Sorbello v Karlsson
[1999] FCA 677
•21 MAY 1999
FEDERAL COURT OF AUSTRALIA
Sorbello v Karlsson [1999] FCA 677CONSUMER PROTECTION – Advertisement of electrical appliance repairer – Telephone directory entries stating brand name of appliance followed by words “Appliance Repairs” and then “Independent Agent” with telephone numbers – Whether entries constituted representation of sponsorship, approval or affiliation.
Fair Trading Act 1992 (ACT) s14(f)
LEONARDO SORBELLO, DIRECTOR OF CONSUMER AFFAIRS v TREVOR JOHN KARLSSON
A3 of 1999WILCOX, MILES AND WHITLAM JJ
CANBERRA
21 MAY 1999
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
A3 of 1999
ON APPEAL FROM A JUDGE OF THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
LEONARDO SORBELLO, DIRECTOR OF CONSUMER AFFAIRS
AppellantAND:
TREVOR JOHN KARLSSON
RespondentJUDGES:
WILCOX, MILES and WHITLAM JJ
DATE OF ORDER:
21 MAY 1999
WHERE MADE:
CANBERRA
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellant pay the respondent’s costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
A3 of 1999
ON APPEAL FROM A JUDGE OF THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
LEONARDO SORBELLO, DIRECTOR OF CONSUMER AFFAIRS
AppellantAND:
TREVOR JOHN KARLSSON
Respondent
JUDGES:
WILCOX, MILES and WHITLAM JJ
DATE:
21 MAY 1999
PLACE:
CANBERRA
REASONS FOR JUDGMENT
THE COURT: This is an appeal against a decision of Higgins J in the Supreme Court of the Australian Capital Territory. His Honour allowed an appeal to that Court by Trevor John Karlsson against orders made in the Australian Capital Territory Magistrates Court against him at the behest of Leonard Sorbello, the Australian Capital Territory Director of Consumer Affairs. The magistrate had found that Mr Karlsson contravened s14(f) of the Fair Trading Act 1992 (ACT) in connection with entries in the 1998 Telstra White Pages Telephone Directory and ordered that he instruct Telstra and Optus to disconnect the telephone services mentioned in the entries.
Section 12(1) of the Fair Trading Act provides that a person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 14(f) reads:
“A person 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 –
…
(f)represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;”
The evidence established that Mr Karlsson had inserted in the Australian Capital Territory Telstra White Pages six entries that were identical except in relation to a brand name. It is sufficient to quote the first of them, in alphabetical order:
“DISHLEX APPLIANCE
REPAIRSIndependent Agent
Help/Advice Line ------------------- 0412 341 300
Service Bookings 7 days
Fyshwick 29 Townsville ----------- 6228 1005”The number “0412 341 300” is the number of the Optus service the subject of the magistrate’s disconnection order; “6228 1005” is the relevant Telstra service.
The remaining advertisements substitute for “Dishlex” the names of one of five other electrical appliance manufacturers. The magistrate found the entries would be likely to convey to a reader that Mr Karlsson “is holding himself out to be a person who has some connection with sponsorship buyer or approval from the (relevant) appliance manufacturer”. He did this on the basis of dictionary definitions of “agent” as “a person who acts on behalf of another”.
Both before the magistrate and on appeal to the Supreme Court, Mr Karlsson raised a number of constitutional issues, all of which were properly rejected and are no longer pressed. There were also issues about the jurisdiction of the Supreme Court and the appropriateness, in any event, of the magistrate’s orders. These are not raised as issues for us and we offer no opinion about them.
The sole issue raised for our determination is whether the entries made the claim identified by the magistrate. In relation to that matter, Higgins J said:
“48.His Worship, correctly, in my respectful opinion, concluded that the word ‘agent’ implies that a person has authority to act on behalf of someone else.
49.Indeed, had the word ‘agent’ appeared alone, it would, in context, convey to the ordinary reasonable reader that the person referred to was authorised to act on behalf of the manufacturers referred to in repairing their branded products. Each entry would have conveyed that meaning in respect of the brand name mentioned.
50.However, his Worship seems to have entirely disregarded the meaning of the term ‘independent’ used to qualify the word ‘agent’.
51.If the ordinary reasonable reader was to ask himself or herself from whom, or what, the ‘agent’ was independent, the only answer suggested by the context is the owner of the brand name mentioned. It denies the authority of the brand owner. It denies any control by, or connection with, the brand owner. It denies dependence for support or supplies upon the brand owner, including an entitlement to any fees, commissions or retainer therefrom.
52.It is, to my mind, unarguable that the term ‘independent agent’ could ever be taken to affirm, rather than to deny, any ‘sponsorship, approval or affiliation’ with the named brand owners. I appreciate that both the respondent and his Worship came to the contrary view. However, it seems to me that, in all probability, they were influenced by the prior history of the appellant’s attempts falsely to convey a misleading impression of being an approved agent of various brand owners.”
Counsel for the appellant submitted to us this reasoning was erroneous. He said the magistrate was correct in using the ordinary meaning of the word “agent”; having regard to the purpose of the White Pages, the material matter is the ordinary meaning of the word. He submitted the word “agent” ordinarily suggested an affiliation with somebody else, in this case the well known appliance manufacturer named in larger print at the commencement of the entry. Counsel posed the question, if an ordinary reader asked himself (or herself) of whom or what is the repairer an agent, the only answer suggested by the context is the relevant brand owner. He pointed out that Higgins J accepted that the word “agent”, used alone, would signify a connection with the brand owner.
In his Outline of Submissions counsel said:
“An ordinary reader would not read the phrase as if the word ‘Independent’ obliterated totally the significance of the term ‘Agent’. There are two reasons for this. First, it is inconsistent with the grammar or structure of the phrase; it asserts that a qualifier completely overturns or negates the substantive term. Second, the notion that an adjective in such a phrase completely denies all significance to the substantive term is not the way language is ordinarily understood. The ordinary reader would not read the expression as if the word ‘Agent’ were not there at all. The ordinary reader is accustomed to many different kinds of agent, ranging from those who are subject to the full control of an employer, to those who conduct a business in their own right while having a connection with a certain supplier for example. In short the ordinary reader would identify the repairer as some kind of agent of the brand owner or manufacturer, even if, by reason of the word ‘Independent’, he or she was not sure what level of autonomy the agent might have. It is to a lawyer that the expression ‘independent agent’ is problematic.”
We accept that the relevant question in this case is the meaning of the term “independent agent” to an ordinary reader. This is the audience to whom the telephone directory is addressed. We also accept that the word “agent”, standing alone, usually connotes a relationship with some other person. If the word “independent” was omitted from these entries, it would convey to a reader an affiliation with the owner of the named brand. However, “agent” does not stand alone. It is qualified by the word “independent”. It is necessary to ask “independent of whom?” One obvious answer is “of the named brand proprietor”. Another answer, perhaps, is “independent of everybody”, in a business sense.
It may be right to say the term “independent agent” is oxymoronic. There is certainly some conflict between the ideas conveyed by the two words. The use of the term may cause confusion to a reader; but the critical question is whether it conveys an assertion of sponsorship or approval by, or affiliation with, the relevant electrical appliance manufacturer. That question must be answered by considering the term as a whole and with reference to its likely impact on the ordinary reader, who would be unlikely to submit it to grammatical or structural analysis.
We agree with the views of Higgins J, already quoted. In particular we respectfully think the magistrate fell into error in failing to address the significance of the word “independent”. When the composite phrase is read as a whole, it can only be understood as a denial of a relationship with the named brand proprietor.
There is a subsidiary matter. Complaint is made of the mention in the directory entries of an address at Fyshwick. Counsel rightly says this is known to be the location of authorised distributors and agents of many manufactured products. He says this address would contribute to an impression that the advertiser was an authorised distributor or agent.
We do not agree. Fyshwick is Canberra’s most significant industrial suburb. It is not wholly devoted to authorised distributors and agents. As counsel accepts, it houses many independent operators. The address in the advertisement is that of premises leased by Mr Karlsson for business purposes at the date of insertion of the directory entries. It was not misleading for him to disclose this address.
Higgins J was correct in allowing Mr Karlsson’s appeal to the Supreme Court and setting aside the magistrate’s orders. The appeal to this Court should be dismissed with costs.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox, Miles and Whitlam. Associate:
Dated: 21 May 1999
Counsel for the Appellant: D R Jarvis Solicitor for the Appellant: ACT Government Solicitor Counsel for the Respondent: C M Everson Solicitor for the Respondent: Saunders & Co Date of Hearing: 20 May 1999 Date of Judgment: 21 May 1999
0
0
0