Issue 2: Does Ampol's use of the Caltex Red canopy constitute misleading or deceptive conduct within the meaning of s 18 of the ACL or convey a false or misleading representation within the meaning of s 29 of the ACL?
140 The relevant applicable legal principles were not in dispute.
141 Section 18(1) of the ACL provides: "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive".
142 Sections 29(1)(g) and 29(1)(h) of the ACL provide: "A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services … make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or … make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation".
143 The central question is whether the impugned conduct, viewed as a whole, has a sufficient tendency to lead a person exposed to the conduct into error (that is, to form an erroneous assumption or conclusion about some fact or matter). See, by way of example, Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 651-2 [39] (French CJ, Crennan, Bell and Keane JJ).
144 Further:
(a) conduct is likely to mislead or deceive if there is a real or not remote chance or possibility of it doing so;
(b) it is not necessary to prove an intention to mislead or deceive;
(c) it is unnecessary to prove that the conduct in question actually deceived or misled anyone;
(d) the question whether conduct is misleading or deceptive is objective and the court must determine the question for itself; and
(e) where the impugned conduct is directed to the public generally or a section of the public, the question whether the conduct is likely to mislead or deceive has to be approached at a level of abstraction where the court must consider the likely characteristics of the persons who comprise the relevant class to whom the conduct is directed and consider the likely effect of the conduct on ordinary or reasonable members of the class, disregarding reactions that might be regarded as extreme or fanciful.
See the cases referred to in support of each of those uncontroversial propositions in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2020) 278 FCR 450 at 458-9 [22] (Wigney, O'Bryan and Jackson JJ).
145 It is well understood that a trader can acquire a reputation for services or goods by reason of the get-up used. The (factual) question is whether the services or goods have become distinctive of, and associated with, a particular trader by reason of the get-up. And a get-up can acquire a reputation independently of trade names. See, eg, Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; 280 ALR 639 at 675 [185] (Greenwood J); Verrocchi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570 at 580 [63] (Nicholas, Murphy and Beach JJ).
146 A trader may also establish a reputation in trade indicia or get-up that may include a colour scheme, which can constitute a significant component of the get-up used to attract consumer attention. And the get-up, including a colour scheme, may establish a reputation distinct from any trading name. See Verrocchi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570 at 582 [70]; and Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97 at 119 [87] (Heerey, Allsop and Young JJ) ("We do not see the colour green … as having been used, separately, as a trade mark. Nevertheless, as a prominent element of the colour scheme of BP the colour green would no doubt be capable of founding a mental association with BP if used alone, depending on the context").
147 Chevron relied on analogous cases dealing with an action for passing off. It is well accepted that regard may be had to the elements and nature of such a cause of action in the context of an action based on contravention of statutory misleading or deceptive conduct provisions. See, eg, ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 327ff (Lockhart J); Kraft Foods Group Brands LLC v Bega Cheese Ltd [2020] FCAFC 65; 377 ALR 387 at 422-3 [133]-[134] (Foster, Moshinsky and O'Bryan JJ).
148 Chevron relied on the following paragraphs from Kraft (at 422-3 [133]-[134]):
The present case concerns the right to bring an action for passing off, or to bring an action based on contravention of statutory misleading or deceptive conduct provisions. It is relevant, therefore, to have regard to the elements and nature of such causes of action. As Crennan J stated in JT International [(2012) 250 CLR 1] at [292], an action for passing off protects any goodwill and reputation in product get-up. Her Honour stated: 'In a passing off action in respect of get-up, a plaintiff must show not only goodwill and reputation in the product get-up, but also a representation by a defendant to the public leading to actual deception or the probability of deception, and actual damage or the likelihood of damage".
In ConAgra [at 327], Lockhart J quoted from Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491 [at 499] per Lord Oliver of Aylmerton (with whom Lord Goff of Chieveley, Lord Brandon of Oakbrook and Lord Bridge of Harwich agreed), where the elements of the action for passing off were described in terms that refer to get-up. The first element was that the plaintiff must establish 'a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services'. The second element of the cause of action was that the plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him or her are the goods or services of the plaintiff. In relation to this element, Lord Oliver stated: 'Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff'. It is unnecessary for present purposes to refer to the third element of the cause of action as described by Lord Oliver. After an extensive review of the authorities in several jurisdictions, and in the context of considering an issue concerning the necessity or otherwise of local business in the forum, Lockhart J stated [at 340] that 'the basis of the cause of action [for passing off] lies squarely in misrepresentation, for its underlying rationale is to prevent commercial dishonesty'. His Honour also stated (at 340) that reputation 'is the key business facet that passing off protects' … Lockhart J then stated [at 343]:
The real question is whether the owner of the goods has established a sufficient reputation with respect to his goods within the particular country in order to acquire a sufficient level of consumer knowledge of the product and attraction for it to provide custom which, if lost, would be likely to result in damage to him. This is essentially a question of fact.
149 Chevron put its ACL case concerning the red canopies in closing as follows:
(a) in the service station industry, consumers have been educated to use the colour of the canopy fascia as one sign identifying the branding of a service station, since all of the major industry participants use it in this way (see [55] above);
(b) the colour of the canopy fascia is one part of a branding combination, but it is a particularly important one, because colour provides a shortcut to recognising a brand, that is, it is a means by which consumers more quickly recognise the branding of a site;
(c) in the case of Caltex service stations in Australia, from 1996, the Caltex Red canopy fascia has been used pursuant to specifications provided to Ampol by Chevron;
(d) the Caltex service station network is the largest in Australia;
(e) no other "substantial service station network business" has used Caltex Red on its retail canopy fascia;
(f) in May 2018, Ampol put forward the view to Chevron (see [111] above) that Caltex Red is the primary colour that consumers identify with the Caltex brand, that this makes it easier for customers to quickly identify a Caltex offering, and that the red canopy was the main driver of visitation to a site; and
(g) it may be inferred that Ampol remained of those views when it adopted the Caltex Red fascia on its rebranding commencing in 2021.
150 The first five propositions (at [149(a)-(e)]) are uncontroversial. The sixth and seventh ([149(f)-(g)]) are largely so, because Ampol accepted in closing that "as a result of long-standing use of the Caltex mark against a red canopy background, there may be some level of association between the Caltex trade mark and the colour red as used on the canopy of a service station" (emphasis in original).
151 The sixth proposition is founded on the contents of the 18 May 2018 letter and the Houston report (see [111] above). Chevron relied in particular on Ampol's own statement in that letter as follows:
Caltex Red is the primary colour that customers identify with the Caltex brand.
This is because Caltex Red is the primary colour used by Caltex Australia in its customer communications and marketing. Caltex Australia therefore considered that the change of the MID signs to the Caltex Red brings consistency in Caltex Australia's marketing / brand message in the Australian market (thereby making it easier for customers to quickly identify a Caltex offering). Caltex Australia notes that this is also what its competitors have done, leveraging the main colour used in its communications on its MID signs for quick brand recognition from customers.
152 It also pointed to the assertion in the letter that referred to Ampol's trial of the red MID signs, and the assertion that the modified sign had in two months produced at one site a total fuel volume increase of 12.6% and "higher uplifts" for premium fuel volumes (15.5%) and StarCard customer volume (18.8%).
153 Chevron's closing written submission continued:
Furthermore, Ampol sent to Chevron, for the same purpose [as the 18 May 2018 letter], a report prepared by the marketing company Houston which referred to 'red on the canopy' being the 'main driver for customer visitation'. By sending that report to Chevron in support of its proposal for red MID signs, Ampol implicitly endorsed that view.
There is no reason for thinking that Ampol did not genuinely hold those views, and there is no reason why Ampol would not have been candid in that context.
(Cross-references omitted.)
154 Chevron says, therefore, that "the proper inference is that Ampol adopted the Caltex Red canopy fascia with the view both that it signified to the consumer a Caltex offering and that it was a significant driver of visitation to a service station, and therefore [was] intending to benefit by that signification".
155 Chevron accepted that the combination of elements used by Caltex includes not only Caltex Red, but also its word and logo marks, as well as the colour Deep Ocean Green, in particular on the MID signs, and that the combination used by Ampol includes the Ampol word and logo marks.
156 It also concedes that "it may be considered unlikely that a consumer will not at some stage observe the different brands Ampol and Caltex".
157 Chevron submitted (in its written closing submissions), however, that:
(a) given the time that the Caltex Red canopy fascia have signified Caltex;
(b) the volume of that use;
(c) the fact that no other major market participants have used it; and
(d) Ampol's own candid recognition of the strength of that signification,
"it is likely that consumers will still associate the Caltex Red canopy with Caltex, even when Ampol uses it".
158 The submission continued: "That is, consumers are likely to think that there is an association between the Ampol and Caltex brands. In other words, consumers are likely to consider that the brands are owned by the same entity, or that the entities that own them are associated with each other".
159 It was then said: "To put it informally, consumers are likely to think that Caltex and Ampol are stablemates … consumers are likely to think that the use of the two brands together with the same canopy fascia signifies that both brands are part of the same stable".
160 Chevron submits that, accordingly, Ampol's failure to remove the Caltex Red canopy fascia constitutes misleading or deceptive conduct in contravention of s 18 of the ACL. For substantially the same reasons, it also pleads that it gives rise to false representations within the meaning of ss 29(1)(g) and 29(1)(h) of the ACL.
161 Ampol submits that Chevron's canopy ACL case is bound to fail.
162 First, Ampol submits that Chevron is effectively seeking to enforce trade mark-type monopoly rights in the use of the colour red on site canopies, by seeking an injunction restraining Ampol from displaying the Caltex Red canopy fascia at Ampol branded service stations, when it has no such rights.
163 Secondly, Ampol submits that Chevron has not laid an evidentiary foundation for proving even an association between the colour red and Caltex. It accepts, as I have said, that as a result of long-standing use there may be some level of association between the Caltex trade mark and the colour red as used on the canopy of a service station. But it says that Chevron has not led any survey evidence to establish how strong any such association may be.
164 Thirdly, Ampol concedes that colour can be associated with a particular trade mark and can facilitate the recognition of it by consumers. It agrees, therefore, that the colour red on a canopy may facilitate the identification of the Caltex word mark or the Caltex star logo. But it says that this "does not mean that a consumer seeing a clearly different trade mark on a red canopy would conclude that the service station provides goods and services having the same commercial origin as Caltex".
165 Ampol submits that even if evidence establishing such an association had been led by Chevron and accepted by the court, Chevron would still fall short of establishing that use of the colour red by another person would make a relevant misrepresentation as to trade origin. It relies, by way of analogy, on the (trade mark) decision in Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97 at 125 [117]-[118] (Heerey, Allsop and Young JJ), where the Full Court said the following in relation to survey evidence that had been relied upon to prove that consumers had an association between BP and use of the colour green at its service stations:
Dr Bednall [BP's expert who gave the survey evidence] concluded that there was a strong association between green and BP. This conclusion is hardly surprising. Green had been one of BP's company colours since at least 1956. After 1989 it had been used as the predominant colour with yellow. In particular, in circumstances where there were only a few oil companies, where all have used colour historically to distinguish themselves, where BP has been the only company before 1995 to use green in that way, it is hardly surprising that people shown this stimulus would associate the green service station with BP service stations which have been coloured with a predominant green and accompanying yellow. That association does not lead to the conclusion that the use of colour from 1989 has included use, as a trade mark, of either green alone, or green as the predominant colour accompanied by any other colour. The mere fact that consumers associate green with BP does not, in our view, satisfy the test of distinctiveness required by s 41(6) of the [Trade Marks Act]. Evidence of promotion and use does not, without more, demonstrate distinctiveness …
Dr Bednall put it no higher [than] that the survey showed a 'strong association' in the minds of consumers. That conclusion is consistent with the answers given by participants to the survey which explored why 85% of people associated the stimulus with the BP brand. The reasons given included: 'green is the colour of the BP brand/trademark' (40.3%); 'green is part of the BP symbol/logo' (5.3%); 'BP promote/advertise themselves with the colour green' (5.4%); 'All BP service stations I have seen are green' (12.5%); 'BP service stations are the only ones that are green' (16.1%); 'BP has been green since I can remember/traditional' (13.6%); 'BP colours are green and gold' (4.7%); 'BP colours are green and yellow' (6.7%); 'yellow is missing' (1.0 per cent). These responses are consistent with a recognition that green has always been part of the BP colour scheme; however, they do not lead to the conclusion that green alone or green predominantly with other unspecified colours has been used as a trade mark.
166 Picking up on those passages, Ampol submits that, while a colour may be associated with a brand, a single colour will rarely act as a brand in itself. It gives the following examples of competing businesses that all use red in their get-up:
(a) each of McDonald's and Hungry Jacks, two competitor businesses, is likely to be associated by consumers with the colour red … But a consumer seeing the colour red in connection with the promotion of hamburgers, or on a fast-food outlet will look for the McDonald's word mark or logo, or the Hungry Jack's word mark or logo respectively to identify the brand of that business; and
(b) each of Red Rooster and Kentucky Fried Chicken, two competitor businesses, is similarly likely to be associated by consumers with the colour red … And again, a consumer would look to the word mark or logo to identify the brand of the relevant business.
167 Fourthly, Ampol submits that the evidence showed that multiple fuel service station brands can be associated with the dominant use of a single colour, including on canopies.
168 For example, in relation to the colour green, Ampol pointed to the evidence (see [55] above) that green is the main colour used for BP service stations. And as for the colour red, Ampol says that it "would likely be associated by customers with … Coles Express, which co-brands with Shell. The canopies at those service stations may use the yellow and red colour scheme used by Shell, but the main colour presented on the MID [sign], and on the site overall, is red".
169 Ampol submits that I should not accept Chevron's submission "that consumers rely on canopy colour alone to recognise a brand", not only because there was no survey evidence to support it, but also because "each of [the relevant service station] examples also involves a more stylised canopy presentation than simply a consistent block of colour as the background to the brand presented on the canopy. Shell uses yellow with a substantial red stripe, BP sometimes uses a three-dimensional green canopy against a white background, and 7- Eleven uses a seven-striped design involving four colours. Each of those stylisations involves more visual features, and is therefore better suited to distinguish - whether each does so in fact would need to be proven".
170 Fifthly, and relatedly, Ampol submits that "consumers will rely on the relevant brand that is displayed on the site, although their identification of that brand in a particular instance will likely be facilitated by the consistent use of colour". It says, by way of example, that "[t]he colour red facilitates recognition of the Coles Express brand just as much as it does the Caltex brand". Its written closing continued:
… in every case, a consumer will rely upon the brand that is actually presented on the site. Chevron has not even attempted to prove otherwise.
For Ampol-branded sites, a consumer cannot realistically miss the prominently located Ampol branding. They would see it on the MID sign, prominently displayed on the red canopy, as well as on all of the pump signage and in the retail store. Such a consumer will readily understand that the brand of the retail offering is Ampol. Counsel for Chevron's position in closing was that the Ampol brand would be seen, but that consumers would consider that it is owned by the same or a related entity to the owner of the Caltex mark.
Chevron did not seek to prove, for example by survey evidence, that any consumer seeing an Ampol-branded service station would consider that it was actually a service station of Caltex. Nor did it seek to prove that a consumer would make an assumption, based on the commonality of a single colour on the canopy alone, that there was a related source of commercial origin.
171 Mr McGrath summed up Ampol's defence of Chevron's canopy ACL claim in his closing address in these terms:
It's about all of the circumstances and it's not enough to do what has been done here, which is to, effectively, pull out the colour red alone as being the similarity that, above all, not just suggests association but proves the representation that's made in paragraph 21A [of Chevron's pleading] … the use of the colour red may just be assumed by the consumer that their attention has been sought. It's attention grabbing and that's why it has been used. And now we know, in this case, as a result of yesterday, that there is no complaint made about the use of the colour red in the [MID] sign. So whatever red appears on those main identification signs will remain and your Honour has to give full weight and consideration to that very fact.
These sites - these Ampol sites are not going to be bereft of their red. They will still have the attention grabbing effect, the visibility effect of the red on the MID. But it's the artifice of saying, well, it's just the canopy. It's the canopy that …speaks, above all else, to the consumer … your Honour needs to give full weight in relation to the form of case that Chevron brings which is that single point of similarity. What they don't do is they do not give full weight to the full set of colours that appears on a Caltex site. It's not just a matter of looking at the Ampol site to think that there's a similarity.
Your Honour has to give full effect to the whole of what a Caltex site looks like. And it was accepted that the Caltex site has a colour scheme which is not the same colour scheme as being used at the Ampol sites. The Caltex sites will have, as their main identification sign, the green. The predominant use of the green. So what is one to make, in the mind of a consumer, when one comes to associations about that very difference - stark difference. What will that do for the artificiality of the case that's put about the representation. I saw green, I saw red. Two different signs prominently branded differently. But, apparently, on the case that's put, that consumer is still supposed to proceed on the notion that because the canopies are the same, then there must be a same stable representation.
It's just nonsense, the case that has been put. It really is nonsense. And as it's retracted back to its core allegation of the canopy alone, it has become even more starkly absurd that the associations that are said to arise in the mind of the consumer would never remotely get close to the representation that's pleaded in paragraph 21A.
172 In my view, Chevron's case that Ampol's use of the "Caltex Red" canopy constitutes misleading or deceptive conduct within s 18 of the ACL or conveys a false or misleading statement within the meaning of s 29 of the ACL must be dismissed, essentially for the reasons that Ampol advances.
173 It seems to me that the ultimate formulation of Chevron's ACL canopy claim is founded on a non-sequitur. As set out above, the claim involves these cascading propositions (set out at [157]-[160] above), which are critical to the way Chevron puts its case, viz:
(a) given the time that the Caltex Red canopy fascia have signified Caltex, the volume of that use, the fact that no other major market participants have used it, and Ampol's own candid recognition of the strength of that signification, "it is likely that consumers will still associate the Caltex Red canopy with Caltex, even when Ampol uses it".
(b) "That is, consumers are likely to think that there is an association between the Ampol and Caltex brands".
(c) "In other words, consumers are likely to consider that the brands are owned by the same entity, or that the entities that own them are associated with each other" (emphasis added).
174 The proposition that it is likely that consumers will associate the red canopy with Caltex is not the same thing as saying that consumers are likely to think that there is an association between the Ampol and Caltex brands. And neither of those propositions is another way of saying - or is to put it "in other words" - that consumers are likely to consider that the brands are owned by the same entity, or that the entities that own them are associated with each other. In my view, the second and third propositions do not at all follow.
175 But, in any event, in my view, absent any survey evidence or the like to the effect that consumers are likely to consider that the brands are owned by the same entity, or that the entities that own them are associated with each other, because Ampol uses a red canopy, the representation cannot be made out in the way Chevron would have it.
176 Even accepting (as Ampol does) that colour can be associated with a particular trade mark, that colour can facilitate the recognition of it by consumers, and that the colour red on a canopy may facilitate the identification of the CALTEX word mark or the star logo, Chevron's ACL canopy case cannot be accepted because it is founded on only one point of similarity (the red canopy), and because it posits a most improbable consumer of Ampol branded fuel products, namely, one who sees the colour red on the canopy, but at the same time is taken to pay no regard to:
(a) the distinctly different Ampol signage;
(b) the differences in the MID sign;
(c) the absence of Caltex Deep Ocean Green as part of the colour scheme; and
(d) the differences between the (Caltex) StarMart on-site stores, with their green and orange colouring, and Ampol's black Foodary branded on-site stores.
177 Viewed as a whole, in my opinion, no reasonable consumer is likely to think that there is any relevant "association" between the two entities, let alone that the Caltex and Ampol brands hail from the same stable. It seems to me that one only has to look at images of two comparable sites to see as much:
178 It is important to bear in mind that all the relevant circumstances must be considered in cases of this type. See Verrocchi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570 at 581 [65] (Nicholas, Murphy and Beach JJ). I would adopt, as their Honours did in a not dissimilar context in that case, the following observations of Lord Lindley, which his Lordship made more than 115 years ago in Schweppes Ltd v Gibbens (1905) 22 RPC 601 at 607:
It appears to me that the real answer to the Appellants' case is this - that they invite your Lordships to look, not at the whole get-up, but at that part of the get-up which suits their case. The resemblances here are obvious enough, but, unfortunately for the Appellants, so are the differences. The differences are not concealed; they are quite as conspicuous as the resemblances. If you look at the whole get-up, and not only at that part of it in which the resemblances are to be found, the whole get-up does not deceive.
179 Before leaving consideration of Chevron's ACL canopy case, I should mention, lest it be thought that I overlooked the point, Chevron's submission that its case was assisted by the following well-known proposition in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 657 (Dixon and McTiernan JJ):
The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public.
180 Chevron sought to tie this principle - the practical application of which Dixon and McTiernan JJ said in the same paragraph as the extracted quote "may sometimes be attended with difficulty" - to the correspondence concerning Ampol's unsuccessful May 2018 attempt to persuade Chevron to change the dominant MID sign colour from Deep Ocean Green to Caltex Red, and Ampol's lauding of the advantages of using the colour Caltex Red. See [111] above. But in circumstances where I have found that the pleaded representation was never made, there is no room for the application of the principle in Australian Woollen Mills (itself a case where the probability of deception was found not to have been established). In any event, Chevron did not plead any intention to deceive on the part of Ampol, nor did it lead any positive evidence to prove that such an intention existed.
181 Ampol also took Chevron to be invoking the principle in Jones v Dunkel (1959) 101 CLR 298 in the following passage from Mr Shavin's closing address:
… we refer to the correspondence in May 2018, where Ampol put forward the view to Chevron that Caltex Red is the primary colour that consumers identify with the Caltex brand, that this makes it easier for customers to quickly identify a Caltex offering, and that the red canopy was the main driver of visitation to a site.
It may be inferred that Ampol remained of these views when it adopted the Caltex Red fascia on its rebranding commencing in … 2020. And this may be inferred all the more readily, given Ms Taylor has acknowledged that there were documents created by Ampol relating to the decision to adopt the red colour scheme, but she did not consider it appropriate to put those forward in her affidavit.
(Emphasis added.)
182 But Jones v Dunkel does not apply in such a circumstance, because, as Ampol correctly submitted, Ms Taylor, who was never asked by Chevron to produce the documents described by counsel above, had no obligation to bolster Chevron's (unpleaded) intention case. And the principle cannot, of course, be used by a party seeking to invoke it to "fill gaps" in evidence.