Puxu Pty Ltd v Parkdale Custom Built Furnitire Pty Ltd

CATCHWORDS

Trade Practices - furniture manufactured closely resembling items already on market and extensively advertised -

defendant's label on items - misleading conduct by

retailers - no intention by manufacturer to mislead -

whether manufacturer's conduct misleading or deceptive

or likely to mislead or deceive - Trade Practices Act 1974

ss.52 and 80.

Puxu Pty Limited v. Parkdale Custom Built Furniture Pty Ltd

VG No. 27 of 1978

Coram:

eel^ J.

Date:

28 November 1979

Place

Melbourne.

I	IN THE FEDERAL COURT OF AUSTRALIA )

)

I	VICTORIA DISTRICT REGISTRY	) VG No. 27 of 1978
I
I	)
I	GENERAL DIVISION	)
BETWEEN :

PUXU PTY LIMITED

Plaintiff

- and -

PARKDALE CUSTOM BUILT FURNITURE PTY LTD

Defendant

REASONS FOR JUDGMENT

28 November 1979

KEELY J.

The plaintiff Puxu Pty Ltd, a company incorporated pursuant to bhe provisions of the New South Wales Companies

Act, claims an injunction to restrain the Defendant, its

servants or agents from engaging in conduct that is misleading

or deceptive or is likely to mislead or deceive and in	:
particular to restrain it' Erom displaying, selling, offering
for sale or disposing of any furniture which imitates or	I
copies the Plaintiff's 'Contour' range of furniture so as to

be misleading or deceptive1' and an injunction to restrain

the Defendant its servants and/or agents from reproducing

or authorising the reproduction of chairs and lounges in

accordance with the Plaintiff's design".

The plaintiff also

, ,

claims damages but the parties agreed that that claim should	i
not be dealt with in the present hearing.	1 '

On 18 August 1978 the Court granted injunctions under s.80 of the Trade Practices Act (the Act) in the following terms:

"Upon the Plaintiff undertaking to pay to any

party adversely affected by this order such

compensation (if any) as the Court thinks just,

in such manner as the Court directs the Defendant

its servants and agents are hereby until the

determination of these proceedings or further

order restrained from selling or offering for

sale or dealing with or displaying any furniture

made in the distinctive shape adopted by the

Plaintiff, namely, its Contour' furniture of exposed wood with contoured seats upholstered in patchwork leather consisting of three

distinctive colours without:-

(a)	in the case of purchasers, not being retailers or dealers, demonstrating to them by reasonable means that the furniture was manufactured by Parkdale

.	- Custom Built Furniture Pty Ltd, and

(b)

conveying to them that the furniture

in the case of dealers or retailers manufactured by Parkdale Custom Built Furniture Pty. Ltd."

The plaintiff at ail material times since shortly

after its incorporation on 8 May 1978 has manufactured and

sold furniture under the name "Post & Rail".

The Post &

Rail range included various lounge suites and chairs sold

as the ~nvestment",

"the O.K. Corral", the Hippodrome",

I 1 the Low Profile" and "the Acquisition".

The "Post &

Rail" item of particular significance for the present

proceedings is called the Contour" range. It included lounge chairs (the plaintiff's - "Contour" lounge chairs) which, together-with either 2-seater or 3-seater lounges,

constituted the plaintiff's "Contour" lounge suite. Other

items in the plaintiff's

Contour" range included a dining

room suite, a buffet, a coffee table, a corner table, a

bar, a bar stool and other items.

However, even if I were

prepared to uphold the claim for an injunction against the

defendant in respect of any furniture which imitates or

copies the Plaintiff's 'Contour"' lounge suite or chairs,

I would be quite unable to find on the evidence before the

Court that any case has been made out in respect of any of those other items of the Post & Rail range.

Post &Rail furniture was first designed, made and

sold in 1973 by Bruce Dowse, a furniture designer.

He gave

evidence that he took the name from the traditional Australian

fence, the post and rail fence" because the furniture was

I1 very Australian, very bold, very rustic and very simple".

He also described it as being very straight up and down, basic, back to earth, fairly indestructible furniture made

of solid pine".

He made and sold the furniture initially on

his own and later in partnership, and over a period of time

during which he began employing labour and increased the

number of employees, there were various changes in the place of

manufacture and sale. Mr Dowse experimented with alterations

to the design of the chairs and in early or mid 1976 designed

a chair "using steel as a medium to give a contour that could

possibly resemble somebody's body as far as shape".

The

physical coilsLructio~l

of that chair was "almost identical" to

the plaintiff's present 11 Contour" chair but there were problems

as to the upholstery and arm covers and it "took a while to

per£ ect

it".

The Post & Rail o on tour" chair in the form manufactured

and sold both at the date of the institution of these proceedings

(18 August 1978) and at the date of this hearing (October 1979)

was first manufactured and sold in that form in late 1976 or

early 1977. Post & Rail furniture was manufactured by Post and Rail Furniture Company Pty Limited until November 1976 when the undertaking was sold to Seegil No. 96 Pty Limited (the directors

of which company included Mr Dowse and another witness Mr Delaney)

which changed its name to Dowse Co. Australia Pty Limited which

in turn sold its undertakings to the plaintiff on 3 June 1978.

The plaintiff has sold the o on tour" lounge suites and chairs and other items of furniture under the name Post & Rail under which name it has carried on business since shortly after its incorporation.	.
.-

The overall appearance of the plaintiff's "Contour" lounge

suite and chairs is unusual. The suite and chairs have a pine wood frame, contoured seating resulting from curved steel bars and most of the items sold are upholstered in patchwork leather

with three different colours, although they are also available

in four or five plain leathers, in plain fabrics, in velvets and

in pure wool.

The defendant is a company incorporated under the provisions

of the Victorian Companies Act.

There is no evidence as to the

date of its incorporation. Since at least June 1978 it has

manufactured and sold furniture as Parkdale Custom Built

Furniture and as Custom Built Furniture.

The defendant has manufactured and sold furniture

including a Canada" dining suite in solid pine with leather

backs and seats in the chairs, an Espana" pine veneer wall unit,

a "Marika" teak veneer wall unit, a ~ianca"

bedroom suite,

various buffets and dressers, bars and bar stools, and a number

of different types of tables together with padded back leather

chairs and leather carvers. In addition, for an unknown period of

time sjnce before16 August 1978 the defendant was making and selling

a "Rawhide" range, called the Rawhide range in solid timber and

leather" in an advertising brochure under the defendant's name

given to Mr Delaney on that date. It included a dining suite,

a Rawhide cocktail bookshelf and unit and other Rawhide wall

units and buffet. The "Rawhide" items of particular significance

for the present proceedings are the lounge suite and chairs

(the defendant's "~awhide" lounge suite and chairs) which

closely resembled the plaintiff's

contour" lounge suites and

chairs. The defendant did not call evidence in the case. There

is no direct evidence as to the date when the defendant began

manufacturing or marketing the "Ra\vhidel' lounge suites and chairs

which are claimed by the plaintiff to have been copied from the

plaintiff's contour"

lounge suites and chairs - although it was

common ground that the defendant's manufacture of such furniture

began no later than June 1978.

Mr Do~mcs

in n written submission in reply on behalf

of the plaintiff said that:

."It is further submitted that the date on which

the defendant commenced to manufacture its

furniture is irrelevant. By reason of the fact

that its furniture is a copy of the plaintiff's

furniture it must have commenced manufacturing II

the furniture after the plaintiff's furniture.

I am unable to accept that submission which appears to beg the

question and I also reject his written submission suggesting that

on this aspect the plaintiff was assisted by the fact that the

defendant had objected to answer an interrogatory by the plaintiff.

The objection was upheld by the Court and the plaintiff did not

seek leave to administer further interrogatories.

However, on all the evidence I am prepared to infer that

the defendant began manufacturing and selling its "Rawhide" suite

and chairs after the time when the Post & Rail "Contour" lounge

suite and chairs were first made and marketed in late 1916 or

early 1977.

In so deciding I have taken into account the

evidence of Mr Dowse that in 1976:

"We ... just generally perfected it, the technique

of doing the patchwork leather. It was something

that nobody had really done, nobody was doing at

that time, and it took a while to perfect the best	II	,
way to do it.

Under cross examination Mr Dowse said:

... we created a demand for a random, free-form

patchwork that was fairly unique at the time, yes.

... I think the patchwork we produced was quite	t	1-	C
unique, yes. ... I personally have not seen an
example of patchwork that resembles the patchwork	!	m
i	,
that we were producing in that period."	r

As already pointed out, no evidence was called for the

defendant. I have also considered Mr Dowse's detailed

evidence (to some of which I referred earlier) as to his

design, his experimentation and other steps taken to develop

the design. He was cross examined by Dr Emmerson on behalf of the defendant in some detail as to his design and it was suggested to him, for example, (i) that none of the materials

used (wood, metal, canvas and leather) was new to the design

of lounge suites and chairs, (ii) that there have been chairs

for many years with two metal members - one on each side of

the chair (referring to ordinary tubular steel chairs"); and

(iii) that one Post & Rail item called "Hippodrome" was a

reproduction of a well known Italian design.

However, it was not suggested in cross examination

that the plaintiff's o on tour" lounge suite and chairs had

L	been copied from the defendant's suite and chairs; nor was
it suggested that it had been designed or first sold after

the "Rawhide" suite and chairs were designed or sola

this connection Mr Downes also relied on the fact that the	,	-
reply by the defendant's solicitor to the letter of demand
k
of 5 July 1978, stated that "we have now received full	!
:
instructions from our client company" and "we deny that our
client is in breach of any Act", but did not suggest that it
had been manufacturing or selling the furniture before the	1. I
1

11 1

plaintiff commenced manufacturing and selling the Contour"

lounge suites and chairs.

Fir Dowse gave evidence as to the similarities and

differences between the plaintiff's Contour" lounge chair

and the defendant's "Rawhide" lounge chair and demonstrated those similarities and differences by comparing a "Contour" chair and a "Rawhide" chair made by the plaintiff and the

defendant respectively which were exhibits before the Court.

Mr Delaney, a solicitor who as a director of the plaintiff took

an active interest in the affairs of the plaintiff not confined

to his role as a solicitor, also gave evidence by way of

comparing the two chairs. Referring to the exhibit which was

the chair made by the plaintiff he said:

"... more than 50 per cent would tend to be in the

getup of that exhibit. Actual patterns, cutting and

shaping of the material is fairly standardised and

unless somebody was very specific about it they would

get that pattern in those colours or colours of their

choice, but it would be very similar to that pattern. l1

Mr Delaney also gave evidence that the Contour1' 2-seaters have exactly the same configurations as the chair except that

they have two of the contoured leather slings and have four

iron bars at the back and the 3-seaters also have the same

configuration.

In appearance the defendant's chair closely resembles that of the plaintiff.

There are various aspects in which the

two chairs are either identical or closely resemble each other.

It is not necessary to set out in detail every point of

similarity or difference.

In addition to the overall appearance

the particular matters in which the two chairs were identical

or closely resembled each other included the following:

1. The use of heavy exposed wood for the frame and the dimensions of the wood - although subject to cerLain

differences in the dimensions to which I shall later

ref

er.

2. The use of patchwork leather with three colours - althoughas I shall point out later, there are differences.

3. The use of curved metal bars running from a wooden cross

piece in front of the chair at floor level back and

upwards to another wooden cross piece at the back of

, .

the chair at approximately head level.

4 . The appearance of a curved bar underneath the seat - although I shall later refer to a difference as to this

' ,

bar.

5. The adjustable canvas sling running across the chair as the back support - althoughas I shall point out later, not identical.

6. The use of metal bars running across the chairs in two places beneath the upholstery at approximately foot level and head level.

7. The system of securing the cushion to the suspended canvas frame (except that the defendant's "Rawhide" chairs have

in addition four small eyelets at the back).	I
In a number of aspects there are differences between the
L

I1 contour" and "Rawhide1' lounge chairs made by the plaintiff and

the defendant respectively. Some of these differences in my

view would be likely to be observed by an ordinary member of

the public who had previously looked at the Post & Rail

I' contour" chair as a potential purchaser.	These would include
the following differences:

(a)

The patchwork leather cover on the plaintiff's chair whereas the leather on the defendant's chair was stitched underneath and the stitching was not visible.

(b)	Also plainly visible were 16 wooden bolt covers on the plaintiff's chair (4 visible from each side, 4 visible from the front and 4 visible from the back) whereas on the defendant's chair the 16 metal bolt heads were not covered.

The 16 metal heads-were plainly visible and-weremuab small= - being approxhately %-inch in dfameter compared riith the bolt

U	covers which were approximately 1% inches in diameter.

(c)

On both the plaintiff's chair and the defendant' S chair

there are eight pls,:s

at which one piece of wood is

bolted (by two bolts) to another piece of wood. At	.
each of those eight places the combined thickness of the two pieces of wood on the plaintiff's chair is
. ,
greater than that on the defendant's chair - by

approximately %-inch.

As a result the plaintiff's

I' Contour'' chair gives an impression of greater

sturdiness and of having more "chunky timber" - to

use the words of one of the plainti£E1s advertisements

in July/August 1978.

(d)	the defendant' S "Rawhide" chair is different from

The overall appearance of the leather patchwork on they both use leather "patchest' of three different colours there are differences in a number of respects.

I do not consider that an ordinary member of the public

who had previously looked at a Post & Rail "Contour"

chair as a potential purchaser would be likely to

observe each and every one of the differences listed

below, but in my view such a person would be likely

to observe one or more of the differences and to see that the overall appearance of the leather patchwork on the "Rawhide" chair is different from that of the

o on tour^^ chair.

As to the likelihood of such persons observing that the overall appearance is different, the follorving evidence by Mr Dowse is relevant. Referrims to his decision at an earlier time to change from random

patchwork leather to standardised patchwork leather,

Mr Dowse said:

11 ... beforehand, it was a fairly random

patchwork; each one resembled one another

but they were different. Consequently

you had people ringing up saying: That was

not the one I ordered1'.

The differences in the appearance of the leather patchwork are as follows:

(i) the nmnber of the patches;

(ii) the size of the patches;

(iii) the shape of the patches;

(iv)	as Mr Delaney expressed it, in explaining how he was able to distinguish one from the other:

I' In particular, also, although not in every

single case, but it was a very predominant

feature with Post and Rail patterning, there

is an elliptical circle that includes,

generally, one of the buttons and most Post

and Rail suites are done in that particular

pattern and the pattern is almost standardized,

you have a circular piece enclosing one button.";

(v) the arrangement of the patches - which was described by Messrs Dowse and Delaney as tending

to be "vertical" on the plaintiff's chair and

-"horizontal" on the defendant's chair. It was

explained that this statement meant that the lines

where the different coloured materials joined

tended to run upwards although sometimes on an

' ,

angle on the plaintiff's

Contour" chair rather

than across on the horizontal as tended to be the

case on the defendant's "Rawhide" chair;	I	-
1
; ,

(vi) the shade of the colours of the patches. On both

the plaintiff's Contour" chair and the defendant's

"Rawhide" chair the patchwork leather makes use of

leather of three different colours which might	j
appear at a casual glance to be the same colours,	t

to rchich '

shall refer as ''dark brown", tan'' and

'l beige" respectively. The "dark brown" colour

on the defendant's Rawhide" chair is a darker

colour than that on the plaintiff's Contour''

chair. The "tan" colour on the defendant's

chair is also a darker colour than that on the

plaintiff's chair - although the difference in

colour is less marked. The "beigett colour on

the two chairs although not identical is very

close to being identical in colour.

Differences which might not have been detected except by a careful buyer who had a particularly clear picture in his

mind of the plaintiff's chair as a result of an examination of

it on a prior occasion were that:

(e)	Both the dacron layer and the foam contained inside the / leather patchwork cover on the plaintiff's chair are of

better quality and the foam is more resilient.

(f)

The finish on the woodwork on the defendant's chair is rougher than that on the plaintiff's chair which

Mr Dowse said had been "sanded to a much higher degree

and using a finer paper't and the defendant's chair

has "little smears and sanding marks along the arms".

(g)

Upon pulling back the upholstery it was clear that the defendant's chair had canvas material stretched between the two contoured bars to form a support

for the seat, whereas on the plaintiff's chair the

seat was supported by a different and stronger

material. Mr Dowse described it as a non-stretch

material consisting of polyurethane fibre-glass

matted trampoline fabric and gave a demonstration

in Court of the strength of the fabric. Although

no similar demonstration was performed on the material

in the defendant's chair on the evidence I accept

that the material used in the defendant's chair was

not as strong and was less likely to resist any

tendency to sag as a result of use.

Other differences demonstrated to the Court which in

my view even a careful buyer with a clear recollection of

the plaintiff's chair would not be likely to see were as

follows :

(h)

On the plaintiff's chair the contoured metal bars

fitted into four nylon sleeves in the two wooden

cross pieces.

On the evidence of Mr Dowse the sleeves

had the intended effect of preventing the ends of

the contoured metal bars from being drawn inwards

from their original position as a result of the

weight of a person sitting on the chair causing the

ends to press into the fibre of the wood.

The

defendant's chair had no such sleeves.

(i) The curved bar beneath the seat on the plaintiff's chair was made of spring steel whereas the somewhat

thicker and'more

rigid bar used on the defendant's

chair was not made of spring steel.

(j)	The heavy screws (sometimes called coach bolts by Mr Dowse in his evidence) used to hold the wooden pieces together were different.

As the defendant is a corporation and is engaged in

trade or commerce the substantial question to be decided is

whether the defendant has engaged "in conduct that is

misleading or deceptive or is likely to mislead or deceive"

within the meaning of s.52 of the Act.

There was no evidence

to suggest that the retailers who purchase lounge suites or

chairs from the defendant are likely to be misled or deceived.	I
There was no evidence to suggest that persons likely to

purchase or to consider purchasing the plaintiff's

Contour"

lounge suite or chair from a retailer form a particular

class in the community. Accordingly, it is necessary to

consider whethe; the conduct of the defendant was misleading

or deceptive or likely to mislead or deceive ordinary members

! I

of the public likely to be considering purchasing x c h an

item from a retailer. The words "ordinary members of the

public", used here and elsewhere in these reasons, include

"the shrewd and the ingenuous, the educated and uneducated

and the experienced and inexperienced in commercial transactions" -

per Sheldon and Sheppard JJ. in C.R.W. Pty Ltd v. Sneddon

(1972) 72 A.R. (N.S.W.)

17 at p.28.

I adopt the dictionary meanings applied by Franki J. in Weitmann v. Katies Ltd (1977) 29 F.L.R. 336 at p.343:

B ,

11 The most appropriate meaning for the word 'deceive'

in the Oxford Dictionary is: 'To cause to believe what is false; to mislead as to a matter of fact, to lead into error, to impose upon, delude, take

in'.

The most appropriate definition in that

dictionary for the word mislead' is: 'To lead

astray in action or conduct; to lead into error;

I II

to cause to err .

It was contended by Mr Downes that the defendant has

contravened s.52 by manufacturing for the purpose of ultimate

retail sale furniture which he described as "nearly identical"

to the plaintiff's furniture and which I have found closely

resembles the plaintiff's

Contour" lounge suite and chairs.

His principal submission was that the manufacture by the defendant of the "Rawhide" suites and chairs was misleading

and deceptive and was likely to mislead or deceive potential

purchasers who saw the defendant's "Rawhide" suites and

chairs into believing that they were the Post & Rail "Contour"

furniture made and extensively advertised by the plaintiff.

Alternatively, Mr Downes argued that potential

purchasers were likely to be misled into believing that the

defendant's lounge suite or chair was "a product of Post and

Rail quality". I accept-the criticism by Dr Emmerson of this

alternative proposition and agree that there is no evidence

before the Court upon which it could be upheld.

Before returning to Mr Downes' principal submission I shall deal with a number of particular submissions.	I accept
his submission that where a manufacturer has engaged in

conduct that is misleading or deceptive, it "cannot expect

the retailer to redress thc misleading nature of the product".

I also accept that it is not necessary for the plaintiff to

prow that members of the public actually bought the

defendant's products in the belief that they emanated from

the plaintiff.

I also accept his submissions that it is

not necessary for the plaintiff to prove (1) that members of

the public were in fact misled by any conduct of the defendant;

or (2) that the defendant conspired with the retailers to

deceive or mislead third persons;

the question is whether

the defendant's conduct contravened s.52 of the Act; or

(3) that ~urchasers	of the defendant's products have suffered
any damage.

Dr Emmerson submitted in his final address that for

conduct to fall within the prohibition in s.52 it is necessary

for the plaintiff to show three things.

Firstly, that the

defendant has made a representation.

Secondly, that that

representation is of a fact which is untrue, and thirdly,

that that representation is likely to be accepted as true by

the person to whom it is made.

He submitted that such a

construction of the section was required both by the language

of the section and by the necessity to avoid certain	!
consequences which he submitted could not have been intended.

Mr Dotines submitted that s.52 is to be given a wide	I
, ,

construction and relied upon what was said by Stephen J.

in Hornsby Building Information Centre Pty. Limited v. Sydnev	!
I

Building ~nformation

Centre Limited (1978) 18 A.L.R. 639 at

"Section 52(1)

of the Act is expressed in wide

terms and its generality is expressly preserved

. by sub-section (2).11 .

. (at p.645) "To subject

the clear and quite general words of s.52 to

some limitation derived from the heading to

Pt.V is, I think, especially inappropriate in

the case of this particular legislation. The

Act is intricately drafted, some of its provisions

being expressed in terms of broad generalities,

as is s.52, others in elaborate detail. Each may

be seen to take the precise form it does because

of the particular work intended for it. That

s.52(1)

is intended to be a provision having a

broad reach is made clear by the express provision

in s.52(2) preserving its generality1 from any limitation which might be thought to arise from

the more specific provisions of succeeding	11
sections.

I accept Mr Downesl submission that, although the

basis for a claim under s.52 may often be found in a

representation, it is not correct to say that s.52 does not

apply unless there is a representation; conduct which causes

people to be misled or deceived and conduct likely to mislead

or deceive is a contravention of the section whether or not

that conduct amourts to a representation.

Dr Emerson also submitted that:

".	.. the Designs Act and the Copyright Act and the

Patents Act together deal exhaustively with any proprietary rights that the plaintiff could obtain either in the appearance or in the functions of

the chairs in question.

I say that it follows from

that that this is subject matter which has been

dealt with exhaustively and in detail by three

Acts, and that no intention should be presumed

to take away from what is said in those Acts merely

because a later section dealing with trade practices

impinge upon this subject matter. It

in very general terns is ... to be thought to

' /

- 19 -

1	In my view those Acts,dealing exhaustively I	&	certain proprietary
I
I

rights ?qhich the plaintiff might have, do not operate to

exclude or modify the duty which s.52 of the Act casts upon

1 I

the defendant to refrain from engaging "in conduct that is

misleading or deceptive or is likely to mislead or deceive".

As Stephen J. said in the Hornsby Building Information Case

(supra at p.645):

"It is, no doubt, somewhat of a novelty that a quite

extensive jurisdiction in passing off actions,

traditionally the concern of the Supreme Courts of

the States, should be conferred upon the Industrial

Court and that this should be done by an Act

described as one 'relating to certain Trade Practices'

and by sections not very explicitly directed to such

a subject-matter. However, this is, I think, but a

consequence of the very direct relationship which

necessarily exists between the deception of consumers

in the course of trade and the injury caused by

the unfair practices of a trade rival. ... it then

becomes possible for a trader, injured by the

competition of his trade rival, to gain a remedy

under the Act instead of having recourse to civil

action by way of proceedings for passing off. The

remedy in such a case will not, as in passing off,

be founded upon any protection of the trader's

goodwill but, being directed to preventing that very

deception of the public which is injuring his

goodwill, it will nevertheless be an effe~cive	'I
remedy for that of which he complains.

I accept Mr Dormes' submission that it is not necessary

for the plaintiff to prove that the defendant intended its

conduct to mislead or deceive (~ornsby

Building Information

Case (supra) per Stephen J. at p.647) but that if such an intention to mislead or deceive were established the Court

should not be astute to say that (the defendant) cannot

succeed in doing that which he is straining every nerve to do"

per Lindley L.J.

in Slazenger & Sons v. Feltham & Co. (1889)

, .

6 R.P.C. 531 at p.538.

Mr Downes contended that such an intention existed and

j	sought a finding that:

j	"the defendant copied the plaintiff's product for the purpose of selling it as the plaintiff's goods".

However, on the evidence I am not prepared to infer that the defendant intended to mislead or deceive any potential

purchaser of furniture - either as a retailer or an ordinary

member of the public - into believing that the defendant's

I' Rawhide'' lounge suite or chairs were the Post & Rail "Contour"

l	lounge suite or chairs made by the plaintiff.
I	I	There was evidence from Messrs Delaney, Stekerhofs and Toomey that each visited a number of retailers' stores on
.	!

three separate occasions and examined lounge suites and

i	individual chairs made by the defendant. The retailers'
1

premises visited (most of which were visited on two or three

:l	I	.
I

occasions) included the Furniture Factory at South Melbourne,

the Furniture Factory at Cheltenham, John Darcy Ziscounts at

Frankston, Maples' store at Femtree Gully, John Allen at

Boronia and Bayswater Bulk Store at Bayswater. At the

Furniture Factory at South Melbourne on one occasion one

suite did not have the defendant's label sewn on it but it

had some "ragged strands" which Mr Delaney "took to be all

that was left of the label".

On all of the other occasions

the defendant's label was sewn on to one part of the upholstery

of each lounge suite or of each individual chair made by the

defendant and'displayed by the retailer as an item for sale.

On the evidence the place at which the label was sewn was the same place as that at which the plaintiff's label was

sewn. on the Contour'' chair which was an exhibit and accords

with the practice in the industry. That place is at the

front of the chair at the bottom of the upholstery. The

extent to which it is readily observable depends upon whether

I 1

it has been left hanging d o ~ m

(as on the Contour" exhibit)

or has been physically pushed up behind the upholstery.

the latter case a person desiring to read it would have to

feel for it and pull it out below the upholstery.

There was evidence from Mrs Hogg and Mr Klug, who

purchased lounge suites which were made by the defendant, that

they did not have the defendant's label on them at the time

of sale.

I shall deal later in more detail with their evidence

which has led me to infer that an employee of the retailer

removed the defendant's label in each case.

In answer to a question during final address Mr Downes did not suggest that there was any evidence that any of the

defendant's furniture left its factory without a label

identifying the defendant as being the manufacturer.

He did

suggest that an inference that some items do not have labels

might be drawn from the evidence of Mr Delaney as to his visit

to the defendant's factory on 16 August 1978. In answer to a

question by Mr Downes as to whether any of the furniture

there had labels on it" Mr Delaney said "To the best of my

recollection, they did not have labels on them".

There was

no cross examination on this aspect and I accept Mr Delaney

as a truthful witness.

However, Mr Delaney's evidence as to

that visit referred both to "furniture standing around in

various stages of completion or perhaps awaiting collection"

and to furniture in various stages of manufacture in (the

factory) and furniture waiting for collection for delivery,

furniture of the type presently in court".

Having considered

his evidence as a whole and having regard to the words of the

particular answer relied upon by Mr Downes, I am not prepared

to infer that any of the defendant's furniture was without a

label at the time it left the factory.

On all the evidence I infer that it was the defendant's practice to have one of its labels sewn on to each item - whether lounge suite or lounge chair - before it left its factory for delivery to a retailer. A copy of the defendant's

label was tendered in evidence by the plaintiff. The following

words appeared on it -'-et out in nine lines of print using

capital leters:

"Parkdale Custom Built Furniture

Rawhide Range in Solid Timber and Leather

All New Materials

40A Levanswell Road, Moorabbin, Vic. 3189"

The label itself is a piece of material approximately 2% inches square which is slightly larger than the plaintiff's label

sewn to the upholstery on the plaintiff's	Contour'' chair
which was an exhibit in these proceedings.

In cross examination Mr Dowse agreed that both in

August 1978 and at the time of the hearing the plaintiff's

Post & Rail furniture, after arriving at a retailer's

establishment, would have removed from it certain wrapping

materials which identified the manufacturer. As a result it

It would be left with the manufacturer's label" and that it was

his understanding that other manufacturers would identify

their furniture when it left the factory in the same way that

Post and Rail did". It should be added that he also said

that the plaintiff's Post & Rail furniture "has a punched

Post & Rail indent on it. That one (i.e. the exhibit) has

not got one but now they have one".

I have also referred earlier to the various differences

between the "Rawhide" lounge suite and chairs made by the

defendant and the o on tour" suite and chairs made by the

plaintiff - some of the differences being likely to be observed

by an ordinary member of the public who had previously looked

at the plaintiff's "Contour" item as a potential purchaser. to have one of its labels sewn on to each item before it left its factory for delivery to a retailer and having regard to

the evidence as to the differences between the defendant's

"Rawhide" furniture and the plaintiff's Contour" furniture,

I am not prepared to infer that there was any intention by

the defendant to mislead or to deceive any potential purchaser

into believing that the "Rawhide" lo~nge

suite and chairs

were the o on tour" lounge suite and chairs.

--- - . - -

-. . .-

-- --

- . . - . - .

- .

. . .

I infer that the defendant intended to lead people

who saw the "Rawhide" lounge suites or chairs made by it

advertised by retailers or who saw the actual furniture in

retailers' shop windows to -

(1)

see that the "Rawhide" products closely resembled

the "Contour" suite and chairs manufactured by the

plaintiff; and

(2)

enter the retailer's shop so as to look at the

"Rawhide" lounge suite or chairs and consider

purchasing them.

I return to Mr Dowries' principal submission that the

manufacture by the defendant of the ~awhide"

lounge suites

and chairs which closely resembled the on tour" suites and

chairs was a contravention of s.52 of the Act in that it was

conduct that was misleading and deceptive and was likely to

mislead or deceive potential purchasers who saw the "Rawhide"

suites and chairs into oelieving that they were the Contour"

furniture made by the plaintiff.

He invited the Court to reach that conclusion partly

by reason of the appearance of the two chairs in evidence in

the proceedings. He also submitted thzt the Court should

come to the conclusion that persons were likely to be misled

or deceived by the appearance of the defendant's "Rawhide"

lounge suite and chairs because two purchasers of the

defendant's lounge suites, Mrs Hogg and Mr Klug, had in fact

been deceivei and it had not been suggested in cross

examination that they were not fairly representative of those

members of the public likely to be considering purchasing

such a lounge suite or chair.

In submitting that the

conduct of the defendant was likely to deceive potential

purchasers he also relied upon a volume of evidence as to

extensive advertising by the plaintiff of the "Contour"

lounge suites and chairs as being Post & Rail products.

Mrs Hogg and her husband had seen the plaintiff's

Post & Rail o on tour" lounge suite at the 1977 Melbourne

Home Show and she had also seen advertisements for it in

several magazines.

One night in July 1978 she saw at a

retailer's shop which was closed at the time a lounge suite, manufactured by the defendant, which she "thought" to be the plaintiff's Post & Rail "Contour" lounge suite. It did not

have the defendant's label on it but she was unaware of that

when she b o w t it. There was no evidence that, when she went

tc +he shop with her husband on a Saturday morning and bought

the suite, she looked for any label or sat on the suite or

examined it in any way to compare it with her recollection

of the Post & Rail "Contour" suite. However, she had a

sufficient doubt to cause her to ask the salesman whether

the suite was a Post & Rail suite and "specifically told

the salesman that (she) wanted Post & Rail".

On her evidence

the salesman's reply did not in fact answer her question but

11 r

was one from which she assumed from his manner that he was	'	,
1	,

saying, yes, it was Post & Rail".

Accepting that evidence as

being correct for the purpose of these proceedings, Mrs Hogg

was misled into believing that the lounge suite was-a Post &

Rail suite as a direct result of the salesman's apparent

response to her question whether the suite was a Post & Rail

suite. That finding is of course based upon the evidence in

these proceedings in which neither the salesman nor the

retailer which employed him has had an opportunity to test

Mrs Hogg's evidence by cross examination or to call evidence

to contradict it. Mrs Hogg also gave evidence that the

receipt given to her did not give the name of the manufacturer.

Mr Klug had seen the plaintiff's Post & Rail lounge

suite in magazines.

In July 1978 he saw at a retail store

a three piece "Rawhide" lounge suite manufactured by the

defendant, which he "thought was a Post & Rail lounge suite".

It did not have the defendant's label on it but he was unaware of that fact at the time. Mr Klug agreed in cross examination that he had the suite in 'front of him, looked at 1, and liked

it before buying it.

The cross examination then proceeded:

"Q.	You did not say, 'This looks like the photograph and I like the appearance of the photograph, therefore I like this suite'?

No.

You looked at the suite and you said, 'I like

that

' ?

A. Yes.

Q. That is correct?

A. Yes.

He also gave evidence that he did not ask who made the suite

as he assumed that the one he was looking at was a Post & magazine. He had previously seen a Post & Rail o on tour" suite only through the door of a shop that was closed and there was no evidence that he sat on or examined in any way

the suite which he purchased.

There was no evidence that he

looked for any label on the suite and the receipt given to

him did not give the name of any manufacturer.

I infer that irmnediately before purchasing the lounge

suite Mr Klug had some doubts in the matter because the

Post & Rail "Contour" suite (which he had seen earlier that

day through the door of a closed shop) was almost 40% ($440 )

dearer than the retailer's price for the "Rawhide" lounge

suite. As Mr Klug said in evidence:

"I asked him how come that the price was cheaper

because it was just $1590 at Scott Berkowitz and

that was the price we were expecting to pay for

it and he said because of bulk buying, that they

bought in such large numbers, for quantity they

get them down to cheaper prices. 'I

He also said that the salesman told him that it had to come from-Sydney whereas in fact it was manufactured in Melbourne.

Accepting Mr Klug's unchallenged evidence as to the salesman's statement as being correct for the purpose of these proceedings, Mr Klug was misled by the salesman into

believing that the suite he bought normally cost $1590 -

the price he was

expecting to pay" for a Post & Rail lounge

suite. As in the case of Mrs Hogg, that finding is based

upon thc evidcncc in these proceedings in which neither the

salesman nor the retailer which employed him has had an

opportunity to test Mr Klug's evidence in cross examination

or to contradict it.

As to the fact that neither the suite sold to Mrs Hogg nor the suite sold toMr Klug had the defendangs label on it, having

regard to the evidence as to the misleading conduct of the two salesmen

and to the inference which I have drawn that it was the practice of	i
the defendant to have one of its labels s e m on to each lounge mite	:
before it left the factory for delivery to a retailer,I infer on
the evidence in these proceedings (which neither retailer and
neither salesman has had an opportunky to test by cross exanination	I

or contradict by evidence)that

an employee of the retailer in each

-	I
i

case had removed the defendant's label from the lounge suite.

V	t
I

Had the one retailer's salesman truthfully answered Mrs Hogg9s question by saying that the lounge suite was not	!
I
I
!
L
a Post & Rail suite and had the other retailer's salesman
I

told Mr Klug that the normal price of the "~awhide" suite

, I

which he was considering purchasing was not $1590 and that

he was confusing - or even that he might be confusing - the

defendant's "Rawhide" suite in front of him with a Post &

Rail o on tour" suite which was similar, in my view neither

Mrs Hogg nor Mr Klug would have been misled into believing

that the ~awhide"

suite being considered for purchase was a

1 -

Post & Rail Contour" suite. Agaiqhad the defendant's label not

been removed from the suites and had the label been seen by

Mrs Hogg and Mr Klug, neither purchaser would have been led to believe that the suite was a Post & Rail suite - unless she or he had been wrongly told that the defendant, whose name appeared on the label, rias the manufacturer of the Post & Rail o on tour" suite.

In my view both Mrs Hogg and Mr Klug were led to

believe that the "~aiihide" lounge suite purchased was a

Post & Rail o on tour" suite.

However, on the evidence I do

not consider that any action of the defendant led either

purchaser to so believe. It has not been suggested on

behalf of the plaintiff that the defendant at any time

salesmen to remove the defendant's label or to give any

misleading answers to either Mrs Hogg or Mr Klug. Both

conspired with either of the trio retailers or with the salesman. Further, the defendant's label had been removed

by an employee of the ret:?ler

in each case.

Before his purchase Fir Klug had seen the Post & Rail

"Contour" suite only once and that was in a shop that was closed. In this connection it is to be noted that on trio occasions after his purchase Mr Klug was able to see the

difference between the "Contour" and the "Rawhide" suites.

About a week after the defendant's

Rawhide" suite was

delivered, Mr Klug saw a Post & Rail lounge suite in Geelong

and in his words:

"I looked at that and looked at mine. That is

how I could tell the difference."

Further, about one month after his purchase Mr Klug "went to the Homes Exhibition and saw Post and Rail which again

I checked and you can see the difference ...lr. These two

occasions may be compared with the day of his purchase when

Mr Klug 'hssumed' that he was getting the Post & Rail suite

of which he had seen a photograph in a magazine.

In my view an

ordinary member of the public (in the sense defined earlier)

would not have assumed" that it was a Post & Rail suite but

would have acted as Mrs Hogg did, i.e. asked whether it was a

Post & Rail suite or specifically told the salesman that she

wanted Post & Rail.

In final address Mr Downes contended that Mr Layton, who was marketing manager with John Bruce Home World Pty

Limited in July 1978, was misled by the appearance of a lounge suite manufactured by the defendant. Mr Layton's

evidence showed that he was asked to prepare for the "Age"

newspaper an advertising 'supplement which was to include the

"~awhide" suite made by the defendant.

In my view his

evidence goes no further than to show that he wrongly

assumed that a bromide photograph, which he had "inherited"

when he began his employment there only three months before,

was a photograph of the "~awhide" suite whereas in fact it

was a photograph of the plaintiff's Contour" suite. His

evidence showed that he was not concerned to determine who

was the manufacturer of the" Rawhide suite.

It only

shows that the witness assumed that the bromide photograph

2 ,

was a suite the same as the defendant's "Rawhide" suite - and	i
I
apparently assumed it without bothering to do any checking at

all as to the manufacturer.

I have already found that the

Rawhide" suite closely resembles the Post & Rail "Contour"

suite (but with observable differences) and I do not consider

that Mr Layton's evidence assists the plaintiff. Nor do I

consider that Mr Stanton's evidence advances the plaintiff's

case any further on this aspect.

What I have written in reaching the opinion that the conduct

of the defendant did not mislead or deceive either Mrs Hogg or

Mr Klug is also rel&ant

to the more general questions of xihether

the defendant's conduct has been misleading or deceptive or likely	,
!
to mislead or deceive within the meaning of s.52 of the Act.

M r Downes sought to rely upon the decision of the House

of Lords in William E d ~ e

& Sons Ld. v. TJilliam Niccolls & Sons Ld.

(1911) 28 R.P.C.

582. However,in my view that decision does not

assist the plaintiff because of the absence in that case of any

label on the plaintiff's goods, the nature and cost.of the goods	,
there under consideration and the admission made in that case by

the defendant's managing director.

, .

Although the "Rawhide" suite closely resembles the 11 Contour" suite, I am unable to conclude that the defendant's

conduct in making the Rawhide" suite has led or is likely to	P	.
I
lead an ordinary member of the public who was or is considering
I
purchasing a lounge suite into believing that the "~arihide"	I
suite is the Post & Rail "contour" suite. In my view this is	1 .
so even if, contrary to the opinion I have expressed, none of

the differences between the contour" suitc and the "Rawhide"

suite would be likely to be observed by an ordinary member of-the public who had previously looked at the Post & Rail II on tour" suite as z potential purchaser.

I have reached that conclusion because in my view such a purchaser or a potential purchaser will not be led to believe

that the "Rawhide" suite is the Contour" suite unless, in

respect of an item costing a substantial amount (up to $1590

for a three piece lounge suite), the potential purchaser -

(1)

assumes that there is no other suite on the

market which resembles the "Contour" suite to

the extent that the "Rawhide" suite resembles

it;

and

(2)

either does not ask the salesman for the name of

the manufacturer (or whether it is a Post &Rail

II Contour" suite) or, upon asking, is given by the

salesman an answer which is untruthful or which	.
fails to answer the question and is effective to
distract the potential purchaser from noticing

his failure to answer the question (cp. Mrs Hogg);

and

(3 )

does not take the trouble to look at the defendant's

.	label attached to the chair.

IJhere the defendant's label has been previously removed

from the "~awhide" suite then the person who is considering	i l
purchasing the suite will not be led into believing that it is	B I

the plaintiff's Post & Rail "Contour" suite unless Lhe

potential purchaser -

.(l)	assumes that there is no other suite on the market which resembles the "Contour" suite to the extent that the "~awhide" suite resembles it;

and

(2)

either does not ask the salesman for the name of the manufacturer (or whether it is a Post & Rail

II Contour" suite) or, upon asking, is given by

the salesman an answer which is untruthful or

which fails to answer the question and is effective

to distract the potential purchaser from noticing

-	his failure to answer the question (cp. Mrs Hogg);

and

(3)

does not take the trouble to look for the

manufacturer's label on the item, or, on noticing

either that there is no label or that a label

appears to have been removed, does not ask the

salesman for an explanation of the absence or

apparent removal of the label as the case may be.

On the evidence I do not consider that the conduct: of

the defendant has been shown to be misleading or deceptive or

likely to mislead or deceive within the meaning of s.52(1)

of the Act. Accordingly the claim is dismissed and the

injunctions granted by the Court on 18 October 1978 are

rescinded.

The plaintiff has submitted that in any event it should have an order for costs of the day, including counsel's fees,

in respect of the adjournment of the case from 15 October 1979

to the following day by reason of the unavailability of the

defendant's counsel, Dr Emmerson. The defendant has opposed

the g%anting of any costs to the plaintiff in respect of that

day because of the terms upon which the defendant's solicitors

in July 1979 agreed to the date of hearing, which had been

fixed for 17 September 1979 being changed to 15 October 1979.

That change was at the request of the plaintiff by reason of the unavailability of its counsel. A note taken by the plaintiff's solicitor on 26 July 1979 recorded that the defendant "agrees to the 15th October but may have to be

The plaintiff's solicitors were not told until the afternoon of

adjourned for one day because their counsel may be" unavailable. in fact required by the defendant on Monday, 15 OctbL2r 1979.

I accept the plaintiff's contention that such notice was

inadequate, although it would not have been possible in the

circumstances to have given a long period of notice.

However,

the adjournment did not result in the loss of a full day as

there was a hearing on 15 October 1979 lasting almost one hour

during which the plaintiff had some sixteen witnesses called

on subpoena to produce documents.

The plaintiff also submitted that it was entitled to

the costs of that portion of the hearing on 16 October 1979

(more than half of the day) which related to an application

by the plaintiff for an order that the defendant be directed

to give-further and better answers to interrogatories

delivered by the plaintiff.

In ruling upon that application

the Court ordered the defendant to answer four interrogatories

but declined to make such an order as to a further ten

interrogatories in respect of which an order was also sought

by the plaintiff. The argument put by both parties related

to all fourteen interrogatories.

In all the circumstances I have come to the conclusion

of the case will be best met by ordering that the defendant

pay to the plaintiff the costs of the day of 15 October 1979.

that, taking both these matters into account, the justice costs of the action including reserved costs. Costs to be taxed if not agreed.

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[1979] FCA 127

28 Nov 1979