Monaco Willows Pty Ltd v Greenbax Pty Ltd
[1996] FCA 743
•27 AUGUST 1996
CATCHWORDS
Trade Practices - Misleading and deceptive conduct - Passing off - Conduct of restaurant under same name as existing shopping centre food hall outlets - Whether name "La Piazza" is descriptive - Whether name is distinctive of the applicant's food hall outlets - Consideration of the extent to which custom, reputation and goodwill of applicant's outlets were derived from use of its name - Whether use of the same name by the respondent's restaurant amounted to a representation that its business, goods and services were associated or otherwise connected in the course of trade with the applicant's outlets.
Trade Practices Act ss.52, 53(c) & (d).
Equity Access Pty. Ltd. v. Westpac Banking Corporation and Another (1989) 16 IPR 431
Conagra Inc. V. McCain Foods (Aust.) (1992) 33 FCR 302
Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. (1982) 42 ALR 177
Opals Australia Pty. Ltd. v. Opal Australiana Pty. Ltd. [1993] ATPR 41-264
Lego Australia v. Pauls (1982) 42 ALR 344
VG\170\95 MONACO WILLOWS PTY. LTD. V. GREENBAX PTY. LTD.
MERKEL J.
MELBOURNE
27 AUGUST 1996
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION No. VG170 of 1995
B E T W E E N:
MONACO WILLOWS PTY. LTD.
(ACN 006 816 333)
Applicant
and
GREENBAX PTY. LTD.
(ACN 062 750 369)
Respondent
Coram:Merkel J
Place:Melbourne
Date:27 August 1996
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The proceeding be dismissed.
The Applicant pay the Respondent's taxed costs of the proceeding.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION No. VG170 of 1995
B E T W E E N:
MONACO WILLOWS PTY. LTD.
(ACN 006 816 333)
Applicant
and
GREENBAX PTY. LTD.
(ACN 062 750 369)
Respondent
Coram:Merkel J.
Place:Melbourne
Date:27 August 1996
REASONS FOR JUDGMENT
Introduction
This matter involves a contest over the right to use the name "La Piazza" for an Italian restaurant.
The applicant conducts three take-away Italian food outlets at the Box Hill Central, Northland and Australia on Collins shopping centres in the Melbourne area under the name "La Piazza".
Since June 1994 the respondent has conducted an Italian restaurant in the Melbourne suburb of Templestowe under the name "La Piazza".
On 3 April 1995 the applicant commenced proceedings seeking injunctions to restrain the respondent from using the name "La Piazza" in relation to the business conducted by it at Templestowe. The applicant contended that the use of the name "La Piazza" by the respondent constituted conduct in breach of ss.52, 53(c) and 53(d) of the Trade Practices Act 1974 and also the passing off of the respondent's business, goods and services as and for the applicant's business, goods and services.
A critical element in establishing the applicant's contentions was its allegation that the use of the name "La Piazza" by the respondent for the purposes of its business amounted to a representation that the business of and the goods and services provided by the respondent were that of or were affiliated or otherwise associated in the course of trade with, the business of or the goods and services provided by the applicant.
La Piazza - the applicant's take-away food outlets
The present business of the applicant commenced with the setting up of a "La Piazza" Italian food outlet in the food court at the Box Hill Central Shopping Centre in 1984. In 1987 the second "La Piazza" outlet was established in the food court at the Northland Shopping Centre. Finally in 1992 the third "La Piazza" outlet known as "La Piazza on Collins" was established in the food court at the Australian on Collins Shopping Centre in the central business district of Melbourne.
Although there are some seating facilities within the areas used by outlets in the food courts the modus operandi is for each outlet to display the food and beverages available for sale to the public at a counter facing the large open area in the food court. The food or beverages purchased by the public are either taken away for consumption out of the food court or, more usually, consumed at one of the tables situated in the court. There are numerous outlets competing with each other in the food courts.
Although some of the applicant's witnesses preferred to describe the La Piazza outlets as a "cafe" or a "restaurant" it is more appropriate to refer to them as take away food outlets. They were described and classified as such in the White and Yellow Page Telephone Directories. Such a description is not a derogatory one. Substantial care, expense and thought was put into the decor, general appearance and quality of the food, beverages and service offered at the three outlets.
Since 1992 a distinctive appearance was created for the outlets. The look adopted was described as -
In the nature of a rustic Florentine look, using wrought iron, granite bench tops, rich timber veneers, Italian hand-made mosaics, hand-made wrought iron light fittings, and the walls (which were pained with a special "rag finish") have a Tuscan ochre look.
Special clothing was selected for the staff and in general a higher quality image was established for the La Piazza outlets particularly at Northland and Australia on Collins. The food was progressively changed to a more sophisticated Italian cuisine which included -
ingredients like artichokes, pesto, dried tomatoes, roast capsicums, eggplants, capers and focaccias. It was said to be Italian cooking with a rural flavour. Daily specials were offered which were intended to correspond to dishes that one might expect to find in the more upmarket Italian Cafes.
A distinctive "La Piazza" logo was used on food packaging, ceramic plates, cups, saucers, serviettes and business stationery.
The obviously distinctive style, food, quality and service resulted in the three businesses proving to be quite successful. At the present time the three outlets employ almost 50 staff and on average serve about 10,000 customers (which includes repeat customers) per week. A significant number of those customers are at La Piazza on Collins. The annual turnover of the three outlets is about $2 million.
The outlets are open during shopping hours at each of the centres. The two suburban outlets rely substantially on the passing trade of shoppers from areas surrounding those centres. The city outlet draws on shoppers and workers in and in the vicinity of, the Australia on Collins centre. Consumers in the city outlet are drawn from the Melbourne metropolitan area but are more likely to come from Melbourne's eastern suburbs.
The success of the outlets is attributable to a mixture of the quality of product and service and the attractive and distinct appearance of the outlets, staff and products for passing trade.
There was little direct advertising of any of the La Piazza outlets. Whilst some advertising and public relations endeavours were undertaken from time to time they were usually associated with a special event, such as a food festival or the opening of a centre, or were minor and sporadic.
The evidence was not precise as to the reasons why customers chose the La Piazza outlets for their purchases of food and beverages. However, I am satisfied that the goodwill relied upon by the three outlets for their custom was generated primarily by the appearance and quality of each outlet and its products and services as presented to the public at the outlet itself. On the basis of the evidence presented before me and a view by me of each of the outlets, I have concluded that it was those matters, rather than any goodwill inhering in the name itself, which constituted the essential elements in the success of the business.
That conclusion is of importance in the present case. Whilst it does not mean that the "La Piazza" name as adopted, used and presented to the public at each outlet was of no significance, it does mean that the primary element in the presentation of the business at each outlet to the public was the overall appearance of the outlet and its products and services. Although the name was an aspect of that presentation the evidence did not establish that it occupied an important role in a customer's decision to visit or acquire food or beverages from a La Piazza outlet.
A difficult question in this case has been the precise identification of the role of the name in the business. Normally a business or trade name is the primary mode by which the business identifies its products or services to the public or to potential customers. Accordingly, extensive endeavours are usually undertaken to advertise, promote and acquaint the public with its business or trade name. That is usually the situation in respect of restaurants or food outlets which endeavour to develop or rely upon a distinctive or special repute. It is not necessarily the situation in respect of take-away food outlets in a food court which are primarily designed and conducted to attract the custom of passing traffic in the food court at a shopping centre.
Consequently in the present case the failure to adduce precise and detailed evidence of the role of the business name "La Piazza" in establishing the goodwill of the outlets and reliance upon more general opinion evidence as to that role, carried the risk that the applicant may not establish a distinct repute for its name extending beyond the immediate areas in which the outlets operate. In general the applicant's case seemed to assume that volume of business led to name awareness. I do not accept that the assumption made is warranted in respect of the applicant's outlets.
La Piazza - the respondent's restaurant
On 11 February 1994 the respondent acquired an existing seafood restaurant business at Shop 1, 124 James Street Templestowe. Shortly prior to acquiring the business the respondent arranged for its solicitors to ascertain whether "La Piazza" was available as a business name. Due to inadvertence by the applicant's accountant its registration of that name had lapsed. Accordingly, it was available to and taken up by the respondent for its new business. The name was selected by the respondent's directors as they wished to create the image of an Italian piazza or square within the restaurant. Subsequently architects were engaged to design an interior with that image which was to be "light, airy and with visual appeal".
After taking possession on 25 March 1994 the respondent renovated the premises in preparation for their use as an Italian restaurant with an "upmarket" Italian cuisine.
The business opened in June 1994. It has been advertised as a "Restaurant.Bar.Cafe" in the local newspapers and in the White and Yellow Telephone Directories.
The restaurant's customers are derived mainly from telephone bookings for dinner with a smaller luncheon trade. It has little passing trade, an "a la carte" menu with full waiter service and is fully licensed. In general, the customers are drawn from within a radius of 10 kilometres from the restaurant with most coming from areas close to the restaurant in and around Templestowe. The "Italian" food provided by the
respondent is in a quite different category to that provided by the applicant.
The main advertising for the restaurant is in the local press including the Leader newspaper which is, in part, distributed in the Box Hill area. Although the restaurant is more than 8 kilometres from the Box Hill Shopping Centre, more than 11 kilometres from the Northland Shopping Centre and even further away from the Australia on Collins Centre, it is likely that some of its local press advertising will extend to individuals who are customers of the applicant's outlets, with the most likely overlap being in the Box Hill area.
The respondent has maintained a data base of its customers and regularly circulates its own news letter to those customers. Apart from the use of the common business name "La Piazza" and the fact that each provides Italian food there is nothing else in the get-up, products, services, design or the manner of usage of the business name by the respondent that could associate it in any way with the applicant or the business, products or services of the applicant.
Confusion between the two businesses
Evidence from witnesses that they were misled by the respondent's use of "La Piazza" can be relevant to, although not determinative of, the issues arising in a case such as the present.
The applicant called a number of witnesses who had some connection with or were otherwise aware of its business. Their evidence was somewhat equivocal and swayed between confusion as to whether there was a connection by reason of the common business name to a belief that the use of the common name meant there was a connection. Only one of the witnesses called by the applicant had been a customer of both businesses in the usual and ordinary course. Whilst I accept that the use of the common name may put some individuals who are familiar with the business name used by the applicant on inquiry as to whether there might be a connection between the two businesses, I am not satisfied, as a matter of objective fact, that such persons are entitled to conclude that there is a connection. In all of the circumstances I am not prepared to infer from the evidence adduced from these witnesses called by the applicant that the mere use of a common name by the respondent for the purposes of its business conveyed any misrepresentation of fact to them or was otherwise conduct which misled or deceived them.
In contrast the evidence of Mr. Di Manno, a director of the respondent, which I accept, was -
"The La Piazza restaurant business has been operating since June, 1994. In that period, it has dealt with many suppliers and served thousands of customers. To the best of my recollection, no supplier or customer has ever suggested or raised the possibility of the restaurant having any connection or association with the La Piazza take away food businesses at Northland, Box Hill or in the City of Melbourne."
Evidence was also adduced from "experts" called by both sides as to the extent to which the applicant had established goodwill or repute through use of the name "La Piazza".
The applicant's witnesses gave evidence that the name was of significance to the value of the applicant's business and that customers are drawn by the name which is part of the applicant's goodwill in the conduct of its food court business.
Mr. Claude Forell, a journalist and restaurant reviewer, was called on behalf of the respondent. His evidence was that, putting aside the well known national chain outlets such as McDonalds, there is very little goodwill in the name used by take away outlets in a food court. He said that the goodwill and repute of outlets such as those conducted by the applicant is derived from the manner it presents its products and services to the public at each outlet rather than the name it uses to do so. In cross-examination Mr. Forell said:
But it would be - if I could put this proposition to you: that a business that trades from a food court to its particular client base over an extended period of time could establish a name which would become known to the particular consumer?---I would say that the food courts rely predominantly on an ever changing, high volume passing trade. there may be people who go back, perhaps in the city, to the same place for lunch day after day or once a week, but I think in the suburban complexes it's a constantly changing clientele and people I would think - as I am - would be attracted by what is on display. You might remember, yes, there is a nice italian place there. The name is not terribly important. You don't have to make a booking, for example. You don't have to remember the name. You simply have to remember that yes, there is food there, and if I want to eat italian today, that's where I'll go. I remember there it is but the name is not so important. That's my opinion.
In general I found the opinion evidence given by the "experts" as to the role of the name "La Piazza" as ambivalent and ultimately of little assistance to the applicant's case. Although the evidence did not negative a role for the name within the food court and its immediate environs I was left in a state of some uncertainty as to the precise role the name "La Piazza" occupied in the promotion of the applicant's business, products and services. In particular I was left in a state of considerable doubt as to whether the name occupied any role of significance in relation to the goodwill and repute of the outlets which extended beyond the food courts and their immediate environs.
"La Piazza"
A "piazza" is
an open square of public place in a city or town. 2. an arcade or covered walk or gallery, as around a public square or in front of a building. Macquarie Dictionary.
a public square or market-place, usu. one in an Italian town; but in 16th to 18th c. often applied to any open space surrounded by buildings. 2. Erron. applied to a colonnade or covered gallery surrounding an open square, and hence to a single colonnade in front of a building. Shorter Oxford Dictionary.
Mr. Forell, described "piazza" as -
a common Italian word for a large, open town square or marketplace, and is widely understood in English as such. It is akin to the word plaza, which derives from the same Latin (platea) and Greek (plateia) roots.
He added -
"La Piazza" is a fairly obvious though not particularly original name for an Italian-style restaurant or cafe. For an owner, the name lends itself to a decor suggestive of an Italian town square or courtyard; to the potential consumer, it may convey images of pasta, pizza, and coffee and by association, other Italian specialities.
Interestingly, the use of "La Piazza" by the applicant and the respondent for their respective businesses was apt. For the applicant it describes the location of an Italian style food outlet in a covered food court akin to an open square or market. For the respondent it describes the square or piazza image which it sought to create within its restaurant.
The law
The Court has considered numerous situations in which traders or competitors have been using or are proposing to use substantially the same or similar business or trade names in overlapping geographic areas within Australia.
In Equity Access Pty. Ltd. v. Westpac Banking Corporation and Another (1989) 16 IPR 431 at 440-442 Hill J set out a number of propositions which were relevant to the determination of such cases and were no longer in dispute. The relevant propositions are:
For the conduct to be misleading or deceptive the conduct must convey in all the circumstances of the case a misrepresentation.
As outlined earlier the misrepresentation by the respondent is said to be that by its use and advertisement of the business name "La Piazza" it was representing that its business, food products or services were that of or were associated with the business, food products or services of the applicant:
There will, however, be no contravention of s.52(1) of the Act unless error or misconception results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible.
The conduct in question is the respondent's conduct and advertisement of its restaurant under and by reference to the name "La Piazza". It is relevant that, in general, the respondent describes and advertises the business it conducts under that name as a "Restaurant.Bar.Cafe". It does not conduct or represent itself as conducting a take-away food outlet.
Conduct will be likely to mislead or deceive if there is a "real or not remote chance or possibility" of misleading or deception regardless of whether it is less or more than 50 per cent. The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the court must determine for itself. Hence evidence that persons in the relevant class have been misled will, although admissible, not be determinative. In some cases however such evidence will be very persuasive.
For the reasons I have already set out I have not found the evidence of persons said to have been misled to be persuasive.
Conduct of a corporation causing mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source is not necessarily coextensive with misleading or deceptive conduct. Since actual deception need not be shown the court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived. The test in passing off cases is usually expressed as being whether a "substantial number of persons likely to become purchasers...are liable to be deceived by the defendant's use of the name. On the other hand it is not necessary to show that all, or substantially all, persons in the market associate the name with the plaintiff's goods, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question.
I have already commented on the possibility of confusion or uncertainty in some members of the public as to whether there might be a connection between the two businesses. However I was not satisfied on the evidence that it was likely that those persons will proceed to the next step and conclude that there is a connection. I will return to this issue later in these reasons.
In a case such as the present the applicant must establish that it has acquired the relevant reputation in the name, that is to say that the name had become distinctive of the applicant's business in a particular country or geographical area.
Whilst I have accepted that it may be open on the evidence to conclude that the applicant has established a reputation in its name for its business, products and services in the food courts and their immediate environs that evidence falls short of establishing that reputation outside of those areas. Of course, it can be expected that some individuals outside of those areas will be aware of the applicant's repute and name but it does not follow that the number of such individuals is substantial or is not insignificant: see Conagra Inc. V. McCain Foods (Aust.) (1992) 33 FCR 302 at 352 per Lockhart J.
Section 52 is not confined to conduct which is intended to mislead or deceive and a corporation which acts honestly and reasonably may none the less engage in conduct that is likely to mislead or deceive.
I am satisfied that the respondent did not intend to mislead or deceive. In using the name "La Piazza" it acted honestly and reasonably. However, if the relevant misrepresentation was established I accept that these matters would not afford a ground of defence to the claims of the applicant.
Hill J also referred to four guidelines established by Deane and Fitzgerald JJ in Taco Company of Australia Inc. v. Taco Bell Pty. Ltd. (1982) 42 ALR 177 at 202-3.
First, it is necessary to identify the relevant section (or sections) of the public (which may be the public at large) by
reference to whom the question of whether conduct is, or is likely to be, misleading or deceptive falls to be tested...
Second, once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, "including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations...
Thirdly, evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading or deceptive or likely to mislead or deceive. The court must determine that question for itself. The test is objective.
Finally, it is necessary to inquire why proven misconception has arisen. The fundamental importance of this principle is that it is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent.
Although the applicant's, but not the respondent's, evidence suggested that the relevant section of the public which may be misled or deceived includes trade suppliers I am not satisfied that this is correct. Any actual or potential suppliers who are aware of the repute of the applicant may be uncertain as to whether there is a business connection between the two businesses. However, I have no doubt that such persons would not accept that the mere usage of a common name by the different businesses evidences such a connection. In the usual course I would expect that suppliers would, as occurred in the present case, inquire as to a connection and be informed that there is no connection.
However, the situation is different for the actual or potential customers of the respondent's business who constitute the relevant section of the public in the present case. Such persons could be expected to respond positively to
the use or advertisement of a name by the respondent whose repute had been qualitatively established in their mind in connection with the provision of Italian food products or services. The issue is whether there has been a misrepresentation in the relevant sense to the actual customers of the respondent's restaurant and those to whom the respondent's restaurant and services are promoted or advertised in the Templestowe district and the surrounding areas including Box Hill.
Hill J also considered whether any different or additional principle applies when the name in respect of which the relevant repute must be established is a descriptive trade name. That is relevant to the present case as although the words "la piazza" are Italian I have already indicated and accepted that they have a descriptive meaning in English. Indeed, it was that meaning which was resorted to, in different ways, by both the applicant and the respondent.
I adopt the conclusion expressed by Hill J at 448:
Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between, names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff's business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this - a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.
That conclusion is consistent with that of Lockhart J in Opals Australia Pty. Ltd. v. Opal Australiana Pty. Ltd. [1993] ATPR 41-264, 41,556 at 41,563.
The words "opal" and "Australia" are two descriptive words. The mere fact that a word is descriptive does not necessarily prevent it from being distinctive of somebody's goods or services; but if a word is prima facie descriptive it becomes more difficult to establish that it is distinctive of the plaintiff's goods or services. Also, if a plaintiff does not use a descriptive word simply for the purpose of distinguishing his own goods or services from those of others, but primarily for the purpose of describing the particular kind of article or service to which he has applied it, and only secondarily, if at all, for the purpose of distinguishing his own goods or services, it will be more difficult for him to establish that it is distinctive of them.
Where the name of a business consists of words descriptive of that business and which have not acquired a secondary meaning, a slight difference between the plaintiff's and defendant's title will in the absence of fraud be a sufficient distinction: Office Cleaning Services Ltd. v. Westminster Window & General Cleaners Ltd. (1946) 63 RPC 39.
These observations are significant. They emphasise the burden which is imposed on an applicant seeking relief in respect of a descriptive name to establish that it has a secondary meaning which is associated with the applicant's business, products or services.
The importance of that issue in respect of the use of descriptive words was again emphasised in Conagra Inc. v. McCain Foods (Aust) Pty. Ltd. (1992) 33 FCR 302. In that case the Full Court upheld the decision of Hill J at first instance that the applicant had failed to establish on the evidence, on the balance of probabilities, that there existed in the relevant geographic region, a sufficiently substantial number of persons who were aware of the applicant's products and for whom the descriptive name "Healthy Choice" would have acquired a secondary meaning that is to say, a meaning signifying the applicant's "Healthy Choice" product: see Lockhart J at 306-7 and 353 Gummow J at 353-5 and French J at 375 and 378-9.
In the present case for the reasons set out earlier I am not satisfied that the applicant has established on the evidence, on the balance of probabilities, that there existed in the relevant geographic area, being Templestowe and a surrounding area with a radius of approximately 10 kilometres (which includes Box Hill), a sufficiently substantial number of persons who were aware of the applicant's outlets and for whom the name "La Piazza" had acquired a secondary meaning signifying the applicant's business, products or services or some association in the course of trade with that business or those products or services.
The problem in the applicant's case before me is that I have been asked to assume that the extensive custom and goodwill of its business is derived, to a significant extent, from the repute it has developed by the use of its business name "La Piazza". However, I was not satisfied that that conclusion was one which I could draw from the evidence before me. In particular, whilst I can accept that some goodwill and repute inhere in the name "La Piazza" in and in the immediate environs of the respective food courts I am not satisfied that a more extensive and general goodwill and repute in the name has been established. The minor and sporadic general advertising of the applicant's business affords support for my conclusion as it signifies that the real drawcard for the business is its presentation to the public at the outlets to passing trade.
Extensive reliance was placed by the applicant on the decision in Taco Bell. It was said to be on "all fours" with the present case. I cannot agree. That case concerned the repute established by the applicant's existing "Taco Bell's Casa" Mexican restaurant. The applicant's case was that the establishment, by an overseas food chain of the respondent's restaurants using the name "Taco Bell", would breach s.52 and constitute the tort of passing off. Critical to the end result was the finding in Taco Bell (1981) 40 ALR 153 at 160-161 by Ellicott J at first instance:
I don't think there can be any real doubt on the evidence before me, that the truly distinctive feature of the applicant's restaurant which fixed in the customer's mind is the name "Taco Bell's Casa". On seeing the name "Taco Bell" as the name of a fast-food outlet in George Street, I think it natural that a customer of "Taco Bell's Casa" would think there was some business connection between the two. The fact that the businesses are different and that the "Taco Bell" restaurants have the distinctive features in their get-up etc. would not, in my opinion, prevent this conclusion from being drawn.
For the reasons I have set out I am not satisfied that the name "La Piazza" has been established as a truly distinctive feature of the applicant's outlets.
In dismissing the appeal at 204-5 Deane and Fitzgerald JJ said:
The s.52 claim against the US company
By September 1981 the Bondi company had by virtue of its operations, acquired a significant local reputation and goodwill throughout Sydney, especially, but not only, in the Eastern Suburbs, in respect of a Mexican food restaurant known and associated with
names consisting of or including the words "Taco Bell". However, that reputation was related only to its particular Mexican food restaurant at Bondi, and not to any more general use of that name. The appellants, on the other hand, also had a reputation in Sydney prior to September 1981, by reference to a substantially identical name, not in connection with a local business, but only in connection with their overseas operations.
The first question which arises is whether there exists, or whether there is likely to exist, in the minds of the relevant section of the public a belief in a connection between the first appellant's restaurants at Granville and George Street, Sydney and the first respondent's restaurant at Bondi. If so, it is necessary to decide why that misconception has arisen or is likely to arise. The relevant section of the public is not a narrow one. It consists at least of persons who know of the existence in Sydney of the US company's Taco Bell chain of Mexican food restaurants and of the existence at Bondi of a Mexican food restaurant named "Taco Bell's".
If all that the US company had done had been to open one Mexican food restaurant in a Sydney suburb under the name "Taco Bell", we entertain some doubt as to whether it could properly be held that the mere adoption and use of that name in respect of another Mexican food restaurant in a quite different part of a large metropolis like Sydney could properly be seen as a representation that the new restaurant business and the Bondi company's restaurant business were connected. It is not, however, necessary to form or express any concluded view on that question. The US company's conduct involves far more than the mere opening of one suburban restaurant under the name "Taco Bell".
It is clear from the evidence that the US company's restaurants in Granville and central Sydney must be seen as part of a proposed chain of Mexican food restaurants. The intentions of the US company in that regard are established by the evidence and have been made known to the public. In these circumstances, each of the US company's restaurants should and will be seen as part of a chain of restaurants established in Sydney and bearing the name "Taco Bell". It is inevitable that some members of the above-mentioned section of the public, who are unfamiliar with the actual operations of both the chain and the Bondi restaurant, already believe, or will in due course believe, that the Bondi company's restaurant is part of the chain. It is nothing to the point that any such persons are likely to be disabused if they actually attend the Bondi company's restaurant: for reasons which we have already given, s.52 contains no requirement that deception continue to point of sale.
Contrary to the findings in Taco Bell I have not been satisfied that the applicants goodwill and repute in its name extends beyond the immediate areas in which its outlets operate. In that regard an important element is my finding that it is the appearance of the outlets and their products and services as presented to passing traffic, including repeat customers, rather than the name, that attracts custom.
Further, the doubt expressed by Deane and Fitzgerald JJ as to the applicability of s.52 if only one "Taco Bell" restaurant was proposed in a different geographic area, adds a note of caution to cases such as the present. That is particularly so in the light of the important distinction between an outlet in a food hall and a restaurant in a quite different part of a large metropolis like Melbourne.
In all the circumstances of the present case I am not satisfied that the use of the name "La Piazza" by the respondent could properly be seen as a representation that the new restaurant business and the applicant's take away food outlets were connected or associated: see Lego Australia v. Pauls (1982) 42 ALR 344 at 352.
I have arrived at that conclusion by treating the applicant and the respondent as using the same name. In reality that approach does not do full justice to the case of the respondent. In fact not only does its business, products and services differ significantly from those of the applicant but the respondent promotes and advertises its restaurant as a "Restaurant.Bar.Cafe". An example of the distinction between the two businesses in that regard is in their respective consecutive entries in the White Pages Telephone Directory which was as follows:
La Piazza - Restaurant.Bar.Cafe
124 James Tmpstwe........ ........ ........ ...9846 5211
La Piazza Take Away Food
Melbourne 260 Collins........ ........ .......9650 7498
Shp 27c NorthlandShopngCntrPres........ .....9471 0149
Box Hill Shp58BoxHillCentralShopngCntr......9890 3433
These additional distinctions further distinguish the respondent's business from that of the applicant.
Conclusion
For the reasons set out above I am not satisfied that the conduct, promotion and advertisement by the respondent of its restaurant business at Templestowe under the name "La Piazza" constitutes a misrepresentation that its business, products or services were that of or were affiliated or otherwise associated with the business, products or services of the applicant. It appeared to be common ground in the submissions of the parties that, absent such a misrepresentation, the applicant's claims for relief must fail. Accordingly the application is dismissed with costs.
I should add that if I had found that the applicant had established its case I would not have refused relief on the ground of waiver, estoppel or acquiescence on its part. In my view it acted reasonably and with due diligence in putting the respondent on notice of its claims in respect of the use of the name "La Piazza". Whilst it is true that it delayed in issuing proceedings I accept that it was quite appropriate for it to do so pending the availability of the evidence it regarded (wrongly, as it turned out) as sufficient to establish its case.
I certify that this and the preceding 22 pages are a true copy of the Reasons for Judgment of the Honourable Justice Merkel
Associate:
Dated:
Heard: 5, 6, 7 & 12 June 1996
Place:Melbourne
Judgment:27 August 1996
Appearances: Mr. C. Golvan instructed by Roth Warren Solicitors appeared for the applicant.
Mr. B. Hess instructed by Brett & Matisi Pty Solicitors appeared for the respondent.
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