Puxu Pty Ltd v Parkdale Custom Built Furniture Pty Ltd

[1980] FCA 105

Re: PUXU PTY. LTD.
And: PARKDALE CUSTOM BUILT FURNITURE PTY. LTD. (1980) 43 FLR 405
No. VG51 of 1979
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Sweeney(1), St. John(2) and Lockhart J.(3) JJ.

CATCHWORDS

Trade Practices - consumer protection - injunction to restrain defendant from marketing products so as to mislead or deceive members of the public into believing that they are the products of the plaintiff.

Trade Practices - Conduct misleading or deceptive or likely to mislead or deceive - Principles to be applied - Confusion of members of public reinforced by actions of third parties - Injunction - Effect - Discretion in granting injunctive relief - Trade Practices Act 1974 (Cth), ss. 52, 80.

HEADNOTE

In or about 1973 Mr. Dowse began to design furniture known as "Post & Rail" furniture. After initial success he formed a partnership. In 1976 Mr. Dowse designed and the partnership began to produce a chair almost identical to one currently being produced by the appellant, known as the "Contour" chair. In late 1976 or early 1977 the Post & Rail and Contour range of furniture began to be manufactured and sold. Subsequently the appellant took over the business of the partnership and produced and marketed Post & Rail designs of furniture, including the Contour designs.

The respondent had manufactured a range of furniture under the name "Parkdale" since June 1978. One range of this furniture was the "Rawhide" range which included lounge suites and chairs.

The appellant contended that the respondent's Rawhide range so closely resembled its Contour range in design, style, shape, upholstery and appearance as to mislead or deceive the public or to be likely to mislead or deceive the public into believing that the Rawhide range was part of the Contour range.

On appeal from a decision of a single judge (Keely J.) dismissing the claim and rescinding the interlocutory injunction granted pending trial.

Held: Per C. A. Sweeney and Lockhart JJ., St. John J. dissenting - (1) The respondent in manufacturing and selling furniture substantially identical with the furniture of the appellant which had in fact been mistaken for that of the appellant had engaged in conduct which was misleading or deceptive or was likely to mislead or deceive and was therefore contrary to s. 52 of the Trade Practices Act 1974.

(2) The respondent's conduct contravened the section, notwithstanding that it supplied the furniture it manufactured with its own label. By producing a product, whether deliberately copied from that of the appellant or not, which so closely corresponded with the appellant's product, the respondent put into the hands of retailers a product with the inherent potential to mislead or deceive the public.

(3) Injunctive relief should be granted even if such relief could be said to give to the appellant a monopoly or protection against the marketing of copies of its products to which it was otherwise not entitled.

Appeal allowed and permanent injunctions granted.

HEARING

Melbourne, 1980, March 17-18; June 23. #DATE 23:6:1980

APPEAL.

Appeal from decision of Keely J. dismissing the appellant's claim.

D. A. Staff Q.C. and G. K. Downes, for the appellant.

A. Nicholson Q.C. and Rachelle Lewitan, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: J. A. Wilmoth & Son.

Solicitors for the respondent: Wisewoulds.

D. LEVIN

ORDER

1. The appeal be allowed;

2. that the order of the court made on 28 November 1979 be set aside, save and except paragraph 2 thereof, which dissolved the injunctions granted by the court on 18 October 1978;

3. that in lieu thereof, the respondent by itself its servants and agents be restrained from engaging in trade or commerce in conduct that is misleading or deceptive or that is likely to mislead or deceive by selling, offering for sale, dealing with, displaying or advertising any lounge suites, lounges or lounge chairs so as to mislead or deceive members of the public into believing that they are lounge suites, lounges or lounge chairs manufactured by the appellant;

4. that the respondent pay the appellant's costs of the appeal and of the proceedings below, including the application for interlocutory relief before Smithers J., and all reserved costs;

5. that the case be referred back to a single judge of the court to hear and determine the remaining issues, including any question of damages;

6. that liberty to apply be reserved to either party.

JUDGE1

This is an appeal from a judgment of a single Judge of this Court who, on 28 November 1979 made the following orders :-

"1. The claim is dismissed.

1. The injunctions granted by the Court on 18 October, 1978 are rescinded.

1. The defendant pay to the plaintiff the costs of the day of 15 October, 1979.

1. The plaintiff pay to the defendant all other costs of the action including reserved costs.

1. Costs to be taxed if not agreed."

The plaintiff in its Statement of Claim alleged that furniture which the defendant began to market in or about June or July 1978 was, without any authority from the plaintiff, deliberately designed and copied from that of the plaintiff and failed clearly to differentiate its product from that of the plaintiff (paragraph 10). The Statement of Claim continued as follows :-

"11. The Defendant has deliberately so designed and made its furniture with the object of misleading and deceiving the public into believing that it is the product of or identical in quality to the product of the Plaintiff whereas the fact is that it is of an inferior quality which enables the Defendant to market its product more cheaply than the Plaintiff.

12. The public is and is likely to be deceived and misled by the said practice of the Defendant by reason of the unauthorised and deliberate copying and use of the plaintiff's said 'Contour' range of furniture.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. The Defendant is continuing to use and threatens to continue to use unless restrained the plaintiff's design style and get up in manufacturing its product.

16. In so carrying on such business in the way particularised in paragraphs 6 to 14 hereof the Defendant has engaged in conduct that is misleading or deceptive or which is likely to mislead or deceive.

17. By reason of the matters aforesaid the Plaintiff has suffered and will continue to suffer loss and damage."

The plaintiff claimed:-

"(1) An injunction to restrain the Defendant, its servants and agents from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive and in particular to restrain it from displaying, selling, offering for sale or disposing of any furniture which imitates or copies the Plaintiff's 'Contour' range of furniture so as to be misleading or deceptive.

(2) 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.

(3) Damages.

(4) An order that the Defendant pay the Plaintiff's costs of these proceedings.

(5) Such further or other relief as the Court shall deem fit."

In its Defence, the defendant, in answer to paragraph 10 of the Statement of Claim, denied that it had copied any furniture from that of the plaintiff and further denied that it had failed clearly to differentiate its product from that of the plaintiff. In answer to paragraphs 11 and 12 it said -

"11. As to the allegations in paragraph 11 thereof, it denies that it has designed and made its furniture with the object alleged. It denies that its furniture is of inferior quality and it denies each and every allegation in paragraph 11 thereof.

12. As to the allegations in paragraph 12 thereof, it denies that the public is or is likely to be deceived or misled by any of its practices. It further denies that it has copied or used any of the plaintiff's range of furniture and it denies each and every allegation in paragraph 12 thereof.

It went on to deny each and every allegation contained in paragraphs 15, 16 and 17 of the Statement of Claim.

The plaintiff's claim was based solely on the provisions of the Trade Practices Act 1974 ("the Act"), sec. 52 of which provides -

"(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (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) in the case of dealers or retailers conveying to them that the furniture is to be marketed and sold as furniture manufactured by Parkdale Custom Built Furniture Pty. Ltd."

These injunctions were dissolved by the order under appeal.

The plaintiff sought to make a case in respect of the items in what was called its "Contour" range of furniture, including a dining room suite, a buffet, a coffee table, a corner table, a bar, a bar stool and other items. The learned trial judge found that no case had been made out in respect of any items in this range other than the lounge suite and chairs and this finding was not challenged before us.

The genesis of these suites and chairs as manufactured by the plaintiff is to be found in the evidence of Bruce Dowse, whose family trust owns 24 per cent of the capital of the plaintiff. After working in a retail store, in television, moving pictures and photography, he became engaged in set design in London. About 1972 he returned to Australia and after about six months he began, as a single operator, to translate ideas he had formed in relation to furniture into physical form. He built items of furniture and sold them to friends and relations and people who were interested in what he was doing. He described these early products as being what he considered to be "very Australian, very bold, very rustic and very simple". The place where he was working was a farm at Casula and he started to use the words "Post and Rail" as a trading name to describe the furniture, right from the beginning, which he placed as being in late 1973. He took the name from the traditional Australian fence. The original furniture he made was held together by two posts and rails.

His business increased to the point where he employed a clerical assistant. In early 1974 he opened a retail outlet at the Argyle Arts Centre, in the Rocks Area of Sydney, in the area where Australian handcrafted products were sold. He then formed a partnership with one Lane and a factory was opened in the Rocks Area, where it remained for about 18 months, when they moved to Manly Vale. At that time the partnership developed to a point where 12 to 15 people were employed. At Manly Vale Dowse entered into partnership with Peter Ryan, whom he described as remaining as his working partner throughout. The latter holds about 24 per cent of the capital of the plaintiff, which was incorporated in May 1978, to continue their existing business.

The furniture which Dowse was designing and producing at this time was, in his words. "very straight up and down, basic, back to earth, fairly indestructible furniture made of solid pine." He found that this style of manufacture gave rise to difficulties as, although the products were finished beautifully, variation in shrinkage rates in different pieces of timber led to the formation of ridges which were unpleasant to the touch and sight.

He then described the successive modifications which he made of his products to overcome these problems, until "about mid 1976 or early 1976" he began to use steel as a medium to give a contour that could possibly resemble the shape of the human body. It took a while to perfect it and the chair which resulted was almost identical with the present chair marketed by the plaintiff, which became an exhibit in the case. The 1976 chair looked identical with the exhibit but it had detachable leather arm covers. It was structurally identical with the present chair. By late 1976 or early 1977 the arm covers were no longer detachable and the chair had assumed the form in which it continued to be marketed up to the time of the trial.

Dowse described the construction of the frame of the chair as having four legs, one cross rail at the back, one cross rail at the front and one cross rail on each side. In his words "that was sort of unique because normally people tend to put more than one." He is able to use so few members because he uses six by two timbers and four by two coach bolts, which are very strong materials. The entire chair is supported by steel from the top to the bottom, the steel being embedded into nylon sockets punched into the timber. The steel has a spring steel butt in the centre and there are steel members at the top and bottom to support the cushions. The two pieces of steel running from top to bottom are in a body shape. As Dowse said, "We worked on the best shape for them. There were many trials and tribulations with them but we worked out the exact contour that they should be and they are made out of just over half inch steel rod, solid rod." The chair has five pieces of steel, two running from top to bottom and three running across.

The present chair has a leather cover in a patchwork design and underneath the cover a trampoline fabric support and an 18 ounce duck canvas on the back. Although the chair was not changed structurally after 1976, the external cover which was then in suede leather was later changed to a patchwork leather style. "It was something" Dowse said, "something that nobody had really done, nobody was doing at that time, and it took a while to perfect the best way to do it."

He developed a unified patchwork approach so that each chair would match as far as the patches were concerned. Before that development the patchwork had been fairly random and people rang to say that they had not received the chairs that they had ordered. Dowse had never seen an example elsewhere that resembled the patchwork the plaintiff was producing.

In addition to the patchwork style the plaintiff also markets chairs and lounges in plain leathers and fabrics, to meet the wishes of retailers. It has done so since 1977.

Dowse gave evidence in relation to the chair of the plaintiff's manufacture and a chair which originated in the defendant's factory, both of which were exhibits, that their basic construction, their timber size and machining, their overall height and depth and their steel support systems were the same, except that the defendant's chair did not have nylon sockets. The means by which the covers were fixed to the chairs were identical in both cases. The shape of the two structural steel pieces running from the top to the bottom looked to Dowse to be identical.

Dowse criticised the quality of the defendant's chair by reference to its lack of nylon sockets for the steel pieces, and the use of cotton duck in the sling portion instead of the stronger materials used in the plaintiff's chair.

In the cross-examination of Dowse, no challenge was made of this detailed account of the development of the chair and lounge and it was not suggested that the defendant's chair or lounge had been developed before those of the plaintiff.

Dowse had been a director of and shareholder in each of the companies including the plaintiff, which has in substance carried on the original business which he founded.

The plaintiff then led evidence of the effect upon a variety of people of the close resemblance between its chairs and lounges and those marketed by the defendant. Martin Layton became marketing manager of John Bruce World Pty. Ltd. in April 1978. One of his tasks was the supervision of that company's advertising. In July 1978 it had on its premises a single suite which had been produced by the defendant under the name "Parkdale". Layton wished to include a photograph of the suite in an advertising supplement of the Age newspaper and he remembered having seen on a file of bromides which his company had a bromide which he believed was of the suite he wished to advertise. A bromide is an over-exposed black and white photograph which, he said, "gives very sharp contrasts between blacks and whites, greys and so on." He went to the file, took out the bromide, which bore no name, and, before authorising the advertisement, he saw and approved its layout in what was called a "rough pull". After the advertisement had appeared in the newspaper, he learned for the first time that what he had thought to be a bromide of the "Parkdale" suite was in fact a bromide of one of the plaintiff's suites, which were marketed under the name "Post and Rail".

Mrs. Hogg, housewife and kiosk supervisor, and her husband had seen a "Post and Rail" lounge suite at the Melbourne Home Show in 1977. Mrs. Hogg subsequently saw it advertised in several magazines and, as she said, "I had it on my mind for a while." She and her husband were looking around the shops in Preston, a Melbourne suburb, one night when they saw what they believed was a "Post and Rail" suite on display in Maples store. On the following Saturday morning they called in to the store to look at it. They asked a salesman was it a "Post and Rail" and he did not say "yes" or "no", but just commented on it being very nice. They agreed to buy the suite, containing two two-seater lounges and two single chairs, together with three occasional tables. As they were having carpet laid at their home, their purchases were kept for them until 2 August. When they bought the suite they believed that it was a "Post and Rail" suite. After about two and a half months the bars in a chair and a lounge began to sag and they found it virtually impossible to get out of them. They then rang the plaintiff to complain and it was only after its representative called at their home that they discovered for the first time that what they had purchased was in fact one of the defendants' "Parkdale" suites. The suite bore no labels.

In cross-examination Mrs. Hogg said that she specifically told the Maples salesman that she wanted a "Post and Rail" suite, that he did not reply directly to that question but that she assumed from his manner that he was saying, yes, it was "Post and Rail". No cross-examination was directed to challenge her evidence about seeing the "Post and Rail" suite at the Home Show and in advertisements or about her belief that the suite purchased was "Post and Rail". Her husband was in poor health and was not called.

John Klug, a transport driver, had seen advertisements for "Post and Rail" lounge suites in a few "Home Beautiful" issues and in "Belle". From the latter magazine he and his wife cut out a photograph of a "Post and Rail" suite and in July 1979 set out to buy one. One Saturday morning, armed with their photograph, they went to a Melbourne suburban store of Scott Berkowitz after closing time, and saw what he described as "a genuine 'Post and Rail' in behind the front door with a price tag on it." On the same day he found the premises of the Furniture Factory in South Melbourne to be open and they saw a three piece lounge suite which they believed to be a "Post and Rail". They asked about its price and were quoted "about the $1200 mark". After asking for a discount, they agreed to buy it for $1150. The suite consisted of a three seater lounge and two chairs. Klug asked the salesman how it was that the price was cheaper, because the Scott Berkowitz tag had showed a price of $1590. He said that their price was lower because they bought the suites in such large numbers that they got a reduction for quantity. About four weeks later, Klug picked up the suite himself. About a week after he took the suite home, he began to have doubts as to whether he had received a genuine "Post and Rail" suite. He looked at his photograph, saying - "you cannot tell the difference much in the advertisement". The suite he had bought carried no label and the receipt which he was given had no trade name but simply described it as a "three piece lounge suite". At the time of its purchase he did not know that there was any other manufacturer producing this type of furniture.

A friend of Klug's had a genuine "Post and Rail" lounge suite and after he had had his own suite for some time, he looked at his friend's suite and then at his own suite and was able to see that they were different. He happened to be working in Moorabbin and he saw at the defendant's premises a "Parkdale" lounge suite and found that the suite he had bought was one of their products. He said that he would not have bought the suite if he had known it was not "Post and Rail", "as they have a good name". He later had trouble with the padding in the back of the lounge and took it to the defendant to be repaired, where the whole sling was replaced by a stronger type of material and the support underneath was renewed.

Michael Delaney, a solicitor, is a director of the plaintiff and his family interests hold approximately 8 per cent of its shares. After seeing the John Bruce advertisement in July or August 1978, he came to Melbourne from Sydney and visited various retail furniture stores where he saw suites manufactured by the plaintiff and those manufactured by the defendant on display. He described the difficulty he experienced on those visits and on later trips to Melbourne in distinguishing between the two suites. Evidence was also led to show that the plaintiff's suites were extensively advertised throughout Australia in newspapers, magazines and on television and at Home Shows. The scale of the advertising may be seen from the facts that expenditure on it between July 1977 and June 1978 was $110,302 and over the period July 1978 to June 1979 was $162,872. These figures related to the whole of the "Contour" range, which included items other than the lounges and chairs.

The plaintiff had established a strong and widespread market for its suites before those of the defendant appeared on the Victorian market, where previously the plaintiff's suites had been the only ones of their particular style and appearance.

It is useful to review the position as it stood at the close of the plaintiff's case. It began with the allegation in the statement of claim that the defendant deliberately copied its furniture and, for good measure, added that it failed clearly to differentiate its product from that of the plaintiff (paragraph 10). It went on to allege that the defendant deliberately so made its furniture with the object of misleading and deceiving the public (paragraph 11). It led detailed evidence of the way in which the design of its lounges and chairs had been conceived and modified over a period of years until it had reached its present distinctive form. Dowse described the close resemblance between the construction and appearance of the defendant's suites and those of the plaintiff. Two purchasers gave evidence that they were led by reason of this close resemblance to believe that suites manufactured by the defendant were in fact those of the plaintiff. Layton took a bromide of the plaintiff's suite to be one of the defendant's suite.

In the face of these allegations and this evidence, the defendant called no evidence.

As Rich J., speaking of the position in The Insurance Commissioner v. Joyce (1948) 77 C.L.R. 39, said (at p.49) :-

"Obviously the question was one to be decided on circumstances. But when circumstances are proved indicating a conclusion and the only party who can give direct evidence of the matter prefers the well of the court to the witness box a court is entitled to be bold."

After carefully reviewing the evidence, the learned trial judge reached conclusions including the following :-

(a) both Mrs. Hogg and Klug were led to believe that the lounge suite purchased was a "Post and Rail" suite;

(b) no action of the defendant led either purchaser so to believe. Both of them were misled by a statement of a salesman;

(c) Layton "wrongly assumed" that the bromide photograph was a photograph of the "Parkdale" suite, "without bothering to do any checking at all as to the manufacturer." His Honour did not consider that Layton's evidence assisted the plaintiff;

(d) although the defendant's suite closely resembled that of the plaintiff, his Honour was unable to conclude that the defendant's conduct in making it has led or is likely to lead an ordinary member of the public considering the purchase of a lounge suite into believing that the defendant's suite is a "Post and Rail" suite.

His Honour went on to say -

"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 and Rail '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.

Where the defendant's label has been previously removed from the 'Rawhide' suite then the person who is considering purchasing the suite will not be led into believing that it is the plaintiff's Post & Rail 'Contour' suite unless 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 '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 apparant 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."

None of his Honour's conclusions depended upon any view which he formed of the credibility of any of the witnesses. There was no attack upon their credit, and no evidence was led to contradict them. This is not a case in which a trial judge has enjoyed any real advantage over an appellate court.

Mrs. Hogg and Klug were, as his Honour found, led to believe that the suites purchased by them were "Post and Rail". It is true that the conduct of the retail salesman with whom they dealt contributed to their continuing to hold this belief. But this does not suffice to show that that conduct was the sole source of their belief. The close resemblance between the two suites was what gave the deceptive conduct of the salesman any chance of success.

It is time to say something more of that resemblance. The learned trial judge listed seven respects in which the suites were either identical with or closely resembled each other He then listed under four different headings differences which he considered would be likely to be observed by "an ordinary member of the public who had previously looked at the plaintiff's chair as a potential purchaser". It should be observed that it is not only members of the public who have looked at a chair as potential purchasers on an occasion prior to the time of making a purchase who are entitled to the protection of the Trade Practices Act.

His Honour then detailed two further differences which he characterised as "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". Then followed three other differences "which even a careful buyer with a clear recollection of the plaintiff's chair would not be likely to see."

In my respectful opinion, his Honour's careful and detailed analysis of the resemblances and differences between the two products was far removed from the processes likely to be involved in consumers' observations and recollections in the market place. The aim of pictorial advertisement is to convey to the potential purchaser an impression of the product represented which will be sufficient to lead him to recognise it when he sees it on display in a store. Few advertisers would be sanguine enough to expect that their readers or viewers would be likely to observe the individual characteristics of a product and later to recollect them in a way which would enable them to list them individually and scientifically. The reader or viewer of an advertisement is not expected to give his total attention to it, however devoutly the advertiser may wish him to do so. The advertiser's hope is that an overall impression will remain, together with a wish to purchase the product. A member of the public may well see a product either in a Home Show or on display in a store and form a general impression of it, without having at that time any intention of purchasing it. He may become familiar with its name and its general appearance without being able to list its individual characteristics.

The learned trial judge found that both Mrs. Hogg and Klug were misled by salesmen but were not led to believe that the suites which they purchased were those of the plaintiff by any action of the defendant. I respectfully disagree with the latter conclusion.

The evidence of Layton was, in my opinion, of great assistance to the plaintiff's case. As marketing manager of a company selling furniture, he had for sale a suite manufactured by the defendant. He went through the whole process of taking out the bromide, which unknown to him, was of the plaintiff's suite, looking at the suite again, preparing his advertisement and approving a "rough pull" of it and then seeing the advertisement after it was published, without discovering his error.

As we have seen, Klug, working from this photograph of the plaintiff's suite, wrongly concluded that the suite which he purchased was that of the plaintiff. Here we have Layton, a professional in the field, working from the defendant's suite on his company's floor, wrongly concluding that the bromide on which he based the advertisement related to that suite, when in fact it was a bromide of the plaintiff's suite. These conclusions were rendered likely by the conduct of the defendant in placing upon this section of the market, which had previously known only the plaintiff's suite, a product eminently capable of being mistaken for it. In Layton's case, there was no salesman involved. He was simply deceived by the closeness of the resemblance. The defendant's suite spoke for itself. Study of the two chairs which became exhibits, one manufactured by the plaintiff and the other by the defendant, made it easy to appreciate how simply the latter could be mistaken for the former.

Mrs. Hogg had seen a "Post and Rail" suite at a Home Show and had seen several magazine advertisements of it. She and her husband saw one night what they believed to be a "Post and Rail" suite on display in a store. When they later called at the store they asked a salesman was it a "Post and Rail" suite and received an evasive answer, which misled Mrs. Hogg and distracted her from noticing his failure to answer the question. But it was the defendant which put into circulation a product which by its appearance led an intending purchaser such as Mrs. Hogg to believe, as she did before entering the store, that she had been looking at a "Post and Rail" suite, and left her secure in that belief despite the salesman's evasive answer.

John Klug, who had become familiar with the plaintiff's suite through magazine pictures and had seen one through the front door of a store, nevertheless bought a "Parkdale" suite at another store in the belief that it was a "Post and Rail". The photograph which he had cut from one of the magazines was of no more help in saving him from that error than Layton's observation of his suite and bromide had been to him. One took the defendant's suite to be the same as that in his photograph, the other took his bromide to be a representation of the defendant's suite. The misleading answers by the salesman to Klug's questions about price would have had no persuasive value, had not Klug been misled or deceived by the appearance of the defendant's suite into the belief that it was a "Post and Rail". For that appearance the defendant alone was responsible. There was no reason to regard either Klug or Mrs. Hogg as other than ordinary members of the public or to conclude that they were in any way especially gullible.

In my opinion, the proper conclusion to be drawn from the evidence of Layton, Mrs. Hogg and Klug was that the defendant had, in trade or commerce, engaged in conduct that was misleading and deceptive within the meaning of s.52(1) of the Act. The defendant's suites were deceptively similar to those of the plaintiff, which had been the only ones of their appearance and design on the market. The fact that they left the defendant's factory with a small label capable of easy removal, as had been done in the case of the suites purchased by Mrs. Hogg and Klug, does not, in my view, deprive the defendant's conduct of its essentially misleading and deceptive character.

By a 1977 amendment, the words "or is likely to mislead or deceive" were introduced into s.52(1). Thus, conduct may be found to offend against the sub-section without proof of actual misleading or deception. It is sufficient to show that the conduct of a corporation, in trade or commerce, was likely to mislead or deceive. In my opinion, the defendant's conduct in marketing these suites satisfied this test. Members of the public who, through seeing advertisements of the plaintiff's suites, or through seeing the suites themselves, had become familiar with their highly distinctive appearance, they being the only suites of their kind previously on the market, were likely to be misled or deceived by the appearance of the defendant's suites, so as to believe that they were produced by the plaintiff.

It was submitted on behalf of the defendant that a finding in favour of the plaintiff would have the effect of conferring a monopoly upon it in the marketing of suites such as its "Post and Rail" line. If the proper conclusion on the evidence is that there has been a breach of section 52, which the defendant threatens to repeat, it seems to me that it is an appropriate case in which to grant an injunction so that consumers may be protected from future conduct which would offend against the section. Any advantage which accrues to the plaintiff in the form of protection against the marketing of copies of its products or of suites so closely resembling them as to mislead or deceive consumers or to be likely to mislead or deceive them, is merely the result of giving the words of the section their ordinary and natural meaning and affords no reason to deny to consumers the protection which the Act intends that they should enjoy. If that protection gives rise to an incidental benefit to the plaintiff, so be it.

In my opinion, the appeal should be allowed with costs. I would propose the following orders:-

1. that the appeal be allowed;

2. that the order of the court made on 28 November 1979 be set aside, save and except paragraph 2 thereof, which dissolved the injunctions granted by the court on 18 October 1978.

3. that in lieu thereof, the respondent by itself its servants and agents be restrained from engaging in trade or commerce in conduct that is misleading or deceptive or that is likely to mislead or deceive by selling, offering for sale, dealing with, displaying or advertising any lounge suites, lounges or lounge chairs so as to mislead or deceive members of the public into believing that they are lounge suites, lounges or lounge chairs manufactured by the appellant.

4. that the respondent pay the appellant's costs of the appeal and of the proceedings below, including the application for interlocutory relief before Smithers J., and all reserved costs;

5. that the case be referred back to a single judge of the court to hear and determine the remaining issues, including any question of damages;

6. that liberty to apply be reserved to either party.

JUDGE2

The appellant was unsuccessful before Keely J. in an application for an injunction pursuant to Section 80 of the Trade Practices Act 1974 (the Act) based upon breach of Section 52 of the Act. The issue before the learned trial judge was whether the respondent, in trade or commerce, engaged in conduct that was misleading or deceptive, or was likely to mislead or deceive contrary to Section 52 (1) of the Act.

In 1976, a designer, engaged for that purpose, designed for the appellant's predecessors in business a novel type of chair which was marketed and advertised extensively under a label and logo styled "Post and Rail". Registration of the design under The Designs Act 1906, because of prior publication before application for registration, was not possible. In 1978 the respondent Company began the manufacture of a chair which, for the purposes of this judgment, I will assume was a copy of that chair and was, in appearance almost identical to it. Such copying could not amount to any infringement of The Designs Act (1906) and so far as my research goes, with the possible exception of the Trade Practices Act, such copying could not amount to an infringement of any statute. Having regard to the learned trial judge's findings on the evidence, the basic question posed by this appeal is: "Does copying a product by a manufacturer and distributing it to a retailer properly labelled with the name of the manufacturer amount to conduct prohibited by Section 52 (1) of the Act, when the original product from which the copy was made is still being marketed and advertised.

I have had the advantage of reading the reasons for judgment of Lockhart J. wherein the facts found by the learned trial judge are adequately summarised. Those findings were, in my view, all consistent with the evidence at first instance, and could not possibly be disturbed. The learned trial judge found as a fact that the practice in the furniture manufacturing industry, so far as chairs are concerned, was to attach by way of an identifying label, a tab of material to the underside of the front of the squab of the chair, which label was not visible if it were tucked in, but could be inspected by lifting the squab and drawing it forward. His Honour also found that it was the respondent's practice to properly label the chairs before delivery to the retailer and there was ample evidence from which he could so find, including the evidence of a director of the appellant company who inspected the respondent's goods in a number of furniture retail stores.

The learned trial judge found that in the two instances of purchase at retail outlets the purchasers thought they were buying the appellant's goods when in fact they were buying the respondent's. His Honour found in one instance that the purchaser, a Mrs Hogg, had been deceived by the salesman into believing that the chair she purchased was a "Post and Rail Chair" and not the respondent's product. In my view there was ample evidence upon which this finding could be made so that in that instance one has, not only the evidence that Mrs Hogg confused the two products in her mind because they were similar, but also a salesman dishonestly dispelled the doubt which arose from such confusion. In another instance of purchase from a retailer, the respondent's product was purchased by a Mr Klug in the belief that it was the appellant's product, but at a price very much cheaper than the appellant's product had been seen, by Mr Klug, in another retailer's premises. When the salesman was asked to explain the difference, he gave what the learned trial judge found to be a dishonest answer in which he said that bulk buying was the explanation. Again, deception was added to the respondent's conduct.

In Hornsby Building Information Centre Pty Limited v. Sydney Building Information Centre Limited, Stephen J. discussed the relationship between the approach applicable to a passing-off suit and Section 52 (1) by stating:

"In determining the meaning of misleading or deceptive in Section 52 (1) and in applying it to particular circumstances the law which has developed around the tort of passing off, founded as that tort is upon the protection of the plaintiff's intangible property rights, may not always provide any safe guide. However, the long experience of the courts in that field should not be disregarded, some principles which have been developed appear equally applicable to Section 52 (1)."

That case was concerned with the name chosen for a business. There have been other cases where the name, description, logo or get-up of products or services has led to injunctions being ordered, see, for example Macdonalds' System of Australia v. McWilliams Wines Pty Limited 1979 A.T.P.R. 18, 512; World Series Cricket Pty Limited v. Parish (1977) A.L.R. 181. Those cases involved deception in the description of the goods or services and not similarity of the goods themselves.

The injunction asked for before the learned trial judge was in the following terms:-

"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 from displaying, selling, offering for sale or disposing or any furniture which imitates or copies the Plaintiff's 'Contour' range of furniture so as to be misleading or deceptive" and an "injunction to restrain the Defendant its servants and/or agents from reproducing or authorizing the reproduction of chairs and lounges in accordance with the Plaintiff's design".

The orders sought on the appeal were:

In lieu of the orders made by the trial Judge make the following orders:

(a) Order that the defendant by itself its servants and agents be restrained from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive and in particular from displaying, selling, offering for sale or disposing of any furniture which imitates, copies or closely resembles the plaintiff's 'Contour' range of furniture;

(b) Order that the defendant by itself its servants and agents be restrained from reproducing or authorizing the reproduction of furniture which imitates, copies or closely resembles the plaintiff's 'Contour' range of furniture;

(c) Order that an inquiry be held as to the plaintiff's damages;

(d) Order the defendant to pay the whole of the plaintiff's costs of the proceedings including reserved costs and the costs of the application for interlocutory relief.

The question as I see it is what, on the evidence, was the defendant's conduct. Clearly the answer was to copy furniture which was already on the market, and extensively advertised, and deliver it to a retailer, properly labelled according to the practice of the trade. There was no evidence that the manufacturer had any proprietary interest in the goods after delivery to the retailer; nor was there any suggestion that the retailer was the agent of the manufacturer. The evidence that the confusion, of which there was evidence in some witnesses' minds, as to what was the original or the copy, was put in argument as being caused by the bare facts I have set out. It could, with equal strength be argued that, knowing its design was being copied, the appellant continued to manufacture, advertise and deliver to retailers properly labelled furniture almost identical with the respondent's product, thereby confusing potential purchasers who were familiar with the respondent's product. Adding to the facts in the instant case the deception of two retail salesmen, in whose deception the respondent was not in any way responsible, does not, in my view, assist the appellant.

The Act gives remedies against deceptive conduct or conduct likely to deceive. The conduct of others not proceeded against cannot be looked at unless there is evidence connecting that conduct with the conduct of the corporation proceeded against in such a way as to make the first-mentioned conduct the conduct of the corporation. Even if one could reasonably draw the inference that the respondents knew that some retail salesmen, at some time, would deceive customers as to the identity of the manufacturer of its furniture, that knowledge, in itself, would not in my view amount to conduct likely to deceive within the meaning of the Act. Selling a car to a second-hand car dealer would be hazardous if that were the law.

Assuming I were wrong in refusing to allow this appeal and the appellant was held to have established the facts upon which an injunction could be granted, it is a discretionary remedy with which care should be exercised when rival manufacturers are the parties before the court. Even if the conduct of the respondent amounted to conduct likely to mislead by causing purchasers to be confused, I would be inclined to refuse an injunction in those circumstances for the reason that it would result in a monopoly of a design which, because of lack of registration, confers no rights upon the designer or the manufacturer of that design.

The Act manifests two broad legislative intentions; firstly an intention to proscribe restrictive trade practices including monopolies and secondly to protect consumers. If to protect consumers involved granting a monopoly to manufacture a particular design, I would take the view that such monopoly should not occur and the injunction should not be granted.

Additionally, there was no evidence that purchasers of the respondent's product suffered damage. Without the benefit of argument from counsel, I would incline to the view that lack of evidence of damage would operate against injunctive relief. Although the respondent's product may have been inferior in construction, it was, in some retail sales, cheaper in price. Had it been inferior, and equal or more in price, an injunction would more readily be granted.

The test applied by Keely J. to determine whether the conduct of the respondent was deceptive, came under attack from appellant's counsel. The learned trial judge considered whether a member of the public who had previously looked at the appellant's product as a potential purchaser, would be likely to be deceived. His Honour excluded persons who may have seen representations of that product on television and in newspapers and journals. The evidence was from two purchasers. They approached their task with care and wariness. The prices to be paid were considerable, the purchase was an important addition to home furnishing and necessarily a purchase not frequently made or lightly undertaken. On the evidence before him, I see no error in the test formulated and applied by His Honour.

I would dismiss the appeal with costs.

JUDGE3

This is an appeal from a judgment of a single judge of this court (Keely J.) dismissing a proceeding for injunctive relief under s. 80 of the Trade Practices Act 1974 ("the Act"). The appellant alleges that the respondent is contravening s. 52 of the Act by engaging in conduct that is misleading or deceptive or likely to mislead or deceive.

Soon after its incorporation on 8 May 1978 the appellant commenced to manufacture and sell a range of furniture called "Post & Rail". The only "Post & Rail" furniture that is relevant to this case is included in the appellant's "Post & Rail" "Contour" range namely, "two-seater" or "three-seater" "lounges" and individual "lounge" chairs.

"Post & Rail" furniture was first designed, made and sold in 1973 by Mr. Bruce Dowse, a furniture designer. He said in evidence that he took the name "Post & Rail" from the traditional Australian post and rail fence because the furniture was "very Australian, very bold, very rustic and very simple". He described it as "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.

Mr. Dowse experimented with alterations to the design of the "Post & Rail" 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". Physical construction of that chair was almost identical to the appellant's present "Contour" chair. There were some problems in relation to the upholstery and arm covers and it took a little while before the present "Contour" chair was finally developed. In late 1976 or early 1977 the "Post & Rail" "Contour" chair was first manufactured and sold in its present form.

"Post & Rail" furniture was manufactured by Post & Rail Furniture Company Pty. Limited until November 1976 when the undertaking of that company was sold to Seegil No. 96 Pty. Limited. Mr. Dowse was a director of and shareholder in the companies. The lastmentioned company changed its name to Dowse Co. Australia Pty. Limited and later sold its undertaking to the appellant on 3 June 1978. The appellant has sold the "Post & Rail" "Contour" lounge suites and chairs and other items of furniture since then.

The respondent has manufactured and sold "custom built" furniture under the name "Parkdale" since at least June 1978. Among the items of furniture manufactured and sold by the respondent is a range of furniture known as the "Rawhide" range which includes the "Rawhide" lounge suite and chairs.

The appellant's "Post & Rail" "Contour" lounge suite and chairs were being manufactured and sold before the respondent commenced to manufacture and sell its "Rawhide" lounge suite and chairs. Although the evidence is not clear as to precisely when the respondent commenced to manufacture and sell the "Rawhide" lounge suite and chairs, it was not later than June 1978.

The appellant contends that the respondent's "Rawhide" lounge suite and chairs so closely resemble the appellant's "Post & Rail" "Contour" lounge suite and chairs in design, style, shape, leather upholstery and general get up and appearance as to mislead or deceive the public into believing or assuming that the respondent's furniture is part of the appellant's range of "Post & Rail" "Contour" lounge suites and chairs.

It is convenient if I state at this stage some of the relevant principles applicable to this case.

Section 52 provides:-

"52. (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1)."

Section 52 is concerned to prohibit conduct in trade or commerce which is deceptive of members of the public as consumers of goods or services.

"Section 52 (1) of the Act is expressed in wide terms and its generality is expressly preserved by sub-s. (2). Its operation requires the existence of three factors, a 'corporation', its engagement in conduct answering the description of 'misleading or deceptive' and the occurrence of that conduct 'in trade or commerce'. If each of those factors be present a contravention of s. 52 will occur. Section 80 (1) will then apply and the court, at the relevant time the Industrial court but now the Federal court, may grant an injunction restraining that conduct as a contravention of Part V of the Act":

per Stephen J. in Hornsby Building Information Centre Pty. Limited v. Sydney Building Information Centre Limited (1978) 18 A.L.R. 639 at pp. 642 and 643.

Section 52 is concerned with the misleading of the public and not merely with injury to the reputation or goodwill of competitors in trade or commerce: see Hornsby Building Information Centre Case (supra).

Although the section is directed to the protection of the public from misleading or deceptive conduct and must not be treated as an extension of the tort of passing off, the principles developed by the courts in the field of passing off are helpful when considering the construction and application of the section. In the Hornsby Building Information Centre Case (supra) Stephen J. said at p. 646:-

"In determining the meaning of 'misleading or deceptive' in s. 52 (1) and in applying it to particular circumstances the law which has developed around the tort of passing off, founded as that tort is upon the protection of the plaintiff's intangible property rights, may not always provide any safe guide. However, the long experience of the courts in that field should not be disregarded, some principles which have been developed appear equally applicable to s. 52 (1)."

As to the words "misleading or deceptive" Mason J., with whom Gibbs, Stephen and Jacobs JJ., agreed, said in R. v. Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 C.L.R. 545 at p. 561:-

"'Misleading' is a word which is capable of expressing various shades of meaning, sometimes signifying that which is subjectively misleading and at other times that which is objectively misleading. Its meaning therefore is apt to be influenced, indeed decisively influenced, by the context in which it is found. Here the setting in which sec. 52 (1) appears is shown by the headings 'Part V - Consumer Protection' and 'Division 1 - Unfair Practices'. In this context the prohibition contained in the sub-section emerges as an important general prohibition against a corporation in the course of trade or commerce engaged in a form of conduct, a trade practice, which is unfair."

The words "or is likely to mislead or deceive" were introduced into sub-s. 52 (1) in 1977.

In McDonalds System of Australia Pty. Limited v. McWilliams Wines Pty. Limited 28 A.L.R. 236 Franki J. considered the meaning and effect of the words "likely to mislead or deceive". After carefully reviewing the decided cases bearing on those or similar words in various contexts, his Honour said at p. 243:-

"The conclusion I draw from the industrial property law is that very little significant distinction has been drawn between conduct likely to lead to deception and conduct which is confusing . . . However the addition of the words 'or is likely to mislead or deceive' which were added in 1977 to s. 52 (1), in my opinion leads to the result that conduct which is confusing to the relevant persons may properly be said to be likely to mislead or deceive those persons. Whilst this may need some further qualification depending upon the particular facts under consideration and upon the nature of the confusion established by the evidence in any particular case, I consider it provides the appropriate basis for examining the relevant conduct said to contravene section 52 (1) in this case."

It is impossible to lay down definitive criteria for establishing the class or members of the public who have the benefit of the protection of the section as this must vary according to the facts of each case. For instance, a corporation may engage in deceptive conduct in relation to the sale of surgical instruments, and the only relevant members of the public may be medical practitioners. Another corporation may engage in deceptive conduct in relation to the sale of law books. The section of the public varies markedly in those two instances.

In the present case the relevant class of persons likely to be exposed to the alleged misleading or deceptive conduct would be anyone interested in purchasing lounge suites or chairs in the higher price range. This is a wide class of persons 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: see World Series Cricket Pty. Limited v. Parish (1977) 16 A.L.R. 181, per Brennan J. at p. 203; McDonalds System of Australia Pty. Limited v. McWilliams Wines Pty. Limited (supra) per Franki J. at p. 244 and C.R.W. v. Sneddon (1972) A.R. 17 per Sheldon and Sheppard JJ. at p. 28.

The appellant puts its case a number of ways: first on the basis that members of the public were in fact misled or deceived when seeing the respondent's "Rawhide" lounge suite and chairs into believing that they were the "Post & Rail" lounge suite and chairs. Reliance was placed on the evidence of witnesses called by the appellant; the fact that the respondent called no evidence; and the close similarity, if not substantial identity, between the relevant goods of the appellant and of the respondent.

Counsel for the appellant submitted that, although its "Post & Rail" lounge suite and chairs had not been manufactured and sold for many years before the defendant commenced to manufacture and sell its "Rawhide" lounge suite and chairs, nevertheless it was a sufficiently substantial period of time for the names "Post & Rail" or "Contour" to become associated in the mind of the public with the novel lounge suite and chairs which are manufactured and sold by the appellant, whether or not the public knew that the appellant was the manufacturer. In addition to the evidence of witnesses, the following matters were relied on by the appellant in support of this submission.

The monetary value of wholesale sales of "Post & Rail" "Contour" furniture, including the "Contour" lounge suite and chairs in New South Wales, from July 1978 to April 1979 was $836,303.00. The monetary value of wholesale sales of such furniture in Victoria over the same period was $225,000.00.

The appellant has advertised its "Post & Rail" furniture including the "Contour" lounge suite and chairs extensively throughout Australia. A substantial portion of the advertising is done by placing advertisements in magazines such as "Home Journal" and "Belle". Also advertising campaigns have been conducted on television channels. Some of the advertisements for "Post & Rail" furniture is done by retailers themselves pursuant to an arrangement with the appellant for special promotion of the appellant's products and part of the cost is borne by the appellant.

The money spent by the appellant on advertising its various products including "Contour" lounge suites and chairs, but without there being any breakup of the figures, over the period July 1977 to June 1978 was $110,302.00 and over the period July 1978 to June 1979 was $162,872.00.

The "Contour" lounge suite and chairs were displayed at a number of furniture displays such as the Melbourne Home Show in 1977.

Witnesses were called by the appellant to prove actual deception. Mr. J. L. Klug, a transport driver who lives in Melbourne, gave evidence that he and his wife looked in various magazines and saw pictures of the "Post & Rail" lounge suite. He cut out a photograph of the suite from "Belle" magazine. He and his wife first went to a furniture factory in Cheltenham, Victoria and asked if there were any "Post & Rail" lounge suites in stock. There were not, so they went a short distance away to a retailer called Scott Berkowitz. The shop was closed but they saw what they believed to be a "Post & Rail" lounge suite in the shop behind the front door with a price tag on it of $1,590.00. They then went to an establishment known as the "Furniture Factory" in South Melbourne and saw a three piece lounge suite which they believed to be a "Post & Rail" lounge suite. They looked at it and asked the price. The salesman said that it was about $1,200.00 and that he would let them have it for $1,150.00. Mr. Klug asked him why the price was cheaper than it was at Scott Berkowitz, namely $1,590.00, and the salesman said it was "because of bulk buying, that they bought in such large numbers, for quantity they get them down to cheaper prices." They agreed to buy it.

In due course, Mr. Klug took delivery of the lounge suite which his wife and he assumed to be a "Post & Rail" lounge suite. At the time they agreed with the salesman to buy it Mr. Klug paid a deposit and received a receipt from the "Furniture Factory" but it made no mention of the name of the manufacturer or anything relevant except to say that it related to one three-piece lounge suite.

Counsel for the appellant submitted that if this conclusion was reached then, as in the field of passing off, the court would be more ready to conclude that the intentional objective of the respondent had been achieved and would therefore more readily infer that there had been an actual misleading or deception of the public or that there was a likelihood of the public being misled or deceived. Although there is considerable force in this argument, I do not think it necessary to decide whether there was a deliberate copying by the respondent of the appellant's "Post & Rail" lounge suite and chairs.

It was submitted by counsel for the respondent that there was no breach by the respondent of sub-s. 52 (1) because the effect of holding that there was such a breach would be to grant the appellant a monopoly over its "Post & Rail" "Contour" lounge suite and chairs and that this would be contrary to the very basis and spirit of the Act.

The argument is misconceived. It is true that the Act prohibits monopolisation; but that prohibition is directed to control of a relevant market for goods or services. It his has nothing to do with the appellant's right to be entitled to produce and sell its own product with its own particular and novel design, get up and appearance without the same being copied by others. Copying of goods is not per se unlawful; but it may be unlawful if it infringes the law, for example in the fields of passing off, breach of confidential relationship, registered designs and trade marks. The question is whether or not the respondent in trade or commerce has engaged in conduct that is misleading or is deceptive or likely to mislead or deceive. If it has, then it has contravened the section and is liable to be enjoined. That the practical effect of an injunction in some cases may be to prevent a respondent from producing or selling goods does not bear on the question of breach of sub-s. 52 (1), although it may be a relevant matter to consider, in the exercise of the court's discretion, as to whether an injunction should be granted.

Counsel for the respondent submitted that the statement of claim and the conduct of the case by counsel for the appellant at the trial were based solely on an allegation that the respondent deliberately designed and copied its "Rawhide" lounge suite and chairs from the appellant's "Post & Rail" "Contour" furniture. As to the statement of claim in my opinion, although there is an allegation of deliberate design and copying on the part of the respondent, there is also a severable allegation that the conduct complained of constitutes deceptive or misleading conduct under s. 52 on the basis that the respondent failed to clearly differentiate its product from that of the appellant. See paragraph 10 of the statement of claim which reads as follows:-

"10. The Defendant has without any authority from the Plaintiff deliberately designed and copied its said furniture from that of the Plaintiff and has failed clearly to differentiate his product from that of the plaintiff."

In my opinion the allegations made in paragraph 10 are severable. Indeed they were so treated by the respondent in paragraph 10 of its defence.

Counsel for the appellant informed this court that the trial had been conducted on the alternative bases of deliberate copying and of copying, whether deliberate or not, that misled or deceived the public or was likely to do so.

It is clear from the learned trial judge's reasons for judgment that his Honour did not treat the case as one depending solely on the allegation by the appellant of deliberate copying. In all the circumstances the attempt by the respondent to confine the appeal merely to the issue of deliberate copying fails.

For these reasons, in my opinion, the appeal should be allowed with costs. I agree with the orders proposed by C.A. Sweeney J.