State Government Insurance Company v Government Insurance Officer of NSW

Re: STATE GOVERNMENT INSURANCE CORPORATION and STATE GOVERNMENT INSURANCE
COMMISSION
And: GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES; GIO HOLDINGS LIMITED and
GIO LIFE LIMITED
No. WA G48 of 1990
FED No. 479
Trade Practices
19 IPR 232

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Trade Practices - misleading or deceptive conduct - acronyms - logos - State insurance bodies - criteria for characterisation of conduct as misleading or deceptive - whether necessary that should induce or be likely to induce specific transactions - disclaimers - effects of non- cognitive factors - application for interlocutory relief - serious case to be tried - balance of convenience.

State Government Insurance Commission Act 1986 (WA)

Motor Vehicle (Third Party Insurance) Act 1943

The Workers Compensation and Assistance Act 1981

State Goverment Insurance Act 1938 (WA)

Government Insurance Act 1927 (NSW) s.3

Trade Practices Act 1974 (Cth) s.52, s.80

Fair Trading Act1987 (WA) s.10

State Government Insurance Act 1986

Bradken Consolidated Ltd v BHP (1979) 145 CLR 107

Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77

Hornsby Building Information Centre Pty Ltd v Sydney

Building Information Centre Ltd (1978) 140 CLR 216

Lumley Life Ltd v IOOF of Victoria Friendly Society (1990) ATPR 40-987 at 50,838

HEARING

PERTH

#DATE 31:8:1990

Counsel for the applicants: Mr D.R. Williams QC and Mr W. Martin

Solicitors for the applicants: Robinson Cox

Counsel for the respondents: Mr J.D. Heydon QC and Mr S Archer

Solicitors for the respondents: Blake Dawson Waldron

ORDER

Upon the undertaking of the Respondents:

A. To include until trial or further order as soon as possible in all television and newspaper advertising using the acronyms "GIO" or "GIO Australia" a disclaimer of any association with the Commonwealth Government and to maintain the existing disclaimer of any connection with SGIO. B. To keep until trial or further order an account of all insurance and investment transactions between the respondents and clients in Western Australia.

The motion is dismissed.

The costs of the motion are reserved.

Liberty to apply on short notice.

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

JUDGE1

In November 1989 the Government Insurance Office of New South Wales decided to expand its activities into Western Australia. The decision was apparently taken at the express invitation of the WA Government. In spite of that invitation the New South Wales body and its subsidiary corporations, GIO Holdings Limited and GIO Life Limited, have come into conflict with their Western Australian counterparts, the State Government Insurance Commission and the State Government Insurance Corporation. The latter complain that by the use of the acronyms "GIO" and "GIO Australia" and logos comprising these acronyms in a red and blue colour scheme and distinctive type-style, the GIO of NSW and its subsidiaries are misleading or likely to mislead consumers in Western Australia into believing that they are associated or connected with the Commission or Corporation or the WA Government. The term "GIO Australia" is also said to imply a connection with the Commonwealth Government. The New South Wales group commenced a substantial advertising campaign in this State in June. The Commission and the Corporation have instituted proceedings against them for contravention of the Trade Practices Act 1974 (Cwth), the Fair Trading Act 1987 (WA) and for passing off. They claim an interlocutory injunction until trial to prevent the respondents from using the acronyms "GIO", "GIO Australia" and the associated logos in Western Australia.

Factual Background

The State Government Insurance Commission was established by the State Government Insurance Commission Act 1986 (WA) proclaimed on 1 January 1987. Its functions include the issue of policies and undertaking of liability under the Motor Vehicle (Third Party Insurance) Act 1943 and The Workers Compensation and Assistance Act 1981. It is also required to acquire and hold shares in the State Government Insurance Corporation established under the Act and to provide services and facilities to the Corporation to enable it to carry on insurance business and to supervise it in the conduct of that business.
The function of the Corporation is described in s.30 of the Act in the following terms:
"30(1) The function of the Corporation is

to carry on, in the State or elsewhere -

(a) the business of issuing and undertaking liability under policies of insurance; and

(b) any business related or incidental to the business referred to in paragraph (a) including any form or class of insurance business or life insurance business, or business related or incidental to insurance business or life insurance business, carried on, in the State or elsewhere, by any insurer.

(2) The authority of the Corporation, to

carry on any form or class of business is not limited by reference to the practice, usage, form or procedure followed by any insurer."

And by sub-s.28(5) it is empowered to use and operate under a trading name approved by the Minister, being an abbreviation or adaptation of its corporate name or a name other than its corporate name. Section 36 empowers the Commission to give directions to the Corporation with respect to its functions, powers and duties either generally or with respect to a particular matter and the Corporation shall give effect to those directions.

The Commission and Corporation supplanted the State Government Insurance Office ("SGIO of WA"), a body corporate which had been established in 1939 under the State Government Insurance Act 1938 (WA). All the assets of the Office are vested in the Commission with effect from 1 January 1987. Under s.10 of the Act the Minister is empowered to give directions to the Commission with respect to its functions, powers and duties either generally or with respect to a particular matter and the Commission is obliged to give effect to those directions.
The Government Insurance Office of New South Wales ("GIO of NSW") was established by s.3 of the Government Insurance Act 1927 (NSW). It is also a body corporate and by sub-s.3(3) it is provided that:

"The corporate name of such body corporate shall be the "Government Insurance Office of New South Wales."

Its functions are described in s.3A and include:

"(a) To undertake and to carry on the general business of insurance and any class or form of insurance which is, at any time, being undertaken or carried on, whether in New South Wales or elsewhere, by any person engaged in the business of insurance, or which may be considered by the Board to be necessary or desirable."

Under s.5B the insurance business of the GIO of NSW is divided into life insurance, insurance funds administration on behalf of the New South Wales Government or other authorities, and general insurance business. It is empowered by s.10E to join in the formation of any company to be incorporated in New South Wales and to acquire shares in any company incorporated in that State. The acronym "GIO" is given a particular status by s.18A which provides:

"18A. It shall be sufficient in any document issued for the purpose of any legal proceedings to which the Office is a party to refer to the Office as the GIO or by means of an expression of a similar nature and any such reference in any such document shall be read and construed as if it were a reference to the Office."

GIO Holdings Limited is incorporated in New South Wales and GIO Life Limited in the Australian Capital Territory. The GIO of New South Wales holds all shares in both companies.

The SGIO Acronym

Between 1961 and 1976 the SGIO of W.A. used the abbreviation "S.G.I.O." to promote itself commercially. In 1976 it adopted the policy of using the acronym "SGIO". It has presented itself, using that acronym, as a Western Australian institution involved with the Western Australian community. That policy has been implemented through sponsorship activities with various State based sporting and cultural organisations. In all such activities since 1976 the acronym has appeared on relevant publicity material. It has been displayed at public events conducted by sponsored organisations and on clothing worn by participants in sponsored sporting competitions.
Late in 1980 John Venning now Manager, Marketing and Distribution for the Corporation, and then in charge of marketing activities for the Office, wrote to the Government Insurance Offices in New South Wales, Queensland, South Australia, Tasmania and the Northern Territory. He suggested that each of the Offices should adopt similar logo styles and colours. He contended that such a policy would benefit all as they would profit from each others advertising and in particular perimeter advertising at sporting events covered by national television. On 25 June 1980 the GIO of NSW, acting on the advice of newly engaged advertising agents, had decided to adopt the logo GIO in blue and red lettering with the future black type-style.
In September 1981 a marketing and advertising conference attended by representatives of each of the Government Insurance Offices was held in Sydney. The conference recommended that the Offices should develop a common corporate image. And in October 1981 their general managers met for an annual conference in Sydney. An extract from the minutes of the conference record that there was general agreement that:

"...the use of standard colour and type-style logos amongst government insurance offices would provide valuable advertising spin-offs, particularly with respect to sporting events telecast interstate."

At the time it appears there was a degree of co-operation between the various State offices. They exchanged information about resources, policies and operational matters and circulated to each other advertising materials being used within the various home States and in the Northern Territory. Following the conference the SGIO of WA began to use the acronym SGIO as a logo in the same type-style and colours as were and still are used by the GIO of NSW. The type-style was Futura Black, a variety readily available in 1981.

The logo was employed initially in all customer related correspondence and material including product information publications. It was used in various marketing campaigns. One, known as "The SGIO Megastar Campaign" lasted until 1983. Late in 1983 a further campaign with the slogan "We're on your side" was launched. In 1985 and 1986 a new slogan "SGIO - You Can Always Look on the Bright Side of Life" was introduced as part of a promotion using the logo in print and electronic media advertising. The policy of sponsoring Western Australian organisations and events was maintained between 1981 and 1986 and the logo given prominence as part of that sponsorship.
Although the State Government Insurance Act 1986 was not proclaimed until 1 January 1987 an interim board was evidently set up by December 1986. On 9 December 1986 the Chairman of the Board, Mr F. Michell, wrote to the then Premier the Hon. B.T. Burke, on SGIO of WA letterhead:

"The Insurance Commission has endorsed a Corporation resolution for the State Government Insurance Corporation to use and operate under a trading name of "SGIO".

In accordance with Section 28(5)(b) of the State Government Insurance Commission Act 1986 your approval of the above resolution is being sought."

The copy letter was endorsed with the Premier's handwritten approval on 11 December. There may be a question as to whether that approval was effective, given that the Corporation did not then exist and the section contemplating a ministerial approval had not come into effect. It could no doubt be argued that s.28(5) was a provision empowering the Corporation to use an approved name regardless of whether the approval pre-dated the coming into operation of the Act. The point was not taken at the hearing and I proceed on the assumption that the Corporation was authorised to use the trading name SGIO from 1 January 1987.

The acronym and associated logo have been used extensively by the Corporation since that time. The "You Can Always Look on the Bright Side of Life" campaign continued until 1989. Another promotion involving an offer to provide market appraisal of motor vehicles under the designation "SGIO Autocheck" was also run up to 1989. A campaign using the logo and such slogans and product designations as "SGIO Priority - We'll Stand by You", "SGIO - Recommended Repairer", "SGIO - Term Life Insurance" and "SGIO - Cash Approved Deposit Fund" commenced last year and is still in operation.
According to Venning's affidavit the general insurance business of the Corporation covers the following areas:
(a) motor vehicle (b) home and contents (c) workers compensation (d) business and farming (e) pleasure craft (f) local government
Its life insurance business includes:
(a) term life policies (b) annuity policies (c) personal bonds (d) rollover bonds and insurance bonds; and (e) superannuation.
Although the Corporation was said by Venning to have offered life products since 1987, its involvement in this area seems largely to have been in product development with some limited marketing until the 1989/90 financial year when more extensive promotion commenced. On 20 June 1990 Michell wrote on Commission letterhead over the designation "Managing Director", to the State Minister for Finance and Economic Development seeking approval for "the SGIO to trade under the additional name of SGIO Life" (sic). The letter was endorsed with the Minister's approval under sub-s.28(5) on 1 July.
As already mentioned, the GIO of NSW had adopted the logo comprising the acronym GIO in blue and red lettering and Futura Black or similar type-style on 25 June 1980. It has used that logo since in all advertising and promotional material. According to its Marketing Manager, William Newbon, it was decided in August 1982 that the logo should no longer be used in conjunction with the words "Government Insurance Office".
In November 1989, the GIO of NSW decided to expand its business interstate under the name and logo GIO Australia embodying the same colouring and type-style for the GIO component and a white lettering on dark background for the word "Australia". According to William Jocelyn, the Managing Director, its purpose was to develop an Australian image and in the process to distinguish its business from that of other State insurance offices. The corporate plan as described by the Assistant Managing Director of the Customer Service Division, Norman Newbon, is that the GIO of NSW will operate Australia wide under the name GIO Australia and overseas under the name GIO International. On 16 November 1989 Jocelyn wrote to the Premier of Western Australia, the Hon. P. Dowding, referring to earlier conversations they had had in Sydney and advising that the GIO of NSW had decided to set up a small office in Perth. He would be visiting Perth to "make peace with our confreres in SGIO and to identify premises etc". He asked for the opportunity to speak with the Premier or the Deputy Premier during that visit.
On 20 November 1989 in company with Mr G. Dunsford, the Assistant Managing Director of GIO of NSW and Chairman of GIO Life Limited, he met with Michell, Venning and other officers of SGIO. During a lunch that followed, according to Jocelyn, Venning told him that GIO could not operate in Western Australia because it would be using the same colours in its logo. Venning's account of this conversation differed. His recollection was that he and other SGIO officers present put to Jocelyn that if GIO of NSW and its subsidiaries were to trade in Western Australia using the GIO logo and the name GIO Australia, members of the public would be confused and misled into believing that they were associated with the Corporation. He specifically referred to the similarity in acronyms, type- styles and colours.
Subsequently Jocelyn met with the Deputy Premier who, he said, told him that GIO of NSW was welcome in Western Australia. According to Jocelyn when he mentioned the SGIO's concern about the colours, the Deputy Premier replied, "well they will get used to it. You can work that out with them. We welcome you here". Jocelyn said that the GIO of NSW had not considered carrying on business in Western Australia until invited to do so by the Premier. There was evidence however from John Boulden, the Corporate Administrator for GIO of NSW that GIO Holdings Limited registered the business name "GIO Australia" in Western Australia on 18 July 1989. Similar registrations were effected in other States in June and November.
On 27 November 1989, Ross Butler, who had worked for the SGIO of WA on a consulting basis in 1986 and subsequently for the Corporation in 1987, was appointed as State Manager, Western Australia for the GIO of NSW. Since that time he has been engaged in what he described as "setting up and managing the GIO Australia branch office in Perth". A small office situated on the 4th Floor of the CSA Centre at 445 Hay Street, Perth was established in January 1990. It was identified as the office of GIO Australia by signs on the building, office and floor directories and on each office. Initial promotional activities included the following:
1. A sponsorship agreement entered into on 10 January

1990 with the Fremantle Surf Life Saving Club whereby GIO of NSW purchased a surf boat and set of oars for the Club in return for sponsorship and advertising opportunities. The surf boat was painted in red and blue bearing a GIO logo and was launched at an official ceremony on 11 March 1990.

2. A sponsorship agreement with Perth Metropolitan

Apex Clubs on 13 March 1990 under which GIO Australia would be the major sponsor of the National Apex Convention to be held in Perth in March 1991. Brochures were distributed to persons attending the 1990 convention in Victoria in April. These incorporated a GIO-Australia logo. The logo also appears in a monthly newsletter issued by the Apex 1991 National Convention Committee.

3. A sponsorship agreement entered into with the

Alcohol and Drug Foundation of Australia on 26 March 1990 under which approximately 300 adhesive stickers were placed on Western Australian Police Vehicles. These stickers carry a safety slogan and the "GIO Australia" logo. The safety programme in Western Australia was launched at a function on 30 March 1990 by the Assistant Commissioner of Police

(Traffic).

4. A sponsorship agreement with the Western

Australian Chinese Chamber of Commerce made on 12 April 1990 under which, for a fee of $1,500, the Chamber allowed GIO to be called "Major Sponsor of the Chamber Fashion Show Dinner Dance". There was evidence that at the dance held on 8 June 1990 a speech made by the M.C. expressly distinguished GIO Australia from the Corporation.

5. An agreement with the Law Association for Asia and

the Pacific, LAWASIA, made on 17 April 1990, whereby GIO Australia became a corporate member. An advertisement was placed in the LAWASIA directory and its newsletter.

6. Other more recent activities have included

sponsorship of the University of Western Australia Golden Oldie Rugby Union Team which entails the use of the GIO- Australia logo on dress jumpers, playing jumpers, club letterhead, ground advertising and club magazine for a period up to and including World Championships to be held in Perth in May 1991. GIO Australia has also agreed to sponsor the Swan East Fremantle Dragon Boat Club Inc.whose crew now wear GIO Australia tee-shirts, caps and jackets. The logo will be painted on the side of the dragon boat.

On 2 July the GIO of NSW moved to new offices on the ground level at 225 St. George's Terrace, Perth. Substantial costs were involved in fitting out and leasing the premises, acquisition of office equipment including telephone and computer systems and the employment and training of sales representatives and salaried staff.

Since 7 May 1990 GIO of NSW and its subsidiaries have been actively promoting the sale of life insurance and investment services in the Perth area. This has been done by telephone and direct mail. Sales material has been mailed to some 780 prospective clients, including a pro forma letter signed by Butler together with various brochures and leaflets relating to products offered under the name GIO Australia. A specimen of the pro forma letter which disclaimed association with any Government other than that of NSW, was exhibited to Butler's affidavit and is in the following terms:

"Dear Investor

Thank you for your interest in GIO Australia.

Although it originated in New South Wales more than 50 years ago, GIO now operates across Australia. GIO Australia has no connection whatsoever with any government, or government insurance office outside NSW. Right now nearly a million Australians have policies with us, and although we have recently commenced business in Western Australia, we believe we have the best insurance investment products on offer to West Australians. Please feel free to contact me should you have any questions about GIO Australia or our products."

On 23 May, Butler issued a cautionary memorandum to his Perth staff and representatives in the following terms:,

"It is crucial that all phone, mail and counter business enquiries are properly screened to ensure that clients and prospects are talking to the organisation they wish to communicate with. Because our advertising will clearly distinguish GIO Australia from SGIO/SGIC, and also because current media articles are presenting very different pictures of our two organisation, I do not think that we are likely to receive any enquiries from clients seeking SGIO services. However in the unlikely situation that this happens, it is crucial any such inquiry be politely referred to SGIO/SGIC on phone (09) 327 7277.

As previously organised, all new business enquiries must be entered into our "New Business Leads Book" with appropriate comments. Any SGIO/SGIC enquiries should also be entered along with referral action taken."

Butler had some basis for his expressed concern. In December 1989 he had commissioned a market research firm to report on reaction to the name GIO Australia and how it might be presented to avoid possible confusion with SGIO. Not surprisingly, the report indicated that nearly half those interviewed associated the GIO Australia logo with SGIO or the SGIC. It was for this reason that he was confirmed in his view that the respondents should take all steps necessary to ensure that they distinguished themselves from other bodies. The report indicated generally a non-existent unaided awareness of GIO Australia among respondents to the survey.

The products offered under the name GIO Australia in Western Australia fall within one or other of the categories of "life" products or investment products. The life products as outlined by Butler are:
(a) insurance bonds - comprising units in managed

investment funds

(b) term life insurance and disability income

protection

(c) rollover deferred annuities (d) cash approved deposit fund (e) superannuation bonds (f) company and occupational superannuation (g) superannuation master trust.

According to Butler, in an affidavit sworn on 30 July, 37 life products had to that date been acquired by residents of Western Australia from the respondents.

The investment products on offer in Western Australia are:
(a) managed unit trusts (b) monthly income trusts (c) cash and term deposits (d) portfolio and investment funds management.
Butler said that he sees at least one prospective customer for GIO Australia life products or investments each day and on his experience the usual sequence of events in dealing with enquiries concerning these products is as follows:
(a) the potential customer telephones the office

or sends in a coupon from one of the press advertisement expressing an interest in life products or investments or both;

(b) the potential customer's name, address, phone

number and an outline of needs are recorded.

(c) the appropriate brochures and/or leaflets are

sent to the potential customer with the pro forma letter;

(d) a followup telephone call is made within 5 to

7 days of mailing;

(e) if interest is expressed in GIO-Australia's

products an interview is arranged at its office in Perth or at the office or home of the customer. Details are then sought of financial circumstances, tax circumstances, risk profile and current investment portfolio;

(f) based on information obtained from the

customer a specific proposal is prepared and presented at a subsequent interview;

(g) customers wishing to acquire products from

GIO Australia or to invest with it usually do so at the second interview.

Butler gave evidence that certain of the products offered by the respondents are not on offer from the Corporation. And there was some debate in cross-examination about the extent of the Corporation's life products offerings. As to that I am not satisfied that for present purposes anything turns on the extent to which the parties overlap or offer unique services within the general range of insurance and investment business.

On 5 June 1990 the respondents launched a major newspaper and television advertising campaign in Perth. The first advertisement which appeared in The West Australian newspaper on 5 June bore in prominent white lettering on a black background the words:

"GIO AUSTRALIA

ARRIVES IN

PERTH]

WE'RE NEW,

INNOVATIVE and

COMPETITIVE]"

Promotional text in considerably smaller print about the virtues of GIO Australia's services followed in two columns around the GIO Australia logo. At the bottom of the advertisement and featured prominently in white lettering on a black background were the words:

"NOT CONNECTED WITH SGIO"

Below that in smaller black block lettering on a white background was the following:

"HEAD OFFICE SYDNEY. OFFICES IN PERTH, CANBERRA, BRISBANE, MELBOURNE, LONDON, TOKYO JAKARTA AND KUALA LUMPUR"

An advertisement for the GIO Monthly Income Trust apparently appeared in the Sunday Times on 8 July 1990 although the copy exhibited to Mr Butler's affidavit appeared to have been published in a Melbourne newspaper and had no disclaimer. Media schedules for newspaper and television advertisements annexed to the affidavit indicated a substantial advertising campaign. Each of the newspaper advertisements published in the State has carried the words "Not Connected with SGIO" and these words also appear at one point during each television advertisement. In the newspaper advertisements the GIO Australia logo is shown in black and white and on television in a red-brown monochromatic version and a grey and black version.

The applicants sought to tender a report prepared by Dr Robert Donovan, a psychologist and market researcher whose qualifications were not in dispute. I rejected the tender on discretionary grounds. I am satisfied, as I indicated then, that the report would have done little more than support findings which it is open for the Court to make without the aid of evidence of public reactions to the disputed logo and acronym. The interviewers were not available to give evidence. Having regard to the interlocutory nature of these proceedings, I was satisfied that to receive the report in the form proposed would be to lend a spurious precision to a fact finding process which is essentially provisional in its character. In this context the respondents made the formal admission that in and before March 1990 many people in Western Australia, hearing the term GIO or seeing the GIO logo without more, might have though that it had something to do with the applicants. In my opinion there can be little doubt that absent some effective differentiating context many people would think that the acronyms GIO and GIO Australia and their corresponding logos used in Western Australia would denote some relationship or association with the State Government Insurance Commission or the Corporation trading under the acronym SGIO. And further in my opinion, there is a strong case for the view that the designation GIO Australia will in the minds of some people suggest an association with the Commonwealth Government.
Although his survey report was not admitted, Dr Donovan gave oral evidence. Logos, he said, tended to be coded in memory visually rather than verbally. That is to say, people react to the total visual format rather than process individual letters. Repeated exposure to a logo generates associations and emotional responses. These may be positive, engendered by the familiarity that comes from repetition. And positive beliefs about the company or organisation represented by a logo will have a similar effect. Against this background he spoke of a negative statement published with one logo and disclaiming an association with another. Such a statement, he said, may enable the reader to make the cognitive connection that the associated logo is not related to the disclaimed logo. But this will not eliminate the positive emotional responses which operate at a non-cognitive level. He referred to some recent research in this connection. And he was shown, over objection, a copy of the GIO Australia newspaper advertisement. He expressed the opinion that people familiar with the SGIO logo would find positive reactions engendered by the GIO logo and contradicted by the disclaimer. Some might be confused, others might tend to screen out the disclaimer. A person might also, because of the familiar logo, feel favourably disposed to GIO Australia even though appreciating intellectually, by reason of the disclaimer, that it had no connection with the organisation using the name SGIO.
In cross-examination Dr Donovan accepted that the exposure of a consumer to the advertisement would be unlikely to directly affect the decision to take up any of the insurances or other services offered. Such decisions are not like those involved in purchasing groceries. The important effect of advertising in what he called "high involvement" consumer decision-making, is to place the advertiser "on the shopping list":

"In this case, I think what would happen is that the familiarity generated by the GIO logo will lead to GIO being put on the shopping list far more readily than they would otherwise and in that sense, no, it will not affect so much the final decision although there is still that positive affect that comes through. And we know from numerous studies now that positive affect is extremely important in decision making and it is seen as one of the fundamental reactions that people can make. And therefore it will get you on the shopping list sooner and it will have some impact through the process."

There was some evidence from persons who had seen the GIO logo and thought it was connected with the SGIO. But given the particular circumstances and limited scope of those responses, it would not be appropriate to draw any inference adverse to the respondents from them.
The Relief Claimed
By their motion the applicants claim orders in the following terms:
1. The respondents and each of them be restrained

from carrying on in Western Australia the business of providing insurance or other financial services under the name "GIO" or under any other name, including "GIO Australia", which incorporates the letters "GIO" and from using any such name in the promotion in Western Australia of such business, until trial or further order.

2. Further or alternatively, the respondents and each

of them be restrained from using as a logo the letters "GIO" in a distinctive style of block print in which the letter "I" is in red and the letters "G" and "O" in blue until trial or further order."

The Principles and their Application

The general principles which govern the grant of interlocutory relief are now well established. Before an interlocutory injunction can be granted whether under s.80 of the Trade Practices Act 1974 or otherwise, the Court must be satisfied that there is a serious question to be tried and that the balance of convenience favours the relief sought. The two issues are not independent. A party demonstrating a weak case, albeit a triable issue, may require a more marked balance of convenience in its favour than one who has a stronger case.
Proceedings for interlocutory relief frequently involve the reception of evidence which might not ordinarily be admissible. Or the parties may, for reasons of time or economy, not present the full range of evidence that would be relied upon at trial. For these reasons and the nature of the proceedings, findings of fact are generally of a provisional character. The object is to determine whether there is a serious case to be tried in fact and law, not to finally decide the facts or resolve controverted issues of law.
In this case the applicants invoke as their principal causes of action the alleged contraventions by the respondents of s.52 of the Trade Practices Act 1974 and like contraventions of s.10 of the Fair Trading Act 1987 (WA) together with passing off. Without traversing the detail of the pleadings, it can be said that the applicants claim that by using the name "GIO" or "GIO Australia" the respondents are misleadingly representing to the public in Western Australia that they are or are associated with the Corporation or the Commission or that the businesses of the two groups are associated. Further, they are said to thereby represent that they are operated, backed by or associated with the Government of Western Australia. The respondents are also said to be representing by their conduct that they are directly or indirectly owned, operated or backed by or associated with the Commonwealth Government. And by the use of the coloured logo, GIO, identical in style and colour to the letters "GIO" in the SGIO logo, they are said to be representing an identity or association with the Commission and/or the Corporation and/or the Western Australian Government.
It is separately alleged that the respondents' conduct in using the acronym and the associated logo is calculated to lead members of the Western Australian public to confuse them or their businesses with the Corporation or the Commission or the businesses conducted by those bodies.
In their defence to the amended statement of claim, the respondents have raised issues of a constitutional nature, contending that the Trade Practices Act 1974 cannot validly apply to the GIO of NSW as nothing more than a holding corporation for the relevant trading entities namely GIO Holdings Limited and GIO Life Limited. The contention is also raised that the respondents are agents or emanations of the Crown in right of the State of New South Wales and so not affected by the Trade Practices Act 1974 - Bradken Consolidated Ltd v BHP (1979) 145 CLR 107. And so far as the Fair Trading Act 1987 (WA) purports to extend to the Crown in right of the State of New South Wales, it is said to be beyond the legislative competence of the State of Western Australia and alternatively inconsistent with the Trade Practices Act 1974 and therefore invalid to the extent of the inconsistency under s.109 of the Constitution. It is further pleaded by way of defence that copyright in the GIO logo subsisted in the GIO of NSW, that it had granted to the State Government Insurance Office of Western Australia in 1980 a non-exclusive licence to use the logo and that notice of termination of the licence has been given to take effect on 31 December 1990. The SGIO logo is said to constitute a reproduction of a substantial part of the GIO logo. On this basis the applicants' entitlement to use the SGIO logo will cease on 31 December.
For the purposes of these interlocutory proceedings these points have not been taken. I proceed therefore on the assumption that the Trade Practices Act 1974 and the Fair Trading Act 1987 (WA) validly apply to the conduct of the respondents and that no question of a claimed prior right to copyright in the GIO logo falls for consideration. This leaves the matter to be dealt with principally on the basis of s.52, the passing off issue having been apparently put to one side in opening argument although revived for consideration late in the day.
In determining whether there is a serious question to be tried of a contravention of s.52 of the Trade Practices Act it is necessary to consider whether there is a serious case that the impugned conduct, the use by the respondents of the acronyms "GIO" and "GIO Australia" and/or their associated logos constitutes conduct in trade or commerce which is misleading or deceptive or likely to mislead or deceive. There can be little dispute that the conduct in question is in trade or commerce.
In deciding whether it is misleading or deceptive or likely to misled or deceive, its tendency to lead people into error may be considered - Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77. The question of characterisation necessarily implies a question of causation. For conduct may be the occasion of error but not its cause. A person may draw erroneous inferences from the conduct of another, but yet not be misled or deceived by that conduct.
So far as the letters "GIO" are concerned, they are an abbreviation of part of the statutory designation of the Government Insurance Office of New South Wales. But the respondents have expressly disclaimed reliance upon any contention that their acronym can be given a descriptive character analogous to that attributed to the title of the Building Information Centres in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216.
The acronym "GIO" in the context of the provision of insurance and investment services where there is an established Government insurance office, may reasonably be expected to convey the notion that it relates to a Government Insurance Office. And absent any relevant qualification or differentiating context, it may reasonably be expected that it will be understood as referring to the Government Insurance Office in the State in which it is used. Of course if the Government Insurance Office of New South Wales chose to trade under the acronym "GIO-NSW" or some like alternative, there would be little room for debate that it did not make clear its origins and the distinction to be drawn between it and the SGIO of WA. In this case not only has that not been done, but by the use of the word "Australia" it has arguably suggested a connection with national government that could be misleading. In that regard I do not accept the contention advanced by counsel for the respondents that the suggested connection is far fetched. It is perhaps a mark of its national marketing plan that one of the six State Government Insurance Offices should appropriate a national designation. But if that designation conveys a connection or affiliation of some kind with the national government and tends to conceal or obscure its true origins in the minds of consumers in other States, then it may mislead.
It is put that consumers selecting life insurance products or making investment decisions will not be influenced at the point of decision by any false impressions initially gained about the origins of GIO Australia. In that connection I have regard to the observation of Lockhart J. in Lumley Life Ltd v IOOF of Victoria Friendly Society (1990) ATPR 40-987 at 50,838 where his Honour dismissed from the purview of s.52 "temporary and commercially irrelevant confusion". That was a case in which the vendors of investment products designated "Flexi Bonds" marketed them under quite different names i.e. Lumley Flexi Bond and IOOF Flexi Bond respectively. But misleading or deceptive conduct in trade or commerce is not limited to conduct which induces or is likely to induce entry into some specific transaction or class of transactions. To so propose is to place a gloss upon s.52 that is not justified by its terms. Conduct which misleads a consumer so that under some mistaken impression of a trader's connection or affiliation he or she opens negotiations or invites approaches may be misleading or deceptive even if the true position emerges before the transaction is concluded. If it could be said that the conduct of the respondents in using the acronym "GIO" or "GIO Australia" leads people to approach them in the belief that they are connected with the SGIO or the Commonwealth Government, then the conduct is capable of misleading or deceiving whatever the information ultimately made available to the consumer.

In this case the use of the acronyms "GIO" and "GIO Australia" in newspaper and television publicity is accompanied by disclaimers to which reference has already been made. The disclaimer is in this context effective only if the impugned conduct, looked at in its entirety, and having regard to the disclaimer, cannot be said to mislead. I leave open the question whether the non-cognitive discounting of a disclaimer to which Dr. Donovan referred can affect that characterisation. That is sufficiently controversial as a proposition that I would not be moved to grant interlocutory relief on that possibility. At a cognitive level however the case for asserting confusion or deception as between the SGIC and the GIO of NSW by reference to the latter's newspaper and television advertisements is impaired by the disclaimer. There is still a serious case to be tried but its strength is affected by the prominence given to the disclaimers in those advertisements. That is not to say that the disclaimers have any impact on the characterisation of GIO Australia as tending to suggest an affiliation with the national government. In that regard there is on the evidence not only a serious question to be tried, but also a strongly arguable one. But in answer to that concern the respondents have offered to undertake to include in all television commercials and newspaper advertisements prior to trial a disclaimer of any association with the Commonwealth Government.
So far as the use of the acronyms GIO and GIO Australia is concerned and given the additional undertaking proffered, the balance of convenience does not favour the grant of relief. The matter should be ready for trial in October 1990, some five to eight weeks from now. With appropriate disclaimers I do not consider that it has been shown that there is a real likelihood that the applicants will suffer any significant loss which cannot be calculated if the respondents are permitted to use the acronym in its present form. That is not to say that at trial a case may not be made that with or without disclaimers the use of the acronym GIO other than by reference to its State of origin, is misleading or deceptive. But for the present, and having regard to the disruption to existing arrangements that would be caused by the first of the two orders sought, I do not think it appropriate to grant that relief.
On the question of logo colour scheme, it is the simple fact that the GIO logo using blue and red lettering was first adopted by the GIO of NSW. It is a body which is not limited to operations in a particular State. While its conduct in commencing business in Western Australia may be the occasion and perhaps even the cause of confusion or error on the part of consumers because of the similar colouring and type-style of the logo it is arguably the SGIO's adoption of the same logo in a small national market that is the effective cause of the error. That is a matter for debate and may not be easy of resolution. Accepting that it raises a question to be tried, I am satisfied that with the existing disclaimers in television and newspaper advertisements and in the pro forma letter the balance of convenience does not favour injunctive relief in this regard either.
Having regard to these findings, it is unnecessary for me to express any concluded view on the effect of the alleged delay in bringing the claim for interlocutory relief. As to that I should perhaps indicate that it was not a factor to which I was inclined in the circumstances of this case and the rapidity with which events have moved since the beginning of the year to give great weight. I should also add that nothing said in relation to the passing off question alters the general view I have formed about the balance of convenience. In the circumstances and upon the undertakings offered by the respondents, the motion will be dismissed and the costs reserved.
CONCLUSION
I cannot forbear from the observation that it is a sad spectacle at any time to see two public bodies, established by statute for public purposes, engaged in unproductive and expensive litigation. At a time when many people in the community are suffering economic hardship it is particularly unfortunate. Neither these comments nor the refusal to grant interlocutory relief in this case should be taken as an indication that the action brought by the Commission and the Corporation is without legal merit. Indeed it should be clear from the preceding reasons that at law they have a serious case to be tried. But the public interest and the public purse would be better served if the parties or their respective governments can move to resolve this litigation by negotiation.

[1990] FCA 479

31 AUGUST 1990