Pro-Active Real Estate Pty Ltd v Real Estate Odyssey Pty Ltd and Ors

[2002] VSC 259

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
INTELLECTUAL PROPERTY LIST

No. 5647 of 2002

PRO-ACTIVE REAL ESTATE PTY LTD (ACN 084 069 732)	Plaintiff
v
REAL ESTATE ODYSSEY PTY LTD, MARIANNE TAYLOR, MARK BURKE, JEREMY TAYLOR AND ALLIED CONVEYANCING SERVICES PTY LTD	Defendants

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JUDGE:	HARPER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 JUNE 2002
DATE OF JUDGMENT:	26 JUNE 2002
CASE MAY BE CITED AS:	PRO-ACTIVE REAL ESTATE PTY LTD v REAL ESTATE ODYSSEY PTY LTD & ORS
MEDIUM NEUTRAL CITATION:	[2002] VSC 259

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CATCHWORDS:      Injunction – Interlocutory application – Alleged passing off by former franchisee – Whether a case to be tried – Balance of convenience – Application dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W. Stark	Carey van Rompaey
For the Defendants	Mr S. Minahan	Allied Lawyers & Consultants Pty Ltd

HIS HONOUR:

1. This is an application for interlocutory injunctions restraining the defendants from trading under the business name "Pro-Choice Real Estate".  Ancillary and complementary orders are also sought.

1. The plaintiff and the first defendant entered into a licence agreement dated 30 March 2000.  It provided that the first defendant could, in return for a fee, trade for the 12 months commencing on 27 March 2000 as "Pro-Active Real Estate (Langwarrin)".  On termination, the first defendant "shall forthwith cease using the [plaintiff's] name and shall remove the name, any logos, symbols, marks or other identification of the [first defendant] with the [plaintiff] from all its stationery, documents, signage, advertisements, sale boards or any other form of usage or display whatsoever."

1. Although the agreement was expressed to have a term of one year, it lasted for two.  By letter dated 14 March 2002, the first defendant gave notice of its "decision to withdraw from the Pro-Active group".  It is common ground that contractual relations were ended as at that date.  In a letter dated 15 March, the plaintiff's solicitors stated that their client "accepts your repudiation of the agreement and accordingly it is hereby terminated."

1. There is a body of evidence pointing to the conclusion that, in the immediate aftermath, the defendants or some of them sought to portray themselves as continuing the very same business under the very same banner.  Generally, the word "Active" in the name "Pro-Active Real Estate" was replaced by "Choice".  But not even that minimal change was immediately comprehensive.  Some advertisements for some properties continued to be displayed in the first defendant's shop-front under the name "Pro-Active Real Estate".  The same premises, telephone number and postal and email addresses continued to be used.[1]  Distinctive aspects of the plaintiff's advertising get-up continued to be incorporated into the first defendant's notices and advertisements.  This is true even of those published after 15 March.  Such advertisements displayed the change in name, as well as a different logo and slogan.  Many links with the plaintiff's advertising get-up were nevertheless retained – as pages 46-48 of the "Frankston/Hastings Leader" of 13 May 2002 reveal.  In other words, although a complete transformation overnight was clearly impossible, the initial changes were small;  and they could have been greater.  The first defendant also projected itself as having a two-year history, thus necessarily linking itself directly with the business it conducted when a licensee.  It would in my opinion be open to a tribunal of fact to conclude on this evidence that the first defendant was in the period immediately after 14 March passing itself off as a continuing member of the plaintiff's group of real estate agencies.

   [1]According to paragraph 16(b) of an affidavit sworn on 17 June 2002 by the third defendant, "the lease of business premises, telephone numbers, the set-up costs of over $200,000, computer software and staffing was (sic) the sole responsibility of [the first defendant] …"  I take it from this that the premises in Langwarrin were never occupied by the plaintiff;  although I note that in an affidavit by Nicholas Lynch sworn on 13 May 2002 and filed on behalf of the plaintiff, Mr Lynch says (at paragraph 23) that the first defendant "has set up in Langwarrin, at the same premises previously used by Pro-Active".  I infer that Mr Lynch was here referring to the fact that the plaintiff's flag once flew (if only metaphorically) over the Langwarrin office.

1. More recently, the defendants have moved to distance themselves from the plaintiff.  Their business not only now has a distinctive slogan and a distinctive logo, but its advertising get-up has also changed.  Several similarities nevertheless remain, including use of the prefix "Pro-" in the first defendant's business name.

1. It would be inappropriate of me at this stage of the proceeding to enter upon the detailed comparisons which will be required at trial.  It is sufficient to say that the plaintiff's cause of action in passing off is not as strong as once it was.  In this context, I take into account the fact that the prefix "pro" is in very common use, and that the expression "pro-choice" has different connotations to the expression "pro-active".  It is therefore possible that the court will at trial decline to grant permanent injunctions of the kind sought by the plaintiff in its statement of claim.  It follows that the defendants have a case to be tried.

1. In my opinion, the balance of convenience also favours the defendants.  An interlocutory injunction preventing their using the name "Pro-Choice Real Estate" would in all probability be a final injunction, because it would force the first defendant either to cease trading until trial, or to adopt a different name.  Once adopted, it would be commercially very difficult – if not impossible – to revert to the present business name.

1. The plaintiff submits that it will suffer irreparable harm if the status quo were maintained until trial.  This, it seems, is really another way of saying that damages - should the plaintiff be entitled to any - will be difficult to assess.  I accept that this is so.  On the other hand, much of the damage has already been done;  and some was inevitable, since until termination the first defendant was bound to advance the "Pro-Active" image and goodwill, and it was necessarily impossible to change everything immediately thereafter.  At the same time, there is (for the reasons set out above) a basis for the conclusion that some at least of the initial changes that were made by the defendants enhanced the false impression of continuity rather than accentuated the new reality of separation. 

1. I should mention one other consideration.  The defendants have, in the outline of their submissions prepared by their counsel, indicated an intention to remove from the first defendant's website "the references to the corporate history of trading from the site".  Likewise, the fourth defendant has stated, through counsel, that it will surrender the business name "Pro-Active Conveyancing" without conceding that it would amount to passing off if used.  It seems to me that both these steps are appropriate.  I will, as a condition of dismissing the plaintiff's summons, require undertakings to the relevant effect.

1. Taking all these factors into account, I am of the opinion that the plaintiff is not, in the circumstances as they now exist, entitled to the relief sought in the summons, issued on 17 May 2002, which is presently before me.  Insofar as that relief includes injunctions restraining the defendants from engaging in conduct that is misleading or deceptive, or amounts to passing off or a breach of statute or common law, it seeks no more than orders restating the law by which defendants are already bound.  If they are presently in breach of that law, they continue on their present course at their own risk;  but the case for the plaintiff is not so strong as to enable me to conclude that, given the balance of convenience, it is proper that interlocutory injunctions be granted.

1. In my opinion, the plaintiff's summons should be dismissed.

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