United Realty Co Pty Ltd v BSP and GS Property Group Pty Ltd

[2003] NSWSC 419

CITATION:	United Realty Co Pty Ltd v BSP & GS Property Group Pty Ltd [2003] NSWSC 419
HEARING DATE(S):	6/02/03, 7/02/03, 12/02/03, 19/05/03, 20/05/03, 21/05/03
JUDGMENT DATE:	19 June 2003
JUDGMENT OF:	Gzell J
DECISION:	Injunction restraining use of the name "United Real Estate" in south and south-west Sydney granted.
CATCHWORDS:	TRADE PRACTICES - Consumer Protection - Franchised real estate agents trading as "United Realty" - New franchise chain trading as "United Real Estate" - Trade Practices Act 1974 (Cth), s 52(1) - What is the relevant section of the public by reference to whom the question whether the conduct is misleading or deceptive is to be tested? - EVIDENCE - Burden of Proof, Presumptions and Weight and Sufficiency of Evidence - Intention put in issue in course of trial - Corroborrative evidence not called - Intention not an element of a claim under s 52(1) - Whether adverse inference should be drawn
LEGISLATION CITED:	Trade Practices Act 1974 (Cth)
CASES CITED:	Jones v Dunkel (1959) 101 CLR 298 Nuhic v Rail & Road Excavations [1972] 1 NSWLR 204 Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121 Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 The Thai Silk Co Ltd v Aser Nominees Pty Ltd (1991) 13 ATPR 41-146 Cubillo v Commonwealth (2000) 103 FCR 1 Cafe v Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191 B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 Baxter v British Airways Plc (1988) 82 ALR 298 Burica Pty Ltd v Tops to Bottoms (Australia) Pty Ltd (1997) 59 IPR 447
PARTIES :	United Realty Co Pty Ltd - 1st Plaintiff Bobb Borg Partners Pty Ltd t/as United Realty Liverpool - 2nd Plaintiff BSP & GS Property Group Pty Ltd Trading as United Real Estate - 1st Defendant K S Gill Property Group Pty Ltd t/as United Real Estate - 2nd Defendant
FILE NUMBER(S):	SC 5954/02
COUNSEL:	P Beale - For Plaintiffs A S Howen - For Defendants
SOLICITORS:	McGrath, Dicembre & Co Solicitors & Barristers Ward Maxwell & Co Solicitors

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

THURSDAY 19 JUNE 2003

5954/02 UNITED REALTY CO PTY LTD & ANOR v BSP & GS PROPERTY GROUP PTY LTD & ANOR

JUDGMENT

1 The first plaintiff is the registered owner of a trade mark comprising a map of Australia in yellow with a red border and with the words “United Realty” in black across it. The first plaintiff has entered into franchise agreements with eleven real estate agents enabling them to trade under the name “United Realty” in specific localities in the south and south-west of Sydney. Since about 1997, the second plaintiff has conducted a real estate business in Liverpool in the name United Realty Liverpool under a franchise agreement with the first plaintiff.

2 The first defendant commenced to conduct a real estate business under the name United Real Estate Quakers Hill in January 2002. In November 2002 it gave notice of cessation of the conduct of business and the second defendant became the registered owner of the business name. The second defendant commenced to trade as a real estate agent in St Marys on 16 November 2002, in Liverpool on 7 December 2002 and in Parramatta on 14 December 2002. Each office operated under the name “United Real Estate”. The Liverpool shop is estimated to be between 700 metres and a kilometre from the second plaintiff’s shop.

3 Franchisees of the first plaintiff are required to conform to specifications as to the logo, the colour and style of typeface in their promotional material. A particular colour of yellow forms the dominant background of this material and it constitutes the background in shopfront design. The second plaintiff’s Liverpool office has a yellow background across the top of the shop and down the sides of the premises. The logo is prominently displayed above the yellow background on the top of the shop and the words United Realty Liverpool in large red letters appear on the yellow background.

4 The second defendant’s logo comprises a Grecian pediment in dark blue supported by two Grecian columns on a base with the words “United Real Estate” in large dark blue letters and the motto “United We Progress” in smaller dark blue letters between the columns. The background is yellow, to my eye very similar to the colour used by the plaintiffs.

5 The shopfront in Quakers Hill has this yellow background across the top of the shop and down the sides of the premises. Across the top in large dark blue letters are the words “United Real Estate” with the logo at beginning and end. Above in smaller dark blue lettering are the words “United We Progress.”

6 “For sale” and “for lease” signs used by both parties contain the dominant yellow background. In the second plaintiff’s case the border is red. In the second defendant’s case it is dark blue. In the second plaintiff’s case the printing is in red and black, in the second defendant’s case it is in dark blue. The website address of both, in the one case containing “unitedrealtyliverpool” in the other “unitedrealestate” appear in similar lettering on the bottom of the signs, in the one case in black and in the other in dark blue.

7 Similar getup appears in other advertising material used by both parties. Within the limits of reproduction in newspapers, the dominant yellow background of consistent colour appears throughout this material.

8 The second plaintiff’s staff wore a uniform of a light blue shirt with the logo of United Realty Liverpool on it. There was some suggestion that a person at the office of the second defendant in Liverpool was wearing a blue shirt and a maroon tie bearing the words “United Real Estate”.

9 The plaintiffs claim that the defendants have engaged in conduct that is misleading or deceptive or likely to mislead or deceive in contravention of the Trade Practices Act 1974 (Cth), s 52(1). They seek an injunction restraining the defendants from using the name “United Real Estate” anywhere in the Sydney metropolitan area or such further orders as the court deems fit.

10 Kulwant Singh, a director of the second defendant, gave evidence that he and Moninder Singh, the general manager of the Quakers Hill shop, developed the motto “United We Progress” in late 2001 and then decided on the name “United Real Estate” which was registered as a business name and used for the Quakers Hill office. Mr Kulwant Singh said he had no knowledge of “United Realty” agencies until late 2002 when he set up the second defendant’s Liverpool office.

11 There are a number of problems associated with the evidence of Mr Singh. He maintained he had no intention of setting up business on his own account until December 2001. Yet, in September or October 2001 he and Mr Moninder Singh went to Queensland on a vacation won by him for his work for his then employer, the New Home Group, a real estate agency operating from Seven Hills. The New Home Group was marketing stage one of a real estate development in Queensland. Mr Kulwant Singh and Mr Moninder Singh approached the developer and obtained rights to market stage two of that development. Since the Messrs Singh took this course in September or October 2001, it is difficult to accept Mr Kulwant Singh’s denial of the proposition that in September or October 2001 he had plans to go into business on his own account.

12 Mr Kulwant Singh swore an affidavit in which he said he chose royal blue and bright yellow because they were significant colours in the Sikh religion. He said yellow was used by the Sikh army and was associated with strength while blue was associated with progress. In cross-examination he said yellow was the colour associated with progress and blue was the colour associated with the Sikh army. When the inconsistency was pointed out to him, Mr Singh said it must have been a clerical error. That evidence demonstrated a scant effort on Mr Singh’s part to ensure the accuracy of his affidavit before he swore it.

13 In that affidavit, Mr Singh swore that the defendants intended to close the Liverpool office as a result of decisions made in relation to their business plan and their relationship with the licensee operating the Liverpool office. In cross-examination, Mr Singh denied that the decision to close the Liverpool office had anything to do with a change in relationship with the licensee. He said it was a change in relationship with the general manager. When this inconsistency was pointed out to Mr Singh he said it was another clerical error.

14 The trial commenced in February 2003 and was adjourned, part-heard, until May 2003. Upon resumption of the trial, Mr Singh gave evidence that he had closed the shops in Liverpool, Parramatta and St Marys. In cross-examination he said in each of the shops there was an employee of the second defendant as licensee and a manager who, with Mr Singh, had invested funds in setting up the shop. Mr Singh said that following a falling out with Mr Kumar, the manager at St Marys, that shop was closed. Later he denied any falling out, saying he intended to enter into partnership with Mr Kumar after he obtained a real estate licence, but when he discovered that Mr Kumar had enrolled part-time and not full-time as he had indicated, Mr Singh was not prepared to wait and brought the arrangement to an end. Later in his evidence, Mr Singh said it was when he discovered that he could not enter into partnership with any of the managers as they were unlicensed, that he terminated the arrangements. I have difficulty in reconciling these two versions.

15 In each case, the manager took over the business from Mr Singh. He said that he had invested $20,000 to $30,000 in the three businesses. I have some difficulty in reconciling those figures with the approximate costs of setting up the businesses that he identified. But in any event, I think it highly unlikely that Mr Singh, a shrewd businessman, was prepared to walk away from three businesses, only newly established, and forego the funds he had invested in them.

16 In December 2002, the defendants gave a number of undertakings to the court. One undertaking was to give the plaintiffs fourteen days written notice of intention to open any new office within metropolitan Sydney. The second defendant opened an office in Penrith in April 2003. They did not give written notice of intention to take that course. I rejected a submission by the defence that Penrith was not part of metropolitan Sydney and allowed Mr Singh to be cross-examined on the matter. Mr Singh said he had forgotten that this undertaking was given when he came to open the Penrith office.

17 Mr Moninder Singh was in Court during the entirety of the proceedings. It was submitted that he should have been called to corroborate the evidence of Mr Kulwant Singh as to when he determined to enter into business on his own account and when and how he developed the name and getup for that business. It was submitted that the failure to call Mr Moninder Singh should lead me to infer that his evidence would not have assisted the defence (Jones v Dunkel (1959) 101 CLR 298).

18 The rule only applies where a party is required to explain or contradict something and that depends upon the issues thrown up in the pleadings and by the course of evidence of the case (Nuhic v Rail & Road Excavations [1972] 1 NSWLR 204 at 221). It is only if evidence requiring an answer is given that a failure to do so may lead to an inference (Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121 at 142-143).

19 The Trade Practices Act, 1974 (Cth) s 52 is not confined to intentional conduct (Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 349, Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 at 441). This matter proceeded by way of summons with no pleadings. I do not conclude that it ought to have been apparent to the defence that Mr Kulwant Singh’s testimony as to his intentions in setting up the “United Real Estate” businesses would be in issue. Nor did the course of the trial require the defence to corroborate the evidence of Mr Kulwant Singh. This is not a criminal matter and while any predatory intentions on his part may have relevance to the question whether injunctive relief should be granted, they do not constitute an element in the claim that the conduct of the defendants was misleading or deceptive or was likely to be so (The Thai Silk Co Ltd v Aser Nominees Pty Ltd (1991) 13 ATPR 41-146).

20 Furthermore, the rule in Dunkel does not require a party to give cumulative evidence. The rule does not compel time to be wasted in calling unnecessary witnesses (Cubillo v Commonwealth (2000) 103 FCR 1 at 120).

21 Finally, an inference that the evidence of Mr Moninder Singh would not have assisted the defence may, not must, be drawn in appropriate circumstances (Cafe v Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280 at 286-287). It is inappropriate, in my view, to draw such an inference where intention is not an element of the cause of action.

22 I was also invited to infer that the second defendant, through Mr Kulwant Singh, engaged in conduct that was deliberately misleading. For the reasons set out above, I decline to draw that inference.

23 The question whether the defendants’ conduct was misleading or deceptive or was likely to mislead or deceive is an objective one that the court is to determine for itself (Equity Access at 440). While evidence that persons of the relevant class were misled, is admissible, it is not determinative (ParkdaleCustom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191 at 198-199).

24 The plaintiffs adduced evidence of confusion in the predominantly residential real estate market in which the second plaintiff and the other franchisees of the first plaintiff operated.

25 Ian Bremner, the chief executive officer of First National Group of Independent Real Estate Agents Limited gave expert evidence. His organisation franchised over 450 real estate agents in different parts of Australia. He said that in the real estate business there was no practicable difference between the expression “real estate” and “realty” and First National allowed its members to operate as “First National Real Estate” or “First National Realty”. He expressed the opinion that members of the public, lawyers, other agents, postal workers and tradesmen would be misled by what he regarded as the extremely close similarity between the names “United Realty” and “United Real Estate”.

26 In cross-examination, Mr Bremner agreed that, apart from the yellow background and the word “United”, the logos of the plaintiffs and the defendants were different. He agreed that the shop fronts of the second plaintiff’s office and the office of United Real Estate Quakers Hill were, save for the background colour, different. In re-examination Mr Bremner said that the use of the word “United” coupled with the words “Real Estate” were sufficient to cause a person to believe they were dealing with one and the same entity or chain.

27 Emanuel Bekiaris was a director and the secretary of the first plaintiff. He was taken to task in cross-examination for a relatively low level of brand protection. In particular, he was criticised for failing to keep the first plaintiff’s website up to date and in failing to maintain a consistent getup. On the website, the background is red and the printing over the yellow background of the map of Australia is in red rather than black. Mr Bekiaris explained that the website was being reconsidered because if one entered only “united realty” one was connected to a pornographic website.

28 Whether or not the plaintiffs were lax in their brand protection, the evidence revealed confusion between the second plaintiff’s business and the Liverpool office of the second defendant.

29 Joseph Arthur Borg is a director of the second plaintiff. He gave evidence that his company, which traded under the name United Realty Liverpool, was commonly referred to as United Real Estate Liverpool. He had taken numerous telephone calls from members of the public including existing clients who referred to his business as “United Real Estate”. He said he had also received mail from clients and third parties addressed to United Real Estate Liverpool. Examples of such documents were in evidence as were documents addressed to United Real Estate Liverpool at its Moore Street address but which were delivered to the second plaintiff at its Memorial Avenue address.

30 There was evidence that another real estate agent in Liverpool asked whether the second plaintiff was moving shop. When told that the new address was that of the “United Real Estate” the response was: “what do you mean United Real Estate. Isn’t that you?”

31 Mr Bekiaris gave evidence that he decided to develop a franchise in the name “United Real Estate” in about 1987 but he could not register that business name because the name “United Realty” was already registered. That name was purchased from the proprietors and the first plaintiff was thereafter registered. Mr Bekiaris also said that since 1987 the first plaintiff had received numerous correspondence addressed to “United Real Estate” and he had many telephone calls from the public in which the expressions “United Realty” or “United Real Estate” were used. Mr Bekiaris conducted a franchise on his own account trading as Leumeah United Realty. Correspondence was addressed to that business as Leumeah United Real Estate. Of the 63 current contracts for sale from that office, 53 were in the name Leumeah United Realty, nine in the name Leumeah United Real Estate and one in the name United Real Estate.

32 Jim Marsden, a solicitor with considerable experience in conveyancing in the Campbelltown, Camden, Ingleburn, Liverpool and Parramatta areas, gave evidence that he sometimes referred to “United Realty” as “United Real Estate”. He expressed his concern that if “United Real Estate” opened offices in Leumeah, Campbelltown or Ingleburn, correspondence or contracts from his office addressed to “United Realty” at Leumeah, Campbelltown or Ingleburn might end up in the offices of “United Real Estate” because of the similarity between the names.

33 The plaintiffs read affidavits of a number of deponents who were not cross-examined.

34 Wendy Van said that while at a beauticians in Moore Street, Liverpool, she saw a sign writer putting up a sign for United Real Estate across the road. She formed the opinion it was an office of United Realty because of the similarity of colour and name. She later directed her husband to the new premises when they decided to seek a valuation from United Realty Liverpool.

35 Her husband, Maceon McDonald, intended to obtain a valuation from Edwin Borg, the brother of Joseph Borg and a director of second plaintiff. Mr McDonald was under the impression when he entered the premises at Moore Street at his wife’s direction, that it was a new “United Realty” office because the colours were the same and the name was the same. He became aware that it was “United Real Estate” only at the end his meeting with Kevin Borgonah, the manager, when he asked to be remembered to the Messrs Borg. Mr Borgonah asked if he still wanted the valuation.

36 Veronica De Paoli telephoned the yellow pages to obtain the telephone number of United Realty Liverpool and was given a telephone number that rang out. She was given a different number when she rang the yellow pages again and by this number made contact with the second plaintiff.

37 Raelean Borg was the sales administration manager of the second plaintiff responsible for the placing of advertisements for the sale of properties. In discussion with Guy Boardman from Homes Pictorial he said he would speak with her when he came to the office as they were in the same building. When told the second plaintiff’s office was round to the corner she was asked: “what do you mean? It’s United Real Estate isn’t it?” Ms Borg said she had taken many calls from vendors, purchasers, landlords, tenants and third parties who referred to the second plaintiff as “United Real Estate”. She had seen numerous letters addressed to the second plaintiff as “United Real Estate” and the second plaintiff was often referred to as “United” at Liverpool. She gave evidence that mail addressed to United Real Estate at their Moore Street address, including a letter enclosing a contract, was delivered to the second plaintiff. She gave evidence that the Consumer Trader & Tenancy Tribunal at Liverpool asked her to deliver a document upstairs. When she said the second plaintiff was not in the same building she was told: “yes you are, you are just downstairs.”

38 Tass Johnson, a solicitor who has practised in the Liverpool area for 22 years, had numerous dealings with the second plaintiff which he commonly referred to as United Realty Liverpool or as United as did his staff. He said he was concerned that, because of the similarity in names, contracts prepared by his firm or orders on agents or correspondence sent to the second plaintiff might end up in the offices of the defendants.

39 Gavin Belcr operated a real estate agency in Liverpool and had commonly referred to United Realty Liverpool as “United Real Estate” or just “United.” He addressed correspondence to the second plaintiff by its correct name and in those two names. From his experience in the real estate industry, he expressed the opinion that there would be considerable confusion to members of the public in having two real estate agents in the same suburb with similar trading names.

40 John Eather, an employee of the second plaintiff, said that the receptionist handed him a telephone message to call a person with respect to units in Castlereagh Street. He called the telephone number and was asked: “I want to talk to you about those units in Castlereagh Street”. When he said he did not recall having spoken with him, the person said he meant to telephone United Real Estate.

41 Nathan O’Neill, another employee of the second plaintiff, deposed to a conversation with a person who called about a property at Smithfield said to be in the second plaintiff’s window display. Mr O’Neill said he would call back. He checked the window display and the records of the second plaintiff to confirm that it did not have any blocks for sale at Smithfield. When he called the person again that person said: “oh it must be the other United then. Sorry, I will ring them”.

42 In addition to this unchallenged evidence, Mr Borg said a locksmith the second plaintiff had used for over twelve months in changing locks, suddenly refused to provide his services to them.

43 The principles to be considered under the Trade Practices Act (Cth), s 52 are helpfully summarised by Hill J in Equity Access at 440-441.

44 In B M Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254 at 257-258, Gibbs J pointed out that a name composed of descriptive words may become distinctive of the business of a particular person and if a plaintiff shows that the name in fact distinguishes his business and that the use of the name by the defendant is calculated to deceive persons into supposing that the business carried on by the defendant is that of the plaintiff and is likely to cause damage to the plaintiff’s business, the plaintiff will be entitled to relief. That observation was made in the context of a passing-off action but is relevant to an action under s 52. As Hill J points out in Equity Access at 441, an applicant must establish that it has acquired the relevant reputation in the name in that the name has become distinctive of the applicant’s business in a particular country or geographical area. His Honour goes on to say that at least in some circumstances, very slight activities may be found to be sufficient to establish that a name has become distinctive of a person’s business in a particular country.

45 There is ample evidence that franchisees of the first plaintiff enjoyed a high reputation as members of a real estate agency chain under the name “United Realty”. Mr Bremner had known of the existence of the chain for many years. Messrs Marsden, Johnson and Belcr said that the United Realty Group together with each individual franchisee with which they had dealt enjoyed an outstanding reputation for integrity, fairness and efficiency in the real estate industry. In addition, the evidence of confusion in the Liverpool area speaks volumes for an established reputation in the sense that the words “United Realty” were distinctive of the business of the second plaintiff.

46 Mr Howen, who appeared for the defendants, pointed out that no survey evidence was called. He submitted that there was no evidence of name recognition under “United Realty” in any of the geographical areas other than Liverpool. I reject that submission. There was evidence from Mr Bekiaris and Mr Borg that they would refer work to other franchisees when property in their locality was involved. That presupposes a reputation acceptable to the referrer. Furthermore, Mr Bremner’s evidence was of the group as a whole and not just United Realty Liverpool. I infer that the other franchisees enjoyed a similar reputation to that of the second plaintiff. After all, it was the reputation of the group that made it desirable for real estate agents like Mr Borg to become franchisees.

47 In Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202-203, Deane and Fitzgerald JJ enunciated a number of propositions. Irrespective of whether conduct produces or is likely to produce confusion, it cannot be categorised as misleading or deceptive unless it contains or conveys, in all the circumstances of the case, a misrepresentation. It is first necessary to identify the relevant section of the public by reference to whom the question whether the conduct is or is likely to be misleading or deceptive, falls to be tested.

48 There was evidence that franchisees of the first plaintiff, including the second plaintiff, obtained referral work outside their particular localities. This was a feature of the businesses of the second defendant as well. Mr Beale, who appeared for the plaintiffs, submitted that the plaintiffs had a reputation that spread beyond a franchisee’s locality to anywhere where persons with knowledge of the plaintiff’s businesses reside.

49 The evidence of the second plaintiff’s franchise established its relevant market as residential real estate together with some acreage sales predominantly in the Liverpool area. Mr Bremner said the franchises depended upon getting listings for sale from their local geographical area and while the internet was changing the way business was done a little, the franchises were essentially local businesses.

50 Mr Borg said that he would refer a property for sale at Brighton-Le-Sands to the United Realty franchisee in that area rather than list it himself. Mr Bekiaris said that a Hornsby property was best listed and marketed through a Hornsby based agent or someone in that vicinity. He agreed that each franchisee primarily markets and lists properties in its own suburb or adjoining suburbs.

51 While Mr Bekiaris expressed a desire to establish franchises in other areas, no evidence of any business plan for expansion was adduced in evidence.

52 There are eleven current franchisees of the first plaintiff operating in Ingleburn, Kogarah, Leumeah, Liverpool, Narellan, Rosebery, Sans Souci, Beverly Hills, Campbelltown, Cecil Plains and Hurstville.

53 I am satisfied that the relevant public with respect to whom the question whether the defendants’ conduct was misleading or deceptive is to be tested are those persons living in the area surrounding the location of the franchisee’s shop in which area I find that the franchisees of the first plaintiff, including the second plaintiff, had a distinctive business reputation under the name “United Realty”.

54 The areas in question are concentrated in the south and south-west of Sydney. I reject the plaintiffs’ submission that the geographical area comprises the arc of the Sydney basin bounded by Brooklyn in the north, Penrith in the west and Thirlmere in the south. The occasional reference from, or listing in, areas outside their localities does not, in my view, establish a relevant reputation in the franchisees in those areas.

55 In my view the conduct of the defendants constituted the misrepresentation on their part that the “United Real Estate” businesses were those of the franchisees of the first plaintiff. That conduct was constituted by the adoption of the name “United Real Estate” together with the use of the dominant yellow background in its getup. Because of the similarity of name and the similarity of colour in the getup, I am of the view that the conduct did, and was likely to, mislead or deceive the public in the relevant geographical areas.

56 Mr Howen referred me to Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 49 where Hill J, of an advertisement in a newspaper, said that some members of the class of persons likely to read and consider the advertisement might, in reading it, be misled by a misconception of their own and that those persons would not have been led into error by the representation made in the advertisement. It was submitted that the confusion of those persons who addressed the second plaintiff as “United Real Estate” did so because of their own misconception and not by reason of any action on the part of the defendants.

57 I reject that submission. It ignores the evidence of substitution of terms in the real estate industry and the embarking by the defendants upon a business under a name likely to be regarded as synonymous with the business of the second plaintiff and with other businesses conducted under franchise from the first plaintiff.

58 I find that the defendants’ conduct in establishing and operating United Real Estate Liverpool was in breach of the Trade Practices Act 1974 (Cth), s 52(1).

59 The evidence of confusion in the Liverpool area when coupled with Mr Bremner’s evidence that the terms “realty” and “real estate” are synonymous in the real estate industry, leads to the conclusion that similar misleading and deception will occur if the defendants open real estate agencies in other localities close to those of the franchisees of the first plaintiff.

60 The second defendant no longer operates in Liverpool, Parramatta or St Marys. It now operates only in Quakers Hill and Penrith. I do not regard operations from those localities as infringing upon the reputation of any of the franchisees of the first plaintiff. They lie to the north of the Great Western Highway in an area in which the first plaintiff has no presence. Parramatta and St Marys also lie to the north of that highway.

61 The defendants have given an undertaking that they will not open any real estate agency using the word “United” in areas of a radius of 15 kilometres around each of the offices of the franchisees of the first plaintiff. The question arises whether injunctive relief is now appropriate. As the defendants submitted, an injunction will not be granted if no purpose is served thereby (Baxter v British Airways Plc (1988) 82 ALR 298).

62 I reject the submission that, in the exercise of my discretion, I should refuse to grant an injunction because the first plaintiff has been lazy in the way it has sought to protect its brand value. It was submitted that its website is a disaster and insufficient attention was paid to quality control and consistency. The website was out of date listing agencies which were no longer franchisees and listing no properties for a franchise or, alternatively, properties of another franchisee. Neither Mr Bekiaris nor Mr Borg took steps to ensure that their businesses were referred to as “United Realty” and not as “United Real Estate” or “United”.

63 While better care might have been taken to maintain the website with current information, the problem of the pornographic website explains, to some extent, this lack of attention. Notwithstanding the state of the website, the evidence clearly established a distinctive business reputation in the franchise chain and in the second plaintiff in particular.

64 Until the defendants commenced to trade under the name “United Real Estate” there was no need for the plaintiffs to limit reference to them to “United Realty”. The contraction to “United” alone and the use of “United Real Estate” were not damaging to the plaintiffs’ businesses because, in the mind of the relevant public, those terms were synonymous.

65 Reference was made to Burica Pty Ltd v Tops to Bottoms (Australia) Pty Ltd (1997) 39 IPR 447 at 452 where Finn J complained that evidence relating to the relative position of the contestants in their industry was uninformative. It was submitted that there was no evidence of the standing of the United Realty group in the industry. I reject that submission. Mr Bremner had been aware for many years of the group and the fact that it has eleven current franchisees is sufficient to establish a significant presence in the localities covered by the franchises.

66 Mr Singh did say that he might open another office in Parramatta in the future. He said he was not concerned if people were confused and, subject to any restraint imposed by this court, he would open another “United Real Estate” shop based solely on commercial considerations in which he was not concerned by competition or confusion. Mr Singh does not regard the getup of the second defendant as having any similarity to that of the first plaintiff. He was unperturbed at soliciting the rights to sell stage two of a development in which his then employer was interested while on holiday at that employer’s expense. I was concerned at the lack of logic in Mr Singh’s evidence relating to the closure of the newly opened shops in Liverpool, St Marys and Parramatta and the inconsistency in his evidence as to his falling out with Mr Kumar, the manager of the St Marys business.

67 I am of the view that the plaintiffs have established damage and likely damage if the defendants are free to open shops using the name “United Real Estate” in areas to the south and south west of Sydney.

68 I reject the submission that injunctive relief should not be granted because Mr Bremner agreed that the goodwill of the group was diminished and not valueless. There was evidence from the franchisee of United Realty Cecil Hills that there was no point in his promoting that agency if United Real Estate Liverpool remained open. The evidence of confusion in the Liverpool area and the evidence that Mr Borgonah was prepared to offer the services of United Real Estate Liverpool to Mr McDonald after he became aware that Mr McDonald thought he was dealing with United Realty Liverpool is sufficient to indicate that the plaintiffs are entitled to protection against the diminution in the value of their businesses.

69 I will grant an injunction restraining the defendants from using the name “United Real Estate” anywhere in the Sydney Metropolitan area south of the Great Western Highway. The first plaintiff has no presence in the area to the north of the highway and has failed to establish a relevant reputation in that area. I take into account the desire of Mr Bekiaris to expand the number of franchises and I allow for this expansion by not confining the injunction to areas immediately surrounding the current franchisee locations. I will hear the parties on the appropriate form of order including a definition of the Sydney Metropolitan area. I direct the parties to bring in short minutes of orders reflecting these reasons. I will hear the parties on costs.

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Last Modified: 06/19/2003