4.1.1.2.1 The development of Bendigo's community bank model
126 Both parties relied on evidence given by Mr Hunt, Bendigo's CEO and managing director until 2009 who was responsible for the development of Bendigo's franchise banking model. I set out Mr Hunt's evidence, insofar as it is relevant to the question of whether the Bendigo Community Marks are inherently adapted to distinguish the Services from services of others, below.
127 It is informative to start by understanding the development of the community bank franchise concept. In that regard, Mr Hunt explained that following Bendigo's conversion to a bank in 1995, he thought that it needed to develop and implement a strategy that would establish a clear point of difference to its competitors and a unique value proposition for customers and communities. Mr Hunt believed that Bendigo needed to strike a balance between assisting individuals and communities to prosper and creating a secure, sustainable, long-term and valuable business. He formed the view that Bendigo's success as a bank would be linked to the success of its customers and communities.
128 That view was informed by what was occurring in the banking industry in Australia during the early to mid-1990s. Mr Hunt explained, and it was apparent from the evidence before me, that at the time a substantial number of bank branches in rural and suburban parts of Australia had closed. Mr Hunt observed that the closure of bank branches during the 1990s had serious economic implications for towns and communities and that people in areas where bank branches had closed had to secure alternative bank services to support their needs. As a result people started to purchase their everyday necessities from the location of their nearest bank, rather than from the area where they lived and worked. This, in turn, reduced income for businesses in those areas where branches had closed and caused businesses to experience financial hardship, with some ceasing to trade altogether.
129 In about 1997 Mr Hunt formed the view that, as a result of branch rationalisation, there was an opportunity for Bendigo to implement a new bank branch strategy. He spent a considerable part of 1997 considering what type of sustainable banking strategy and model Bendigo should adopt and, in doing so, looked at a number of operating models in Europe and the United States of America (US), such as cooperative banks, friendly societies and locally based models, but did not think that any of those models would address Bendigo's objectives. This was because they used a traditional distribution (branching) method, a structure that Mr Hunt believed would not secure the level of change required, either within Bendigo or at the local level, if Bendigo was to create a sustainable solution.
130 Mr Hunt turned his attention to the issue of capital retention in regional Australia and communities more generally. He was of the opinion that most communities export capital, have little capacity or influence to attract the capital necessary for them to prosper, both socially and economically, and that the inability of people and businesses to attract and retain capital at a local level ultimately resulted in poor social and economic outcomes. Thus Mr Hunt thought that Bendigo's participation should be at the local level so as to develop and implement better capital flows and retention strategies.
131 In selecting an appropriate new banking model Mr Hunt collaborated with people and businesses affected by branch closures in order to understand what would be required for Bendigo to implement an economically sound and sustainable model for itself, customers, businesses and communities.
132 By 1997 Bendigo had a strong connection to regional Australia. The combination of that connection and the closure of multiple bank branches, especially in rural areas, led Mr Hunt to create what he described as a "unique value proposition for [Bendigo's] customers and communities", namely a collaborative franchise banking model which used a local collaborative buying base. Mr Hunt said that the franchise banking model that he developed and which was adopted by Bendigo was new to Australia.
133 In early 1997 Bendigo set up a franchising working group led by Mr Hunt to work through financial models and the feasibility of a new franchise banking model. Mr Hunt described the franchise banking model that he developed as embodying the disciplines and accountabilities of a shareholder ownership model and the incentives implicit in cooperative models. In developing the franchise banking model, Mr Hunt's main objective was to:
(1) secure branch banking services for participating towns, whether rural, suburban or metropolitan;
(2) assist people, local businesses and communities to better manage and retain locally generated capital and share in the potential growth of the local area;
(3) promote investment through stimulating commercial activity, creating local employment opportunities and increasing the confidence of local businesses; and
(4) expand Bendigo's operations across Australia, provide a new revenue stream and extend Bendigo's service delivery points without the capital costs required by the traditional branch expansion approach.
134 Throughout 1997 Mr Hunt updated Bendigo's board on his investigations:
(1) at the Bendigo board meeting held on 25 August 1997, Mr Hunt reported that the franchising working group had significantly progressed the financial models and feasibility for both the community banking and franchise proposals. The minutes of that meeting record that it was agreed that management should proceed with the proposal and commence to open a pilot site;
(2) Mr Hunt explained that in the initial stages there were two models discussed: first, community banking where the franchisee is a company formed by the local community; and secondly, the full franchise model with either an internal bank owned or external franchisee;
(3) at the Bendigo board meeting held on 22 September 1997, Mr Hunt reported that he had been pursuing the community bank option with a development group in the Wimmera region and that he was reasonably confident in establishing support to test the approach. The minutes record that Mr Hunt informed the meeting that the "reaction from business people who are likely to have the capacity to unite the public about this concept has been extremely positive" and that "if he can enthuse the communities, there is little doubt we will be able to substantially improve the Bank's retail deposit holdings, profitability and confirm our position as a community Bank"; and
(4) at the Bendigo board meeting held on 27 October 1997, Mr Hunt reported that the plan was to announce the broad concept of community banking in the Wimmera region on 31 October 1997. At that meeting the board agreed in relation to the topic "Franchising Proposal" that:
… the Executive pursue the establishment of up to four pilots, two community bank and two standard franchises, subject to the Board receiving the following documentation:
- a signed financial statement setting out the impact on the Bendigo balance sheet and P & L and the likely balance sheet and profit and loss for the two types of franchise operations,
- a brief statement of how the legal, operational and marketing aspects will be handled,
- confirmation that the legal documentation includes appropriate warranties and protections for the Bank and the necessary insurance cover to protect normal banking activities,
- future criteria for selection of pilot sites.
It was agreed that this material is to be sent to the Board prior to committing to set up any individual franchise.
The Board also acknowledged that the treatment of costs incurred to date may change depending on the success of the pilots and the likely expansion of the programs. The Board also commented on the need to do this without adding to our staff compliment until such time as the success of the pilots is determined.
The paper that went to the 27 October 1997 board meeting on the topic of franchising noted that the financial models developed highlighted that franchising the bank's services offered a viable and attractive means of broadening its delivery network. The prime benefits were said to include:
The model allows us to promote via both full franchisee (typified by Colonial Bank) and community banks. The community banks offer a major competitive edge as they allow us to "return banking services to the bush". We believe this will provide significant kudos and a competitive edge to the Group, particularly given our regional base.
135 In the meantime, on 21 October 1997 Bendigo:
(1) applied for registration of trade mark no. 746687 for:
which was accepted for registration on 28 February 1998 in class 36 (Bendigo Composite Mark);
(2) filed the First Community Bank Trade Mark Application (see [75(1)(a)] above); and
(3) filed the Community Bank Branch Trade Mark Application (see [75(1)(b)] above).
136 I pause here to note that the evidence of the application for registration of the Bendigo Composite Mark and its subsequent registration and of the lapsed applications for registration of the other marks referred to in (2) and (3) of the preceding paragraph did not form part of Mr Hunt's evidence nor indeed any of the voluminous evidence relied on by Bendigo. Their existence was brought to Mr Hunt's attention during cross-examination. Surprisingly, and despite his involvement in the franchise banking model and Bendigo's correspondence with the RBA, set out below, Mr Hunt could not recall seeing the Bendigo Composite Mark. He said that as managing director he would have directed that steps be taken to protect Bendigo's proposed investment and that which it was going to ask the community to make.
137 As part of the process of developing the franchise banking model Mr Hunt liaised with the RBA to ensure that Bendigo's new proposed franchise banking model would meet all regulatory requirements. Bendigo's letter dated 28 October 1997 addressed to Les Austin, Assistant Governor Financial Institutions, RBA, included:
… For some time now we have been developing a model which attempts to secure banking services in some of the larger country centres which are being disenfranchised or under-serviced by the banking sector.
Utilising our experience in running agencies, we have now developed a concept which might enable a community to own and operate a branch (thus securing local banking services) - with Bendigo Bank providing all of the implementation, training, and support necessary to facilitate that banking service for their district.
Staff, although employed by the licensee (community entity), would be contracted to be bound by the rules and regulations of the Bank, and all systems and controls of a normal banking operation would he adhered to. All credit decisions emanating from this operation would be controlled by Bendigo Bank. …
The brand of the licensed branch would be Bendigo Bank - with the local community bank acknowledged on the window and promotional literature: eg
…
There is little doubt that once a district loses its bank the impact on local businesses and consumers is dramatic. Needing to travel to bank, even loyal locals' spending habits change substantially and this accelerates the demise of the town. If the community were to own the licensed branch, we feel there would be a far greater loyalty and support derived - thus sustaining the likelihood of an economic operation.
I attach some information about our concept, and would appreciate your views prior to significantly progressing discussions in country regions. Providing there is substantial local community support, our current modelling shows these operations can be economic for both the licensee and the Bank.
…
Although we have held discussions with a number of regional groups, we would appreciate the Reserve Bank's opinion as to whether you see any problems for us in progressing this concept. In the meantime, we will continue to talk to a number of communities about the concept but will not finalise our position on structure until we have received input from yourselves, our legal advisors and any potential licensees.
…
138 The depiction of the "licensed branch" branding proposed by Bendigo to the RBA at the time incorporated the Bendigo Composite Mark with the addition of the name of the region or town. Mr Hunt agreed that the Bendigo Composite Mark was one way of achieving the link between a community bank branch and Bendigo as required by the RBA (in relation to which see [139]-[141] below) and by Bendigo.
139 By letter dated 10 December 1997 the RBA responded to Bendigo's letter of 28 October 1997. The RBA's letter included:
Your letter raised a number of issues, and we have set out our responses below:
1. confirmation that there will be no objection to the use by Bendigo Bank of the names "Community Branch" and "Community Bank", including the registration of these names as trade marks
Section 66 of the Banking Act 1959 prohibits the use of the word bank (or related words) in relation to a financial business which is carried on by someone other than an authorised bank. Bendigo Bank is, of course, so authorised. Provided it is clear that all business done in the branch is conducted for the account of Bendigo Bank and depositors are aware that their protection under the Banking Act is dependent upon the assets of Bendigo Bank, we see no difficulty with use of the above names. All stationery and signage would need to show "Community Bank - a Division of Bendigo Bank Ltd".
2. confirmation that the attached structure whereby a locally managed entity acquires from Bendigo Bank management rights and enters into a management relationship with a wholly owned Bendigo Bank subsidiary and that subsidiary writes business on behalf of Bendigo Bank Limited is in no way in breach of any of the Reserve Bank requirements
At this stage, the details of ownership and remuneration of the management companies which are to run the branches, have not been provided to us but we have no difficulty, in principle, with arrangements of the type which appear to be envisaged. Crucial to this judgement is the information supplied by Bendigo Bank that the customers will be banking with it and that the Bendigo Bank Community Branch and Manager are no more than management companies which are, in effect, franchisor and franchisee. The use of the word ''bank" in the registered names of the subsidiaries would not be permitted as they are not authorised banks.
…
4. the terms of that agreement that must be put in place between Bendigo Bank Limited and its subsidiary;
The Reserve Bank does not have any specific requirements in mind for the relationship between Bendigo Bank and its subsidiary; its main interest would be in the relationship between the subsidiary and the franchisee. The Reserve Bank would see it as important that Bendigo Bank be in a position to control all aspects of the business being conducted on its behalf. …
140 On 6 April 1998 Bendigo sent a further letter to the RBA in relation to the "use and registration of trading names" for its "Bendigo Bank Community Bank/Franchising Project", in particular the proposed branch at Rupanyup/Minyip. That letter included:
Trading Name
We propose to use the trading name "Rupanyup/Minyip Community Bank Branch of Bendigo Bank". The trade name would primarily be displayed on signs at the branch and on letterhead. We will be arranging to register the business name in the near future. A copy the proposed format of the trade name accompanies this letter.
Trade Mark
To protect its naming rights, Bendigo Bank intends to register the following trade mark - "Community Bank Branch" and will instruct our solicitors Jerrard & Stuk to proceed with the application once we have received approval from the Reserve Bank on its use. The trade mark registration would be owned by Bendigo Bank Limited.
…
As noted, we are seeking the Reserve Bank's approval for the registration of the above trade mark. The Reserve Bank has previously confirmed that it has no objection to the use by Bendigo Bank of the names "Community Bank" and "Community Branch" including the registration of these as trade marks.
The accompanying proposed format was as follows:
141 On 15 April 1998 the RBA responded to Bendigo indicating that it had "no objection to the registration of the trademark 'Community Bank Branch' nor its use in the format proposed. Any other use of the trademark, similarly, would need to make clear the relationship with Bendigo Bank".
142 APRA had similar requirements to the RBA in that it required Bendigo to ensure that its marketing material, including that featuring the Bendigo Word Mark, clearly disclosed that Bendigo was the issuer of the banking and financial products and services offered. By way of example Mr Hunt referred to a flyer dated 21 February 2003 relating to Bendigo's new "red MasterCard" which he initially described as being "co-branded" with the Bendigo Word Mark and the "B Bendigo Bank" (B Bendigo Mark). The flyer included:
And:
However, in cross-examination, Mr Hunt agreed that the branding on the flyer (depicted above) was not co-branding but a unitary brand corresponding to the Bendigo Composite Mark.
143 In June 1998 Bendigo opened its first community bank branch in Rupanyup/Minyip.
144 Bendigo's franchise banking model changed slightly in its early years. The model in place from June 1998 to July 1999 gave local people the opportunity to set up a locally-owned company to operate and manage a Bendigo branch (Franchise Bank Branch). Those wishing to invest in the locally-owned company raised the start-up capital required to enter into a franchise relationship with a wholly-owned subsidiary of Bendigo by depositing money into a pledged investment with Bendigo. Subject to the capital target being met a locally-owned company was incorporated which was granted the right to manage and operate a Franchise Bank Branch under a franchise deed and management deed. The locally-owned company engaged a management company pursuant to the franchise deed and management deed to manage the franchised operation on its behalf.
145 In July 1999 Bendigo changed its franchise banking model slightly. From that time, subject to establishing viability, a locally-owned company (Franchise Company) was established to operate and manage a Franchise Bank Branch. The Franchise Company raised the start-up capital required to enter into a franchise relationship with Bendigo by offering shares to the public under a prospectus; investors in the Franchise Company became its shareholders; and the Franchise Company was granted the right to manage and operate a Franchise Bank Branch under a franchise agreement.
146 Under the franchise agreement Bendigo as franchisor provided the banking infrastructure and coverage of its banking authority and the investors/shareholders in the Franchise Company shared in the profits of that company via dividends. Mr Hunt explained that while there were several changes to the form of the franchise agreement over the years the fundamental principles that underpinned Bendigo's franchise banking model have not materially changed since its development in 1997.
147 Before a franchise agreement was signed, those interested in establishing a Franchise Bank Branch in their local area had to establish a steering committee. It was the steering committee's role to conduct an awareness campaign to educate people, businesses and, where necessary, local councils about Bendigo's franchise banking model. If there was sufficient interest in a Franchise Bank Branch and a feasibility study, commissioned by the steering committee with the assistance of Bendigo, found that the Franchise Bank Branch was likely to be viable, the steering committee prepared a business plan. Upon approval of the business plan by Bendigo, the steering committee incorporated a public company limited by shares to be the Franchise Company and the franchise agreement was signed by the Franchise Company. Following the signing of the franchise agreement, the prospectus and capital raising campaign would be launched at a public meeting. The activities associated with raising capital were significant and, according to Mr Hunt, required an extensive awareness campaign to be conducted across the local region of the proposed Franchise Bank Branch.
148 The franchise agreement between Bendigo and the Franchise Company established the relationship between Bendigo as franchisor and the Franchise Company as franchisee. It put in place the controls and parameters within which a Franchise Company was required to operate, including granting the Franchise Company a right to use Bendigo's intellectual property and required marketing and sales techniques and systems. A Franchise Company and its employees were required to comply with all of Bendigo's operations and corporate manuals and the Franchise Company was required to manage operational risk.
149 According to Mr Hunt, the right to use Bendigo's intellectual property under the franchise agreement included the right to use the Bendigo Word Mark and the "B Bendigo Bank trade mark". However, neither of the Bendigo Community Marks were identified as one of Bendigo's trade marks in the two franchise agreements referred to by Mr Hunt in his affidavit, which were dated 1998 and 2001 respectively, but were included as such in later versions of the franchise agreements dated 2005 and 2013. Bendigo provided the Franchise Companies with guidelines on, among other things, how to use the Bendigo Word Mark. For example:
• a document titled "Proofreading guidelines" included:
Use of 'Community Bank®'
• The term 'Community Bank' is bold and must be followed by ® (superscripted registered (R) symbol) ie. Community Bank®. It must be followed by the words branch, project, concept, model, etc.
• On Fastart the superscripted registered (R) symbol can be inserted after 'Community Bank' by typing (R) immediately after 'Community Bank' eg Community Bank(R)
• The term 'Community Banking' is never used, replace with Community Bank® branch, project, concept, model, etc.
• The term 'Branch' only starts with capital B when included in the full name of the branch ie. Fern Tree Gully Community Bank® Branch. Otherwise it is 'branch'
• The word 'the' does not precede Community Bank® Branch ie. "Community grants were distributed by Fern Tree Gully Community Bank® Branch…"
• a document titled "Communicating your message" dated July 2006 included under the heading "Registration of Community Bank®":
In 2003, Bendigo Bank was granted Australian Trademark Registration for the term 'Community Bank®'. The trademark is clear recognition of the unique nature of Bendigo Bank's Community Bank® model and its success to date. Trademark recognition is a way in which we can protect the value and intellectual property that has been established to date.
It is important that whenever you write the term 'Community Bank®', that it is accompanied by the registration mark (which is superscripted) and it is in bold. Nine times out of 10, newsrooms will remove the registration mark - they are under no obligation to use it. However, every piece of communication coming from Bendigo Bank and Community Bank® Companies should always use this format when using the wording 'Community Bank®'.
150 In about 2005 Bendigo engaged a third party service provider to provide a template-based solution for its common marketing and promotional collateral called Marketing Central (formerly called "FastArt"). Franchise Companies had access to Marking Central. Bendigo designed templates for marketing and promotional material to be used through Marketing Central and franchisees could select the style of artwork or advertisement required. Mr Hunt explained that by this controlled process of selection it was Bendigo's intention to achieve uniformity in the appearance of advertising and in the use of trade marks, including the Bendigo Word Mark. The process worked in the following way:
(1) after selecting artwork the Franchise Company would complete the relevant fields within that artwork or advertisement;
(2) once the relevant fields were complete the Franchise Company could then review the artwork. At this stage the artwork was a proof only and contained a watermark;
(3) once happy with the proof the Franchise Company could submit it for approval by the relevant department at Bendigo; and
(4) the proof artwork could only be used by the Franchise Company after receiving Bendigo's approval. If it was not approved the watermark would not be removed from the artwork and the Franchise Company would not be authorised to publish the draft.
151 Where a Franchise Company did not use Marketing Central for its marketing and promotional material it was required to brief its allocated marketing representative at Bendigo who, in turn, would brief the work into Bendigo's design studio for approval. If the brief was approved by Bendigo's design studio, the material was either sent directly to the requesting Franchise Company for printing or Bendigo's design studio would arrange for the material to be printed by one of its suppliers.
152 To the best of Mr Hunt's knowledge, Bendigo's franchise banking model was the first of its kind in Australia and different to the models offered by Australian banks, building societies and credit unions. Mr Hunt wanted to create a brand which could be used in connection with Bendigo's new franchise banking model and which would:
(1) differentiate Bendigo's new proposed service offering from the way in which banking and financial services were provided at the time;
(2) set Bendigo apart from the banking and financial institutions that were closing branches across Australia; and
(3) differentiate the banking and financial services provided through Bendigo's existing standard corporate branches from its new franchise banking model.
153 Mr Hunt said that in overseeing the implementation of the new franchise banking model, he created what he understood to be original and previously unused terms namely, "community bank" and "community banking". But as he conceded in cross-examination, that could only be so in Australia given the existence of community banks in the US.
154 Mr Hunt had referred to the US model of community banking in public presentations he gave over the years. For example, on 29 April 1998 Mr Hunt gave evidence to the Standing Committee on Financial Institutions and Public Administration in relation to regional banking services about the development of Bendigo's franchise banking model. After presenting the model, Mr Hunt was asked if there were any examples around the world that were similar to the Bendigo model. Mr Hunt responded:
We were not able to find something that was precisely matched with this. There are community banks in the United States that grew from community needs, just like the Bendigo Building Society grew from community needs and a gathering together to address those needs. There are certain structures around but they are not precisely like this, nor are they as involving as we have found this project.
155 Mr Hunt was cross-examined about that answer and a speech he gave to the Trans Tasman Business Circle in 2008 about the development of Bendigo's franchise model where he also referred to Bendigo looking at community banks in the US. The following exchange took place:
Q: And it's your evidence that the Bendigo model is a slightly different model to the community bank model in the US, without - I'm not asking you to describe the model yet but …?
A: Well, it is…
Q: I will do…
A: …substantially different in that it changes the level of risk, responsibility and reward between the-the-the- the various stakeholders.
Q: Yes. And the US model of community bank that you looked at were generally understood to be two things: so they were small banks; is that correct?
A: In the main, yes.
Q: And they were owned and operated or managed in their local community?
A: They were targeted - serving a range of community needs. That's right.
Q: And that's indeed how they're described, community banks?
A: That - yes. That's true.
Q: Now, in both your speech to the business - Trans - Tasman Business Circle and in your evidence to the Parliament, you used the - when you used the expression community banks in the United States, you were intending to refer to that United States model with the attributes that we just mentioned?
A: Well not specifically because the key element was that all of the banks that I looked at - looked at or looked through were effectively what I termed supply side economic models, that is, they were models that were set up to provide products to a range of communities or - or community. And it was my view that we needed to look at a different approach in terms of the engagement with the buying public or the community of buyers that would enable us to more clearly satisfy the sustainability elements.
Q: Okay. And is - both in your speech to the business group - circle and in your evidence before Parliament, you call the United States model that you looked at community banks but you don't use that expression in your affidavit. Is there any reason for that?
A: No. No, not really. There were no community banks in this country. I was - I was - I guess I was referring to them as models that were referring to themselves as community banks in the States, but there were no such organisations here in the sense of banking a whole community.
Q: And the reason - one of the reasons why you didn't do that, Mr Hunt, if I may suggest, is because it's your evidence that you, in effect, coined the term community bank, isn't it?
A: I - in my view, the community bank terminology was used throughout the development in the sense that the community banking model or a community bank in our development but it was the development of a more sustainable way of banking for each of those communities that - that was my focus.
Q: Right?
A: And - and to the extent to which the use of that though the development then became the obvious brand for this alternative approach in Australia because it needed to differentiate itself from other providers, it needed to change that risk, reward and responsibility balance, and it needed to engage community as owners and buyers from their local enterprise or branch.
156 A copy of the prospectus for Elwood Community Financial Services Limited dated July 1999 (Elwood Prospectus) was in evidence as an example of a prospectus used to raise capital by a Franchise Company. It included at "3.2 Community Banking Project":
Bendigo Bank developed its Community Bank project in response to the continuing closure of bank branches across Australia, and the subsequent effects on disenfranchised communities.
Community Bank is a means by which communities with the will and enthusiasm can enhance their future prospects by securing a conduit to the finance system.
…
The Community Bank project does this by providing communities with the opportunity to manage a community-owned branch of Bendigo Bank. It supposes that ownership of this management right provides local residents and businesses with a powerful incentive to conduct their financial affairs through their own local bank branch, thereby maximising revenue potential for the local enterprise.
157 Mr Hunt was cross-examined about the use of the word "community" in this part of the Elwood Prospectus. The following exchange took place:
Q: Again, all these uses of "community" describe or, sorry, are used in its natural or ordinary meaning?
A: And it's a wide-ranging meaning.
Q: But it means in these cases the community of the area to which this is addressed?
A: The way this is termed, yes. That's what it's describing.
Mr Hunt later sought to explain that what he meant when he said that the word "community" has a wide-ranging meaning was that it was a word used to describe many things: the community of a place, of members and of people connected to a common purpose.
158 Included in the Elwood Prospectus at "3.8 Community Interest" was:
A significant amount of work and public consultation has been undertaken in relation to the feasibility of establishing the Elwood community bank branch of Bendigo Bank.
A group of interested community members was briefed by Bendigo Bank on 24 November, 1998 in relation to the proposal to establish Elwood community branch, and a committee formed to evaluate the proposal. A preliminary public meeting was held to discuss the community bank concept and the steps required to establish a community bank branch of Bendigo Bank at Elwood. As a result of a meeting held on 22 December, 1998, the committee engaged an independent consultant, Robert Moyle and Associates Pty Ltd, to conduct a feasibility study in relation to the proposal.
159 Mr Hunt was also cross-examined about this part of the Elwood Prospectus. The following exchange took place:
Q: In all of these cases, the meaning of "community" is the same, isn't it? It means the local community in Elwood?
A: Yes, it does. And at this stage, "community bank" as a brand - as a clear statement of style to serve the community - hadn't really been formed, in the sense that it was only a small number of branches. There's now well over 300, and - so the concept -
Q: Yes?
A: … of "community bank" has taken on a different view, in my - in my view.
Q: Well, in respect of each branch, "the community" refers to the particular community of that geographical location, doesn't it?
A: "Community" is a descriptive word.
160 CFCU relies on parts of Mr Hunt's oral evidence where it contends that Mr Hunt conceded that the words "community" and "community bank" are descriptive. Without setting them all out these include:
(1) in relation to questions about the "early days" when the franchise banking model was conceived:
Q: And it's that lateral [sic] alternative, that is, where the franchisees company formed from the people within the community that you have called community bank?
A: That's right. …
(2) in relation to the managing director's update given to the 27 October 1997 board meeting:
Q: And I think you've used "community bank" and "community banking" from time to time in these papers and elsewhere?
A: Yes, that's right. And even prior to that there was a terminology that had grown in many organisations-you know, the whole idea of sort of, like, generally banking - various communities, or the Australian community, for that matter.
And:
Q: … And what you called "community bank" in this section is, we see at the top of that page - was to describe the option we discussed earlier, where the franchisee was a company formed by people in the local community?
A: That's right. And this - this is early days, in the sense of trying to flesh out what was a reasonable approach to protect all parties, really.
(3) in relation to the meaning of "community bank":
Q: And the correct way is the way you put it at the bottom of paragraph 35 of your affidavit, that it's - it's a banking model in which local people had an opportunity to set up a locally-owned company to operate and manage a bank branch. That's the correct way to describe your franchise model, isn't it?
A: Well, that's right. That's right, in terms of the branch itself, but it is - overall, it's the model that actually enables them to gain banking back in their community, and gain sufficient benefit, which is displayed elsewhere, that goes back to the community from everyday thing called banking.
(4) in relation to a document titled "marketing guide" for 2005/2006 which was provided to Franchise Companies:
Q: … That reflects a concern, doesn't it, that the term "Community Bank Branch" and "community banking" have descriptive meanings?
A: I think it reflects the variety of usage. I mean, I think by this stage we had seen, through the gestation period, you know, there were many and varied ways of describing it, as we've seen in the documentation presented, and this was a way of actually trying to bring that into - put that in shape and have it consistently utilised across the network.
Q: And I think you've agreed that terms like - a term like "community banking" is a natural way to describe the franchise concept?
A: It was the term that I used at the start of the development, and it was the term that most - given that it was not in use in Australia, it was the term that clearly defined a different model of bank in that community, and it enabled them - the local town to describe itself as - as being the owner of that right to operate that Community Bank Branch, and it clearly protected Bendigo as the banker, the three elements of the - you know, the brand that has become consistent.
(5) in relation to use by other traders:
Q: … It's the case, isn't it, that from time to time other traders have decided that they want to use the words "community bank" or "community banking" in relation to their businesses?
A: Other traders? You're referring to other organisations?
Q: Other organisations that you're aware of?
A: I think I said yesterday that there have been many and varied people using the term of "serving community", "community banking", etcetera; that, over the course of - including Bendigo - you know, Bendigo Building Society, as it was in the early days, and even in the early days of Bendigo Bank. There was the general term of "serving the community" or "community banking". It was only when this completely different business model, and a different approach of connecting with the community as investors, as well as people - for specific purposes of providing a branch - that those terms came together as a brand, in my view.
(6) in relation to the report of the Parliamentary Inquiry into the Level of Banking and Financial Services in Rural, Regional and Remote Areas of Australia (Parliamentary Inquiry) published in 2004 (Parliamentary Inquiry Report), of which Chapter 8 was titled "Credit Unions, Building Societies and Community Banks":
Q: And then by December 2001, as we see in the following paragraph, there was at least another version of the Heritage Building Society model of a community bank insofar as the parliament inquiry refers to it set up by December 2001 in Nanango Shire Council - Nanango Shire, sorry?
A: Well, it couldn't have been a community bank in the sense that Heritage wasn't a bank, but, you know, could have been banking in a community, yes.
Q: Or community banking?
A: That's what I'm saying. It could have been banking in a community.