Richardson & Ors v Radford
[1995] QSC 85
•15 May 1995
IN THE SUPREME COURT
OF QUEENSLAND
Writ No. 1894 of 1993
Before Mr Justice Dowsett
[Richardson & Ors v Radford & Ors]
BETWEEN:
DAVID RICHARDSON
First Plaintiff
AND:
GEORGE ERNEST NEVILLE HOLMES & ORS
Second Plaintiff
AND:
TORRES INDUSTRIES PTY LTD
(A.C.N. 010 883 173)
Third Plaintiff
AND:
STEPHEN RADFORD
First Defendant
AND:
PERRY SUTTON
Second Defendant
AND:
QUEENSLAND COASTAL PILOT SERVICE
PTY LTD (A.C.N. 053 843 646)
Third Defendant
AND:
GANNETT PTY LTD
Fourth Defendant
REASONS FOR JUDGMENT - DOWSETT J.
Judgment delivered 15/05/1995
CATCHWORDS: FIDUCIARY OBLIGATIONS - Passing Off - Misleading and Deceptive Conduct - Trade Practices Act - Queensland Marine Act 1958-1985.
Counsel:Mr Chesterman QC & Mr Bowden for plaintiffs
Mr Sofronoff QC, Mr Doyle & Ms Byrne for defendants
Solicitors:Walters & Co for plaintiffs
Kenny & Co for defendants
Hearing Date(s): 11 October, 1994 - 14 October, 1994
IN THE SUPREME COURT
OF QUEENSLAND
Writ No. 1894 of 1993
Before Mr Justice Dowsett
[Re: Richardson & Ors]
BETWEEN:
DAVID RICHARDSON
First Plaintiff
AND:
GEORGE ERNEST NEVILLE HOLMES & ORS
Second Plaintiff
AND:
TORRES INDUSTRIES PTY LTD
(A.C.N. 010 883 173)Third Plaintiff
AND:
STEPHEN RADFORD
First Defendant
AND:
PERRY SUTTON
Second Defendant
AND:
QUEENSLAND COASTAL PILOT SERVICE
PTY LTD (A.C.N. 053 843 646)
Third Defendant
AND:
GANNETT PTY LTD
Fourth Plaintiff
REASONS FOR JUDGMENT - DOWSETT J.
Judgment delivered 15/05/1995
Prior to 1 July, 1993 the provision of pilot services to vessels navigating the coastal waters of Queensland and the Torres Strait was regulated by the Queensland Marine Act 1958‑1985 and had been regulated under that or earlier legislation since last century. Section 179 of the Act provided for the licensing of pilots. Section 180 provided as follows:-
"Without limiting the general power to make regulations conferred by s.264 of this Act, regulations may be made under that section with respect to the granting of licenses under this Division of this Part, and prescribing the duties and liabilities of Queensland coastal pilots and providing for the proper conduct of the pilot service in which they are engaged, including, but without limiting the generality of the aforegoing, regulations in respect of all or any of the following matters:-
(i)prescribing the qualifications as to nationality, citizenship, age, experience, length and nature of service, skill, character, medical fitness, and otherwise for the grant of such licenses;
(ii)providing for the appointment of secretaries to the Queensland Coast and Torres Strait Pilot Service and prescribing their duties and remuneration;
...
(iv)providing for the proper conduct of Queensland coastal pilots and of any pilot services, including the prescribing of duties, and the provision for the holding of inquiries as to such conduct;
...
(vi)...
(vii)providing for the remuneration of Queensland coastal Pilots;
..."
The regulations prescribed the structure for the provision of pilot services. Although the licensing authority was the Marine Board, the, "management supervision and control of the pilot service and of the working and movements of the pilots ... (was) vested in the secretary or secretaries of the pilots." (Regulation 13) The secretaries were appointed by the Board.
Regulation 18 prescribed the duties of the secretaries. As well as managing the pilot service and the working and movements of the pilots, they were also required to keep a register of the pilots and to allot duties to pilots in turn. The regulations made detailed provision for the so-called "turn" system, designed to equalize the distribution of work (and income) amongst the pilots. Regulation 20 provided for remuneration of the secretaries by the deduction of 7½ per cent from the pilotage fees recovered for the pilots. The secretaries were required to bear all office and management expenses incurred by them in the execution of their duties.
Regulation 21 provided that a person requiring a pilot should direct the request to the secretaries. Regulation 22 required the pilots to make themselves available to take their turns as directed by the secretaries and to forward to the secretaries completed pilotage orders signed by the masters of the vessels. A pilot was not permitted to collect pilotage dues unless instructed to do so by the secretaries, in which case he was to forward the sum so collected to them. They would subsequently refund the appropriate amount to him, after making authorized deductions.
Regulation 27 required that the pilots and secretaries provide vessels for ferrying pilots to and from ships, although the cost of embarking and discharging a pilot was recoverable against the ship in question. Regulation 35 provided for the recovery of pilotage dues and other expenses from the master, owner or other person applying for the services of a pilot, and provided that the secretaries might sue to recover them. If the secretaries failed to do so, or so instructed the pilot, the pilot might himself sue.
Regulation 36 provided for internal rules for the, "smooth running of the service". Such rules required the agreement of the secretaries and of at least two-thirds of the licensed pilots. The Board had an overriding power to disallow such regulations should any pilot object to them. There was provision for appeal by a pilot against any decision of the secretaries. (Regulation 37) The secretaries might complain about a pilot to the Board, and a pilot might similarly complain about the secretaries. (Regulation 16 and 39)
The first plaintiff and those of the second plaintiffs who are natural persons have been, at all material times, licensed pilots. The corporate second plaintiffs are, in effect, family companies formed by the various pilots to employ themselves, no doubt for financial reasons. The third plaintiff was incorporated by the pilots in 1951 for the purpose of acquiring assets to be used by them in the course of their work. When a new pilot was licensed, he was invited to acquire shares in the third plaintiff. The first and second defendants were appointed secretaries on 21 November, 1989 and 5 August, 1984 respectively, and both continued in office until 30 June, 1993 when the statutory system was abolished. The third defendant is a company of which the first defendant was a director and the second defendant remains a director. It offers pilot services to vessels plying off the Queensland coast and in Torres Strait. Another company, Queensland Coast and Torres Strait Pilots' Association Pty Ltd (the "pilots' company"), also offers those services. The pilots who are plaintiffs (or their companies) hold most of the shares in the pilots' company. The fourth defendant is a company controlled by the first and second defendants. It owns certain call signs and telephone/fax numbers claimed by the plaintiffs.
At some time in 1992, it became public knowledge that the Queensland government intended to transfer to the Commonwealth the responsibility for licensing coastal pilots. The pilots and secretaries anticipated that this change would result in their losing control of the pilot service. In February, 1993 many of the serving pilots decided to form their own organisation to take the place of the secretaries after the anticipated changes came into effect. At some stage, Mr Sutton was invited to participate in the new organisation as an administrator, but he was not interested in that proposal. He also wished to provide pilot services and decided to use the third defendant, which company had been used by the secretaries in connection with their duties for some years prior to 30 June, 1993. Most of the pilots who were licensed before that date now work with the pilots' company, but some work for the third defendant. Additional plots have been licensed since the transfer of responsibility to the Commonwealth.
At the trial, a great deal of time was taken up in investigating the history of Queensland pilots. As might be expected, it is a history which has considerable interest, not only for the pilots themselves, but also for those interested in the history of Queensland or in the history of this adventurous and important calling. The pilots undoubtedly take great pride in this history, during most of which, the secretaries played an integral role in the provision of pilot services.
Prior to 1912, the pilots themselves appointed secretaries, but in that year, as a result of differences between the pilots and the secretaries, a new system was devised by which the Marine Board appointed them. This appears from the work, Reef Pilots by Captain John C H Foley (Banks Brothers and Street, Sydney, 1982) at pp.59-60. I was invited by the parties to make reference to this book for background information. Two brothers, George and Tom Banks had been secretaries prior to the 1912 changes and were appointed by the Marine Board thereafter. As appears from the second defendant's statement (ex 57), members or employees of the firm of Banks Brothers or its successor, Banks Brothers and Street continued to act as secretaries for many years. The first and second defendants became secretaries because of their associations with the latter firm. During that long association, it was, no doubt generally in the interests of the secretaries and the pilots that they co-operate in the provision of pilot services. No doubt, too, informal arrangements and relationships developed between the pilots on the one hand and the secretaries on the other.
To some extent, the plaintiffs sought to colour the legal relationship between the secretaries and the pilots by reference to various incidents which occurred over the years. For example, from time to time, both the pilots and the secretaries made attempts at promotion of the pilot service by the manufacture and distribution of mementos such as glasses and beer mats. However it was not alleged, and it does not appear from the evidence that there was ever any firm arrangement between the parties having the effect of conferring additional obligations upon the secretaries beyond those stipulated in the legislation and regulations.
With the passage of time, the mechanisms of the pilot service became more complex because of increased shipping activity, improvements in communications, the availability of air travel, including helicopters for ferrying pilots to and from ships and changes in the routes taken by vessels as a result of the opening of Hydrographer's Passage, a route which greatly facilitates the passage of ships from the Queensland coast to south-east Asia and beyond. These changes affected, in one way or another the distribution of work, the outgoings incurred by pilots in their work and the fee structure prescribed in the regulations. They did not significantly affect the duties of the pilots or the secretaries or the legal relationship between those two groups.
Before going further, I should make some observations about the plaintiffs' case. It assumes that prior to 30 June, 1993 the pilots were members of an unincorporated association. There is a further assumption that the members of the voluntary association were entitled to the "goodwill" of the "business" of piloting on the Queensland coast. See the statement of claim at paras 2.0, 3.1, 3.2, 10.4, 10.4.1, 11.2.1, 11.2.2, 11.2.3, 11.4.1, 11.7, 12.4.1, 13.4.1, etc.. For present purposes, I accept that there was a voluntary association of pilots to which new pilots were routinely admitted and of which the secretaries were not members. The association met regularly, if infrequently, and elected office‑bearers.
These assumptions are important aspects of the plaintiff's case for a number of reasons. Firstly, the plaintiffs argue that the pilots who were licensed prior to 30 June, 1993 and now work for the third defendant resigned from the voluntary association and thereby gave up any claim to its property. If that property included the piloting business of all pilots prior to 30 June, 1993 that was a costly surrender for them and a fortuitous one for the plaintiffs. Secondly, by postulating a unified business prior to 30 June, 1993 in which the secretaries were, in effect employed, it is easier to argue that the defendants' duty as secretaries precluded competition with that business. Thirdly, the plaintiffs claim that the defendants are passing off their current business as that of the plaintiffs or engaging in misleading or deceptive conduct in breach of s.52 of the Trade Practices Act. These claims depend upon the alleged use by the defendants of the name, Queensland Coast and Torres Strait Pilot Service, a logo and cable addresses and telephone/fax numbers used by the secretaries and the pilots prior to 30 June, 1993 in connection with the pilot service. The plaintiffs claim that their present business is a continuation of the "business" of the former pilot service and that in using the indicia of that business, the defendants are passing off their business as the plaintiffs' present business. If there has been no continuation of such former business, the claim is difficult to sustain, as also is the associated claim for allegedly misleading and deceptive conduct.
These assumptions led the plaintiffs to submit that the pilot service prescribed by the Act (s.180) and regulations was the voluntary association to which I have referred. I do not accept that view. The pilot service referred to in the Act and regulations was the statutory structure for delivering pilot services, not a collective description of pilots, who were rather described as "coastal pilots" (s.180) or "pilots" (regs.13, 18, 36). Section 180 referred to both "coastal pilots" and the "pilot service", suggesting that they were different concepts. Regulation 36 similarly distinguished. It is clear that the pilot service would have existed whether or not the pilots chose to join the voluntary association. Further, a pilot's status under the Act did not depend upon such membership.
Many aspects of the structure of the former pilot service were inconsistent with the proposition that the pilots were carrying on the business of piloting in their capacity as members of the voluntary association. Although the Board considered their views in selecting new pilots, the total number of pilots was fixed by the Board on the recommendation of the secretaries. See Captain Richardson's evidence at p.17. The pilots had no control over the management of the service. This was vested in the secretaries who were responsible to the Board. They were not responsible for the cost of running the service, although they shared some expenses associated with specific piloting tasks and association business. Income was equalised because that was required by the regulations. Some assets used in the provision of pilot services were owned by the third plaintiff, but not by the members of the voluntary association. The pilots could not have sold any "interest" in the alleged "business" or even their licenses, although they could have sold their shares in the third plaintiff. Clearly, there was no integrated business as alleged by the plaintiffs. Although it is arguable that each of the pilots or family companies was operating a discrete business, the better view is that they were merely participating in a statutory structure.
THE FIDUCIARY CLAIM
The primary (but by no means only) matter in dispute between the parties is whether or not the relationship between the secretaries and the pilots was fiduciary in nature. The importance of this question arises largely (but not entirely) from the fact that prior to 30 June, 1993 steps were taken by both the plaintiffs and the defendants to gain orders for pilot services after that date. Inevitably, both sides approached persons who were already regularly engaging pilots. The plaintiffs submit that because the first and second defendants, as secretaries were in a fiduciary relationship to the pilots, they were prohibited from using their position for private gain without the prior informed consent of the pilots and that canvassing existing "customers" was, in the absence of such consent, in breach of their fiduciary duty.
The starting point for considering the relationship must be the legislation and regulations. This is a potentially uncomfortable position for the plaintiffs in light of the observations made by Megarry VC in Tito v. Waddell (No.2) [1977] Ch 106 at p.230, where his Lordship said:-"I cannot see why the imposition of a statutory duty to perform certain functions, or the assumption of such a duty, should as a general rule impose fiduciary obligations, or even be presumed to impose any. Of course, the duty may be of such a nature as to carry with it fiduciary obligations: impose a fiduciary duty and you impose fiduciary obligations. But apart from such cases, it would be remarkable indeed if in each of the manifold cases in which statute imposes a duty, or imposes a duty relating to property, the person on whom the duty is imposed were thereby put into a fiduciary relationship with those interested in the property or towards whom the duty could be said to be owed."
This passage was expressly approved by Gibbs CJ in Hospital Products Ltd v. United States Surgical Corporation (1984) 156 CLR 41 at p.71. His Honour said:-
"I agree with the statement of Megarry VC in Tito v. Waddell (No. 2) that the imposition of a statutory duty to perform certain functions cannot be said as a general rule to impose fiduciary obligations, and the same is true of contractual duties arising under ordinary commercial contracts."
Although that proposition is by no means part of the ratio of the case, it is obviously of highly persuasive authority. The proposition does not mean that a person having a statutory duty may never be a fiduciary in that regard. Rather, it means that where Parliament has chosen to impose obligations upon a person, it will rarely be helpful for the Court to extend those obligations by imposing a fiduciary duty. The ambit of such obligations will usually be found in the words of the legislation in question.
In one aspect of their duties, the secretaries may have been fiduciaries. They received moneys payable to the pilots and accounted for those moneys after deduction of outgoings and the secretaries' percentage. Such net amounts were held by the secretaries solely for the benefit of the various pilots on whose behalf they were received, and so they were probably trustees thereof. See The Registrar of the Accident Compensation Tribunal v. Federal Commissioner of Taxation (1993) 178 CLR 145 at pp.165‑6. However, "... it is well settled that a person may be a fiduciary in some activities but not in others ...". See Hospital Products (supra) at p.98, per Mason J. The question for determination is whether, in dealing with persons who used pilot services, the secretaries were acting as fiduciaries.
Hospital Products (supra) demonstrates the difficulties inherent in formulating the test for the existence of a fiduciary relationship. In that case, Gibbs CJ. (with whom Wilson J generally agreed), whilst doubting whether it was fruitful to attempt a general statement of the circumstances giving rise to such a relationship, adopted the test propounded by the Court of Appeal of New South Wales in the case under appeal, that a person will be in a fiduciary relationship if he is obliged or undertakes to act in relation to a particular matter in the interests of another and is entrusted with the power to affect those interests in a legal or practical sense, provided that he has also undertaken not to act in his own interests. See Hospital Products(supra) at pp.68, 69 and 72. Mason J (as his Honour then was), at pp.96‑97, adopted a similar test, but without the final proviso. Deane J considered that the agreement in question was commercial in nature and that no aspect of it imposed a fiduciary duty. See p.124. The suggestion in the headnote (p.43) that his Honour found that there was a fiduciary relationship is apparently in error. Deane J was of the view that notwithstanding the absence of a fiduciary relationship, the Court might enforce contractual obligations by way of a constructive trust.
Dawson J said at pp.141-2:-"It is usual - perhaps necessary - that in such a relationship one party should repose substantial confidence in another in acting on his behalf or in his interest in some respect. But it is not in every case where that happens that there is a fiduciary relationship. If it were, whenever there is 'a job to be performed' (Tito v. Waddell (No. 2) and entrusting the job to someone involves reposing substantial trust and confidence in him, equity would impose fiduciary obligations. Clearly, that is not the case. Nor does a fiduciary duty arise because the person to whom a job is entrusted acts in his own interest and thereby fails to perform the job properly, however useful it may appear with hindsight that such protection should have been available...
The difficulty in identifying and classifying those qualities in individual relationships which give rise to fiduciary obligations is well recognized ... There is, however, the notion underlying all the cases of fiduciary obligation that inherent in the nature of the relationship itself is a position of disadvantage or vulnerability on the part of one of the parties which causes him to place reliance upon the other and requires the protection of equity acting upon the conscious of that other ... From that springs the requirement that a person under a fiduciary obligation shall not put himself in a position where his interest and duty conflict or, if conflict is unavoidable, shall resolve it in favour of duty and shall not, except by special arrangement make a profit out of his position. In terms of general principle I do not think that it is necessary to go further than that in the present case."
In order to apply the first limb of the test proposed by Gibbs CJ, it is appropriate to examine the obligations undertaken by the secretaries. Apart from the duties to which I have already referred, the regulations required the secretaries to keep accounts of moneys received and disbursed, report misconduct by pilots and carry out a fairly complex adjustment exercise for the purpose of equalizing income amongst the pilots. The Board might require them to provide a fidelity bond, securing the due performance of their duties and payment of moneys. A secretary might appoint a deputy, but the identity of that person was subject to approval by the Board. The Board could determine the appointment of a secretary at any time on notice. There was also power to suspend or remove for misconduct upon the complaint of a pilot, master, inspector, ship-owner or other interested person. I have previously referred to Regulation 21 which required persons seeking pilots to apply to the secretaries. Upon receipt of such a request, the secretaries were required to make every endeavour to secure the services of a pilot for the vessel. The secretaries had the right to require security for pilotage dues or payment in advance.
It may be helpful also to examine the pilots' duties prescribed by Regulation 22. They were obliged to hold themselves ready to perform pilot duties as directed by the secretaries. There were ancillary obligations as to keeping records and reporting readiness for duty. Regulation 23 provided for recuperative periods after duty. Pilots were required to live within two hours of the General Post Office at Sydney or Brisbane unless they had approval from the Board and the secretaries to reside elsewhere. A pilot wishing to retire during a period of registration was required to give notice through the secretaries. Applications for leave of absence were also made to the Board through the secretaries. Regulation 26 provided for pilots' recreational leave. In certain circumstance, the consent of the secretaries was necessary. Applications for leave of absence on account of illness were to be submitted with medical evidence. Applications for long service leave were to be made to the Board through the secretaries. With the approval of the Board, the secretaries could recall a pilot from recreational or long service leave.
Regulations 18 and 26(h) conferred residual discretions upon the secretaries as to the working of the turn system. One assumes that in exercising those discretions, the secretaries were subject to constraints of reasonableness and fairness. With these exception, the allocation of piloting tasks was not a discretionary process, although one suspects that from time to time, an element of commonsense would be involved. The regulations provided a strict system for determining how the work should be allocated. The secretaries were obliged to comply with that system. By accepting that obligation, the secretaries were not undertaking to act in the interests of the pilots, but to comply with the law. No doubt it was in the interests of the individual pilots that the turn system be observed, simply because that would result in an orderly, predictable and fair allocation of the work. Further, it was in their interests that the pilot service as a whole be properly administered. However the public and in particular, the sea-going public had similar interests. I find it difficult to conclude that the secretaries were appointed to act in the interests of the pilots. They were appointed to administer the service. That involved much wider public duties.
As to the second aspect of the test proposed by Gibbs CJ, whether or not the secretaries were, "entrusted with the power to affect (the interests of the pilots) in a legal or practical sense", upon allocation of a particular task, an individual pilot might expect that he would be allowed to perform the work and earn the fee, but it is difficult to characterize such allocation as affecting interests in a legal sense. It might, however, be described as doing so in a practical sense. It could also be said that the allocation of pilots to ships affected the interests of persons associated with those ships in a practical sense.
Applying the approach proposed by Dawson J, can it be said that the pilots reposed confidence in the secretaries? This does not involve an enquiry into whether there was actual confidence in a subjective sense, nor will the absence of actual confidence mean that the relationship is not fiduciary. See Hospital Products (supra) per Gibbs CJ at p.69. The test rather requires an examination of the circumstances creating the relationship between the parties in question, for the purpose of discovering whether it involved the repose of such confidence.
I am unable to conclude that this relationship could properly be described as involving a repose of confidence in the secretaries by the pilots. The pilots did not select the secretaries. They merely worked in a system in which the secretaries also worked. The Board had responsibility for resolving any disputes between the two groups. The secretaries were closely controlled in their work by the regulations, particularly as concerned the allocation of work.
The better view is that the secretaries' powers and duties (apart from those relating to the receipt and payment of money) were conferred and imposed upon them by the regulations for the orderly administration of the pilot service. That was very much a public duty. As observed by Megarry VC and by Gibbs CJ, the mere assumption of a statutory duty does not lead to the creation of a fiduciary relationship between the person upon whom the duty is imposed and those who have some interest in its performance. I conclude that there was no fiduciary relationship between the secretaries and the pilots in so far as concerns the obtaining and allocation of piloting tasks. The claim based upon alleged breach of fiduciary duty must fail.
Passing Off
The nub of this cause of action is the allegation that the defendants are passing off their business, conducted through the third defendant, as the business allegedly conducted by the plaintiffs under the name of Queensland Coast and Torres Strait Pilot Service. It is argued that this latter business is the same business as was carried on prior to 30 June, 1993, and that the plaintiffs then owned that business (with the other registered pilots who have since "resigned") and still do so (without the "resigned" pilots). It is said that the business enjoyed and enjoys a valuable reputation and goodwill in the maritime industry which "belongs" to the pilots who continue in the voluntary association.
Prior to 30 June, 1993 a variety of cable addresses, telex addresses, telephone and facsimile numbers, which are presently held by the third and fourth defendants, were used in organizing the pilot service. The plaintiffs say that those addresses and numbers were identifying features of the goodwill and reputation of the "business" of the former pilot service. As to the name, there is really no evidence that the defendants are presently trading under that name or have done so since 30 June, 1993, although I am satisfied that they have tried to exploit their prior association with the name and the former pilot service, as has the pilots' company.
Although the pleading does not mention it in this context, the plaintiffs also rely on use of a logo as part of the conduct said to constitute passing off. The logo is of some interest. It depicts a square-rigged sailing ship within a roundel, with a scroll bearing the words, "Torres San Pedrico Pilots", and the date, 1606, referring to the first European visit to Torres Strait by Torres in his ship, the "San Pedrico". The history of the use of the logo is not clear. The plaintiffs claim that the logo was the "property" of the pilots to the exclusion of the secretaries. The evidence demonstrates that it was used extensively in connection with the pilot service prior to 30 June, 1993 but it is impossible to infer that the pilots then had any exclusive proprietary or other interest in it. It was associated both with the pilots and the secretaries, although it is true that the pilots wore blazers bearing the logo whilst the secretaries did not do so.
The previous regime was a statutory structure within which each pilot provided services and the secretaries coordinated the allocation of work. Each pilot performed duties as assigned by the secretaries and was paid for them. Each met some of his own outgoings, although some were shared. After 30 June, 1993 many pilots chose to pursue their calling under the auspices of the pilots' company, which undertook the duties previously performed by the secretaries. Some pilots chose to become employees of the third defendant. Undoubtedly, pilots in the first category are entitled to prevent anybody passing off his or her business as that of any of them. If the pilots' company is carrying on a business, it is similarly entitled. There is, however, no suggestion that the defendants are doing so. In asserting links to the previous regime, they are merely stating a fact. They are not asserting connection with other persons or companies who or which also enjoy such connection. Use of the cable addresses, telephone/fax numbers and logo can only link the defendants' business to the plaintiffs' businesses or the pilots' company's business if those addresses and numbers and those businesses all have links to the previous regime. The defendants' use of the addresses and numbers and the logo suggests a link with the former regime, not with other existing businesses. The problem is not that the defendants' business may be thought to be the plaintiffs' businesses or a business conducted by the pilots' company, but rather that all businesses may be thought to be associated with the former regime. The passing off claim must fail.
Misleading and Deceptive Conduct
The plaintiffs allege that the same conduct constitutes misleading and deceptive conduct contrary to s.52 of the Trade Practices Act in that such conduct might lead persons trading with the defendants to believe that their services are those of the plaintiffs or that the third defendant is, or its services are sponsored by, affiliated with or approved by "the service". As I have said, the plaintiffs and the defendants are very anxious to establish a perception of continuity between their respective businesses and the previous regime. The conduct complained of does no more than that. It is not misleading or deceptive. Both groups were closely associated with the former regime. There is no reason why they should not say so. This claim must also fail.
Cable Addresses, Telephone/Fax Numbers and Logo
Additional claims are made concerning these items. The plaintiffs submit that the addresses and numbers are either "intellectual property which can be protected by the Court and which are the property of the plaintiffs," or that they are held in trust for the plaintiffs. The substance of the claim is that these addresses and numbers were acquired by the secretaries prior to 30 June 1993 for purposes associated with their duties and that they therefore were acquired for the benefit of the pilots. Given my view as to the duties of the secretaries and the specific obligation placed upon them, "to bear personally all office and management expenses incurred ... in the execution of ... their duties", I conclude that these addresses and numbers were obtained for the purpose of discharging that obligation. One of the cable addresses, "2S Torres", was allotted to replace and old address, "Torres Sydney", which had been allotted to the pilots many years ago, but passed to the secretaries at some stage. This historical accident has no present legal significance.
It cannot be said that the addresses and numbers are, or were in any sense the property of the plaintiffs or any of them. I can see no basis upon which they can be called, "intellectual property", whatever that may mean in this context. There is an alternative claim for protection of the addresses and numbers based upon the Trade Practices Act. For reasons already given in connection with the wider claim under the Trade Practices Act, it must also fail.
The plaintiffs also claim the exclusive right to use the logo, either because it is their property or pursuant to the Trade Practices Act. I am unable to conclude that the logo was, "the property of the members of the (voluntary) association so long as they remained members". The logo was used in conjunction with the pilot service, but there is no basis for inferring any proprietary or other interest in the pilots to the exclusion of the secretaries. To the extent that the plaintiffs rely upon the Trade Practices Act as a basis for restraining use of the logo, their claim must also fail for the reasons previously given in connection with the wider claim under that Act.
Name
It is said that the name of the third defendant is so similar to that under which the plaintiffs trade that to trade under it is misleading and deceptive conduct. The names are both clearly descriptive. Having regard to the reasoning of Barwick CJ and Stephen J in Hornsby Building Information Centre Pty Ltd v. Sydney Building Information Centre Ltd (1977) 140 CLR 216 at pp.221 and 228-230, protection under the Trade Practices Act is not available. This claim also fails.
Memorabilia
Recommendation as to Licensing of Pilots
These claims were abandoned in the course of argument.
Interest
Prior to 30 June, 1993 the first and second defendants adopted the practice of accounting to the pilots on a regular basis for moneys due. In some cases, this was done monthly, in others, twice per month and in some cases, upon other bases requested by the pilots in question. Pursuant to Regulation 18(h) as amended on 11 July, 1985 the secretaries were obliged to:-"Upon receipt of pilotage dues payable in respect of any ship, other than when paid in advance, pay 82½ per centum of the amount paid in respect of all pilotage orders, excluding the amount of reimbursable expenses allowed in Regulations 28 and 34, forwarded by a pilot to the secretary or secretaries -
(A)in the case of a pilotage service performed on behalf of a pilot company, to that pilot company;
(B)in any other case, to the pilot ..."
The figure of 82½ per cent was derived by deducting the secretaries' percentage and a further 10 per cent which was payable to the pilots' superannuation fund. For present purposes, the argument centres upon the duty to remit moneys, "upon receipt of the pilotage dues payable ...". In effect, the plaintiffs urge that the regulation required the defendants to pay the moneys immediately they were received. The plaintiffs did not seek to rely on the limited fiduciary relationship to which I have previously referred.
The secretaries also adopted the practice of meeting many outgoings incurred by the pilots, either from their own funds or from funds held for pilots but not yet disbursed. The payment for helicopter services was a special example of this. Those services were very expensive, and the pilots had previously expressed concern when charges were debited to their accounts before recoupment from the ships in question. Thereafter, the secretaries paid the helicopter charges from their own funds and reimbursed themselves after recoupment. Other expenses were also met before recoupment, although not necessarily from the secretaries' own resources.
It is not clear from the regulations who, as between the pilots and the secretaries, should have borne the costs of such outgoings in the event that the ship in question failed to pay them or prior to recoupment. Regulation 27 suggested that the secretaries and pilots had a joint obligation to provide vessels for embarking and discharging pilots at sea, although the costs were recoverable from the ships. These costs were probably a joint responsibility prior to recoupment, but it is doubtful whether the regulation applied to other outgoings.
The claim for interest is very small, being less than $15,000. This seems not to have been a problem before larger disputes arose. One suspects that had the strict letter of the law been applied to the payment of outgoings and accounting for pilotage fees, the pilots may have been worse off than they were, but it is impossible to tell. I am satisfied that the secretaries were generally agreeable to meeting any request from a pilot for more frequent accounting. Nonetheless, Mr Chesterman submits for the plaintiffs that they had an entitlement to these funds immediately they were received and are now entitled to interest on outstanding balances from time to time.
As a matter of strict construction, the regulation might be said to require immediate payment, but in a practical sense, this would be very difficult. Prior to its amendment in 1993, s.38 of the "Acts Interpretation Act 1954" provided that:"Where no time is prescribed or allowed within which anything shall be done, such thing shall be done with all convenient speed, and as often as the prescribed occasion arises."
After the amendment, which took effect on 3 June, 1993 the section provided:-
"If no time is provided or allowed for doing anything, the thing is to be done as soon as possible, and as often as the relevant occasion happens."
One may doubt the applicability of these provisions to the present problem as on one view, the regulation does prescribe a time for payment, but the defendants conceded, without arguing, that the obligation was to pay, "as soon as possible".
The evidence suggests that pilotage fees were credited to pilots' accounts immediately upon receipt of cheques and before they were cleared. The plaintiffs' claim depends upon the assertion that the defendants' records showing such credits accurately reflected amounts then owing to pilots. It is true that Mrs Witcombe said that the records were accurate, but she was not asked to distinguish between the date of making an entry in a pilot's account upon receipt of a cheque and the date of clearance of the cheque. Mr Sutton said that crediting occurred before clearance. See ex.57, para.15. I accept this evidence. Obviously, there was no obligation to pay before clearance. For this reason, the accounts showed amounts as due to pilots before they were actually due. As I cannot determine when the various cheques were cleared, this claim probably fails for that reason alone.
In any event, I am satisfied to infer that the pilots were generally aware of the practice of the secretaries and their duties under the regulations. They were using facilities and services arranged by the secretaries and must have known that the secretaries were paying for them and recouping the costs. The pilots also knew that the secretaries were receiving their fees for them. They knew when they did the work in question and when they received their remuneration.
Despite attempts by counsel on behalf of the plaintiffs to suggest that the pilots were naive, I am not willing to draw that inference. They must have known that money attracts interest. Commonsense would have told them that the period between rendering of an account and receipt of payment would vary from case to case. I am satisfied that the pilots and secretaries had worked out mutually satisfactory accounting arrangements. If the question of interest on outstanding fees had been a matter of concern to any pilot, I have no doubt that he would have enquired of his colleagues with a view to discovering how they dealt with the secretaries. To the extent that the secretaries may not have complied with any regulatory obligation to pay fees as soon as possible, the pilots, by their conduct, implicitly agreed to that course. It is unlikely that a claim for interest could be successful in those circumstances, whether because of abandonment or otherwise.
However, the claim fails for another reason. It depends upon the assertion that the regulations conferred a private right of action upon the plaintiffs to enforce the secretaries' duties and claim remedies for default. This is a matter of construction. See Sovar v. Henry Lane Pty Ltd (1967) 116 CLR 397 at pp.405-6 (per Kitto J.). In the present case, there was a statutory duty to pay which could, no doubt have been enforced in an action for debt, but the regulations disclosed no intention that the pilots be able to recover damages for breach of the secretaries' duties. Regulation 16 contemplated that any complaint by a pilot concerning a secretary be addressed to the Board. Regulation 37 offered an alternative remedy, but again by reference to the Board. The regulations did not confer upon pilots a private right of action against the secretaries for breach of duty. This claim also fails.
I give judgment for the defendants against the plaintiffs on all claims.
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