copies of the labels. He said that the wine is sold and distributed through the cellar door on the Chalk Hill Road property which is also Pizzateca.
As far as sales of wine by Vito Mitolo & Son into the United States are concerned, Vito again said that he had reviewed the records and that WAVEFORM in three varieties has been sold through America’s Wine Shop by McAdam Buy-Rite; the Fine Wine Agency (New York); the Wine Angel (New Jersey); and a number of other channels which it is not necessary for me to mention. He said that upon his review of the company’s records since the Facebook Exchange, the company has sold $115,000 worth of wine as at 3 February 2017 and $115,000 worth of wine as at 8 August 2016.
As far as sales of wine by Vito Mitolo & Son into the People’s Republic of China are concerned, the company has sold the brand Royal Governor (Shiraz and Cabernet Sauvignon) and this wine is sold and distributed through the company’s business partner in Guangzhou. Again, from his review of the company’s records, Vito states that since the Facebook Exchange, the company has sold $130,000 worth of wine as at 3 February 2017 and $130,000 worth of wine as at 8 August 2016.
Vito was cross-examined at some length. It emerged that his evidence was unsatisfactory and unreliable in a number of respects. I should mention at this point that the affidavits of Vito and Tony were similar in many respects in terms of layout and content. In their closing submissions, the applicants produced a schedule showing the similarities. It is clear from Vito’s cross‑examination that, although he professed to have examined the records of Vito Mitolo & Son, he had done no more than rely on what Tony had told him.
First, although Vito said in paragraph 172 of his affidavit that he had reviewed the records of Vito Mitolo & Son for the purposes of providing evidence of sales revenue in connection with the sale of wine into the United States, it is apparent that:
(1)the company’s taxation returns, balance sheets and profit and loss statements were not produced and that some, if not all, of the monies received for sales of wines into the United States were paid to one of Vito’s other companies, 610 Regency Road Pty Ltd;
(2)he was not responsible for the preparation and calculation of the figures. That was done by Tony; and
(3)the documents produced by the respondents upon request supported sales revenue of no more than approximately $67,000 and no sales into the United States after April 2016. Vito was unable to explain the difference between approximately $67,000 and $115,000 and he did not know whether there had been sales into the United States after April 2016.
Secondly, Vito’s evidence in cross-examination with respect to sales of wine into China was even more unsatisfactory. He said that, in fact, he had not reviewed any of the records of Vito Mitolo & Son and he did not know why he said he had. He said that he had not received any money from China. There were two relevant container loads, one under 610 Regency Road Pty Ltd. One container load was shipped in June 2013 before Vito Mitolo & Son was incorporated. The second container load was shipped in late 2013. The reference to the dates of the shipment of wine to China led Vito to qualify the evidence he had given in his affidavit about when Tony had first raised with him the idea of selling wine. It seems that the respondents did not provide any invoice from China.
Thirdly, Vito’s evidence about the sales of wine in Australia was that, despite what he said in his affidavit, he did not review the records of Vito Mitolo & Son, but he relied on what Tony told him. As at January 2018, all of the company’s wine sales in Australia were through Pizzateca. Furthermore, the wine was mainly sold through people who had eaten at the restaurant and groups were not encouraged to come in for wine tasting.
Vito agreed that Vito Mitolo & Son sold very little, if any, wine in Australia until after March 2015. The respondents did not produce any documentary evidence of sales of wine in Australia in the 2015 financial year. One invoice produced for that period could not have been correctly dated in view of the vintages referred to in the invoice.
Vito agreed that his figure of sales revenue for the period as at 8 August 2016 must relate to sales in the period from 1 July 2015 to 8 August 2016. The documents provided by the respondents suggested sales of $31,410 for the period from 8 August 2016 to 3 February 2017, not $70,000 as suggested by Vito in paragraph 169 of his affidavit. Vito did not know if any of the WAVEFORM series wine was sold in Australia. None was sold at Pizzateca.
Vito agreed that there had been no sales of wine into China since the two shipments in 2013 and no sales into the United States since 2016.
Fourthly, Vito agreed that sales of wine by Vito Mitolo & Son in Australia did not pick up until the establishment of Pizzateca in June 2016 and that he received a letter of demand from the applicants’ solicitors in August 2016.
Fifthly, Vito was cross-examined about his evidence concerning the costs incurred by Vito Mitolo & Son in connection with the WAVEFORM label. It emerged from the cross‑examination that the figure for printing labels should be $3,000, not $30,000 and that for the most part, Vito had no independent knowledge of the matter and relied on Tony and what Tony had told the respondents’ solicitors.
Sixthly, Vito made a number of statements about his belief following the Facebook Exchange. At one point, he said that he believed that the amendments to the WAVEFORM label were made so that Vito Mitolo & Son could operate commercially “without infringing Frank’s business”. Later when relating the negotiations that took place and the meeting at Café Cena on 1 September 2016, he said he told Frank that the respondents would continue to use the modified WAVEFORM label “as it was agreed to by Frank in the 2014 Facebook Exchange and a substantial investment has been made in promoting the brand”. He gave oral evidence-in-chief that he understood from the Facebook Exchange that Frank had given the respondents the “OK” to put V. Mitolo and Son on the label. In cross-examination, he was probed about his belief in July 2014 when Tony sent the Facebook Exchange to him by screenshot. It is not easy to discern the exact nature of his belief, but it appears to embrace the following matters: (1) the respondents could use V. Mitolo and Son as long as it was not too prominent, or less prominent; (2) he did not think the approval from Frank was subject to the name not being the primary name on the wine; and (3) he knew the respondents did not have Frank’s approval for all future labels, but at the same time, he denied that he knew he needed such approval.
Vito is the owner of the Oakley Road property. Up to the time of trial, there was no formal lease or licence agreement with Vito Mitolo & Son with respect to the property. Neither Vito nor Vito Mitolo & Son has an interest in Pizzateca Pty Ltd which, until recently, leased the property at Chalk Hill Road. Tony has recently purchased the property.
Vito agreed that he had known about Mitolo Wines operating in the McLaren Vale area making McLaren Vale wine for “a long time”. He agreed that neither Vito nor his parents were born in the McLaren Vale area or grew up there.
Vito said in cross-examination that he did not know whether any of the WAVEFORM series wine was sold in Australia. Two pallets of it might have been. He said that it was sold in the United States and the respondents made money out of it. At one point, he seemed to agree that Vito Mitolo & Son suffered no detriment as a result of the Facebook Exchange.
Finally, Vito said that his plans with respect to the Oakley Road property were as follows: (1) to have a cellar door there in addition to the cellar door at the Chalk Hill Road property; (2) the main name on the wine sold from the Oakley Road property might be different and could be Agriturismo; (3) there would be a restaurant providing high quality seasonal Italian food with a capacity of 75 persons; and (4) the drawings are only concept drawings and may not represent what will be built.
In re-examination, Vito said that he considered that he could use the “two-heads” label (i.e., the larger label set out at [105] above) because of a combination of the Facebook Exchange and the fact that he told Frank at the Bushing King Festival that he was going to establish a restaurant and cellar door at Oakley Road and the fact that there has been a sign with V. Mitolo and Son on it outside the Oakley Road property since October 2014. The significant matters in the Facebook Exchange were that the modified WAVEFORM label has V. Mitolo and Son on it and Frank had said that the respondents had every right to use their own name.
I turn now to the evidence of Tony.
Tony is the managing director of Pizzateca Pty Ltd and he works full time at the Pizzateca restaurant. He had been aware of Mitolo Wines since his time at school. He was aware from discussions with family members that Frank started Mitolo Wines in 1999. He recalls being told by his father in 2014 that the applicants bought a property at McMurtrie Road, McLaren Vale where they were going to construct a cellar door. He became aware from his discussions with his father and other members of the wine industry that the applicants purchased the majority of their grapes from Lopresti Wines.
Tony states that he established Vito Mitolo & Son for the purpose of producing and selling wine. The company has produced wines from the Oakley Road property as the producer V. Mitolo and Son since 2014. The company has produced wine for sale in the domestic market since 2014 under the WAVEFORM label and wine for export to the United States and to China.
In June 2016, Vito Mitolo & Son commenced operating a cellar door at the Chalk Hill Road property with the intention of selling and offering tastings of its wines.
Tony performs all of the marketing, label design and public relations functions of the brand, being the wine, produced by Vito Mitolo & Son. Tony said that that came about when at the beginning of 2014, and whilst living in New York City, he decided that he wanted to commence some work in the sales and marketing sector. He was working as a musician, but he realised that this would not be “a long term career path”. He decided to gain work experience and begin a new venture whilst in New York City. He spoke to his father and suggested the idea of selling wine in New York City. His father agreed with the idea. He said that shortly after speaking with his father, he incorporated Vito Mitolo & Son in Australia and obtained the relevant import licences for the company in the United States. That chronology cannot be correct because Vito Mitolo & Son was incorporated in October 2013. Tony also started a Facebook page for the company and commenced designing labels for the production of the company’s wine.
Tony began promoting the label for Vito Mitolo & Son’s WAVEFORM wine on social media, in particular, through the company’s Facebook page and his own personal Facebook page, in or around July 2014. He said that the WAVEFORM concept was conceived by him to represent the three waveforms of music and, therefore, the three varieties of wines produced under the label of the company. He then related the circumstances of the Facebook Exchange between him and Frank in July 2014. After discussing the matter with Vito, they decided to redesign the label to make the word “Mitolo” in the V. Mitolo & Son less prominent. Vito instructed him to work with Frank and not to cause any “dramas”. Tony said that he did not at any time indicate to Frank that what he was proposing was merely a hobby or that “commerciality” was not going to be pursued.
Following the Facebook Exchange, Vito Mitolo & Son proceeded with production by bottling 14,000 bottles across three varieties and printing the redesigned labels. Tony said that prior to that, the WAVEFORM label was only a concept design drawn up by him and that Vito Mitolo & Son had not commercially printed its labels before printing the redesigned labels. Very little of this wine was sold on the domestic market as Tony was in the United States at the time and opted to focus on that market. Tony said that the first batch of the company’s WAVEFORM wine was bottled by Scarpantoni Wines in October 2014 and that this batch, and all ensuing batches, featured the modified WAVEFORM label. The first batch was produced using grapes purchased from Scarpantoni Wines, as well as other vineyards.
Tony said that in reliance on the 2014 Facebook Exchange, Vito Mitolo & Son commercially arranged for the printing of approximately 14,000 labels and marketed the WAVEFORM wine, both in the United States and locally. Tony gave similar evidence to Vito of the costs incurred by Vito Mitolo & Son in relation to the redesign of the label in 2014. His evidence was that the cost was $78,000 and his breakdown of those costs was in the same terms as the evidence of Vito.
Tony said that he returned to Australia in December 2014 and that he continued to market Vito Mitolo & Son’s wine through Facebook and Instagram. He wanted to ensure that there was a family focus as well as a focus on the region of McLaren Vale. Between 4 April 2015 and 16 December 2015, he highlighted the company’s family theme and the connection to the McLaren Vale.
Vito Mitolo & Son held the McLaren Carne Vale at the Oakley Road property on 6 February 2016 and Tony “heavily marketed” the event through Facebook. Tony said that on 27 December 2015, he changed his profile picture on Facebook to advertise the event by Vito Mitolo & Son and on all marketing campaigns he ensured that the company appeared prominently as the organiser of the event and that he made specific reference to the showcasing of the company’s wines. The McLaren Carne Vale was a great success.
Tony made the decision to open the permanent restaurant called Pizzateca at the Chalk Hill Road property in February 2016, and from 18 May 2016 onwards, he advertised the opening of Pizzateca on Facebook. The restaurant commenced operating in June 2016. It is open three days per week for lunch and dinner serving mainly pizza and wine to approximately 140 guests. The wines of Vito Mitolo & Son are sold at the premises and that has been the case since June 2016. Other wines sold from the Pizzateca restaurant are the wines of Alpha Box and Dice, Oliver Tarange, Chalk Hill Wine and Chapel Hill Wine.
Tony said that from his inspection of the records of Pizzateca, wines of Vito Mitolo & Son to the value of $39,210 (wholesale) have been sold from the premises until June 2017. This figure is comprised of the following labels:
(1)Pizza Rosso ($13,500); and
(2)Other labels ($25,710).
The first time Tony heard that Frank was “taking issue” with the wines, labels and commercial activities of Vito Mitolo & Son was following a text conversation and subsequently in discussions with his father in August 2016.
Since this proceeding was issued by the applicants, Vito Mitolo & Son has hosted an event called Menu Fuso on 11 June 2017 and was involved in the Sea & Vines Festival on 12 June 2017 at the vineyard on the Chalk Hill property. In his evidence-in-chief, Tony said that he has not experienced any confusion between the Mitolo Wines brand and the wines of Vito Mitolo & Son. However, in cross-examination, he said that he had, in fact, experienced confusion at Pizzateca, although he did not specify the extent of this confusion. He produced a copy of a bundle of Facebook and Instagram posts relating to the geo-tagging and hash-tagging of the applicants’ wines and those of Vito Mitolo & Son.
Tony said that his understanding of Instagram is when uploading a photograph on Instagram, the meta-data relating to the location in which the photograph is taken which is attached to the photograph and is called a geo-tag, is read and automatically uploaded with the photograph when posted. It follows that a user of Instagram uploading a photograph taken at the Chalk Hill Road property will automatically have the option to allow the location V. Mitolo & Son or Pizzateca to appear alongside the photograph. An option listing the applicants’ cellar door would not be available due to a difference in geographic location and, therefore, geo-tag data.
As to the cellar door at the Chalk Hill Road property, Tony gave the same evidence as Vito with respect to the wines available for purchase at the cellar door prior to 8 August 2016, and the wines currently available for purchase at the cellar door. He gave the same evidence about the opening times and visitors to the cellar door as Vito.
Tony’s evidence concerning Vito Mitolo & Son’s sales of wine from the cellar door at the Chalk Hill Road property since the Facebook Exchange, the labels used by the company as at 8 August 2016, and the sales of wines by V. Mitolo and Son in Australia, the United States and China is the same as the evidence given by Vito.
Tony states that there is a bar area inside the Pizzateca restaurant premises from which Vito Mitolo & Son’s wines may be purchased. The wines available for purchase are those which are available for consumption with food at Pizzateca. Pizzateca does not have the space to have a dedicated wine tasting operation, and “overwhelmingly” the company’s sale of wine is wine which customers in the restaurant have enjoyed with their meal and wish to take home.
Tony said that Pizzateca and Vito Mitolo & Son do not promote or encourage tastings at Pizzateca and that if customers enter the premises for the purposes of wine tasting only, as opposed to eating in the restaurant, the practice is to tell them that they are unable to accommodate them. This is because staff in the premises are usually busy with food service. That is not always the case and if they are not too busy, then either Vito or Tony are happy to spend time with customers while they taste the wine.
The takeaway sales of Vito Mitolo & Son’s wine is promoted by way of signage and A-frames at the Chalk Hill Road property as well as on the Pizzateca wine list. Tony produced photographs of the roadside signs, a Vespa three wheel vehicle, an umbrella, an apron, the wine list and a cutting board. Those photographs show a prominent use of the sign, V. Mitolo and Son, sometimes within the two-heads logo and sometimes not.
Tony states that Vito Mitolo & Son currently offers the following wines for sale: (1) Grenache Rose, (2) “Pizza Rosso” Shiraz; (3) Grenache; (4) “Sabbath” Barbera; (5) Single Vineyard Shiraz; (6) Montepulciano; (7) 2016 Fatto E Mano Basket Press Shiraz; and (8) 2015 Fatto E Mano Basket Press Shiraz.
Tony said that he can confirm that in Australia, Vito Mitolo & Son’s wines continue to be sold exclusively from the Chalk Hill Road property and that he can confirm that the company still has stock in the United States of the WAVEFORM brand. He also states that the company continues to have wine stock of the Royal Governor brand in the Peoples Republic of China. He states that the company’s WAVEFORM series of wine effectively evolved into the OZTALIA series and the wines produced and sold by the company have further evolved to the range of eight types identified in the preceding paragraph. He states that OZTALIA is more than just a series of wines, but is an overarching theme for what they do at Pizzateca and V. Mitolo & Son. It is a term which he coined to capture the essence of who the respondents are, Australians of Italian heritage for whom family, food and wine are essential parts of their lives. He states that he was born in Australia as was his father, Vito. His grandparents came to Australia from Italy and, although they continue their Italian traditions, particularly with respect to food and wine, adjustments and changes had to be made to how things were done to reflect the new environment in which they were being done. He states that over time this form of Italian food and wine developed its own distinctive style which was Italian in origin, but making use of the produce and environment of Australia and that that to him is OZTALIA. For example, at the Pizzateca restaurant, pizzas are made in the Italian way, but with Australian ingredients. The pizzas are made in the way that Tony’s grandparents taught him, however, local ingredients are used. Tony said that the reason the signage at Pizzateca contains the words “Vera Pizza Oztalia” is because they are making traditional home style Italian pizza with Australian ingredients in Australia.
Tony describes the environment at Pizzateca as very informal and that it is intended to make customers feel like they are having lunch with his family. He describes the informal “hand-made” label presentation of Vito Mitolo & Son’s wines as fitting in perfectly with this environment as does the invitation to purchase wine if customers have enjoyed it with their meal. He considers that all of this comes within the concept of OZTALIA which is why OZTALIA has gone beyond being simply a wine series. He states that the OZTALIA theme is central to the experience at Pizzateca, is “saturated” throughout Pizzateca marketing, and has steadily evolved over the course of Pizzateca’s operation. The use of the word “OZTALIA” was a “nod” to the experience at Pizzateca and how Vito Mitolo & Son’s wines complement that same experience. He describes the primary focus of Pizzateca as the presentation of the OZTALIA theme and that it is for that reason that he has chosen not to operate a tasting service or a conventional cellar door from the Chalk Hill Road property. He states that tastings cannot be booked and are only ever conducted in an informal setting at the bar at Pizzateca if he has the time to guide a customer through Vito Mitolo & Son’s wines. In fact, this rarely occurs. Rather, the wines and other wines are recommended to customers who visit Pizzateca and are commonly paired with the type of food ordered.
Tony gave evidence about an application for development lodged with the Onkaparinga Council on 11 February 2016 in relation to the Oakley Road property. The application is for development approval for a winery with small batch processing, wine barrel storage, cellar door and a restaurant with capacity for 150 people and a car park. The application has progressed through the development application process and is now awaiting building consent. Tony states that he and his father intend to seek a further extension of time to lodge the building plans and, subject to obtaining necessary approvals, plan to develop a cellar door. It has not yet been decided what label the wine will be sold under at the Oakley Road property. Tony said that the word “Mitolo” will not be used prominently on the label and that he and his father have no intention of using a label style which is in any way similar to the corporate style of the applicants. Tony states that they intend to establish a restaurant which sources a substantial proportion of its produce and ingredients from the McLaren Vale/Fleurieu area in further development of the OZTALIA theme. It is intended that the wines of Vito Mitolo & Son will be sold at the restaurant.
Until the 2018/2019 financial year, it was Tony who maintained the accounts, including the invoices of Vito Mitolo & Son and Pizzateca. He provided the figures for sales revenue, other than sales revenue for sales into China which came from Vito.
With respect to sales into China, Tony agreed that he did not review any of the company’s records as stated in his first affidavit, but simply obtained information from Vito. He has not seen any invoices for sales to China. He agreed that there was no link between the sales into China and the Facebook Exchange.
With respect to sales into the United States, the records produced by the respondents show sales in the 2014 calendar year totalling approximately $12,000; 2015 calendar year totalling $40,650; 2016 calendar year (up until 8 August 2016) $332.30, a total of $52,902.83. Tony sought to explain the difference between this figure and the figure in his affidavit by saying that he had made a mistake and that the figure in his affidavit was for inventory, not sales.
With respect to the “Incurred Costs of the 2014 Re-Design”, Tony agreed that the design costs had not been the subject of an invoice. The respondents had not printed any labels for the WAVEFORM series of wines before the Facebook Exchange. Other costs such as travel and accommodation seem to be costs that would be incurred in any event.
With respect to sales in Australia, there appears to be no “invoiced” sales in the 2015 financial year. After he had been taken through the documents, he agreed that the figures in paragraphs 99.1 and 99.2 of his first affidavit were roundabout figures.
The cross-examination of Tony and the documents produced suggests that no WAVEFORM series wine was sold in Australia, although I accept that a little later in his evidence, Tony said that there was stock of the WAVEFORM series wine in Australia which was sold at package events.
THE CONVERSATION BETWEEN FRANK AND TONY AT THE BUSHING KING FESTIVAL
This conversation took place in October 2014. I have already set out Frank’s version (at [74]) and that of Vito (at [94]–[95]). Frank was the more reliable of the two witnesses and I accept his version that Vito did not tell him that he planned to operate a cellar door and restaurant at the Oakley Road property.
THE NEGOTIATIONS BETWEEN FRANK AND VITO AFTER THE LETTER OF DEMAND
The applicants claim that Vito Mitolo & Son has by its conduct represented that it and the applicants are the same person or that the wines produced by the first respondent and being the infringing products were produced by or at the direction of the applicants or both. The applicants claim that that same conduct amounted to a representation that the wines have a sponsorship, approval or affiliation with the applicants or the applicants’ products.
The conduct which the applicants claim gives rise to the representation is the use by Vito Mitolo & Son of the sign “MITOLO” or a sign substantially identical with, or deceptively similar to it in advertising, marketing, promoting, exhibiting in public, exporting, offering for sale and selling wine products.
The general principles which are to be applied in order to determine whether conduct is misleading or deceptive were identified in the early authorities in the High Court and this Court: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 (Taco Co v Taco Bell); Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82).
For present purposes, it is sufficient to repeat the convenient summary of the relevant principles which is set out in the decision of the Full Court of this Court in S & I Publishing Pty Ltd v Australian Surf Lifer Saver Pty Ltd (1998) 88 FCR 354 at 361–363:
…We would restate the applicable principles relevant to the present case as follows:
1.There will be no contravention of s 52 unless the error or misconception which occurs results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199-200 per Gibbs CJ and at 209-211 per Mason J; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 91; Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Ltd (1993) 38 FCR 1; ATPR 40,751 and cf Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 at 132.
2.Conduct will be misleading and deceptive if it leads into error: Parkdale at 198.
3.Conduct will be likely to mislead or deceive if there is a “real or not remote chance or possibility” of misleading or deceiving regardless of whether it is less or more than 50 per cent: Global Sportsman at 87.
4.Conduct causing confusion or uncertainty in the sense that members of the public might have cause to wonder whether the two products or services might have come from the same source is not necessarily misleading and deceptive conduct: Parkdale at 200; Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 at 472-473; 57 ALR 401 at 413 per Lockhart J; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 2 TPR 48; 42 ALR 177.
5.In a case such as the present an applicant must establish that it has acquired the relevant reputation in the name or get-up such that the name or get-up has become distinctive of the applicant’s business or products: Sheraton Corporation of America v Sheraton Motels Ltd [1964] RPC 202; BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 51 ALJR 254; 12 ALR 363.
6.Conduct may be misleading or deceptive or likely to mislead or deceive notwithstanding that the corporation said to engage in that conduct acted honestly and reasonably and did not intend to mislead or deceive: Parkdale at 197 per Gibbs CJ; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 223 per Stephen J; Global Sportsman at 88. Logically, a finding that conduct had been intentionally engaged upon will be irrelevant in determining whether that conduct is misleading or deceptive. It may perhaps be imagined that conduct engaged upon with the intent to mislead or deceive may fail in its purpose and not be found misleading or deceptive. Nevertheless, where the intention to mislead or deceive is found, it logically would be likely that a court would more easily find that the conduct was misleading or deceptive: cf Australian Home Loans Ltd v Phillips (1998) ATPR 41,626 and New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 86 ALR 549 at 558. It is unnecessary in the present case to consider the question whether a finding of intention to mislead or deceive can have relevance in other ways to issues such as remedies.
7.In many cases it will be necessary to consider the class of persons to whom the representation was directed: Parkdale at 199 and Taco Bell at 72; 202. To the extent that it is here necessary so to do that must be the class of persons interested in purchasing magazines concerned with triathlon sport.
8.There is no proposition of law to the effect that intervention from erroneous assumption between conduct and misconception destroys the necessary chain of causation with the consequence that the conduct cannot be regarded as likely to mislead or deceive: Taco Bell at 70; 200; Campomar Sociedad Limitada v Nike International Ltd (1998) 85 FCR 331 at 361-362; 156 ALR 316 at 344-345.
9.The test of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective one for the Court to determine. It is ultimately a question of fact.
Two further matters should be noted. First, further to what is set out above about the distinction or difference between confusion on the one hand, and being misled on the other, the observations of Deane and Fitzgerald JJ in Taco Co v Taco Bell should also be noted. Their Honours said (at 201):
Confusion
In McWilliam's v McDonald’s ((1980) 33 ALR 394), the Full Court held that, although the conduct of McWilliam’s was likely to have caused confusion or wonderment, it did not appear that in the particular circumstances of that case the conduct was misleading or deceptive or likely to mislead or deceive. As we read their Honours’ judgments, that was a factual conclusion. Their Honours were not suggesting that there is, for the purposes of s 52 of the Act, a necessary dichotomy between “confusion” on the one hand and “misleading or deception” on the other.
Conduct which produces or contributes to confusion or uncertainty may or may not be misleading or deceptive for the purposes of s 52. In some circumstances, conduct could conceivably be properly categorized as misleading or deceptive for the very reason that it represents that confusion or uncertainty exists where, in truth, there is no proper room for either. Ordinarily, however, a tendency to cause confusion or uncertainty will not suffice to establish that conduct is of the type described in s 52. The question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52.
As I hope I have made clear earlier in these reasons, the instances of actual confusion include cases of wonderment and cases of actual error.
Secondly, the question of whether conduct is misleading or deceptive is a question of fact; it is an objective question and one which is to be considered in the light of all the surrounding facts and circumstances. Conduct is misleading or deceptive if it induces error or is capable of inducing error: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [109]–[111] per McHugh J; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357.
I am satisfied in light of Frank’s evidence, including the documents he produced, that Mitolo Wines has acquired a reputation in the market in the name “Mitolo” as distinctive of the applicants’ wine products. I refer to my earlier discussion of the instances of actual confusion which involved actual error and to my discussion of the expert evidence. It seems to me that the conduct of using the name V. Mitolo and Son has induced error and is likely to induce error. It cannot be said to be transitory or caused by the consumer’s own misconceptions.
The first respondent has contravened s 18 and s 29(1)(h) of the ACL. The applicants alleged that Vito and Tony were knowingly involved in the contraventions (ss 2 and 236 of the ACL). That allegation was not the subject of extensive submissions. Nevertheless, I think it is correct. Vito was the sole director and secretary of the company, and, according to him, owned half the shares. Tony owned half the shares, was responsible for marketing and designing the labels and appeared to be in charge of financial matters.
Passing Off
The applicants referred to passing off in their Further Amended Statement of Claim, but it was not as clearly pleaded as it should have been. Nevertheless, the case was conducted on the basis that it was a live issue before me. As developed in closing submissions, the case was that by offering for sale red wines bearing the McLaren Vale geographic indication from a location very near to the applicants’ cellar door and utilising the name V. Mitolo and Son, the first respondent was representing that the wines are, or are associated with, the wines made by the applicants.
The relevant principles are well-known. I take the liberty of repeating what I said in Coca-Cola Company v PepsiCo Inc (No 2) [2014] FCA 1287; (2014) 109 IPR 429; (2014) 322 ALR 505 at [251]–[252], [258]–[260]):
251The three core concepts in the law of passing off are reputation (in the relevant mark or other indicia), misrepresentation (leading to deception), and damage to goodwill (or the likelihood thereof): Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 (“Conagra Inc v McCain Foods”) at 356 per Gummow J.
252In Reckitt and Colman Products Ltd v Borden Inc and Others (1990) 17 IPR 1, Lord Oliver of Aylmerton described the three elements in the following terms (at 7):
... First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying get-up (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.
(see also TGI Friday’s Australia Pty Ltd and Another v TGI Fridays Inc and Another (1999) 45 IPR 43; [1999] FCA 304).
…
258Where an applicant alleges that a respondent has engaged in passing off by using a trade mark or similar indicium, he must show that his own trade mark or indicium is known in the relevant market and the reputation associated with the mark is, to some degree, substantial. Passing off includes a representation by the respondent that leads a consumer or customer to believe that the respondent’s business is associated with the applicant’s business (Erven Warnick BV v J Townend & Sons (Hull) Ltd [1979] AC 731, at 741‑742 per Lord Diplock).
259The tort of passing off is complete upon the making of the representation and relief may be granted even if any deception or erroneous belief in the mind of a consumer or customer is dispelled before sale: Caltex Oil Australia P/L v S & M Motor Repairs Pty Ltd (1987) AIPC 90‑931. That means that in a case such as the present the tort will be complete even if on reaching the cash register the consumer realises his mistake and does not proceed with the purchase. The same applies to the misleading or deceptive conduct claim. The fact that a purchase does not proceed will be relevant to damages, not liability. At the same time, it is important to note that confusion by itself is not enough to establish passing off or misleading or deceptive conduct.
260The plaintiff in a passing off action need not prove an actual subjective intention to mislead: Sydneywide Distributors v Red Bull Australia Pty Ltd at 372 per Weinberg and Dowsett JJ (with whom Branson J agreed). However, it is well‑established that proof of an actual subjective intention to mislead will be evidence in a borderline case that the defendant’s conduct has misled or deceived its audience: Australian Woollen Mills v Walton at 657 per Dixon and McTiernan JJ. A distinction must be drawn between an intention to copy and an intention to deceive. For the principle identified by Dixon and McTiernan JJ in Australian Woollen Mills v Walton to be engaged, an intention to deceive must be shown, and an intention to copy does not always indicate an intention to deceive: Conagra Inc v McCain Foods at 345 per Lockhart J; Apand Pty Limited v The Kettle Chip Company Pty Limited (1994) 52 FCR 474 at 495.
For similar reasons to those which I have given in relation to the claim of misleading or deceptive conduct, passing off has been established. The evidence of Frank and the substantial period over which Mitolo Wines has operated using the Mitolo mark mean that it has, in connection with wines, a substantial reputation in the market. It is true that the wines differ in terms of labelling and the circumstances under which they are ordinarily sold. However, it is sufficient if an association is conveyed and the evidence of instances of actual confusion, in the sense of error, dispels any notion that differences in labelling and premises has prevented error arising.
The Cross-Claim
I have dealt with the estoppel plea in the context of the respondents’ defence to the applicants’ claim. The estoppel in materially the same terms is pleaded in the respondents’ Cross-Claim and its factual basis is the basis for the respondents’ claim against the applicants for a contravention of s 18 of the ACL. For the reasons I have already given, it must be dismissed.
The respondents’ Cross-Claim must be dismissed.
CONCLUSIONS
The applicants have abandoned any claim for past infringement in the United States in relation to the modified WAVEFORM range of wine and they do not contend that the OZTALIA range of wine infringes the Mitolo mark.
The other uses of V. Mitolo and Son, for example, those uses identified in subparagraphs (2) and (3) of [292] do involve an infringement of the Mitolo mark. The exception involving the use in good faith of a person’s name is not made out and the estoppel claim or defence is not made out with respect to any relevant act of infringement.
The causes of action for contraventions of ss 18 and 29(1)(h) of the ACL and passing off are also made out.
I will hear the parties as to the final orders which should be made. To that end, the applicants should file and serve draft minutes of order reflecting the conclusions in these reasons within 14 days. The respondents should, within a further seven days, indicate by letter whether they agree with the applicants’ draft minutes of order, or, if they do not, file and serve their own draft minutes of order.
I certify that the preceding three hundred and seventy-one (371) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate:
Dated: 13 June 2019
ANNEXURE A
The applicants sought to adduce evidence of confusion in the market place between the applicants’ wine products and those of Vito Mitolo & Son. The applicants contended that this evidence was not hearsay evidence because they were not seeking to prove the truth of the representations or statements. In the alternative, if it was hearsay, it was admissible under the Evidence Act 1995 (Cth). The applicants had served a notice under s 67 of the Evidence Act of their intention to adduce the evidence.
1. Frank’s Evidence
(a)In paragraph 94.2 of his first affidavit, Frank deposed to the fact that on 16 June 2016 a Twitter user, whose identity beyond the name of the user’s Twitter account “Willunga Wino” is not known to Frank, made a post on Twitter which mentioned the applicants’ Twitter account in connection with Pizzateca. He produced the post.
The objection to this evidence was that the identity of the Twitter user was capable of being identified and there was no evidence that all reasonable steps have been taken by the applicants to locate and compel the person to give evidence.
The applicants put three arguments in support of the admissibility of the evidence. First, the evidence is not hearsay evidence within s 59 of the Evidence Act. Secondly, even if it is hearsay evidence, it falls within the exception in s 66A of the Evidence Act. Thirdly, even if it is hearsay evidence, it falls within the exception in s 63(2) or s 64(2) of the Evidence Act.
I ruled that the evidence was admissible.
It was convenient for counsel to deal with the objections to the evidence by putting full argument in relation to the first objection and then accepting the ruling in the case of subsequent objections. That was undoubtedly a convenient course, although it somewhat obscured the fact that slightly different problems arose with respect to some of the subsequent objections. I do not think counsel considered them material, and, in the circumstances, I propose to deal with the matter in a general way. There is a respectable argument that the evidence is not within s 59(1) of the Evidence Act because it is not being adduced to prove the truth of any fact asserted in the statements, but rather a state of wonderment or error (Ratten v R [1972] AC 378 at 387 (PC); HP Bulmer Ltd and Showerings Ltd v J Bollinger SA and Anor [1978] 95 RPC 79 at 106 per Buckley LJ). However, I do not need to pursue that issue because I consider all of the evidence which was the subject of objection is admissible under s 66A as evidence of a contemporaneous representation about a person’s knowledge or state of mind (Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968; (2004) 209 ALR 93 at [17] per Finn J). Furthermore, to the extent s 66A does not apply, one or other of the exceptions in s 63 (maker not available; as to which see the Dictionary to the Act, Part 2, 5.4) s 64 (make available but undue expense or undue delay would be caused) applies.
(b)In paragraph 94.10 of his first affidavit, Frank deposed to the fact that on 28 November 2016, the Premier of South Australia published a Facebook post in relation to the applicants. In response, a number of Facebook users posted comments. One of these comments from a user called “Blacky Whitey” was “@pizzatecca.yum”. He produced the posts.
The objection to this evidence was the same as it was in relation to paragraph (a) and the applicants’ arguments were the same as they were in relation to paragraph (a). I ruled that the evidence was admissible for the same reasons.
(c)In paragraph 94.12 of his first affidavit, Frank deposed to the fact that on 11 June 2017, a member of the public made an Instagram post referring to the McLaren Vale Sea & Vines Festival and the applicants.
In paragraph 94.13 of his first affidavit, Frank deposed to the fact that in an undated Instagram post, a member of the public posted photographs of two locations at the Pizzateca premises at the Chalk Hill Road property, but referred to “#mitolo” and “#mitolowines”.
He produced the posts.
The objection to this evidence was the same as it was in relation to paragraphs (a) and (b) and the applicants’ arguments were the same as they were in relation to paragraphs (a) and (b). I ruled that the evidence was admissible for the same reasons.
2. Ms Melanie Minear’s Evidence
Ms Minear is Ms Czuchwicki’s sister. She works as a florist.
The applicants sought to adduce the following evidence from Ms Minear which was objected to by the respondents:3.In around June 2016 a woman named Rosa who works with me as a florist mentioned to me that she was attending the Sea & Vines Festival at McLaren Vale and as part of that festival she was going to visit “Frank Mitolo’s cellar door, Pizzateca.”
5.In around May 2017 my friend, Michael Gagliardi, attended at my home at Glen Osmond. He said, “I’ve just been to the Mitolo cellar door. I got a pizza there”.
6.I was confused because I knew from Kirsty-Marie that the Mitolo Wines cellar door was still under construction. I told Michael that Mitolo Wines didn’t have a cellar door yet. He responded by saying that the place that he had been to “had the name Mitolo all over it”.
The respondents’ objections to this evidence were framed as follows:
(i)Paragraph 3: Identity of maker of representation known and calling the maker would not unnecessarily prolong the trial as evidence of Ms Minear would not be required.
(ii)Paragraphs 5 and 6: Identity of maker of representation known and calling the maker would not unnecessarily prolong the trial as evidence of Ms Minear would not be required. Inadmissible to prove extent of signage unless maker of statement able to be tested on observations.
I ruled that this evidence, save and except for the evidence in the last sentence in paragraph 6, was admissible for the same reasons.
3. Ms Joanna Hawkins
Ms Hawkins is Frank’s executive assistant. She has held this position since 8 June 2017. Prior to that time, she worked at Sportsmed SA Orthopaedics Pty Ltd (Sportsmed). In the course of preparing for her new role at Mitolo Wines, she carried out research in relation to Frank and Mitolo Wines. She also learned about the commercial activities of Vito and Tony in McLaren Vale. She had a conversation with two of her colleagues at Sportsmed shortly after she advised Sportsmed that she was leaving to take up a new role with Mitolo Wines. Those colleagues were Mr Alex Frost who was the commercial operations manager and Mr Nathan Cretteden who was the IT manager. Those colleagues said to her “We’ve been to Frank’s restaurant, Pizzateca”. Ms Hawkins said in response words to the effect that, “Pizzateca was operated by a cousin of Frank’s and there was no connection with Mitolo Wines”. That conversation took place in early June 2017.
The respondents’ objection to this evidence was as follows:
Identity of possible maker of statement known. Calling the maker of the statement would not unnecessarily prolong the trial. Representation is attributed to two people by the use of plural “we”.
I ruled that this evidence was admissible for the same reasons, but propose to put little weight on it for the reason given in the body of these reasons.
4. Ms Karen Stevens
Ms Stevens is a psychologist and a friend of Ms Czuchwicki. She swore an affidavit which contained the following:
2.In around September 2016, I was speaking with my friend Georgina Pazios over dinner when she told me about this new pizza place called Pizzateca that her daughters had been to. She said words to the effect that Pizzateca was part of Mitolo Wines.
3.Georgina told me that Pizzateca was near their holiday house at Victor Harbour. She suggested that we go there next time my fiance and I visited.
4.I felt confused because I hadn’t heard Kirsty-Marie mention anything about Mitolo Wines opening a pizza place. I surmised at the time that Pizzateca must be part of their wine business, perhaps their cellar door. I based this belief on my familiarity with Mitolo Wines through Kirsty-Marie.
5.I telephoned Kirsty-Marie a few days later and asked her about Pizzateca. She told me that it was not part of Mitolo Wines but it was a restaurant operated by a cousin of Frank’s.
6.Next time I saw Georgina I told her that Pizzateca was not affiliated with Mitolo Wines. She expressed surprise.
The respondents objected to paragraphs 2 and 3 in the following terms:
Identity of the maker of the statement known and calling the maker of the statement would not unnecessarily prolong the trial as the evidence of Stevens would not be required.
I ruled that this evidence was admissible for the same reasons, but propose to put little weight on it for the reason given in the body of these reasons.
SCHEDULE OF PARTIES
SAD 340 of 2016 Cross-Claimants
Second Cross-Claimant:
VITO MITOLO
Third Cross-Claimant:
ANTHONY MITOLO
Cross-Respondents
Second Cross-Respondent
MITOLO WINES PTY LTD (ACN 112 011 560)
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