Re Equity Access Pty Ltd v Westpac Banking Corporation

[1989] FCA 506

3UDGMENT No. ..%... :l ...a

C A T C H W O R D S

CONTEMPT - infringing use of trade mark - false representation - conduct - injunction granted - continuing use of trade mark in breach of injunction - misapprehenslon that period of grace granted - nevertheless deliberate breach - public interest factors

- honesty in advertising - fine imposed.

Trade Marks Act 1955

Fair Trading Act 1987 (WA) s.12

Australasian Meat Industry Employees Union v Mudginberr~ Station

(1986) 66 ALR 577

Attorney-General v Times Newspapers Lim~ted [l9741 AC 273

AUSTRALIAN DESIGN COUNCIL (formerly The Industrial Deslgn Council
of Australia) v PETER BORELLO trading as Buccaneer Pools

NO. WAG 76 of 1989

FRENCH J .

PERTH

15 AUGUST 1989

IN THE FEDERAL COURT	)
OF AUSTRALIA	)
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	1
GENERAL DIVISION	) NO. WAG 76 of 1989
B E T W E E N :	AUSTRALIAN DESIGN COUNCIL (formerly The Industrial Design Council of Australia)

Applicant

and

PETER BORELLO trading as Buccaneer

Pools

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	15 AUGUST 1989
WHERE MADE:	PERTH
THE COURT ORDERS:

1.         By consent the respondent whether by himself, his servants or agents be restrained until further order from publishing by whatever means or arranging to have published in connection with the advertising of his swimming pools the words "our designs have won seven

Australian Design Awards" and publishing or arranging to have published words suggesting or implying the

respondent's swimming pools, whether as a whole or individually or howsoever carry a current design award or awards save that the words in form as follows, "our designs have won seven Design Awards (EXP)" shall be deemed not to be in breach of the order.

That the respondent be fined the sum of $2,000 to be paid to the Registrar of this Court within seven (7) days.

By consent, the respondent to pay the applicant's costs

including solicitor/client costs.

Note: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT	)
OF AUSTRALIA	1
WESTERN AUSTRALIA	1
DISTRICT REGISTRY	)
GENERAL DIVISION	1 NO. WAG 76 of 1989
B E T W E E N :	AUSTRALIAN DESIGN COUNCIL (formerly The Industrial Design Council of Australia)

Applicant

and

PETER BORELLO trading as Buccaneer

Pools

Respondent

CORAN :	FRENCH J .
15 AUGUST 1989

EX TEMPORE REASONS FOR JUDGMENT

ON NOTION TO PUNISH FOR CONTEMPT

This is a motion to punish the respondent for contempt of Court said to arise from the breach of an injunction order made by consent on 8 June 1989. The substantive application was commenced on 22 Nay 1989. The applicant is the Australian Design Council, a company incorporated in the Australian Capital Territory and formerly known as the Industrial Deslgn Council of

Australia. By its statement of claim the Council asserted that it is the proprietor of a trade mark number C296,242 registered under	the Trade Narks Act 1955. The trade mark is in the form of a
white inverted "V" on a rectangular field of blue. The business of the Council includes licensing manufacturers to use the trade mark for marketing their goods. The Council also issues awards for good design based upon assessment of particular products by independent panels. The respondent, Borello, is said to carry on the business of manufacturing fibreglass swimming pools under the name Buccaneer Pools. His products, it was contended, fall within the class of goods in respect of which the Council's trade mark is registered and this was not disputed. The Council claimed that since 1987 he has used the trade mark or a fraudulent or obvious imitation of it in the course of his business and in so doing infringed the Council's monopoly. particulars of the infringement set out that he affixed labels containing the trade mark to his pools and advertised them in newspapers with the trade mark depicted in a way intended and likely to lead to the belief that it referred to the pools. He was also said to have published brochures depicting the trade mark in conjunction with photographs or diagrams of the pools to similar effect. The Council invoked s.12 of the Fair Trading Act 1987 (WA) alleging that contrary to that section, Borello falsely represented that his pools had the approval or endorsement of the Council or were qualified by a subsisting design award or some other award. The representations were sald to have been made by the affixing of the labels with the Council's trade mark to the pools and the publication of newspaper advertisements and brochures containing depictions of the trade mark in reference to
the goods. I note that in evidence given in these proceedings, Mr
Renshaw, the State Director of the Council, told the Court that awards made by the Council are only made for a speclfic period, which is currently two years, and requlre re-assessment after that time.
It was further claimed in the statement of clalm that Borello had used in his labels, advertisements and brochures the words "Industrial Design Council of Australia, Design Council Selection". The words "Winner of Seven Design Awards" were also published in conjunction with depictions of the trade marks containing the words "Industrial Design Council of Australia, Design Council Selection". These words and markings were used in a way, it was said, intended and likely to lead to the bellef that the words "Winner of Seven Design Awards" referred to the respondent's pools and that they had the endorsement or approval of the Council.
On like facts a plea of passing off was raised and additionally it was alleged that the design of the trade mark was an original artistic work, copyright in which is the subject of an exclusive licence in the Council, infringed by the respondent publishing the labels, advertisements and brochures already mentioned. Claims were made for damages, injunctive rellef, orders for delivery up, exemplary damages and interest. On 1 June
1989 Borello filed an appearance and on 8 June an order was made
by consent in the following terms:

"By consent the Court orders that:

1.    The Respondent whether by himself his servants or agents be restrained durlng the term of the Trade Mark Registration No. C296.242 from infringing, the Applicant's monopoly in such trade mark without the consent in writing of the Applicant flrst had and obtained, by:

(a)	applying such trade mark or any fraudulent or obvlous imitation of it to hls swimmlng pools;
(b)	selling or offering to sell any swimming pools to which such trade mark or any fraudulent or obvious imitation of it is applied;

(C) printing and publishing or arranging to have printed or published whether in a newspaper, pamphlet or howsoever and whether by way of advertising or otherwise the trade mark or any fraudulent or obvious imitation of it;

2.    The Respondent be perpetually restrained from representing his swimming pools to have the endorsement or approval of the Applicant, without the consent in writing of the Applicant first had and obtained, by:

(a)	applying such marks or words to his swimming pools that suggest the Applicant's approval or endorsement of the swimming pools;
(b)	selling or offering to sell any swimming pool to which any marks are attached or on which words appear suggesting the Applicant's approval or endorsement of the swimming pools;
(c)	printing and publishing or arranging to have printed or published whether in a newspaper pamphlet or howsoever and whether by way of advertising or otherwise and whether or not accompanied by photographs any marks or words suggesting the Applicant's approval or endorsement of the swimming pools."

On 20 June, Borello published an apology in the West Australian newspaper in the following terms:

"APOLOGY

Peter Borello of Buccaneer Pools advises that Buccaneer Pools at one tlme held awards from the Australian Design Council in respect of some only of his pool designs.

The award for the "Capri" design expired in January 1986, the awards for the "Fiji" and "Miami" designs expired in July 1987. The awards for the "Commodor", "Spa master", "New Lagoon" and "Marina Spa" designs expired in September 1987.

Since September 1987 no Australian Design Awards for the designs mentioned or for any other Buccaneer Poolst have applied.

Advertising by Buccaneer Pools since September 1987 to the effect that Buccaneer Poolsf designs have since September 1987 carried a design award or that the designs of Buccaneer Pools have the endorsement of the Australian Design Council has been incorrect.

Buccaneer Pools apologises to the Australian Design Council for the inconvenience and loss the Australian Design Council has suffered as a result of any advertising or promotion by Buccaneer Pools of its products."

On 7 July a motion was filed by the Council returnable on 25 July and calling on Borello to show cause why he should not be punished for contempt of Court aris~ng out of a breach of the injunction. On 25 July the motion was amended and orders were made by consent for the delivery up to the Design Council of specified advertising and promotional materials in Borello's possession bearing the Council's trade mark. The material is to be retained by that body for a period of five years after which it may be disposed of, provided that the Council shall return it to Borello in the event that during that time the material ceases to infringe the orders made on 8 June. An order was made for payment of costs and the motion otherwise adjourned.

question of punishment for contempt of court. The injunctive	for determination today relates to injunct~ve relief and the The outstand~ng matter raised on the motion w h ~ c h falls
relief has been resolved by consent and I will make orders accordingly in due course. The statement of charge incorporated in the motion first sets out the consent orders made on 8 June and then goes on:

"2. The orders were made in the presence of counsel for the Respondent.

3.        A copy of the sealed order was forwarded by

courier to each of the Respondent and his
solicitor on the 3rd of July 1989.

4.   The sealed order was personally served upon

the Respondent on the 6th of ~ u l y 1989.

5.   At the date of filing this notice of motion and subsequently the Respondent has continued

t	0
(a)	apply the Applicant's trade mark or a fraudulent or obvious.imitation of it to his swimming pools;
(b) sell or offer to sell swimm~ng	pools to

which the trade mark or a fraudulent or

obvious imitation of it is applied;

( C ) publish or arrange to have publ~shed in

pamphlets and by way of television advertising the trade mark or a fraudulent or obvious imitation of the trade mark;

(d)	apply marks or words to his swlmming pools that suggest the Applicant's approval or endorsement of the swimming pools by use of the words "Industrial Design Council of Australla" and "Australian Design Award";
(e)	sell or offer to sell swimming pools to which marks are attached or on which words appear suggesting the Applicant's approval or endorsement of the swimming pool s ;
(£1 publish or arrange to have published in pamphlets or by way of advert~sing marks or words suggesting the Applicant's approval or endorsement of the swimmlng pools."

Particulars of the charge provided were as follows:

"1.

On the 29th of June 1989, the 30th of June 1989, the 7th of July 1989 and the 11th of July 1989 at his business premises at 28 Belmont Avenue, Belmont:

(a)	The Respondent was displaying or was permitting the display of swimming pools with the Applicant's trade mark applied to the swimming pools.
(b)	The Respondent was offering his swimming pools for sale with the Applicant's trade mark applied to the swimming pools.
(c)	The Respondent was displaying or permitting the display of his swimming pools with the Applicant's trade mark applied to the swimmlng pools and suggesting the Applicant's approval or endorsement of the swimmlng pools by use of the words "Industrial Design Council of Australia" and "Australian Design Award".
(d)	The Respondent through his servants or agents was issuing to members of the public brochures containing the Applicant's trade mark and suggesting the Applicant's approval or endorsement of the Respondent's swimming pools by use of the words "Industrial Design Council of Australia" and "Australian Design Award".
(e)	The Respondent was displaying or permitting to be displayed posters and signs containing the Applicant's trade mark and suggesting the Applicant's approval or endorsement o f the Respondent's swimming pools by use of the words "Industrial Design Council of Australia" and "Australian Design Award".

2.	On the 14th day of July 1989 the Respondent published or arranged to have published an advertisement for his swimming pools in the West Australian newspaper. The advertisement	contained the words "All pools include	state-of-the-art sand filters and our designs
have won 7 Australian Design Awards"."

Borello, through hls counsel, has admitted substantially all allegations of primary fact contained in the statement of charge so far as they relate to events specified in the particulars. He does not admit the assertion in paragraph 3 that a copy of a sealed order was forwarded by consent to him and his solicitor on 3 July 1989 but nothing turns on that as he agrees the sealed order was served on him personally on 6 July.

He does not admit that he published or arranged television advertising showing the trade mark. Nor is there any evidence to support that allegation. He does not admit the inference that the words admittedly published in advertising and promotional material, namely "Industrial Design Council of Australia" and "Australian Design Award" suggest the Council's approval or endorsement of his swimming pools. This inference was not, however, debated by his counsel and on the evidence and the admitted facts, I am satisfied that it can and should be drawn as alleged in the statement of charge. Paragraph 2 of the particulars of charge relating to the advertisement appearing in The West Australian nesspaper was also denied on the basis that the advertisement was placed as the result of a pre-existing arrangement for sponsorship under which advertising was to be placed at the discretion of the newspaper. So far as any question of penalty is concerned, I am satisfied that nothing should turn on that advertisement.

Turning to the evidence, the Council relies upon three affidavits to support its case. The first, sworn by Dana Ann Read, who is described as a Manager, says she attended at Borellors business premises at Belmont on 27 June 1989. There she saw a number of free-standing pre-fabricated swimming pool shells, apparently for sale, at least one of which depicted on a label, fixed to its external surface, "the rectangular shaped blue and white coloured Australian Design Award Logo". The words "Industrial Design Council of Australia" and "Australian Design Award" were clearly visible on the label. In a showroom she observed at least one pool shell which bore a free-standing cardboard sign also showing the design logo. The words "Industrial Design Council of Australia" and "Australian Design Award" were clearly visible on the side. She observed two cloth banners about 1 m X 1.5 m also bearing the logo. They were prominently displayed suspended from the top of a railing to the balcony of the mezzanine floor of the showroom. Again the words "Industrial Design Council of Australia" and "Australian Design Award" were vislble on the banners. A white sign suspended from the railing contained the words in red writing "Four Industrial Design Awards and More to Come". Five framed design logo certificates were displayed prominently side by side and facing an entrance to the display room. Ms. Read was given a brochure containing an insert in it which prominently displayed the logo. The words "Industrial Design Council of Australia" and "Australian Design Award" were clearly visible on this material. A copy of the brochure was exhibited to her affidavit.

Ashley Ian McKinnon attended the premises on 30 June, 7

days was substantially what had been seen by Ms. Read. He took	July and 11 July respectively. What he observed on each of these
photographs from outside the premises showing the sign and at least one of the banners referred to. He also exhibited a brochure in the same form as that given to Ms. Read. Mark Alexander Renshaw, State Director of the Councll, attended at Buccaneer Pools' premises on 11 July 1989 and his observations there were substantially to the same effect as those of the other two deponents.

Mr Borello filed an affidavit deposing to a meeting on

6 June 1989 at which he and Renshaw attended together with their

respective solicitors. While the solicitors were discussing settlement details he asked Renshaw to attend the Buccaneer Pools premises to tell him which of the advertising brochures and material were acceptable and so that he might complete application forms to reinstate awards previously issued by the Council. He also wanted to make application for a further three awards. According to Borello, Renshaw said he would visit his premises in a week. Borello said that he was under the impression that despite the orders made on 8 June he could continue to use his advertising material until Renshaw had told him what was required for compliance with the order. He says he he left messages for Renshaw on 3 July and 10 July and in the event, Renshaw came to the premises on 11 July. Borello claims not to have been intentionally in contempt of Court and has proffered an apology for any contempt he may have inadvertently shown.

Bore110 has also commented on the affidavits filed against him. He did not contest Renshaw's observations but said	that the framed design logo certificates each contained details of
the relevant award and when it was made. He contended that the certificates contained statements of fact including the date of issue of the awards. As to the advertisement which appeared in the West Australian on 14 July, this was published pursuant to a sponsorship arrangement with Lloyds of London. He was not aware that the particular advertisement was to be published at that date. The words relating to the "Seven Australian Industrial Design Awards" were true as they referred to the past tense. As to Ms. Read's affidavit, he did not dispute her observations but otherwise did not comment on them. He took a like position in relation to McKinnonrs affidavit.
By consent of the parties further oral evidence was given by both Renshaw and Borello, each tendering as his evidence-in-chlef the contents of an unsworn affidavit. The unsworn affidavits were marked as exhibits. In his further draft affidavit, verified by his oral evidence, Renshaw referred to the meeting of which Borello had spoken and which was said to have occurred on 6 June. He said that they were at all times in the presence of their respective solicitors and he did not recall a private conversation of the nature alleged. Borello had stated at the meeting that he had expended a considerable sum of money on brochures containing infringing trade marks and that it would be a waste to destroy them in light of Renshaw having agreed to receive further applications from him for design awards. To further the goodwill between the parties at the meeting, Renshaw said he agreed on behalf of the Council to Borello's retention of the
until such time as further awards were made. He also said that he brochures on the express condition that they were not to be used
had stated to Borello at the meeting that there was no guarantee that further awards would be made. Indeed, having regard to Buccaneer Pools' behaviour in relation to the awards, it was with some reluctance that he agreed to accept further applications at all. He denied saying anything to Bore110 either expressly or by implication to the effect that there would be any acquiesence or tolerance of any continued use of infringing material, signs or advertising.
When Renshaw attended Borellofs business premises on 11 July he saw the signs and labels referred to in his earlier affidavit and said to a salesman in the showroom words to the effect, "Tell Peter I will be in touch with him through my solicitor". He then started to leave the premises. As he was about to drive away, however, Borello approached him and beckoned him to talk. They returned to the showroom and he observed that certain of the infringing matter had been removed. Other infringing matter was then removed by Borello at his request. Borello in his supplementary evidence confirmed the latter part of Renshawts affidavit to the effect that when he attended at the premises on 11 July he complied with all requests in relation to the removal of the offending material.
I am satisfied on the admitted facts and the evidence before me that Borello breached the terms of the injunction in his use of the trade mark and his use of the words "Industrial Design Council". I am satisfied also that his failure to take any steps
deliberate decision, although I am prepared to accept that that to comply with the Court order was the result of a conscious and
decision was based upon a misapprehension that the Council was prepared to tolerate a period of grace before compliance with the Court's order would be insisted upon. That misapprehension was, I find, not contributed to in any way by anything said or done by the Council or its representatives. The breach of the injunction was the product of a misunderstanding by Borello. He has
apologised to the Court and has co-operated in relation to the proceedings. He has subsequently complied with the orders. The applicant does not make submissions in support of the imposition of a fine although it moves for that relief.
It has been said that the underlying rationale of the contempt power is the necessity to protect the effective administration of justice and that there is a public interest in the exercise of that power in the case of disobedience to an order. On the other hand, it is also said that no public interest is served by punishing the offender if the only person for whose benefit the order was made chooses not to insist on its enforcement. In relation to those principles generally I refer to the Australasian Meat Industry Employees Union v Mudginberri Station (1986) 66 ALR 577 at 584 and Attorney-General v Times Newspapers Limited [l9741 AC 273 at 308.
The present case, however, is not simply a private dispute. There is a clear and obvious public interest in maintaining honesty in advertising at all times and in particular,
so far as it relates to the endorsement or approval of an independent body such as the Australian Design Council. In my
opinion, therefore, a fine should be imposed to underly the importance of prompt compliance with the orders of the Court and the public interest element in this case. I take into account the extenuating circumstances surrounding the breach whlch is otherwise of a deliberate character. The respondent will be
fined the sum of $2,000. The orders I propose to make are as
follows:

1.    By consent the respondent whether by himself, his servants or agents be restrained until further order from publishing by whatever means or arranging to have published in connection with the advertising of his swimming pools the words "our designs have won seven Australian Design Awards" and publishing or arranging to have published words suggesting or implying the respondent's swimming pools, whether as a whole or individually or howsoever carry a current design award or awards save that the words in form as follows, "our designs have won seven Design Awards (EXP)" shall be deemed not to be in breach of the order.

2.    That the respondent be fined the sum of $2,000 to be paid to the Registrar of this Court within seven (7) days.

3.   By consent, the respondent to pay the applicant's costs including solicitor/client costs.

I certify that the preceding
fourteen (14) pages are a true
copy of the Ex tempore Reasons
for Judgment of his Honour

Justice French.

Associate:	C &wd.a~
Date:

Counsel for the Applicant: Mr K.J. O'Toole

Solicitor for the Applicant: Kevin James O'Toole

Counsel for the Respondent: Mr G.I. Brooke

Solicitor for the Respondent: Messrs. Nielsen & Co.

Date of Hearing:	15 August 1989
Date of Judgment:	15 August 1989