Siddons Pty Ltd v The Stanley Works Pty Ltd

Re: SIDDONS PTY LTD
And: THE STANLEY WORKS PTY LTD
No. V G253 of 1990
FED No. 138
Trade Practices
(1991) 13 ATPR 41-111/99 ALR 497/20 IPR 1
29 FCR 14

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Wilcox(2), Burchett(1) and Heerey(2) JJ.

CATCHWORDS

Trade Practices - alleged misleading and deceptive conduct - alleged false representation as to particular history or place of origin of goods - sale of socket with name of supplier and the word "Australia" - whether representation that socket made in Australia - determination of potential audience - ascertaining meaning conveyed - effect of conduct on potential audience.

Trade Practices Act 1974, ss.52, 53(a) and 53(eb).

Taco Co of Australia Inc v Taco Bill Pty Ltd (1982) ALR 177

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Annard and Thompson Pty Ltd v TPC (1979) 40 FLR 165

Finucane v NSW Egg Corporation (1988) 80 ALR 486

Morgan v Odhams Press Ltd (1971) 1 WLR 1239

Lewis v Daily Telegraph Ltd (1964) AC 234

Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293

Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82

Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429

Korezynski v Wes Lofts (Aust.) Pty Ltd (1985) 10 FCR 348

Netcomm (Australia) Pty Ltd v Dataplex Pty Ltd (1988) 81 ALR 101

Thorp v C.A. Imports Pty Limited (1989) 90 ATPR 50,962

Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553

Rhone-Poulenc Agrochimie S.A. v U.I.M. Chemical Services Pty Ltd (1986) 12 FCR 477

Kaye v Robertson (1990) 19 IPR 147

HEARING

MELBOURNE

#DATE 5:4:1991

Counsel for the Appellant: Dr C.L. Pannam QC with Mr D. Shavin

Solicitors for the Appellant: Messrs Freehill, Hollingdale and Page

Counsel for the Respondent: Dr C.N. Jessup QC with Mr S.R. Horgan

Solicitors for the Respondent: Messrs Mallesons Stephen Jaques

ORDER

1. The appeal be upheld.

2. The orders made by Jenkinson J. be varied by adding thereto the following order:
"4A. The respondent whether by itself, its servants or

agents or otherwise howsoever be and is hereby restrained from:

(a) offering to sell or selling in trade or commerce in Australia for resale thereafter by retail in Australia;

(b) promoting by any means the sale by retail in trade or commerce in Australia;

(c) offering to sell by retail in trade or commerce in Australia - a socket the shape of which is formed outside Australia on which is impressed the word "Australia".

3. The respondent pay to the appellant its costs of the appeal.

4. The cross-appeal be upheld.

5. The orders made by Jenkinson J. be varied by adding thereto the following order:

"8A. The Cross-Respondent whether by itself, its servants or agents or otherwise howsoever be and is hereby restrained from advertising, promoting by any means, offering to supply or sell, supplying or selling any tool having the same history of manufacture as any of the tools referred to in the First Schedule to this Order if packed with cardboard backing and moulded transparent cover with an outline map of Australia printed on the cardboard backing and the word "Australia".

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. (See also Order 37 Rule 2(3)).

JUDGE1

This case is concerned with two simple words. They are cut into the surface of an alloy (chrome vanadium) steel socket designed for use as a socket spanner, as follows:

"STANLEY

AUSTRALIA".

I should add that the second word, "AUSTRALIA", which is placed very closely below the other, is formed by letters just over half the size of those forming the word "STANLEY", and extending in length only from about beneath the letter T to about beneath the letter E. As a result, the message conveyed is undoubtedly, by virtue both of position and of size, primarily whatever is signified by "STANLEY", with an addition of what is signified by "AUSTRALIA". There is no immediate context, that is, nothing written on the socket, other than some numbers which may indicate the size of the socket, to influence understanding of the two words. (The suggested effects of more distant contexts will be discussed later.)

An international group of corporations, the principal members of which are North American, is well known under the name Stanley. The group has had a reputation over many years for the supply of high quality tools. One member of it, which markets in Australia a range of tools, including spanners and socket spanners, is the respondent The Stanley Works Pty Ltd, a company incorporated in Tasmania. The respondent produces the socket, at its Australian plant, by the application to previously formed relatively soft steel alloy objects, imported from Taiwan, of hardening, diffusion of carbon into the steel alloy, tempering, and electro-plating, involving processes designed to effect changes in their molecular structure so as to make them suitable for use as socket spanners. Although the finished product is thus part of the output of an Australian factory, the sockets were not "made in Australia" in a strict sense, since they were originally formed in Taiwan, however far they were then from answering the description of usable socket spanners.
The appellant says the respondent infringed ss. 52, 53(a) and 53(eb) of the Trade Practices Act 1974 by the sale of these sockets, so marked. That proposition is put on the basis that, by the two words cut into the socket, the respondent represents it to have been made in Australia. No customer ever deceived in that way was called, but of course, if the words do convey the alleged meaning the Court can itself be asked to say so. Jenkinson J. did not think they did. Nor do I.
The message told by the two words is necessarily simple. They say the item is a product of an Australian company. They do not say more. In particular, they simply do not say "made in Australia". Even, of course, if their meaning were to be stretched (as I would think, unwarrantably) to "produced in Australia", that statement would be perfectly true. (Cf. Netcomm (Australia) Pty Ltd v. Dataplex Pty Ltd (1988) 81 ALR 101, which involved a very different product, and very different circumstances.) It is only if the respondent should be taken to have represented that the sockets were made in Australia, in the full sense of that word importing a reference to original constitution, that a contravention could be found. A loose understanding will not do, for it would not be wrong; in a loose sense, the sockets are to be identified with Australia. And these two nouns, not linked by any verb, or explained by any other word, cannot be understood otherwise than as making an incomplete and loose statement. For that reason, and with respect to those who think otherwise, the question is not whether a person gathering the impression the socket was produced in Australia would limit that impression to something less than would be conveyed by a clear statement "made in Australia". There not being any clear statement (and certainly no suggestion of a comprehensive statement), even an obtuse person could not understand he was being told something so precise as the words "made in Australia" assert. It ought not to be overlooked that conduct which contravenes s. 53 constitutes, by virtue of s. 79, a criminal offence; the court should be slow to erect a fanciful or doubtful construction which will have that effect.
I accept it would be enough to show a significant section of the public would be misled: Pacific Dunlop Ltd v. Hogan (1989) 23 FCR 553 at 581. And the significant section may include people whose understanding is not acute. But the defectiveness of their understanding is not in itself the ground of liability. Something the respondent does must have the relevant effect. Where a marketer resorts to the vague but powerful persuasions of emotional imagery, he may infringe, without making any untrue, or even any precise, statement, by conveying a message in despite of logic: Pacific Dunlop Ltd v. Hogan at 576-577, 583-584, 586. That applies to the cross-claim, which does not depend on words, but on the direct association of a product, not a producer, with a map of Australia. But here there is no clouding emotion: two terse cold words are simply chiselled into a steel tool. They mean what they say or can reasonably imply, but if someone were to read a comprehensive and precise manufacturing history into them, he would not get it from the respondent's words, nor from any aura of emotion created by the respondent, but from his own imagination.
It is not irrelevant to observe that the whole law of trademarks is founded on the policy, in the public interest, of entrenching the identification of goods with their mark and so with the owner of the mark. That policy would be extraordinary if it were thought an identification of goods with an Australian mark imported a representation (which would often be false) that the goods were made in Australia. Yet it is not only the Trade Practices Act which is concerned with the possibly confused customer; trade mark law is too. Indeed, such a concern is one of the issues often discussed in relation to the conferment of statutory protection upon the mark: see Ladas, Patents, Trade Marks and Related Rights: National and International Protection (1975) vol. II p 1,341.
But the appellant also relied on the context, in the widest possible sense. It contended that persons to whose attention the sockets came might see them as associated with other Stanley tools they had used or come across marked "made in Australia". If so, it was said, they might conclude the words "made in" had simply been left off the sockets for lack of space to write the full message. Reliance was placed, as supporting the argument, on some rather ambiguous evidence suggesting a factor in the respondent's choice of inscription for the sockets was the smallness of the space on them. But this is hardly logical. The customer would not know about that evidence. The question is whether, unaided, he would draw such an inference. In fact, the available area, upon the sockets produced to the Court, was ample to contain further words. The evidence relied on by the appellant is, in those circumstances, as irrelevant as the very damaging admissions (if they had been relevant) which were dismissed from consideration in Rhone-Poulenc Agrochimie S.A v. U.I.M. Chemical Services Pty Ltd (1986) 12 FCR 477 at 487, 504-505. And the assumed customer with knowledge of other Stanley tools would be likely to know that some of them are marked "made in the U.S.A.", so that tools sold by Stanley Australia (as its catalogue calls it, not inappropriately) are not necessarily made in Australia. Furthermore, once attention is shifted from the socket itself to customers knowledgeable enough to recall other Stanley tools, it would be unreasonable to deny those same knowledgeable customers a general knowledge that the name Stanley relates to an international group of which the Australian member is merely a part. Given that understanding, those customers would be less, not more, likely to make an unwarranted assumption that goods produced by Stanley Australia have no connection with any other country, or are necessarily, in the strict sense, "made in Australia". Australian consumers should not be perceived as requiring to be protected against a threatening ignorance of the fact that modern manufacturing and commerce, conducted through international groups, does involve transnational processing of products.
The evidence shows that very high technology was applied to the production in Australia of these sockets. It would have been correct to have described them accordingly. But the respondent did not inscribe a detailed statement on the socket; it used two words to convey that the product was its product, and thus associated with Australia. Brevity by definition leaves things unsaid, but ss. 52, 53(a) and 53(eb) do not proscribe brevity. If things are left unsaid, someone may fill in the gap in his knowledge by speculation, but it does not follow the Act has been contravened by the brief statement. The Act was not designed to require of commerce that it be prolix. And it would do a very great disservice, in the long run, to the causes the Act promotes if its straightforward prohibitions became concealed obstructions in the path of proper commercial behaviour.
For these reasons, I would dismiss the appeal. Even had I been of a different opinion, I would not have considered it appropriate to issue an unqualified injunction in respect of these sockets. At most, on the appellant's case, a statement containing nothing in itself untrue may, by the loose thinking of some persons, be taken to imply something untrue. In such a state of affairs, all that is required is an order ensuring the respondent's display material and packaging dispels the error. The suggestion that, after purchase, a socket would go on misrepresenting its manufacturing history is really fanciful; anyone so misled would be disabused of his misconception as soon as he went to a hardware store to buy another socket, assuming he did not already realize that not all the tools sold by any one supplier are made in the same place. I do not think the respondent was bound to file a notice of contention in order to ask the court to consider the form of any relief to be granted upon an allowance of the appeal, as the form of an injunction is always a matter for the exercise of the discretion of the court granting it, and the point was discussed in argument.
The cross-appeal raises somewhat different issues. The appellant's tool was sold in packaging displaying a map of Australia, boldly juxtaposed, not to the name of the appellant company, but to the product itself. The appellant did not attempt to justify this by showing that it produced the tool in Australia, but only on the basis that the map referred to a warranty noted on a different part of the package. I am quite satisfied that no ordinary customer would make the association the argument suggests, but almost anyone would take the prominent map to assert an Australian identity for the tool, an assertion which the appellant accepts (if made) is not true of some of the tools in question, which are imported. Therefore I think the cross-appeal should be allowed. I should make it clear I do not think there is a misrepresentation that the tools are made in Australia, but in the case of imported tools even a less precise representation of Australian identity would, of course, be indefensible, and was not defended.
The appellant, however, claimed it is no longer using the packaging with the map of Australia of which complaint was made. It gave an undertaking to the court, but not in such terms as to cover any possible resumption of conduct of substantially the same kind. Apart from statute, discontinuance of the particular packaging impugned in the proceedings would not deny the cross-appellant's entitlement to seek an injunction against conduct which might be repeated in the future: see the interesting case Kaye v. Robertson (1990) 19 IPR 147 at 153, per Glidewell LJ. (with whom Bingham and Leggatt LJJ. agreed). In a case under the Trade Practices Act, s. 80(4) reinforces that position. Accordingly, I would grant an injunction pursuant to the cross-appeal.

JUDGE2

The appellant, Siddons Pty Ltd, ("Siddons") and the respondent, The Stanley Works Pty Ltd, ("Stanley") are competing manufacturers and wholesalers of hand tools, including spanners and sockets. In this litigation, each alleges that the other has contravened provisions of Part V of the Trade Practices Act 1974 ("the Act") in the branding and labelling of its products.

The Parties' Claims

Stanley sells in Australia:

(a) spanners which bear the word "Stanley" on one side and "Made in

Australia" on the other; and

(b) sockets on which appear the word "Stanley" and immediately

below that the word "Australia".

In both cases the relevant words are indented into the metal surface of the tools. Siddons complains that the effect of these words, in both cases, is to convey the false representation that the goods were made in Australia.
Jenkinson J. upheld the complaint of Siddons concerning Stanley's spanner. The evidence before his Honour disclosed that the spanner is made out of a piece of metal which is brought to the desired shape by the application of force and heat and is affected in its molecular arrangement by heat and cold. Its surface is then plated. The work commences in Taiwan and the spanner is imported into Australia in a form in which it has approximately the ultimate dimensions of the finished product, but modification of the molecular arrangement and treatment of the surface is carried out in this country. The strength and the durability of the piece of metal is substantially less on arrival here than it is when the spanner is sold.
His Honour held that the words "Made in Australia" meant, in their application to a tool such as a metal spanner, that "most of the processes by which a piece of metal is brought into the shape of the tool as sold have occurred in this country". His Honour found that in the instant case none of those processes occurred in Australia. His Honour concluded that Stanley had contravened s.52, s.53(a) and s.53(eb) of the Act. Those sections relevantly provide:

"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.

53. A corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services -

(a) falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; ........ .......

(eb) make a false or misleading representation concerning the place of origin of goods;"

Jenkinson J. granted injunctive relief in relation to the spanners. This part of his Honour's decision is not challenged on appeal.
But Jenkinson J. dismissed the complaint as to Stanley's socket. The manufacturing history of the socket is substantially similar to that of the spanner but his Honour held that the words "Stanley" and "Australia" on the socket did not amount to a representation that the product was made in Australia and that, therefore, no contravention of s.52, s.53(a) or s.53(eb) had occurred. His Honour's reasoning appears from the following passage:

"Mr Shavin of counsel for Siddons submitted that, on the socket, the word "Australia" would be understood by a substantial number of potential purchasers as an assertion as to the place of origin of the thing on which the word is marked. I cannot deny that some would. But my conclusion is that those who did would be thus misled, not by what the words in all the circumstances under which they stand on the metal socket mean to the reasonable member of the public who regards them, but by mental processes which are at fault. The two words, the one immediately above the other, may in my opinion reasonably be taken to assert both a connection of some commercial kind between whatever entity the word "Stanley" signifies and the socket and a connection of some kind between that entity and the place named, Australia. It cannot, in my opinion, be reasonably concluded that the words also assert a connection between that place and the socket, except the connection which the other two assertions involved."

Most of this appeal has been concerned with an attack by Siddons on that conclusion. However, Stanley also defended the judgment below by contending that, even if the words did amount to the suggestion of a connection of a manufacturing kind between this socket and Australia, that suggestion fell short of a statement that the socket was made in Australia. Counsel contended that, as long as that representation did not amount to saying that the goods were made in Australia, there was no relevant falsity.
By a cross-claim, Stanley complained that Siddons had sold in Australia:

(a) boxes of tools to which were attached a label containing an outline map of Australia, the word "Australia" and also the words "Unconditionally Guaranteed"; and

(b) single tools packed with cardboard backing and moulded transparent cover with an outline map of Australia printed on the cardboard backing and also the word "Australia".

His Honour held that the boxes would be taken by a reasonable person to have been made in Australia and to have Australia as their place of origin and that, because some of the tools in the box did not in fact meet that description, there had been a contravention of the relevant provisions of the Act. He granted appropriate relief. This order is not challenged on appeal. As to the single tools sold with the cardboard backing, his Honour applied essentially the same reasoning as he had in respect of the Stanley socket and held that a case of contravention had not been made out. This finding was the subject of a cross-appeal by Stanley. But Siddons has decided for commercial reasons to alter the form of packaging in any event. Although some rather unenthusiastic argument was put, with a view to distinguishing the representation made by the Siddons products from that of the Stanley socket, counsel for Siddons indicated that the impugned form of packaging would not continue to be used. On behalf of their client they gave an undertaking to this Court to that effect.
The Target Audience
The question whether Stanley's conduct in marketing the socket infringes the relevant provisions of Part V has to be determined by reference to the effect of that conduct on purchasers or potential purchasers of sockets: Taco Co of Australia Inc v Taco Bill Pty Ltd (1982) ALR 177 at p 202, Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at p 209.
The socket is a simple device, retailing for a little over $4.00. One can infer that it would be purchased by persons engaged in skilled trades or home handywork. A decision to purchase is unlikely to be the subject of anxious consideration. The immediate impression that the article makes on the purchaser's mind would therefore seem to be of great practical importance in influencing the decision whether or not to purchase.
Given this target audience, is there any minimum standard to be expected of persons to whom the alleged misleading or deceptive conduct is addressed? Having posed the question in this way, J D Heydon QC in Trade Practices Law (1989) analyses the authorities and finds they provide support for three possible answers. The first, expounded by Murphy J. in Parkdale at p 214, encompasses virtually all purchasers, including the uneducated, the inexperienced, the ignorant, the unthinking and the credulous. The second is found in the judgment of Franki J. in Annand and Thompson Pty Ltd v TPC (1979) 40 FLR 165 at p 176:

"The test is whether in an objective sense the conduct of the appellant was such as to be misleading or deceptive when viewed in the light of the type of person who is likely to be exposed to that conduct. Broadly speaking, it is fair to say that the question is to be tested by the effect on a person, not particularly intelligent or well-informed, but perhaps of somewhat less than average intelligence and background knowledge although the test is not the effect on a person who is, for example, quite unusually stupid. The question is not whether the purchaser was deceived but whether the conduct was misleading or deceptive."

His Honour adopted the same approach in Taco at p 181. A third answer appears in the judgment of Gibbs C.J. in Parkdale at p 199 as follows:

"Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced and the gullible as well as the astute, the section must in my opinion be regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests."

In Finucane v NSW Egg Corporation (1988) 80 ALR 486 at pp 515-516 Lockhart J. preferred the second approach and held that the reasoning of Franki J. was not overruled by the decision of the High Court in Parkdale. We would respectfully agree. As Lockhart J. noted, Mason J. spoke in Parkdale (at p 210) of the "ordinary purchaser", without adopting what Lockhart J. called "the more restrictive approach" of Gibbs C.J. Brennan J., the other member of the Court, did not deal with the point. In practice, applicants who failed to take reasonable care of their own interests have frequently succeeded in s.52 claims.

Ascertaining the Meaning Conveyed

Applying the standard favoured by Franki J., the relevant inquiry is as to the meaning which the words "Stanley Australia" would convey to ordinary purchasers and potential purchasers. The two words are names which, in themselves, require no particular level of intelligence, education or technical knowledge to understand.
The argument of Stanley in substance accepts the finding of Jenkinson J. that some persons might understand the word "Australia" as an assertion that the socket was manufactured in Australia. But it asserts that such an understanding would not be a rational one because it does not flow from a proper grammatical analysis of the words themselves; and, consequently, the indentation of the word "Australia" into the socket cannot properly be regarded as misleading conduct.
This argument puts in mind the approach which the law of defamation takes to the meaning of words. In that area, there is high authority for the proposition that the courts "must accept a certain amount of loose thinking": Morgan v Odhams Press Ltd (1971) 1 WLR 1239 at p 1245 per Lord Reid. As Lord Devlin said in Lewis v Daily Telegraph Ltd (1964) AC 234 at p 278:

"My Lords, the natural and ordinary meaning of words ought in theory to be the same for the lawyer as for the layman, because the lawyer's first rule of construction is that words are to be given their natural and ordinary meaning as popularly understood. The proposition that ordinary words are the same for the lawyer as for the layman is as a matter of pure construction undoubtedly true. But it is very difficult to draw the line between pure construction and implication, and the layman's capacity for implication is much greater than the lawyer's. The lawyer's rule is that the implication must be necessary as well as reasonable. The layman reads in an implication much more freely; and unfortunately, as the law of defamation has to take into account, is especially prone to do so when it is derogatory"

See also per Lord Reid at p 258.

Lewis was followed by the High Court in Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293. Although in the leading judgment in that case Mason J. at p 301 pointed out that a statement is not capable of conveying a defamatory imputation "... merely because it excites in some reader a belief or prejudice from which they proceed to arrive at a conclusion unfavourable to the plaintiff", there is nothing in the judgments of the High Court inconsistent with the passages just cited from Lewis. Indeed at p 302 Mason J. quoted with approval a passage from the judgment of Holroyd Pearce L.J. in Lewis in the Court of Appeal - see (1963) 1 QB 340 at p 374 - in which he said:

"When persons publish words that are imprecise, ambiguous, loose, fanciful or unusual, there is room for a wide variation of reasonable opinion on what the words mean or connote. The publisher can hardly complain in such a case if he is reasonably understood as having said something that he did not mean."

And Brennan J. at p 304 adopted a further passage from Lord Devlin's judgment in the House of Lords, at p 285:

"... it is the broad impression conveyed by the libel that has to be considered and not the meaning of each word under analysis. A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man; you can't make a rule about that. They can convey a meaning of suspicion short of guilt: but loose talk about suspicion can very easily convey the impression that it is a suspicion that is well founded."

(The issue in both Lewis and Harrison was whether a statement that the plaintiff was under investigation by police or had been charged or arrested could convey the imputation that he was guilty of the crime.)

In Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at pp 90-91 a Full Court (Bowen C.J., Lockhart and Fitzgerald JJ.) discussed Lewis and Harrison in the context of a claim under s.52 of the Trade Practices Act. They referred to the passage in Harrison in which Mason J. quoted the words of Holroyd Pearce L.J. They also quoted the earlier extract from Mason J. at p 301, to which we first referred. The Full Court went on at p 91:

In Taco's case and in (Parkdale), it was similarly emphasised that there is no contravention of s.52(1) of the Act unless error or misconception results from conduct of the corporation, and not from other circumstances for which the corporation is not responsible. One such circumstance may in some cases be a lack of care or vigilance in all the circumstances by those said to have been or to be likely to be misled or deceived..... However, the character of the corporation's conduct is not tested by reference to its effect or likely effect only on the reasonable man, but by reference to the entire class of 'possible victims':....."

We see this decision as an adoption for s.52 cases of the approach taken in defamation cases such as Lewis and Harrison. The last sentence is particularly relevant to the argument made by the respondent, and accepted by Jenkinson J., about potential purchasers being misled by their own faulty reasoning.
As a matter of principle, liability for a breach of s.52 arises from the breach of a duty fixed by law, being a duty towards persons generally. In that respect it is analogous to tortious liability as defined by Winfield: Winfield and Jolowicz on Tort, 13th Edition, (1989) page 3. Those duties "exist by virtue of the law itself and are not dependent upon the agreement or consent of the persons subject to them", ibid, page 5. Whether for the purposes of the tort of defamation or liability under s.52, the court seeks as best it can to ascertain the effect the words in question are in fact likely to have in the circumstances on whoever the words reach. This is to be contrasted with the position when the court construes a contract. Only the parties to the contract are affected. It is they who have chosen the words they wish to create the mutually desired rights and obligations. The court will not add some implied term merely because it might seem reasonable to do so, for the good reason that one (or both) of the parties might have deliberately chosen not to go beyond the words actually used. In construing a contract a court starts with the assumption that there is but one meaning to be imputed to the parties, difficult though it may be at times to ascertain: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at pp 436-43 7. But in assessing the effect of words published to an indeterminate number of people and alleged to constitute conduct in breach of s.52, the court will not make any such assumption. It accepts that some recipients may take the words in a different meaning from others. This is not really a matter of gullibility or intelligence. Intelligent persons may be just as much inclined to engage in "a certain amount of loose thinking" as stupid persons. Indeed the argument in this case proceeded, correctly in our view, on the assumption that it was sufficient to make out a case of contravention of the relevant provisions of Part V if the court could conclude that a significant number of persons affected might take the words in a meaning which amounted to a false representation. Thus we are not concerned with a search for one meaning which would be conveyed to all. If, in a particular case, particular words would be likely to convey to a significant number of potential purchasers a particular erroneous belief, a contravention of s.52 or s.53 may be established.
The Stanley Socket
The socket is a metal object, cylindrical in shape, with a shiny surface and different shaped apertures at each end. It is approximately 4 cm high and 2.5 cm in diameter. On the side appear some figures and other markings not material to the present case. About one-third of the way up from the bottom appear the words:

STANLEY

AUSTRALIA

The word "Stanley" is approximately 4 mm high and the word "Australia" approximately 2 mm.
Stanley argues that the word "Australia" qualifies the word "Stanley"; it does not say anything as to the history or origin of the socket.
We do not doubt that some purchasers might form this impression, but there are problems with such a conclusion. The corporate name of Stanley does not include the word "Australia", although on some price lists and other marketing literature the words "The Stanley Works Pty Ltd Australia" appear, such words being on the same line and in the same size type. However it was not suggested that such literature would necessarily be seen by, or present to the mind of, retail purchasers of sockets.
It was put in argument that Stanley was a company which was part of a multi-national group whose headquarters are in the United States and that the words therefore indicated merely that the product was being sold by the Australian Stanley company, as distinct from the United States Stanley company or the Canadian Stanley company. Again, such a meaning might in fact be conveyed, but only, we would think, to a purchaser who happened to be aware of the extrinsic fact (to borrow again from the law of defamation) that there was a multi-national Stanley group of the kind indicated. Further, the word "Australia" appearing on the socket is a noun, not an adjective. It appears on a different line and in a different size to the words "Stanley", thus suggesting at the very least that its function is not confined to qualifying the word "Stanley".
If the word "Australia" is to be taken as indicating the geographical location of the supplier so as to assist a purchaser who might seek to claim under a warranty, as was suggested in argument, it is notably unspecific. In any case, a purchaser of a product such as this could be expected to turn to the retailer in the event of any warranty or similar problems being subsequently encountered.
On the other hand we think some purchasers might readily and reasonably attribute to the word "Australia" a connection with the product and take the view that the product was made by some entity called Stanley and that it was made in Australia.
The need to promote Australian manufactured goods and to lessen Australia's reliance on imported goods has recently been at the forefront of public consciousness in this country. In the market place one would expect Australian origin to be a factor influencing, perhaps quite strongly, a purchaser choosing between products of comparable price and quality. Manufacturers obviously perceive this to be the case. It is now commonplace to see labels which emphasise the fact that a particular product was made in Australia. The history of this litigation shows the importance which the present parties, prominent participants in the hand tools market, attach to the identification of Australia as the place of manufacture of hand tools. Against such a background, we think it very likely that a significant number of prospective purchasers would assume that the word "Australia" was placed on the Stanley socket for the very purpose of indicating Australian manufacture - and the more so because, for the reasons we have suggested, it is a little difficult to see how it could have been placed there for any other purpose.
It has to be remembered that, although a substantial part of the manufacturing process involved in the production of the socket did in fact take part in Australia, Stanley's argument must logically mean that, even if the product were wholly imported, no misleading or deceptive conduct would be involved in marketing it prominently imprinted with the word "Australia".
Made in Australia
We do not think that the perceived manufacturing connection can be confined to something less than what is conveyed by the expression "Made in Australia". In the case of a simple product like this, with no component parts, we think there is nothing to make it occur to those who read the word "Australia" as asserting a manufacturing connection that it means something like "partly made in Australia" or "having been substantially contributed to by manufacturing processes in Australia", unless such persons had some actual knowledge of the manufacturing history of the socket or knew that in this industry manufacturing processes were or might be split between overseas countries and Australia. We do not see any rational basis for crediting such knowledge to the wide range of persons who might take the words as indicating a manufacturing connection.
It was conceded that the socket could not be said to be made in Australia. The concession in our view was correct and consistent with authority: Korezynski v Wes Lofts (Aust.) Pty Ltd (1985) 10 FCR 348; Netcomm (Australia) Pty Ltd v Dataplex Pty Ltd (1988) 81 ALR 101, and Thorp v C.A. Imports Pty Limited (1989) 90 ATPR 50, 962.
Therefore it is not necessary to consider Stanley's alternative argument that, given some lesser meaning, the words were not misleading or deceptive.
Orders
In our opinion the appeal of Siddons should be allowed with costs. An injunction should go in a form similar to the injunction granted in relation to the spanner, there having been no argument by Stanley addressed to us suggesting any modification. The cross-appeal should be allowed but, in the light of the undertaking given in relation to the future use of the map of Australia, which undertaking was foreshadowed in a letter from Siddons' solicitors to Stanley's solicitors shortly after the notice of cross-appeal was lodged, with no order as to costs. The learned trial judge made orders for costs of the trial which turned on the parties' varying success and failure on the issues before him. Some of these issues were not the subject of argument on appeal. To the extent that we depart from the conclusions of his Honour, we are of the opinion that each of the parties should have been successful in relation to one additional aspect of its case. Accordingly, our views do not change the balance of success and failure perceived by Jenkinson J. We would not disturb the orders for costs made by him.

[1991] FCA 138

05 APRIL 1991