Smith and Australian Securities and Investments Commission and Amee Donohoe Trading as Central Coast Surf Academy (Joined Party)
[2014] AATA 192
•7 April 2014
[2014] AATA 192
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/4606
Re
Kelly Smith
APPLICANT
And
Australian Securities and Investments Commission
RESPONDENT
And
Amee Donohoe trading as Central Coast Surf Academy
JOINED PARTY
DECISION
Tribunal Senior Member Bernard J McCabe
Date 7 April 2014 Place Brisbane The decision under review is affirmed.
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Senior Member Bernard J McCabe
CATCHWORDS
BUSINESS NAME REGISTRATION – Objection to registration of business name – Availability of business names that are identical or nearly identical – Comparison of ‘academy’ and
‘school’ – Legislation provides precise and exhaustive list of names that are identical or nearly identical – Decision under review affirmed.LEGISLATION
Business Names Registration Act 2011 (Cth)
Business Names Registration (Availability of Names) Determination 2012 (Cth)
REASONS FOR DECISION
Senior Member Bernard J McCabe
7 April 2014
Solicitors of a certain vintage will recall negotiating with clerks in the office of the Registrar of Business Names in each state over whether a client’s proposed business name was too similar to another business name that was already registered. It was a rough and ready process. The outcome usually came down to the common sense and experience of the particular clerk. But the world has moved on. A single national registry of business names was established under the Business Names Registration Act 2011 (“the Act”). The register is administered by the Australian Securities and Investments Commission (“ASIC”). Much of the registration process has been automated: the all-powerful clerks have been replaced by computers with less imagination.
The discretionary powers have been limited by new definitions and guidelines.
The holder of a registered business name may still object to the registration of a name on the basis it is identical, or nearly identical, to the existing registered name. That is what happened in this case. The applicant, Mr Kelly Smith, is the holder of the registered name Central Coast Surf School. ASIC decided to register the name Central Coast Surf Academy. The party seeking to register the Academy name is Ms Donohoe, a high-profile surfer who wants to run a surfing instruction business in the same general area as the applicant. Mr Kelly says the two names are practically identical, and the Academy name should not be registered.
While I accept the two names are so similar they might confuse or mislead, that is not the test. For reasons I will explain, I am satisfied the two names are not identical or even nearly identical for the purposes of the Act. The name Central Coast Surf Academy is available to be registered by Ms Donohoe.
THE APPLICANT’S PARTICIPATION IN THE HEARING
The Tribunal agreed to conduct the hearing by telephone in order to suit the convenience of the parties. Unfortunately, at the time of the hearing, the applicant was only available on his mobile phone. I understand he was traveling on a train. Reception was poor.
He was cut off twice during the hearing. After he dropped out on the second occasion, my associate was unable to re-establish contact. I decided it was appropriate to proceed with the hearing in his absence. I heard from counsel representing ASIC, and from
Ms Donohoe’s solicitor. I am satisfied it was fair to proceed because (a) the applicant was given ample opportunity to participate in the hearing, and (b) the argument over the application of the Act was essentially a technical one that was likely to be resolved on the basis of arguments that had been clearly signalled in the documents filed by the parties. There was no evidence being led. The outcome of the case turned on the interpretation of the Act.THE LEGISLATION
The objects of the Act are set out in s 16. Section 16(3) points out one object is “to avoid confusion by ensuring that business names that are identical or nearly identical are not registered”. The other objects referred to in s 16(3) include avoiding business names that are “undesirable” and restricting names that are deemed inappropriate for some other reason, most obviously because they might mislead consumers.
When an application to register a business name is made, ASIC is required to register the name if it satisfies the requirements in s 24(1). In particular, s 24(1)(c) says ASIC must register the name if it is available (subject, of course, to the other provisions which are not at issue here). Section 25 goes on to explain when a business name “will be available…” within the meaning of s 24(1)(c). Section 25(a)(i) says a business name will be available if the proposed name “is not identical or nearly identical” to another name that has already been registered.
One would have thought that instruction was enough to be getting on with. But the parliament has decided to provide additional guidance as to the meaning of these plain English words. The words “identical” and “nearly identical” are defined in s 3 to mean “identical” or “nearly identical” according to rules made by the Minister under s 26.
I was provided with a copy of the Business Names Registration (Availability of Names) Determination 2012 (“the Determination”). Section 5 of the Determination identifies a number of matters that should be disregarded when considering whether two names are identical, or nearly identical. Section 6(1) goes on to say:
When comparing a business name with another name (other than a company name) to determine whether the names are identical or nearly identical, a word or expression in an item in Schedule 1 is to be taken to be the same as each other word or expression in the item.
I note s 6 does not suggest the names referred to in Schedule 1 are examples of words that are identical. The section suggests on its face that the listed words in particular are regarded as being the same.
The applicant points out item 142 in Schedule 1 refers to “academy of dance, dance academy, dance centre, dance studio, school of dance”. He says that example is directly applicable here: the only difference between the situation in this case and the example in the Determination is the fact the Determination refers to dance schools and academies.
The respondent and the other party say that is not how the legislative instrument must be interpreted. Mr Rosewarne, counsel for ASIC, argued Schedule 1 is a precise and exhaustive list. Only the names on the list are deemed to be the same; they are not examples of more general application. It follows item 142 is irrelevant to the applicant because it deals with dancing instructors rather than surfing teachers.
That approach makes for some curious outcomes. It is not clear why dance academies merit special protection, for example, when any other sort of entity in the business of providing instruction – in languages, hobbies, sports or even surfing – will be forced to rely on costly remedies at common law or under other statutes to protect their names and avoid confusion. Mr Rosewarne acknowledged that anomaly, but suggested it was open to any business to lobby the Minister to have words or names added to Schedule 1.
I discussed with the parties whether that interpretation was absurd. The decision-making process contended for certainly has the capacity to result in inconsistent and arbitrary outcomes. But that does not of itself make the respondent’s interpretation absurd. If the Minister plainly intended the Determination would operate in this way, and the Determination is validly made under the Act, the mandated outcomes are – for better or worse – the mandated outcomes.
It seems one of the motivations for constructing the law in this way is to make it easier to automate the process of applying for a business name. Computers do not do well with examples: while they work more quickly (and presumably more cheaply) than the registry clerks of fond memory, they do not yet have the capacity to analogise from a list of examples. They prefer clear instructions capable of certain application. Computers don’t ‘do’ nuance, and they are not open to persuasion.
In any event, the words of s 6 of the Determination make it clear the decision-maker must have regard to the words in Schedule 1 as they are written there in the course of considering whether a name is identical or nearly identical. Item 142 does not assist the applicant.
The respondent acknowledged the applicant might resort to other remedies to restrain someone from using a business name that is similar – on the basis that doing so amounts to misleading or deceptive conduct under the Australian Consumer Law, for example. But that is not the responsibility of this Act, notwithstanding its stated objective of avoiding confusion.
CONCLUSION
The business name in question is available to the other party, notwithstanding its similarity to the applicant’s registered business name. This is an inevitable consequence of the particular approach to the decision-making process provided for in the legislative scheme. The applicant is free to consider other remedies that may be available to him, and he may lobby the Minister to seek an ad hoc amendment to the Determination.
But for now, the decision under review must be affirmed.
I certify that the preceding 17 (seventeen) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe .............................Sgd.................................
Associate
Dated 7 April 2014
Date of hearing 1 April 2014 Applicant In person Counsel for the Respondent Mr S Rosewarne Solicitors for the Respondent Australian Securities and Investments Commission Solicitors for the Joined Party Mr B Davis
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