Talmax Pty Ltd & Anor v Telstra Corp Ltd

[1996] QSC 34

IN THE SUPREME COURT

OF QUEENSLAND

No. 418 of 1994

Brisbane

Before Justice Byrne

[Talmax Pty Ltd & Anor v. Telstra Corp Ltd]

BETWEEN:

TALMAX PTY LTD
  (ACN 054 044 594)
  First Plaintiff
AND:
  KIEREN JOHN PERKINS
  Second Plaintiff

AND:
  TELSTRA CORPORATION LIMITED
  (ACN 051 775 556)
  Defendant

REASONS FOR JUDGMENT - BYRNE J.

Judgment delivered :  14/03/1996

CATCHWORDS: TRADE PRACTICES - S.52 Trade Practices Act 1974 Torts - Passing off - Whether conduct contravening s.52 or amounting to passing off.

Counsel:P R Dutney Q.C. for plaintiffs

P A Keane Q.C., S.G., N. O'Bryan for defendant

Solicitors: Biggs & Biggs Francis & McGregor for plaintiffs

Freehill Hollingdale & Page for defendant

Hearing Dates:             16 and 17 October, 1995

IN THE SUPREME COURT

OF QUEENSLAND

No. 418 of 1994

Brisbane

Before Justice Byrne

[Talmax Pty Ltd & Anor v. Telstra Corp Ltd]

BETWEEN:

TALMAX PTY LTD
  (ACN 054 044 594)
  First Plaintiff
AND:
  KIEREN JOHN PERKINS
  Second Plaintiff

AND:
  TELSTRA CORPORATION LIMITED
  (ACN 051 775 556)
  Defendant

REASONS FOR JUDGMENT - BYRNE J.

Judgment delivered :  14/03/1996
           This action arises out of a supplement published in the Courier-Mail on Saturday, 12 March 1994.  The supplement is a four page lift-out. The words "Advertising Feature" appear in small type in the top right-hand corner of the first page, along with the words "Telecommunications '94" in large type as a heading.  Copies of page 1 of the supplement are annexed.
           The content of the supplement complained of is a prominent colour photo in the top right-hand section of the first page and an article below it.  The photo is of Kieren Perkins in a swimming pool wearing a cap printed with the Telecom logo and a drawing of a dolphin.  It is captioned with the words "OLYMPIC champion Kieren Perkins ... returning to Chandler Aquatic Centre for the Telecom Australian Open Titles" in small print.  The article is headed "Kieren leads charge by Telecom Dolphins" and reads:

"BRISBANE'S favourite son Kieren Perkins returns to the famous Chandler Aquatic Centre next week for the Telecom Australian Open Swimming Championships, which Australian Swimming believes will be the biggest and the best ever staged.

Kieren, who has been training hard this season, is looking forward to showing off his remarkable talents in front of his home crowd.

Although Kieren has admitted he may not be in world record-breaking shape, Chandler remains one pool in which he would dearly love to break a world record - the Telecom Australia Open Championships is a golden opportunity.

Other key members of the Telecom-sponsored 'Dolphins' will also compete at Chandler.

Kieren has set world marks in Barcelona, Edmonton, Auckland, Canberra, Blacktown and Warringah Aquatic Centre over three years which have seen him climb to the top of the international swimming ladder.

Two other goals remain in Perkins' sights and if he continues on his winning way he'll surely achieve them - to win Commonwealth Games gold in Victoria and to win World Championship gold in Rome in September.

Perkins was recently named the Telecom Australian Swimmer of the Year and received a Yamaha Jet-ski."

Until recently, Telstra traded as Telecom Australia.  It is widely known as Telecom.  Telstra admits that it was responsible for the supplement, and that publication occurred "at about the time of a ballot in Brisbane in relation to long distance telephone calls" in which consumers were to choose between Telecom and Optus for the supply of STD telephone calls.  This is the opportunity referred to in the heading "Now you can make a choice", which is positioned immediately to the left of Perkins' photo.  The article describes the ballot, the preselection process, and the benefits of choosing Telecom.  It extends down the left-hand side and is the largest article on that page.  Underneath it are two small articles dealing with preselection and the relocation of a Telecom business unit to Brisbane.  The rest of the first page consists of a summary of the contents of the remaining three pages and a large, colour advertisement for an advertising agency. The remaining pages contain articles describing Telecom products and services, the use of Telecom products made by customers, and the advanced technology Telecom envisages providing consumers in future.  There are also articles about a business customer and a radio and TV personality who say that they prefer Telecom, and articles describing Telecom's customer services and community involvement.  The supplement also contains advertisements relating to communications companies and an advertisement for Lifeline.  All the articles in the supplement are written in an informative newspaper reporting style, but the supplement is obviously an advertising feature.
This action was brought by Talmax Pty Ltd ("Talmax"), a management company formed to take advantage of available opportunities to commercially exploit the name, image and reputation of Kieren Perkins. Telstra admits that Perkins "is a well-known and respected sporting identity whose face and name are widely recognised throughout Australia and Queensland in particular". He has gained recognition for his numerous, significant achievements in swimming at a world class level, including several world records and medal-winning performances at Olympic Games and Commonwealth Games. Under a deed between Talmax and Perkins, Perkins assigned the right to his services and to the use of his identification to Talmax. Telstra raised an argument relating to the efficacy of that assignment, which occasioned amendments during the trial adding Perkins as a plaintiff. This step was not objected to on the basis that damages would not be pursued for emotional distress to Perkins. Telstra admits that it is a corporation subject to the rigours of s.52 of the Trade Practices Act 1974 and that the publication occurred in trade or commerce.  It also admits that it did not seek permission from either plaintiff to arrange the publication. 
           The claim is that, by the use of the name and image of Perkins, Telecom represented that it had an association which did not in fact exist.  The plaintiffs contend that the conduct complained of misrepresents Perkins as being associated with, or endorsing, Telecom, and was therefore misleading and deceptive or likely to mislead or deceive.  No reliance is placed on ss. 53(c) or (d) of the Trade Practices Act. The plaintiffs depend for their success on establishing a breach of s.52 or passing off.[1]
Section 52
           The association said to be misleading or deceptive is particularised in several ways.  The first is of a contractual relationship between Telecom and Perkins. The article does not expressly suggest such an association.  It is difficult to see that one could be implied. Unsurprisingly, this contention was not pursued.  The second type of association allegedly conveyed is of endorsement, again said to be implied in the publication.  Emphasis was placed upon the impression arguably suggested by the photo and the article considered as a whole, especially in their positioning next to the large heading "Now you can make a choice" and underneath the words "Advertising Feature". Much the same contention was advanced in respect of the third suggested association, viz that Perkins supported Telecom. The fourth association allegedly represented is of a "current relationship" between Telstra and Perkins.  Here the contention is that the article says that Perkins was a member of the "Telecom Dolphins" on 12 March 1994. The heading of the article, "Kieren leads charge by Telecom Dolphins", and the sentence "Other key members of the Telecom-sponsored Dolphins will also compete at Chandler" are claimed to convey such an assertion, which is said to be false on the footing that Perkins was not a member of the "Telecom Dolphins" on the day the article was published.  The fifth type of association suggested - that Perkins gave permission for his photograph and name to be used in Telstra's advertising - is said to emerge from the photo and the article considered in their context as a dominant feature of the supplement.
Endorsement or Support of Telecom?
           The first question is whether the publication would have led a significant number of readers to apprehend that Perkins endorsed or supported Telecom, generally or in its competition with Optus for subscribers.[2]  If the article conveyed such an impression, it was misleading, or likely to mislead, because Perkins did not in fact commend Telecom, its products or services.
           Plainly, the article and photo were included in the supplement to influence customers to choose Telecom in the ballot.  This objective was to be advanced by associating Perkins, a popular, successful, local, sporting celebrity, with Telecom. His appeal to an audience of telephone subscribers accounts for the article and the prominence the supplement accords him.[3]  But do the article and photo suggest approval by Perkins of Telecom or its products and services?
Endorsements can be conveyed by indirect intimations and equivocal suggestions. Although not characteristic of promotions in Australia, subtlety sometimes finds a place in the advertiser's armoury. Of course, celebrity endorsements may be less effective if the association with the celebrity, or the indication of the celebrity's approbation, is indistinct. Yet oblique techniques of persuasion and subliminal messages involving celebrities are occasionally used, and, in principle, they are capable of involving contraventions of s.52.[4]   Here no words of commendation are attributed to Perkins, and nothing in the article explicitly conveys an endorsement by him. So whether the article implies support of Telecom or approval of its products and services is a question of fact. As there is no evidence of the actual response of readers, this falls to be determined largely as a matter of impression.
           Readers would have been aware that sporting celebrities often agree to lend their names and images to advertising as a matter of general business practice.[5]   Such a belief may have predisposed some readers - especially those who had seen Perkins endorsing other goods and services in advertisements - to suspect that the prominence accorded to Perkins signified his preference for Telecom.  However, by analysis of the supplement, a careful reader would have observed a contrast with other articles which clearly were endorsements.  One such endorsement was by a business customer. Another was by a radio and TV personality, who states that he prefers Telecom because of its Australian ownership. 
           The message conveyed concerning the association between Perkins and Telecom is to be ascertained by considering the article in its context in the advertising supplement, and against the background of a general predisposition to infer approbation of the advertiser because of a well-founded belief that sporting celebrities commonly endorse goods and services.   The accompanying text also matters.  Perhaps a few readers regarded the style of reporting as suggesting that Perkins had been specially interviewed for the supplement. In short, there is a little support for the contention that the article insinuates endorsement.  However, there is an important countervailing consideration.
           The evident emphasis of the article is on the material support Telecom has given to Australian swimming and the benefits Perkins has derived through that sponsorship, including his prize as "Telecom Australian Swimmer of the Year".  The article aims to entice readers to support Telecom because Telecom has supported Australian swimming and Kieren Perkins.  That is the plain thrust of the presentation.
           The article and photo are not an implied representation that Perkins supports or has supported Telecom; and, in my opinion, it is unlikely that readers would have thought otherwise.
A relationship with Telecom?
           A sponsorship agreement exists between Telstra and Australian Swimming Incorporated ("ASI") evidenced by a letter of 17 June 1993 to Telstra's National Sponsorship Manager. By para.1.01(a) of that agreement, Telstra is granted exclusive naming rights to the team representing Australia in international competition (except for the Olympic Games and the Commonwealth Games).  Somewhat curiously perhaps, Telstra is also granted naming rights to any team swimming as the "Australian Team" in domestic competitions.  All such teams are named the "Telecom Dolphins", which accounts for the drawing of the dolphin next to Telstra's logo on the swimming cap worn in the photo.  Under para.1.01(b), Telstra has the naming rights to the National Swim Squad, which is known as the "Telecom Dolphins Swim Squad".  The National Swim Squad is not the Australian Swimming Team.  Although the difference was not clearly explained, it seems that the Australian Team is usually drawn from the National Swim Squad. Perkins agreed to be a member of the Australian Swimming Team formed for the purpose of the Pan Pacific Championship.  It was there that the photo in the supplement was taken. The agreement took effect from 23 July until 17 August 1993. The agreement was varied on 29 July 1993 to refer to Telstra as the main sponsor. Membership of the National Swim Squad was effected through separate agreements.  Perkins has never been a member of the National Swim Squad. 
           To the extent the article suggested that Perkins was a member of the National Squad at the time of publication, it is misleading.  However, the references in the article and its heading are to the "Telecom Dolphins" and the "Telecom‑sponsored ‘Dolphins’".  I am not satisfied that readers would have taken these references to mean the National Swim Squad, rather than an Australian Team. The article was not otherwise misleading.  It was not proved that Perkins was not a member of an Australian team on 12 March 1994.  Perkins was asked, "Prior to March 1994 what was the nearest in date of Australian teams you were a member of?".  He replied: "It was the 1993 Pan Pacific team which swam in August of 1993".  Perkins was not asked whether he was a member of an Australian team during March.
           The sponsorship agreement between Telstra and ASI apparently contemplates an Australian team swimming in domestic competition.  Perhaps one was then constituted for the imminent Telecom Australian Open Championships.   Therefore, although the photo and article represent that Perkins was a member of the Telecom Dolphins on 12 March 1994, this representation is not shown to have been false, which is a sufficient reason for concluding that this part of the case also fails.
Implied consent by Perkins or Talmax?
           The article and photo are said to imply, falsely, that permission had been given to associate Perkins with the supplement.
           Anyone who inferred that Talmax or Perkins had allowed the name and image to be used must have reasoned or assumed either that Telecom was not in law entitled to have published the article and photo without consent; or that, consistently with ordinary or proper practice, Telecom would not have done so; or that, in all the circumstances, the text implies permission.
           A reader who took it that Telecom was legally obliged to obtain consent to use the name and image of Perkins in this advertisement - one which did not amount to an endorsement - would have proceeded on a belief about the law which, as things stand,[6] is erroneous. Such a mistake could not convert the article into conduct contravening s.52.[7]
           The next question is whether readers would have assumed that, in accordance with decency or usual practice, permission would have been given.[8]
           By swimming at an international event wearing a cap carrying the Telecom Dolphins' logo, and by accepting the award as Telecom Swimmer of the Year, Perkins had very publicly associated himself with Telecom and its sponsorship of Australian swimming.  That being so, readers are unlikely to have considered that common decency or usual practice required Telecom to obtain a consent before proclaiming the extent of its support for Australian swimming and Perkins in an advertisement. It is more likely that readers would have supposed that that public affiliation with Australian swimming in general and Perkins in particular entailed a liberty in Telecom to publicize it.  In other words, if they reflected on the matter at all, readers are likely to have regarded an entitlement to publish the article and photo as a benefit incidental to the sponsorship and the award. And, in my opinion, intuitive or subconscious reactions would not have resulted in a different state of mind in a significant number of readers.
           In short, given the association with Telecom which Perkins chose to accept, it seems unlikely that many readers would have thought or assumed that ordinary practices or the proprieties required Telecom to obtain consent before including the article and photo[9] in the supplement.
           This brings me to the more difficult issue whether, in all the circumstances, the text impliedly asserts permission to use the name and image.
           The style of the article suggests that it could be the report of an interview with Perkins.  In particular, the second and third paragraphs might be thought to contribute to such an impression:

[1]The plaintiffs disclaimed reliance on United States cases concerning protection against misappropriation of the personality of a celebrity: see, generally, J. Thomas McCarthy, The Rights of Publicity and Privacy, (1987); Restatement of the Law 3d on Unfair Competition (1995) §46; cf. the Canadian cases discussed by Robert G. Howell, "Character Merchandising: The Marketing Potential Attaching to a Name, Image, Persona or Copyright Work", (1991) 6 Intellectual Property Journal 197, 203ff.

[2]See Pacific Dunlop Ltd v. Hogan (1989) 23 FCR 553, 581; Honey v. Australian Airlines Ltd (1990) 18 IPR 185, 193.

[3]As to the advantages commonly sought through association with a celebrity, see J. Thomas McCarthy, op cit, § 4.1 [D]; R. Craswell, "Interpreting Deceptive Advertising", (1985) 65 Boston University Law Review 657, 662-663; Hirsch v. S.C. Johnson & Son, Inc 280 NW 2d 129, 134 (Wis 1979); Tot Toys Ltd v. Mitchell [1993] 1 NZLR 325, 361.

[4]Pacific Dunlop Ltd v. Hogan (1989) 23 FCR 553, 586; cf. S. Ricketson, "Character Merchandising in Australia: Its Benefits and Burdens", (1990) 1 Intellectual Property Journal 191,196.

[5]cf. Hogan v. Pacific Dunlop Ltd (1988) 83 ALR 403, 425.

[6]Sony Music Australia Ltd v. Tansing (1993) 27 IPR 649, 653-654, 656; J.G. Fleming, The Law of Torts, 8th ed. (1992) pp.718-719.

[7]cf. Hogan v. Koala Dundee (1988) 20 FCR 314, 325; S.G. Corones, "Basking in Reflected Glory: Recent Character Merchandising Cases", (1990) 18 Australian Business Law Review 5, 22.

[8]cf. Hogan v. Pacific Dunlop Ltd (1988) 83 ALR 403, 425.

[9]Which did not amount to an approbation by Perkins of Telecom.

"Kieren, who has been training hard this season, is looking forward to showing off his remarkable talents in front of his home crowd.

Although Kieren has admitted he may not be in world record-breaking shape, Chandler remains one pool in which he would dearly love to break a world record - the Telecom Australia Open Championships is a golden opportunity."

Perkins is referred to by his first name in the headings of the article and in another paragraph of it, as well as in these two paragraphs.  These references tend to reinforce the impression of a personal interview.
           As the case was fought, it does not matter whether Perkins talked to someone from Telecom or to anyone at all, saying he had been training hard, was looking forward to showing off his talents, was not in world-record breaking shape, and wanted to break a world record at Chandler.  The only significance of such words lies in any potential they had to lead readers to suppose that Perkins had permitted his name and image to be associated with the advertisement.

           Perceptions of readers will have been influenced by a variety of experiences and outlooks.  And readers cannot be expected to pause and carefully think about whether the impression this sort of article immediately creates is logically appealing.  But, on balance, it is hard to imagine that many readers would have derived from the article a representation of assent to the association of Perkins with the advertisement.  The text does not suggest, for example, that the words attributed to Perkins were spoken to a Telecom representative. And, once again, Telecom's sponsorship is a complicating factor, colouring the way in which messages could have been received.
           Some cases evidence a ready judicial inclination to find a misrepresentation of consent where, without their authority, celebrities are associated with promotions of goods and services.[10]  However, in this case, in my opinion, it is not proved that a significant number of readers would have inferred that Perkins or Talmax had consented to the publication.  I doubt that many readers would have reacted, consciously or subconsciously, in that way.  So it is not surprising that not a single reader testified to having understood the article as implying assent by Perkins or Talmax to the publication.
No contravention of s.52
The claims founded on s.52 therefore fail.
No passing off
For the reasons given concerning the s.52 case, there has been no misrepresentation of the association between Perkins and Telstra. So, in my opinion, passing off has not been established either.

[10]See the analysis by Robert G. Howell, "Personality Rights:  A Canadian Perspective:  Some Comparisons with Australia", (1990) 1 Intellectual Property Journal 212, 216-221.