W R Carpenter & Co Pty Ltd v Wollongong Instant Scaffolds Pty Ltd
[1992] FCA 430
•29 MAY 1992
Re: W.R. CARPENTER and CO PTY LIMITED ATLAS and SCAFFOLDING AND RIGGING PTY
LIMITED
And: WOLLONGONG INSTANT SCAFFOLDS PTY LIMITED; PHILLIP EDWARD ZEITSCH and JOHN
HUBERT HALL
No. G49 of 1992 FED No. 430
Contempt, Attachment and Sequestration
(1992) 36 FCR 10
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)
CATCHWORDS
Contempt, Attachment and Sequestration - Contempt - what constitutes - respondents placed advertisement in yellow pages prior to orders being made restraining use of such advertisement - distribution of yellow pages after orders had been made - whether contempt - discretion to permit cross examination of a person charged with contempt.
HEARING
SYDNEY
#DATE 29:5:1992
Counsel and Solicitors Mr T. Alexis instructed by
for Applicant: Cutler Hughes and Harris
Counsel and Solicitors Mr C. Rundle instructed by
for Respondent: Whitelaw McDonald
ORDER
Motion dismissed, with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
By paragraph one of their notice of motion dated 20 March 1992 the applicants moved the court for orders inter alia:
"1. That the respondents be adjudged guilty of contempt, in that after 19 February 1992 they used the word 'instant' in connection with the supply, sale, promotion and advertising of scaffolding and related products, there being published and in circulation and uncorrected by them or any of them an advertisement placed by or behalf of the first respondent in the 1992 edition of the Yellow Pages telephone directory for the Wollongong area."
The statement of charge also dated 20 March 1992 is in these terms:
"1. On 19 February 1992 this court made the following orders ('the Court's orders'):
'1. The respondents, their servants and agents be restrained from directly or indirectly using in connection with the supply, sale, promotion and advertising of scaffolding and related products:
(a) the word 'instant';
(b) any derivative of that word; or
(c) any word deceptively similar to that word.
2. The first respondent deliver up to the solicitors for the applicants within 7 days for destruction all original or copy advertising material of the first respondent that contains or uses the word 'instant' or any derivative of that word or any word deceptively similar to that word in respect to the name of business described in such advertising material.
3. The respondents pay to the applicants damages, agreed by the parties in the sum of $2,000.00, judgment accordingly.
4. The first respondent within 7 days:
(a) change its name so that it does not contain the word 'instant', any derivative of that word or any word deceptively similar to that word;
(b) before registering such change of name, notify the applicants' solicitor of the name to which the first respondent is to be changed.
5. The respondents pay the applicants' costs as taxed or agreed.'
2. On a date unknown to the applicants, but said by solicitors for the first respondent to be shortly after November 1991 the first respondent caused to be placed in the 1992 edition of the Yellow Pages telephone directory for the Wollongong area ('the Yellow Pages') an advertisement in the form annexed to this Statement of Charge and marked 'A'.
3. The Yellow Pages is currently in circulation in the Wollongong areA and will remain so for about 12 months.
4. The facts referred to in paragraphs 3 and 4 constitute a use by the first respondent of the name 'Instant Scaffolds', continuing during the period of circulation of the 1992 edition of the Yellow Pages.
5. Such use is in breach of paragraph 1 of the Court's orders and constitutes contempt of those orders.
6. The applicants have by their solicitors and through the first respondent's solicitors requested the first respondent to take steps to cure the contempt and mitigate the harm caused by it.
Particulars
Letter from the applicants' solicitors, Cutler Hughes and Nurse, to the first respondent's solicitors, Whitelaw McDonald, dated 28 February 1992.
7. The respondents have by their solicitors refused to do so. Particulars
Letter from the first respondent's solicitors, Whitelaw McDonald, to the applicants' solicitors, Cutler Hughes and Harris, dated 2 March 1992."
The earlier history of these proceedings is as follows: (1) By their application dated 10 February 1992 the applicants claimed inter alia:
"1. An order restraining the respondents by themselves, their employees and agents from using in connection with the supply, sale, promotion or advertising of scaffolding and related products
a) the name 'Instant Scaffolds',
b) any name containing or deceptively similar to that name, c) in relation to premises and promotional material, colours, substantially or deceptively identical or similar to the colours used by the first applicant in at premises."
(2) By their statement of claim also dated 10 February 1992 the supplicants alleged that the first applicant carried on business of manufacture, sale and hire of quickly erected scaffolding under the business name of Instant Scaffolds, that it had established a substantial reputation and goodwill in the name Instant Scaffolds, that the first applicant had appointed the second applicant, Atlas as its exclusive agent in Wollongong for the hire and sale of the first applicants, Instant Scaffolds Products. The statement of claim went on to allege that the first respondent, Wollongong Instant Scaffolds Pty Limited carried on a similar business to that carried on by the first applicant and had carried that business on under the name of Wollongong Instant Scaffolds. It was said that this conduct was misleading or deceptive and also a passing off.
(3) In support of their application the applicants filed two affidavits; first an affidavit by William John Vella, the manager for the state of New South Wales of the Instant Scaffolds division of the applicant company. The affidavit gives the background to the present dispute in paragraphs 1 to 11 as follows:
"l. I am the State Manager, New South Wales, for Instant Scaffolds, a division of the applicant company. I have held that position for approximately 18 months although I have been with Instant Scaffolds for approximately 12 years.
2. Instant Scaffolds carries on the business of manufacture, hire and sale of aluminium scaffold and other access products.
3. The name 'Instant Scaffolds' is a registered business name, registered in favour of the applicant. Annexed hereto and marked 'A' is a true copy of a Certificate of Registration of Trademark number B336871.
4. Instant Scaffolds has carried on its business for many years and is well known in the building industry for the hire and sale of aluminium scaffold. Its activities extend nationally and it has conducted business for 3 years in the Wollongong area.
5. Up until 31 December 1991 Instant Scaffolds conducted its business at Wollongong out of premises at 7 Ellen Street, Wollongong. Instant Scaffolds closed its operation at that time and appointed Atlas Scaffolding and Rigging Pty Limited ('Atlas') as agent for its product and business in the Wollongong area.
6. Atlas has been appointed Instant Scaffolds' sole agent in Wollongong for the hire and sale of its products as and from 1 January 1992. Customers of Instant Scaffolds st the time when it conducted its own business in the Wollongong area have been notified of the appointment of Atlas as agent. This was done by way of telephone and personal contact through Instant Scaffolds then representative, Adam Harding.
7. In December 1991, after we had closed operations at 7 Ellen Street, Wollongong there was received at those premises through the mail a bank statement issued by National Australia Bank where the bank customer's name was shown as 'Wollongong Instant Scaffolds Pty Limited'. I, thereafter, caused a company search to be carried out and was informed that a company was incorporated under the name of 'Wollongong Instant Scaffolds Pty Limited' and the directors of it were Mr Phillip Edward Zeitsch and Mr John Hubert Hall. Annexed hereto and marked 'B' is a true copy of a letter from National Australia Bank to Instant ScAffolds of 2 January 1992.
8. Annexed and marked 'C' is a true copy of a search of the respondent company.
9. Both Mr Zeitsch and Mr Hall are former employees of Instant Scaffolds. Mr Zeitsch worked for Instant Scaffolds for approximately 10 years and left in about April 1991. At that stage he was Marketing Manager. Mr Hall worked for Instant Scaffolds for about 6-7 years and left approximately 2-1/2-3 years ago. At the time he left he was Branch Manager, Artarmon.
10. Instant Scaffold has expended advertising fees and other expenses in advising clients and the public generally of the appointment of Atlas as its agent in the Wollongong area.
11. Mr Peter Reid of Atlas said to me on 5 February 1992 words to the effect,
'Bill what is going on? I thought I was meant to be the sole agent and now these people are trading as Instant Scaffolds from the old Instant Scaffolds premises.'"
(4) The applicants filed an affidavit by Peter Reid sworn on 7 February 1992 and that affidavit in paragraphs 1 to 6 was as follows:
"l. I am a director and shareholder of Atlas Scaffolding and Rigging Pty Limited ('Atlas').
2. By written agreement dated 1 February 1992 between Atlas and Instant Scaffolds, a division of the applicant, Atlas was appointed sole agent for Instant Scaffolds in the Wollongong area for the hire and sale of Instant Scaffolds' products. The date of commencement of the agency was 1 January 1992. Atlas has been acting as agent for Instant Scaffolds pursuant to that agreement.
3. I was aware that an advertisement announcing the appointment of the agency would appear in the Illawarra Mercury. On 5 February 1992 I checked the Illawarra Mercury newspaper for the advertisement which had been placed. Annexed hereto and marked 'A' is a true copy of the advertisement which was placed announcing the agency. In the course of reading the Illawarra Mercury I saw an advertisement placed by 'Wollongong Instant Scaffolds'. Annexed hereto and marked 'B' is a true copy of that advertisement which appeared on page 2 of the Illawarra Mercury.
4. At some during during the day on 5 February 1992 I received a telphone call from Mr Peter Inskip who I understand to be a principal of Faguna Pty Limited, one of the customers of Atlas. The following conversation took place
Inskip 'I have been looking in the paper for your advertisement. There is another ad in their for Wollongong Instant Scaffolds. Is that you guys? Nave you opened up a depot in town as well?'
Reid 'Don't be silly, we have only just got this up and going.'
I am informed by Rim Sticcotti and verily believe that customers have said to her since the time of the advertisements words to the effect, 'You must be going well to open up 2 offices.'
5. On 6 February 1992, in the morning, I had a telephone discussion with a person who identified himself to me as John Hall. The following conversation took place
Hall "I am from Wollongong Instant Scaffolds. I am ex-Instant. I don't know what the Instant blokes have told you but we're in town and we're wondering if we can do business with you"
Reid 'You must already know I am Instant's official agent down here so I am the opposition, obviously.' Hall 'I realise that but if you keep an open mind and I am short of equipment I have no problems coming to you for re-hire.'
Reid 'Obviously, an agency agreement exists but I have an open mind.'
Hall 'Can I call in if I am out in that area? Alternatively, if you are going past our office you can call in and make yourself known.'
6. I am concerned at the use of the name 'Wollongong Instant Scaffolds' and believe that it will cause confusion with customers who wish to deal with Instant Scaffolds products. I have had 12 years working as a scaffolder and rigger and during that time I have also been involved in the sale and renting of scaffolding equipment. Instant Scaffolds has been regarded by me and others I know in the industry as a market leader in the field of manufacture, sale and hire of scaffolding. It was because of this market recognition that I persued the agency vigorously.
(5) On 14 February 1992 Morling J made interlocutory orders by consent as follows:
'Upon the undertaking given by Counsel on behalf of the applicants to pay to any party adversely affected by the interlocutory injunction or undertaking such compensation (if any) as the Court thinks, just, in such manner as the Court directs.
The Court Orders that:
1. The respondents be restrained, by themselves, their employees and agents from using in connection with the supply, sale, promotion or advertising of scaffolding and related products
(a) the name 'Instant Scaffolds',
(b) any name containing or deceptively similar to that name,
(c) in relation to premises and promotional material, colours substantially or deceptively identical or similar to the colours used by the first applicant in its premises
effective to 5 pm on Wednesday 19 February 1992.'
(6) On 18 February 1992 the first respondent filed an affidavit sworn by one of itc directors, Mr Phillip Edward Zeitsch sworn on 17 February. (7) On 19 February 1992 Morling J made orders, again by consent as follows:
1. The respondents, their servants and agents be restrained from directly or indirectly using in connection with the supply, sale, promotion and advertising - of scaffolding and related products:
(a) the word 'instant';
(b) any derivative of that word; or
(c) any word deceptively similar to that word.
2. The first respondent deliver up to the solicitors for the applicants within 7 days for destruction all original or copy advertising material of the first respondent that contains or uses the word 'instant' or any derivative of that word or any word deceptively similar to that word in respect of the name of business described in such advertising material.
3. The respondents pay to the applicants damages agreed by the parties in the sum of $2,000.00, judgment accordingly.
4. The first respondent within 7 days:
(a) change its name so that it does not contain the word 'instant', any derivative of that word or any ward deceptively similar to that word;
(b) before registering such change of name, notify the applicant's solicitor of the name to which the first respondent is to be changed.
5. The respondents pay the applicants' costs as taxed or agreed. THE COURT NOTES That:
6. The agreement between the parties is as follows:
The first and second applicants hereby release the first respondent and the second respondent from any claim, right, action, claim for damages or loss of profits arising from any action, conduct or thing done in respect of the use by the respondents of the names 'Wollongong Instant Scaffolds Pty Limited' and/or 'Wollongong Instant Scaffolds' prior to and including 19 February 1992.'
The applicants now charge the respondents with contempt of the orders made on 19 February 1992. In support of its charge the applicants rely upon the evidence of Mr Vella in his affidavit sworn on 17 March 1992 to the following effect: (l) the orders made by Morling J were served on the first respondent and on Mr Hall on 2 March 1992; (2) on 22 February 1992 the yellow pages telephone directory was distributed in that part of the Wollongong area known as N7042. The second applicant and the first respondent are both located in that area. At page 657 of the yellow pages the following advertisement appeared.
ADVERTISMENT OMITTED
(3) correspondence passed between the solicitors of the parties as follows: by letter 28 February 1992 the solicitors for the applican ts wrote to the solicitors for the respondents referring to the yellow pages advertisement and claiming that it was in breach of the order . By letter dated 2 March 1992 the solicitors for the respondents replie d stating that the advertisement that appears in the yellow pages was placed for publication shortly after the clients incorporation and I quote:
"prior to 19 February 1992 and short after November 1991.'
There was a denial that the respondents, were in breach of the orders of 19 February. Reference was also made to paragraphs 3 and 6 of the consent terms of settlement.
The solicitors for the applicant replied by letter dated 6 March 1992 in which reference was made to the agreement noted in paragraph 6 of the orders made by Morling J and to the release contained in that provision. The solicitors referred to the decision of the High Court in Grant v John Grant and Sons Pty Limited (1954) 91 CLR 112 to the effect that as a matter of construction a release is in equity, at least construed as referrable to the subject matter of the dispute at hand, that is to say, a release will ordinarily be read in its true context. In my opinion, this point was well taken by the solicitors for the applicant. In my view the release noted in paragraph 6 of the orders made by Morling J is no answer to the present claim.
I should add at this stage that it is not suggested that on 19 February, being the date on which the orders were made, the applicants had any knowledge of any intention on the part of the respondents to insert an advertisement in the Yellow Pages.
The respondents elected, in the matter before me, to call evidence. They relied firstly on an affidavit by the second respondent, Mr Zeitsch, sworn on 12 May 1992 to the following effect. As has been said, Mr Zeitsch is a director of the first respondent. He said in his affidavit that he was informed and verily believed that on 19 February 1992 it was beyond the power of the first respondent to prevent the publication of the 1992 Wollongong Yellow Pages and that in fact on that date the Yellow Pages had already been printed.
Mr Zeitsch annexed a facsimile received from the Yellow Pages Australia, which is a business name of Pacific Access Pty Limited, who are apparently the official advertising contractor to Telecom Australia. The facsimile is dated 7 May 1992 and states that the Wollongong Directory had its public close on 15 November 1991 and its final close on 29 November 1991.
On behalf of the respondents reliance is also placed upon an affidavit of Stephen Karl Yarrington, sworn 8 May 1992. Objection was taken to paragraphs 2, 3 and 4 of that affidavit, being the substantial evidence in the affidavit. The evidence given by Mr Yarrington was admitted subject to relevance.
The thrust of the evidence is to establish that in April 1992 the branch of the first applicant's business operations in Newcastle was handing out to members of the public a brochure which stated that the business address of the first applicant in Wollongong was 7 Ellen Street, Wollongong, which it appears it had vacated by 22 April, being the date upon which Mr Yarrington says he was given the brochure in Newcastle. Although I admitted the material subject to relevance, it seems to me that material is irrelevant to the present issues and I propose to reject it accordingly.
I return to the affidavit evidence of Mr Zeitsch. As has been said, this affidavit was read in chief but when counsel for the applicants indicated that he wished to cross examine Mr Zeitsch, counsel for the respondents took the objection, described as a formal objection, that on a contempt application it is not proper to cross-examine a person who is being charged with that contempt. However, I permitted the cross-examination to proceed at that stage and indicated that I would give reasons later for that ruling.
In Comet Products UK Ltd v Hawkex Plastics Ltd, (1971) 2 QB 67, the question was considered by Lord Denning, MR at pages 73 to 74. Lord Denning there makes the point that these proceedings, being in the nature of a criminal charge, although a civil contempt, "the accused is not bound to give evidence unless he chooses to do 80.
However, Lord Denning, at p 74, went on to say:
'I think Mr Sparrow was on much stronger ground when he said that in any case here the defendant had filed an affidavit which had been put before the court and therefore he was liable to be crossexamined on it. Mr Sparrow referred us to Clarke v. Law ... and In re Ouartz Hill andc. Co. Ex Darte Young ... Those cases show that in ordinary civil proceedings in Chancery, if an affidavit is filed and used before the court, the defendant, when he is threatened with cross-examination, cannot get out of it by saying that he will withdraw his affidavit. If he has filed an Affidavit, and in addition has gone on to use it in the court, then he is liable to be cross-examined upon it if the court thinks it right so to order. I would not say that the mere filing is sufficient, but I do say that when it is not only filed but used, the defendant does expose himself to a liability to be cross-examined if the judge so rules.
So that brings me to the final question: Ought a judge to rule that Mr Hawkins should be crossexamined on his affidavit? It is to be remembered that this power to cross-examine is a matter for the discretion of the judge who is trying the case. If the cross-examinAtion could be limited to the particular circumstances of this alleged contempt, then it might be right to permit it."
In my opinion, I had a discretion to permit cross examination. In allowing the cross-examination to proceed, it seemed to me that an important consideration was that the respondents were seeking to rely upon the evidence-in-chief of Mr Zeitsch to set up a positive case that it was beyond the power of the respondents to take any step to prevent the publication, or continued publication, of the Yellow Pages.
Bearing in mind that these are proceedings in the nature of a criminal charge, it seemed to me to be unfair to the applicant to allow such evidence to be adduced in chief without any opportunity on the part of the applicants to test it. For those reasons I permitted the cross-examination to proceed. However, it does not appear, as events have turned out, that there is any real dispute about the relevant facts.
I turn then to the first question which arises and that is whether, in the circumstances, it has been established beyond reasonable doubt that the first respondent is in breach of the orders made on 19 February 1992. In this regard I propose to apply the ordinary criminal standard of proof (see Concrete Constructions Pty Limited v Plumbers and Gasfitters Employees Union of Australia, (1987) 72 ALR 451).
On behalf of the applicants it is submitted that the breach of the orders occurred on 19 February when the first respondent, directly or indirectly, used the word "instant" in the Yellow Pages. It is said that the first respondent should then have issued a disclaimer to the members of the public 80 as to disclaim the use of the word "instant" in the advertisement.
On behalf of the respondents it is said that the order takes effect from its date; that is, the argument runs, the order does not operate retrospectively and the deadline for lodging the advertisement was as early as November 1991, although there was evidence from Mr Zeitsch admittedly in information and belief form, that the latest date for alterations to booked advertising was the middle of December 1991.
It is first necessary for me to construe the order and in particular, order 1. In my opinion that order should be construed as operating on and from its date, that is, the order operates on the conduct of the first respondent on and from 19 February. Put differently, paragraph 1 of the order imposed no obligation upon the first respondent in respect of its conduct prior to that date. It follows in my view, that the present question is whether by reason of its conduct since 19 February, the first respondent has directly or indirectly used the word "Instant".
In my view the answer to this question must be in the negative, that is, there was nothing done by the first respondent in this regard after 19 February. There was conduct by the first respondent before that date but that is irrelevant for present purposes. If the evidence disclosed, and it did not, that it was open for the first respondent to withdraw the advertisement after 19 February there may have been a breach of the order (cf. Enzed Holdings Limited v0Wynthea Pty Limited (1984) 57 ALR 167 at 176 to 177.
As I have said, I must be satisfied of the matters charged on the criminal onus and I am not so satisfied. The notice of motion is dismissed with costs.
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