TPADE PRACTICES - Consumer protection - Misleading or deceptlve conduct - Passing off - Riqht to interlocutory injunction - rJse of similar descriptive trade names - Two motels in small town - Applicants' older establishment called "Caboolture Motel" - Applicants seeking to restrain respondents from calling new
establishment "Caboolture Hotel Motor Inn".
Trsde Practices P.ct 1074 s.52
SPENDER J. BRISBANE 7-2 JUNE 1988. |
I .
.
| IN THE FEDERAL COURT OF AUSTRALIA | ) |
| ) |
| QUEENSLAND DISTRICT REGISTRY | |
| ! |
| GENERAL DIVISION | ! |
CAROL WONNE STREET and ANTHONY WINSTON STREET
| trading a3 the "CABOOLTURE | MOTEL" |
Applicant
.m :
JEDSMINSTER PTY. LTD.
First Respondent
.m :
TURBOT R O W GEORGE PTY. LTD.
Second Respondent
| .JUDGE MAKING CRDER: | SPENDER J. |
| @ATE OF ORDER: | |
| WHEP.E MADE: | BRISB?.NE |
| 1. 'Jpon | the | applicants, | through | their |
counsel, qlving the usual undertakings a:
| to damages, the first snd | Second |
| respondents by themselves or by | their |
| servants or agents or any | of | them be |
restrained until the trial of the action
| or earlier order from using | by way | of |
| advertising | otherwise | or | the | name |
"Caboolture Hotel Motel", "Caboolture
| Hotel Motor Inn", or Caboolture | Hotel |
| Motel Inn" or | any other words combining |
| the | word | "Caboolture" | with | the | words |
| "Motel" or "Motor Inn", by reference | to |
| the business carried | on at Morayfield |
| Road, | Morayfield, | first | the | by |
respondent.
| 2 . | After fourteen days of | today's date, the |
| first | second | and | respondents | by |
| themselves or by their | servants or agents |
| qr any of | them be restrained until the |
| trial of the action | or earlier order from |
| using | any | Sign3 | I | advertisements, |
stationery, staff uniforms and any other
| item | wherein | or whereon | the | words |
| "Caboolture | Hotel | Motor Inn" or |
"Caboolture Hotel Motel" or "Caboolture
| Hotel | Motel | Inn" | or any | other | name |
| containing | the | words | "Caboolture" | and |
| "Motel" or "Motor Inn" in respect | of the |
| said business. |
| 3 . | Each | party | have | liberty | to | apply | on |
reasonable notice.
| 4 . | The matter | to be brought on again for |
| directions on seven days' notice to | the |
| other parties. |
| 5. Costs | and | incidental | of | the | to |
3pplication are reserved.
| Note: Settlement and entry | of orders is dealt wlth by Order 36 |
of the Federal Court Rules.
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| IN THE FEDERAL COURT OF AUSTRALIA | ) ) |
| QUEENSLAND DISTRICT REGISTRY | |
| 1 |
BETWEEN:
CAROL YVONNE STREET and ANTHONY WINSTON STREET
| t r a a i n g T X i T 0 0 ~ ~ ~ ~ ~ | MOTEL" |
Applicant
AND :
JEDSMINSTER PTY. LTD.
First Respondent
AND :
TURBOT ROMA CEORGE PTY. LTD.
Second Respondent
SPENDER J.
BRISBANE
22 JUNE 1988.
REASONS FOR JUDGMENT
| The applicants, who trade as | the "Caboolture Motel" in |
Caboolture, seek interlocutory relief. They claim against the first respondent:-
| " 1. An | interim | injunction | restraining | the |
Respondent its servants O K agents or any of
them from continuing to use either by way of
| advertising | otherwise, | or | the | names |
| "Caboolture | Hotel | Motel" | or | "Caboolture |
L.
Hotel-Motor Inn" or "Caboolture Hotel-Motel
Inn" or any like name in reference to the
business carried on by the Respondent at
Morayfield Road, Morayfield in the State of
Queensland;
| 2. An interim | injunction | compelling | the |
| Respondent | to | forthwith | remove | from | the |
| premises | situated | at | Morayfield | Road, |
Morayfield and ceased (sic) the use of all
| signs, | advertisements, | stationery, | staff |
| uniforms | and | any | other | item | whatsoever |
| wherein or whereon the words | ''Caboolture |
Hotel-Motor Inn" or "Caboolture Hotel Motel"
| or | "Caboolture | Hotel | Motel | Inn" | or | like |
| words | are | used | in | respect | of | the | said |
business."
The business now known as the "Caboolture Motel" has
been carried on for approximately ten years, orlginally as the
| "Motel | Caboolture" . The | name | "Caboolture | Motel" | has | been |
registered as a business name under the Business Names Act 1962
| (Qld.) since | 9 October 1985, and | Mr. | h Mrs. Street became the |
| registered proprietors of that business on | 1 August 1986 and have |
continued to conduct business under that reglstered business name
to the present.
| Jedsminster | Pty. | Ltd. | is | the | licensee | of | an | hotel |
conducted at Morayfield Road, Morayfield. The second respondent,
| Turbot Roma George Pty. | Ltd., is the registered proprietor of the |
| land | on | which | the | hotel-motel | business | is | conducted. | The |
| business opened on 21 December | 1987. | The nominee of the licensee |
is Mr. Walter Bennie. He is employed by the first respondent and
manages the complex. There are sixteen motel style accommodation
| units. | The | licence | is | registered | in | the | name | "Morayfield |
| Hotel-Motel". | There | had | previously | been | an | hotel | on | the |
Morayfield Road property which had conducted business for many
years under the name of "Morayfield Hotel". This building was demolished and a modern complex, consisting of an hotel with a large drive-in bottle department as well as sixteen motel units, was constructed and commenced business in late 1987.
On 19 January 1988, solicitors for the applicants wrote
to the manager of the first respondent. That letter stated in
part:-
"Our client has noted that the business name "Caboolture Hotel Motel" appears on signs about the property at Morayfield, on clothing worn by certain staff members, in advertisements in local newspapers and is listed with telecom (sic) and is generally used to promote the business carried on at Morayfield.
On a number of occasions our client has made
bookings for guests, particularly interstate guests, only to find that the guests through obvious confusion, ended up staying at your premises. Our client is also continually receiving phone calls and correspondence intended for your business, again because of the confusion between the associated names."
The letter indicated that fourteen days would be allowed for the removal of all signs, advertising material and listings with
| Telecom in respect of the name "Caboolture Hotel Motel". |
| After some communication between | the | respective |
on altering the name under which it trades to Caboolture Hotel". This letter was acknowledged on 11 March, and the solicitors for the applicants indicated:-
solicitors, the solicitors for the first respondent wrote 9
| "...our | client is prepared to allow a further 21 |
days to enable your clients to replace all the
| signs | and | other | matters | that | may | have | any |
reference to the name "Caboolture Hotel Hotel". if no action is taken during this time."
| On | 29 | April, the solicitors for the applicants again wrote |
complaining of the continued advertising as the "Caboolture Hotel the solicitors for the respondents wrote and said:-
| "We | confirm | that | in | accordance | with | previous |
correspondence the previous sign has been removed
and replaced with a sign 'Caboolture Hotel Motor
Inn'."
The letter continued:-
"Further, all other references to the previous name have now been deleted and all appropriate parties have been notified accordingly so that the future
trading name of the business will be 'Caboolture
Hotel Motor Inn'.
We submit that, without any admission that the
| name | 'Caboolture | Hotel/Motel' | could | have | been |
| confused | with | your | clients' | business, | in | an |
abundance of caution our client has agreed to
change the name to Caboolture Hotel Motor Inn."
While the previous correspondence included reference to
| the removal of | a sign, there is nowhere any earlier reference to |
an intention to carry on business under the name "Caboolture
| Hotel Motor Inn"; in fact, the letter of | 9 March 1987 is directly |
| to the contrary. In | a letter dated 31 May 1988, the solicitors |
for Jedsminster Pty.Ltd. indicated:-
| ". | . | .our | client proposes to trade under the name |
| 'Caboolture Hotel Motor | Inn' | and is prepared to |
give an undertaking to the Court that it will not
| use the name 'Caboolture Hotel Motel'. | It is our |
contention that the other forms of restraints are too wide and our client is not prepared to give undertakings in those terms."
The respondent had sought registration of the name "Caboolture Hotel/Motel", but this had been rejected by the
| Commissioner for Corporate | Affairs. | The | rejection of the |
| registration was accompanied by a statement that | "[tlhe name |
applied for could be confused with or mistaken for the presently registered Caboolture Hotel and Caboolture Motel". The evidence is largely silent as to who were or are the registered proprietors of the name "Caboolture Hotel", but one may infer from the yellow pages of the telephone directory which lists the name "Caboolture Hotel" at the address Morayfield Road, Morayfield, that they are entities associated wlth the respondents or their predecessors. ~t is to be noted that, according to the white pages of the Caboolture telephone directory, a number of buslnesses wlth the word "Caboolture" in
| their name give an address as | Morayfield Road, Morayfield, |
including "Caboolture Air Conditionlng", and "Caboolture Autoland
Mitsubishi".
| Caboolture is a small town sltuated some 4 5 kilometres |
| north of Brisbane. | In the general region of Caboolture there are |
a number of satellite communities such as Toorbul, Brlbie Island,
Morayfield and Beachmere. Caboolture has a primary school and a
high school, train station and postcode. Morayfield likewise has a state school, high school, train station and postcode.
The hotel-motel is located at Morayfield Road,
Morayfield, about 200 metres south of the Caboolture/Morayfield boundary, on the southern entrance and exit road to Caboolture.
| The Caboolture Motel | is approximately 1.5 kms. away, on Lower |
| King | Street, | which | is in | the | centre | of | Caboolture. | It | is |
situated on the main arterial road from the Bruce Highway into
Caboolture.
Since the hotel-motel commenced business, it has used,
| in one way | O K | another, the names "Caboolture Hotel Motel", |
| "Caboolture | Hotel | Motor | Inn", | "Caboolture | Hotel/Hotel | Inn", |
| "Morayfield Hotel/Hotel" and "Wellers Hotel-Hotel Inn". | Up until |
| 26 Hay 1988, a | large neon sign contained the words "Caboolture |
| Hotel Hotel"; but on that day it was replaced by | a similar slgn |
bearing the words "Caboolture Hotel Motor Inn". Uniforms and the
hotel letterhead previously used the name "Caboolture Hotel
Motel".
The advertisements for the Caboolture Hotel Motel are
extensive and generally highlight the "specials" available at the
liquor barn drive-in, as well as the family restaurant and the
available entertainment. The advertisements variously referred
| to the hotel as the "Caboolture Hotel Motor Inn", the "Caboolture |
Hotel Motel", and "Wellers Caboolture Hotel Motor Inn". The
| address is given as Morayfield Road, Horayfield | or as Morayfield |
| Road, Caboolture. |
| Mr. | Street, the male applicant, deposes that on | 2 1 |
| January 1988 he received | a | letter at the "Caboolture Motel", |
addressed to the "Caboolture Hotel Hotel", with the address being
l .
given as 4 Lower King Street, Caboolture. Mr. Street readdressed
the letter and forwarded it on to the respondents' hotel. He
| deposes that on | 9 | May 1988, | a | person from the Department of |
| Social Security at Redcliffe was inquiring after | a person who had |
| allegedly stayed at the Hotel | on 29 April 1988. It appears that |
the inquiry ought to have been directed to the Caboolture Hotel the Caboolture Motel. On 16 May 1988, persons mistakenly arrived
| at the premises of the applicants, but in fact had made | a booking |
| at the respondents' hotel. |
| Hr. | Street also deposes, on an information and belief |
| basis, to an occasion when | a | person who had booked at the |
| Caboolture | Motel | in | February | had | mistakenly | stayed | at | the |
Caboolture Hotel Hotel.
| The Caboolture Motel | 1s the only motel in Caboolture. It |
| consists of ten self-contained units and | a | laundry, with | a |
manager's residence and reception area. It is advertised In
| Jasons Queensland Accommodation Guide, the | R.A.C.Q. | motorists |
accommodation gulde, and in the Caboolture Shire Information
| Guide, of which about 20,000 glossy copies are issued every six |
| months. |
The applicants assert that carrying on the hotel-motel
| business | as | the | "Caboolture | Hotel | HotOK | Inn" | constitutes |
| misleading and deceptive conduct, in trade | or commerce, contrary |
| to s.52 | of the Trade Practices Act 1974. It is said that there |
| are two aspects of this conduct: the first as | to its capacity to |
mislead members of the public concerning the business conducted
by the respondents and the business of the applicants, and
| secondly, | as | to | the | misdescription | of | the | locality | of | the |
business of the respondents.
It was then submitted that the applicants and the
| respondents are engaged in the same business in | a | relatively |
small community, that the "keyword" in the name of each business
| is the same, and that it | is conducted in a field where consumers |
| would not be expected to exercise | a fine discrimination. |
| It | is | clear | that | the | businesses | are | by | no | means |
identical. The physical layout of each business is different.
The hotel-motel complex has its drive-ln liquor barn as an
important part of its operation as well as the provision of
entertainment and restaurant meals. The provision of motel type
| accommodation is but | a | facet of | a much larger operation. The |
applicants' business, on the other hand is essentially smaller,
and centred on the provision of accommodation, although meal
facilities are available.
| The evidence concerning the operation of the Caboolture |
| motel uniformly points to | a well-run and efficient business. In |
| my view, it has acquired | a not Insignificant reputatlon, which |
has attached to the name "Caboolture motel".
| The question | is | one of impression and of fact and |
degree, and regard must be had to the relevant section of the
public which, f o r present purposes, consists of those people who
| are likely to require, or might want, accommodation, of | a motel |
kind, in and around the district of Caboolture. The question is whether they are likely to be misled or deceived by the first respondent's conduct in using the name, "Caboolture Hotel Motor
Inn".
| In | Burswood | Management | Ltd. | v. | Burswood | Casino |
| Motel/Hotel Pty.Ltd. (1985) 7 F.C.R. | 186, Toohey J . succinctly |
summarised the law and then went on to comment on the difficulty
| involved in the use of descriptive words. He said, at | p.190:- |
"Conduct infringes s.52 of the Trade Practices Act
if it is misleadinq or deceptive or is likely to
mislead or deceive, This is-a question of fact to
be determined by the court; it is unnecessary to
| prove | that | the | conduct | In | question | actually |
deceived or misled anyone: Park'dale Custom Built
| Furniture Pty.Ltd. | v. Puxu Pty.Ltd. | (1982) 144 |
C.L.R. 191 at 198. The class of consumers who may be misled in the present case is very much the
| public at large, having regard to the impact | of |
| newspaper | advertlsing. | The | lntention of the |
| respondents | is | not | relevant; | the | question | is |
whether their conduct was misleading or deceptlve
or likely to mislead or deceive: Hornsby Buildlnq
| Information Centre Pty.Ltd. | v. | Sydney Buildinq |
| Information Centre Ltd. (19/ | 8 ) 1 0 | C.L.R. 216 at |
| m. An applicant for relief must be associated, | in the minds of members of the public or the |
| relevant | section, | with | a particular | name | or | |
| product otherwise conduct | is not likely to mislead | |
| or deceive: Dairy Vale Metro Co-operative Ltd. | v. | |
| Brownes D a i r v d m v | A.L.R. | 494; Taco Co. | |
| of Australia Inc. v. Taco Bell Pty.Ltd. (n |
| A.L.R. 117. | conduct | which | merely | causes | |
| uncertainty in the minds | of | relevant members of | |
| the public does not contravene | S . | 52: | Parkdale. | |
| Conduct is not misleading or deceptive unless it contains or conveys a misrepresentation: Taco. |
| If a name is no more than merely descriptive | of a | |
| particular type of business, its use by others who |
| carry | on | the | same | type | of | business | does | not | |
| deceive | or | mislead | as | to | the | nature | of | the | |
| business described: Hornspy at | 230. | But a name | |
| may be more than descrlptlve: it may relate to | a | |
| commercial | activity | of | the | applicant | or | be | |
associated in the minds of members of the public with that activity and in that regard mislead." |
In my opinion there are various categories of persons who are likely to be misled or deceived by the first respondent's use of the name "Caboolture Hotel Motor Inn". One of those categories would include those who had learned of the "Caboolture Motel" from the personal recommendation of others. If the
| persons who received that recommendation were travelling past the least some who would not only be confused or uncertain as to whether that was the establishment recommended to them, but would also believe that that was the place recommended. Caboolture is a small district with a small population and, for at least some of this category of persons, in my opinion it would make no difference whether the property were called the "Caboolture Hotel Motel", the "Caboolture Hotel-Motel Inn", or the "Caboolture | respondents' "Caboolture Hotel Motor Inn", there would be at a person had in fact been booked at the "Caboolture Motel" but stayed (apparently quite happily) at the "Caboolture Hotel Hotel", is but an illustration of the deception llkely from the |
| |
| I think | the physical differences between the two |
businesses and their buildings would be sufficient to prevent persons who had patronised one or the other from being misled or deceived into thinking that the other business was the one at which they had stayed. I think that persons who had not previously stayed at either place and who had heard of, read of,
| or been recommended to the "Caboolture Motel", might, on seeing | a |
business described as the Caboolture Hotel Motor Inn, be misled
into thinking that that was the business that they had been told
about or had read about.
| One has to recognise that | it | will not | be | on every |
| occasion | that | the | Caboolture | Hotel | Motor | Inn | will | be so |
| compendiously | described. | But | here | the | primary | word | is |