Creak v Ford Motor Company of Australia Ltd [2023] NSWCA 217 | Case summary

Creak v Ford Motor Company of Australia Ltd [2023] NSWCA 217 | Case summary | Zoe

Judgment (11 paragraphs)

[1]

[2020] NSWCA 236 Commissioner of Taxation for New South Wales v Palmer [1907] AC 179 Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552; [1979] HCA 41 Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (as Trustee for the Thornleigh Trading Trust) [2019] NSWSC 1914 Ford Motor Company of Australia Ltd v Tallevine Pty Ltd (in liq) [2021] NSWSC 1192 Isaac v Dargan Financial Services Pty Ltd (2018) 98 NSWLR 343; [2018] NSWCA 163 KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702 Label Manufacturers Australia Pty Ltd v Chatzopoulos [2022] NSWSC 1059 Maloney v The Queen (2013) 252 CLR 168; [2013] HCA 28 Man Financial (S) Pte Ltd v Wong Bark Chuan David [2007] SGCA 53; [2008] 1 SLR(R) 663; [2008] 4 LRC 419 Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096; (2010) 273 ALR 407 MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506; [2021] HCA 17 Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535 Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40 Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229 Peters (WA) v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45 Peters American Delicacy Co Ltd v Patricia's Chocolates & Candies Pty Ltd (1947) 77 CLR 574; [1947] HCA 62 Price v Spoor (2021) 270 CLR 450; [2021] HCA 20 Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310 Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 Robins v National Trust Co Ltd [1927] AC 515 Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2002] EWCA Civ 196; (2002) 54 IPR 145; [2002] FSR 33 Texts Cited: D W Grieg and J L R Davis, The Law of Contract (Law Book Co, 1987) J D Heydon, Cross on Evidence (LexisNexis, 13th edition) J D Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Butterworths) C R Williams, "Burdens and Standards in Civil Litigation" (2003) 25 Syd Law Review 165 Category: Principal judgment Parties: Ian David Charles Creak (Appellant) Ford Motor Company of Australia Ltd (Respondent) Representation: Counsel: T Brennan SC with M Darian-Smith (Appellant) CRC Newlinds SC with R Glasson (Respondent)

[2]

Solicitors: Adrian Holmes Law Services (Appellant) Lander & Rogers (Respondent) File Number(s): 2022/65750 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2022] NSWSC 83 Date of Decision: 8 February 2022 Before: Schmidt AJ File Number(s): 2019/163053

[3]

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[4]

HEADNOTE [This headnote is not to be read as part of the judgment] From 2010 to February 2014, the appellant, Mr Ian Creak, through a company of which he was the sole director and shareholder, Tallevine Pty Ltd ("Tallevine"), conducted an authorised Ford dealership pursuant to a Dealership Agreement with the respondent, Ford Motor Company of Australia Ltd ("Ford"). During its time as an authorised Ford dealer, Tallevine advertised, distributed, supplied, and sold a range of Ford vehicles, including those that it had on its own motion "raptorised". The process of "raptorisation" consisted of the affixation of grilles, accessories, and parts to Ford vehicles in order to mimic the Ford vehicles sold in the United States under Ford's "Raptor" line. Following termination of the Dealership Agreement by Ford, Mr Creak, through Tallevine, continued not only to represent to prospective purchasers that Tallevine enjoyed a subsisting business relationship with Ford, but also to "raptorise" Ford vehicles sold at Tallevine's dealership and on the internet. With a view to compromising proceedings instituted by Ford in the County Court of Victoria for misleading or deceptive conduct and passing off, Mr Creak, Tallevine, and Ford entered into a deed of settlement on 16 September 2015 ("Deed"). The parties also contemplated that the Deed would pre-emptively settle proceedings that Tallevine intended to commence in the Federal Court of Australia, arising from the circumstances in which the Dealership Agreement had been terminated. Clause 2.1 of the Deed envisaged that Ford would institute proceedings in the Supreme Court seeking injunctive relief against Tallevine; that Tallevine would appear in those proceedings; and that the parties would co-operate in proffering consent orders to the Court in the form contained in the minutes attached to the Deed. Those minutes contained positive stipulations obliging Tallevine to deliver up to Ford certain websites and documents, and proscriptions relating to Tallevine's use of Ford's intellectual property. While Mr Creak was not anticipated to be a party to the proceedings between Tallevine and Ford, by cl 2.2(a) of the Deed, he undertook that neither he nor any of his "Related Entities" would engage in the conduct proscribed by the minutes. Clauses 3 and 4 of the Deed respectively provided that the parties were to release one another from certain claims, and that each was not to bring or pursue proceedings in respect of those claims. To this end, cl 5 of the Deed contained covenants for indemnification of any losses caused by a breach of cl 3 or cl 4. The Deed did not bring an end to the appellant's raptorisation of Ford's vehicles, nor to other conduct that the consent orders and minutes sought to restrain. That raptorisation and conduct continued after Tallevine had sold its business to another company controlled by Mr Creak, Fleet Serv Pty Ltd ("Fleet Serv"), in June 2017. Ford thereupon commenced contempt proceedings against Tallevine in 2017, in which Tallevine cross-claimed either that Ford had repudiated the Deed or that Tallevine had validly rescinded the Deed ("2017 Proceedings"). The 2017 Proceedings came to a halt after Tallevine entered liquidation. In the primary proceedings, brought against Tallevine and Mr Creak, Ford contended that, inter alia, Mr Creak had breached his undertaking in cl 2.2(a) of the Deed by failing to comply with the minutes to the Deed. Ford also contended that Tallevine's prosecuting its cross-claim in the 2017 Proceedings amounted to a breach of the release provisions contained in cll 3 and 4 of the Deed, such that it and Mr Creak were liable to indemnify Ford for any losses suffered thereby. At trial, Ford did not lead evidence on the quantum of its loss other than reasons for judgment given and orders entered in the Common Law Division quantifying its costs of defending the cross-claim in the sum of $295,000. Conversely, Mr Creak contended, among other things, that his raptorisation of Ford's vehicles was done in good faith (so as to fall within an exemptive provision in the minutes, cl 10(b)), and that cl 2.2(a) of the Deed was void as being in restraint of trade. Mr Creak asserted in the alternative that cl 2.2(a) was a bare warranty that the facts described therein would be in existence in the future, such that the Court ought not to enjoin him from further breaches thereof by injunction. The primary judge (Schmidt AJ) entered judgment for Ford on the entirety of its claim. Injunctive relief enjoining further breaches of cl 2.2(a) issued against Mr Creak, alongside a monetary judgment of $145,000 in satisfaction of his obligation to indemnify Ford for any losses caused by Tallevine's prosecution of its cross-claim. The primary judge quantified the monetary judgment by reference to prior costs orders entered in the 2017 Proceedings by Fagan J, less a sum already paid to Ford as security for its costs therein. On appeal, the principal issues before the Court were: (i) Whether the primary judge had erred in concluding that the restraint of trade doctrine did not apply to cl 2.2(a) of the Deed, as a term of a deed of settlement, or in concluding that, even if the doctrine were to apply, any such restraint would not be void as being reasonable in the interests of the parties and in the public interest; (ii) Whether the primary judge had erred in concluding that the raptorisation of Ford's vehicles carried out by Mr Creak, Tallevine, and Fleet Serv was not exempted from the minutes to the Deed; (iii) Whether the primary judge had erred in issuing injunctive relief against Mr Creak, on the basis either that cl 2.2(a) was in the nature of a bare warranty, or that mandatory orders compelling the performance of actions by Tallevine could not be imposed upon Mr Creak, or that the ambiguity present in the Deed was such as to render injunctive relief inappropriate; and (iv) Whether the primary judge had erred in having recourse to the orders entered by Fagan J in quantifying the sum payable by Mr Creak to Ford pursuant to cl 5 of the Deed. The Court (per Gleeson and Kirk JJA and White JA), allowing the appeal in part, held: As to issue (i) per Gleeson and Kirk JJA: (1) Where a restraint of trade is imposed by a deed of settlement compromising litigation not itself concerning an anteriorly imposed restraint of trade, no distinctive approach is warranted in determining whether the restraint of trade doctrine voids the restraint. Where a restraint of trade imposed by a deed of settlement aims to compromise litigation concerned with an anteriorly imposed restraint of trade, the doctrine of restraint of trade is still applicable but with the additional consideration that the covenantee has a legitimate interest in enforcing the deed of settlement with some degree of certainty: [17]-[30]. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535; Peters American Delicacy Co Ltd v Patricia's Chocolates & Candies Pty Ltd (1947) 77 CLR 574; [1947] HCA 62; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; [1973] HCA 40; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45, discussed. World Wide Fund for Nature v World Wrestling Federation Entertainment Inc (2002) 54 IPR 145; [2002] EWCA Civ 196, doubted. Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347; Man Financial (S) Pte Ltd v Wong Bark Chuan David [2007] SGCA 53; [2008] 1 SLR(R) 663; Metcash Ltd v Jardim (No 3) (2010) 273 ALR 407; [2010] NSWSC 1096; Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310, disapproved. (2) The primary judge was correct to conclude that the restraint of trade doctrine did not operate to void cl 2.2(a) of the Deed, as the restraints were reasonable as between the parties and not contrary to the public interest taking account of all the circumstances: [31]. As to issue (i) per White JA: (3) The dispute compromised by the deed of settlement did not concern the validity of an anterior restraint of trade. The doctrine of restraint of trade was applicable to cl 2(a), but the primary judge was correct to conclude that the restraint was not invalid as being unreasonable in the interests of the parties and was in the public interest. Where a restraint of trade is imposed by a deed of settlement, entered into with the benefit of legal advice, and represents a genuine and proper compromise of an actual or anticipated dispute between the parties, the evidentiary onus shifts to the covenantee to establish that the impugned restraint is void: [98]-[113], [124]. World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2002] EWCA Civ 196; [2002] FSR 33, followed. Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45; Metcash Ltd v Jardim (No 3) [2010] NSWSC 1096; (2010) 273 ALR 407; Properties Northside Pty Ltd t/as Raine & Horne Manly/Freshwater v Pickering [2015] NSWSC 310, considered. Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347, doubted. As to issue (ii) per curiam: (4) Although the primary judge erred in limiting the good faith use exception in order 10(b) of the minutes to the preservation of good faith use of trade marks permitted by ss 120 and 122 of the Trade Marks Act 1995 (Cth), the primary judge was correct to conclude that the appellant's raptorisation of Ford's vehicles was not within conduct permitted by order 10(b): [1] (Gleeson and Kirk JJA); [84]-[91] (White JA). As to issue (iii) per curiam: (5) The primary judge did not err in enjoining further breaches by Mr Creak of cl 2.2(a) of the Deed by injunction. Irrespective of its classification as a condition, innominate term, or bare warranty, cl 2.2(a) was clearly worded as an undertaking to refrain, and to cause others to refrain, from the conduct proscribed by the minutes to the Deed. As a negative promise, cl 2.2(a) was enforceable by injunction: [1] (Gleeson and Kirk JJA); [92]-[95] (White JA). Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552; [1979] HCA 41; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8; Price v Spoor (2021) 270 CLR 450; [2021] HCA 20, applied. (6) The primary judge did not err in issuing mandatory injunctions compelling Mr Creak to carry out actions that Tallevine had been obliged to perform pursuant to the consent orders. Although the minutes to the Deed did not purport to oblige Mr Creak to perform those actions, mandatory injunctive relief to that effect operated to remedy Tallevine's and Fleet Serv's breaches of those obligations at Mr Creak's behest: [1] (Gleeson and Kirk JJA); [129]-[136] (White JA). (7) The primary judge did not err in qualifying some of the injunctive relief ordered by reference to the language of order 10(b) of the minutes to the Deed. Although some ambiguity might have arisen as to the ambit of the term "good faith", any such ambiguity was capable of being resolved by reference to the Court's reasons, and was a risk taken on by Mr Creak: [1] (Gleeson and Kirk JJA); [137] (White JA). Orleans Investments Pty Ltd v Mindshare Communications Ltd (2009) 254 ALR 81; [2009] NSWCA 40, followed. As to issue (v) per curiam: (8) The primary judge's recourse to the costs orders entered by Fagan J in the 2017 Proceedings in order to quantify the extent of Mr Creak's obligation to indemnify Ford was erroneous. Such recourse was inconsistent with the prohibition contained in s 91(1) of the Evidence Act 1995 (NSW) against admitting evidence of a prior decision to prove the existence of a fact that was in issue in prior proceedings: [1] (Gleeson and Kirk JJA); [157]-[166] (White JA). (9) Even if Ford's cause of action to enforce the indemnity did not merge in the primary judgment, it would be an abuse of process for Ford, having failed to prove the quantum of its claim before the primary judge, to institute new proceedings in which it sought to quantify its claim for indemnity or to seek the assessment of its costs pursuant to s 198 of the Legal Profession Uniform Law (NSW): [1] (Gleeson and Kirk JJA); [167] (White JA). Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142, followed.

[5]

JUDGMENT

GLEESON JA and KIRK JA: We agree with the orders proposed by White JA and, subject to what follows, with his Honour's reasons. The following observations are directed to the issue of restraint of trade, as raised by grounds 4-7 of the amended notice of appeal.
The common law restraint of trade doctrine applies if there is a "restraint" in the relevant sense, if it is a restraint of "trade" in the relevant sense, and if the restraint of trade in question is not of a species which falls outside the operation of the common law doctrine: note Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; [2001] HCA 45 at [14]-[19]. If the doctrine does apply then it is necessary to ask both whether the restraint is reasonable as between the parties, in that it is no wider than is reasonably necessary to protect some legitimate interest of the covenantee, and whether the restraint is against the public interest: see eg Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co [1894] AC 535 at 565; Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 at 376. At common law the onus of proof for the former issue lies on the covenantee, and for the latter lies on the covenantor: see authority gathered in JD Heydon, The Restraint of Trade Doctrine (4th ed, 2018, LexisNexis Butterworths), 34-35. The burden of persuasion no doubt is allocated the same way (as to the difference between burdens of proof and persuasion, see below at [25]-[27]). Issues of severance may then arise along with, under New South Wales law, the possibility of reading down pursuant to the Restraints of Trade Act 1976 (NSW).
Here, based on prior English and Australian first instance authority, the primary judge held that the restraint imposed by cl 2.2(a) of the Deed fell within an exceptional category to which the doctrine did not apply. As White JA indicates at [106] below, it was appropriate that her Honour follow earlier Australian first instance authority out of comity. However, like White JA, we respectfully disagree with aspects of the approach taken in that authority.
The relevant proposition can be traced back to the judgment in Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229 (the George Michael case). Parker J held there that a contractual restraint entered in settlement of a dispute about another contractual restraint "does not attract the doctrine of restraint of trade" (at 347). Based on authority relating to compromises of other types of dispute, his Lordship said that there "is a clear public interest in upholding genuine and proper compromises" (at 345). He referred to "powerful public policy reasons" against a litigant being able to take advantage of the restraint of trade doctrine to rid themselves of the substituted restraint that they had agreed to in order to resolve the earlier dispute (at 346). He said (ibid): But the overriding consideration … is that if it be open to a plaintiff to challenge a compromise of a restraint of trade issue by alleging that the compromise is itself in restraint of trade, then it seems to me to follow that a restraint of trade issue could never be compromised by the substitution of a new agreement. Unless the parties are able to compromise the issue in some way which does not involve the substitution of a new agreement, they will have no option but to litigate the issue to judgment, whether they like it or not.

[6]

First Issue: Offering of raptorised Ford vehicles bearing a Ford sign: orders 4-10 (Grounds 1 and 4A)

The form of the consent orders was contained in the Minutes, which were an attachment to the deed, and formed part of the agreement between the parties. By cl 9 of the deed, it was agreed that the only conduct relied on by the parties was as set out in the deed and the deed superseded all earlier conduct by or between the parties in connection with the subject matter of the deed. Except in so far as any issue about Tallevine's "raptorisation" of motor vehicles is reflected in the recitals to the deed, or the language of its operative provisions including the agreed orders, or perhaps, from the claim and counter-claim made in the proceedings in the County Court of Victoria, the deed cannot be construed on the assumption that it was intended to resolve a dispute about such conduct. Ground 4A (quoted at [66] above) is correct, in so far as the claim and counter-claim in the County Court proceedings did not include a dispute about raptorisation of Ford vehicles. The question is whether the conduct about which Ford complains is within the terms of the orders attached as a minute to the deed.
The "raptorisation" of vehicles by Tallevine about which Ford complains in these proceedings was characterised by Ford as involving the modification of Ford vehicles including by fitting them with counterfeit grilles with the word FORD on them, but without the Blue Oval Device. Tallevine also offered decals using the word "Raptor", carbon wrapping, custom paint, bigger wheels and suspension, and custom interiors including seats and door trim with the "Raptor" word and device. Mr Creak described "Raptor enhancements" as: "A range of after-market accessories and upgrades for various utilities and in particular the Ford Ranger which included upgraded alloy wheels, nudge bars, decals, leather seats, sports bars and unique 'Raptor' branding".
An example of a "2017 Ford Ranger Raptor XLS" advertised for sale by Tallevine or Fleet Serv (it is not clear whether the advertisement was placed before or after 30 June 2017) is as follows:
Order 4 restrained Tallevine from advertising, distributing, supplying, offering for sale, and selling motor vehicles under or by reference to, amongst other things, any sign that included the word FORD, but subject to order 10. Order 7 restrained Tallevine from advertising, distributing, supplying or selling motor vehicle parts or accessories bearing any of the Ford signs that were not manufactured by or with the authority of Ford or its related bodies corporate, or which were fitted with any such parts or accessories.

[7]

Clause 2.2(a) of the Settlement Deed not a "bare warranty": Ground 3

Mr Creak submitted that cl 2.2(a) should not be read as a contractual promise by Mr Creak that he and his Related Entities would not engage in any of the conduct the subject of the attached Minutes, but as a bare warranty that the facts in future would be as there described.
As I understood the submission, it was that because cl 2.2(a) was a bare warranty, while a breach thereof might sound in damages, assuming loss could be proved, it did not provide a basis for injunctive relief.
This submission was misconceived and rightly rejected by the primary judge. By cl 2.2(a) Mr Creak gave an undertaking that neither he nor any Related Entity would engage in conduct the subject of the agreed orders. The promise was clearly worded as an undertaking. Whether the promise was a warranty, condition, or innominate term would be relevant if Ford sought to rescind the deed of settlement for breach of the promise. It is not relevant to whether the promise is enforceable by injunction.
Mr Creak was the controlling mind and directing will of Tallevine and Fleet Serv. If they were to engage in conduct that was the subject of the restraints, it would be because of what he decided or did. In relation to them, his undertaking that they would not engage in any of the conduct the subject of the attached Minutes was negative in substance and enforceable by injunction (Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552 at 573; [1979] HCA 41; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [12] fn 11; Price v Spoor (2021) 270 CLR 450; [2021] HCA 20 at [51]). Mr Creak submitted that, because the definition of "Related Entity" was wide and included, inter alios, any body corporate of which Mr Creak or any relative of his was a member, the promise should not be enforceable by injunction. As I apprehended the submission, it was that, in those circumstances, Mr Creak would not be in a position to fulfil the undertaking. But the fact that an injunction would not be granted to compel Mr Creak to perform an obligation which he was incapable of performing is not a reason for denying Ford injunctive relief where Mr Creak failed to comply with his undertaking that he could perform.

[8]

Validity of Clause 2.2(a) of the Settlement Deed: Grounds 4, 5, 6 and 7

The Defence pleaded that, if the deed had the effect alleged by Ford it contained a cartel provision and was, to that extent, unenforceable pursuant to ss 4L and 45AJ of the Competition and Consumer Act 2010 (Cth). That defence was abandoned at trial. It is surprising that neither party, nor the Court in any pretrial hearing, had taken any steps for the transfer of the proceeding to the Federal Court pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) as raising a special federal matter (s 6(1)). As those grounds of defence were abandoned at trial, that issue does not arise.
As quoted at [56] above, par 17(c) of the defence pleaded that if the settlement deed had the effect alleged by Ford, it was in restraint of trade within the meaning of s 4(1) of the Restraints of Trade Act.
The primary judge found that the restraint of trade doctrine did not apply to the settlement deed (J [90]-[103]). In reaching this conclusion, the primary judge applied observations of Parker J in Panayiotou v Sony Music Entertainment (UK) Ltd [1994] EMLR 229, followed by Nicholas J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Noack (2004) 71 NSWLR 212; [2004] NSWSC 347). In Panayiotou, the plaintiff was seeking to have a recording agreement declared invalid as being in restraint of trade. That agreement had been entered into as part of a compromise of earlier litigation in which an anterior agreement had itself been alleged to be in restraint of trade. Parker J said (at 346): "A further consideration is that in the Inner Vision Action Mr Michael was taking the opportunity presented by the doctrine of restraint of trade to rid himself of his existing recording agreement not so as to be free of fetters to a record company but with a view to signing with Sony Music/CBS (UK). He was looking, in other words, to substitute one restraint for another. I am not suggesting that he was acting in any way improperly in doing that, but there are as it seems to me powerful public policy reasons why, having done it, he should not be allowed to take advantage of the availability of the restraint of trade doctrine once again to seek to rid himself of the substituted restraint. But the overriding consideration, as it seems to me, is that if it be open to a plaintiff to challenge a compromise of a restraint of trade issue by alleging that the compromise is itself in restraint of trade, then it seems to me to follow that a restraint of trade issue could never be compromised by the substitution of a new agreement. Unless the parties are able to compromise the issue in some way which does not involve the substitution of a new agreement, they will have no option but to litigate the issue to judgment, whether they like it or not."

[9]

Width of the injunctive relief ordered

The only challenge to the width of the injunctive relief ordered were in grounds 11 and 12 in the Notice of Appeal that were as follows: "11. The primary judge erred at J [390] in reasoning that it was appropriate to make injunctions which operated by reference to the current paragraph 10 of the Schedule to the Deed. 12. The primary judge erred in ordering mandatory injunctions at orders 3 and 4 when the only contractual stipulation binding upon the Appellant was negative in effect."
Orders 3 and 4 were: "3. The Second Defendant, by himself or by procuring Fleet Serv Pty Ltd to do so, do all things necessary to immediately transfer to the Plaintiff the domain name raptor4wd.com and any other internet domain name registered in his name or in the name of any related entity that contains the word RAPTOR. 4. The Second Defendant, by himself or by procuring Fleet Serv Pty Ltd to do so, immediately amend the content of the website now shown at www.phauto.com.au and www.dieselauto.com.au as follows: a. to include a prominent statement that the business is not an authorised Ford dealer; b. to include a statement that there is no warranty provided by Ford Australia or Ford US for Raptor and F Series vehicles in Australia; c. to remove all statements to the effect of: i. Our F series trucks are ordered direct from the factory in the USA for customisation and conversation [sic]; ii. The venture as a new dealer with Ford has proved our ability to provide high volume sales with unmatched customer service retention; iii. Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network; iv. Ford Ranger vehicles are of course serviceable and warrantable through any of the corresponding dealers in Australia; v. with Ford F Series and Ford Ranger at Thornleigh we offer Ford Trained Master technicians for peace of mind trouble free maintenance."
Order 3 reflected order 3(d) attached to the deed of settlement that bound Tallevine.
Order 4(a) and (b) reflected order 1(e)(i) and (ii) attached to the deed of settlement that bound Tallevine.
Order 4(c) reflected order 1(e)(iii) attached to the deed of settlement that required Tallevine to amend its website "to remove all statements to the effect of paragraph 12 below". "Paragraph 12 below" provided that: "12. The defendant is immediately restrained from publishing any of the following statements or statements to the same or similar effect: (a) the defendant is "authorised to enhance" F series trucks and Ranger vehicles; (b) the defendant exceeds Ford manufacturer standards on enhancement quality; (c) Raptor vehicles and enhancements sold or performed by the defendant can be financed by the defendant through My Ford Finance; and (d) F Series and Raptor vehicles are serviceable and warrantable through Ford Australia or any authorised Ford dealers in Australia."

[10]

Damages and Indemnity

Orders 1 and 2 made by the primary judge were as follows: "1. Judgment be entered for the Plaintiff against the Second Defendant in the amount of $145,000. 2. The Second Defendant is to indemnify the Plaintiff for its losses and liabilities arising from the First Defendant's cross claim against the Plaintiff in proceedings no. 2017/75192."
Ford pleaded that it suffered damage by reason of Tallevine's breach of the orders made on 28 October 2015, being costs which it incurred in proceedings 2017/75192 in which it sought relief against Tallevine for contempt. It also alleged that Tallevine's filing of its cross-claim in those proceedings against Ford was a breach by Tallevine and Mr Creak of cl 4.1 of the deed of settlement. It also claimed an entitlement under cl 5.1 of the deed of settlement to have Mr Creak indemnify it against the costs it incurred in bringing the contempt proceedings against Tallevine and defending Tallevine's cross-claim pursuant to cl 5.1 of the deed.
By cl 4.1 of the deed, Tallevine and Mr Creak covenanted not to bring or pursue a Claim (as defined) against Ford in respect of any matter which was the subject of a release under cl 3.1. By cl 3.1, Tallevine released Ford from any Claim arising from or connected with the Dispute (as defined) or any part of it, the allegations giving rise to or referred to in the Dispute or any part of it, and any other Claim which was known, or could have reasonably been known, to Tallevine as at the date of the deed.
"Claim" was defined to include costs (whether or not the subject of a court order). The "Dispute" meant the dispute the subject of the County Court proceedings including Tallevine's counter-claim in those proceedings.
Ford sought both damages and an order that Mr Creak indemnify it for its loss and liability arising from Tallevine's cross-claim against it in proceeding 2017/75192.
The primary judge found that Ford was entitled to damages to recover the costs it incurred in bringing the contempt proceedings against Tallevine but had failed to prove the quantum of those costs (J [318], [324], [325], [329], [334]-[335], [341]-[343]).
There is no cross-appeal against this finding.
The primary judge had earlier explained that Ford had served an affidavit which referred to a confidential exhibit of memoranda of fees and disbursements in the contempt proceedings which were not served. Mr Creak sought an unredacted copy of the memoranda, some of which were only provided in the week before the hearing commenced. When advised that there were objections to the affidavit of Ford's solicitor, who was required for cross-examination, Ford advised that the solicitor would not be called. It nonetheless sought to rely on the memoranda of fees. The tender was rejected. Ford does not challenge that ruling. A late application by Ford for leave to call the solicitor was refused and, again, that ruling is not the subject of challenge (J [62]-[79]).

[11]

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 September 2023

The orders required Tallevine to take positive steps as specified in orders 1, 2 and 3 and restrained Tallevine from engaging in the conduct specified in orders 4, 5, 6, 7, 8, 9, 11 and 12. Mr Creak relies on order 10. It is convenient to quote orders 4, 6, 7, 8, and 10 at this point. "4. The defendant is immediately restrained from advertising, distributing, supplying, offering for sale and selling motor vehicles, motor vehicle parts or accessories or any other goods or services under or by reference to the following signs (Ford Signs), or any sign which is substantially identical to or deceptively similar to any of the Ford Signs, or authorising or procuring or inducing any person to do so: (a) the word FORD (subject to paragraph 10 below); (b) the following word and device: (c) the word RANGER (subject to paragraph 10 below); (d) the words MYFORD FINANCE; (e) the words GO FURTHER. … 6. The defendant is immediately restrained from applying to register any business name, company name, domain name or trade mark which contains any of the Ford Signs or Ford Raptor Signs or any sign which is substantially identical to or deceptively similar to any of the Ford Signs or Ford Raptor Signs, including the name PENNANT HILLS FORD and PENNANT HILLS RAPTOR, or authorising or procuring or inducing any person to do so. 7. The defendant is immediately restrained from advertising, distributing, supplying, offering for sale or selling: (a) motor vehicle parts or accessories bearing any of the Ford Signs or Ford Raptor Signs that are not manufactured by or with the authority of the plaintiff or its related bodies corporate; or (b) motor vehicles fitted with any motor vehicle parts or accessories referred to in subparagraph (a) above. 8. From 17 September 2016, the defendant is restrained from advertising, distributing, supplying, offering for sale and selling motor vehicles, motor vehicle parts or accessories or any other goods or services under or by reference to the following signs (Ford Raptor Signs), or any sign which is substantially identical to or deceptively similar to any of the Ford Raptor Signs, or authorising or procuring or inducing any person to do so: (a) the word RAPTOR (subject to paragraph 10 below); (b) the following word and device: … 10. Nothing in these orders prevents the defendant from: (a) describing its business as "Pennant Hills Auto Traders" with the description "Specialising in importing Raptor and F Series vehicles from the United States", provided that the words RAPTOR and F SERIES are in the same size and style of font as the rest of the description; (b) using the words FORD, RANGER and RAPTOR in good faith to describe the vehicles that the defendant is offering for sale."

As recorded by the primary judge (at J [20]), Mr Creak admitted the following facts: "Businesses of Tallevine and Fleet Serv 16. Tallevine carried on business as a motor dealer from premises located at 242 and 252 Pennant Hills Road, Thornleigh NSW 2120 up to a date no earlier than on or about 30 June 2017. 17. Tallevine has the following registered business names: (a) RAPTOR SVT - from 17 February 2015; (b) RAPTOR 4x4 - from 4 March 2014; (c) Pennant Hills Auto Traders - for the period 16 December 2015 to 28 July 2017. 18. Tallevine carried on business using the domain names and websites 'www.raptor4x4.com.au' and 'www.phauto.com.au' up to on or about 30 June 2017. 19. Fleet Serv carries on business as a motor dealer from premises located at 242 and 252 Pennant Hills Road, Thornleigh NSW 2120. 20. Fleet Serv has the following registered business names: (a) C.A.R.S AUTOHAUS - from 30 June 2017; (b) PENNANT HILLS AUTO TRADERS - from 30 June 2017; (c) Fleet Serv - from 15 October 2015. 21. Fleet Serv carried on business using the domain name and website 'www.raptor4wd.com' from on or about 30 June 2017 to no earlier than 11 May 2019. 22. Fleet Serv has, since on or about 30 June 2017, carried on and is continuing to carry on business using the domain name and website 'www.phauto.com.au'. 23. Fleet Serv is carrying on business using the domain name and website 'www.dieselauto.com.au'. Domain names 24. Tallevine and Mr Creak did not instruct their IT service provider, Printwell, to transfer the domain names 'phford.com.au', 'pennanthillsford.com.au', 'raptor4x4.com.au', 'rangerraptor.com.au' and 'raptorsvt.com.au' to Ford until April 2017. 25. The domain names were not transferred to Ford until 11 December 2017. 26. On or about 28 June 2017, Mr Creak procured the registration of the domain name raptor4wd.com in the name of Gavin Cox. 27. Gavin Cox has at all material times been an employee of AdTorque Edge. 28. AdTorque Edge has at all material times been the IT Service provider for Tallevine and Fleet Serv. Trade Mark application no. 1719737 29. On 6 April 2017, Trade Mark application no. 1719737 lapsed. 30. On 17 January 2018, Tallevine and Mr Creak procured the lodgement of an application with IP Australia to extend time in respect of, and thereby revive, Trade Mark application no. 1719737. 31. On 27 April 2018, Tallevine and Mr Creak procured the lodgement of a further application with IP Australia to extend time in respect of, and thereby revive, Trade Mark application no. 1719737. 32. The applications lodged on 17 January 2018 and 27 April 2018 were a step in the application to register Trade Mark application no. 1719737. Vehicles advertised for sale and sold by Tallevine and Fleet Serv 33. From 28 October 2015 to 30 June 2017, Tallevine offered for sale or sold motor vehicles under or by reference to the word FORD and using brochures created by Ford, via the website 'www.raptor4x4.com.au'. 34. From 28 October 2015 to on or about 9 January 2017, Tallevine used the Blue Oval Device to advertise its 'Fleet and Government Sales' via the website 'www.phauto.com.au'. 35. From 28 October 2015, to on or about 30 June 2017, Tallevine advertised, offered for sale and/or sold motor vehicles with grilles bearing Ford Signs or Ford Raptor Signs that were not manufactured by or with the authority of Ford or its related bodies corporate, including being the motor vehicles particularised in paragraph [37] of the SOC. 36. From 17 September 2016 to on or about 30 June 2017, Tallevine advertised and offered for sale motor vehicles under or by reference to the Ford Raptor Signs, including via the websites 'www.gumtree.com.au' and 'www.tradeuniquecars.com.au'. 37. Since on or about 30 June 2017, Fleet Serv has advertised, offered for sale and/or sold motor vehicles with grilles bearing Ford Signs or Ford Raptor Signs that were not manufactured by or with the authority of Ford or its related bodies corporate, including being the motor vehicles particularised in paragraph [52] of the SOC. 38. Since on or about 30 June 2017, Fleet Serv has advertised and offered for sale motor vehicles under or by reference to the Ford Raptor Signs, including via the 'www.gumtree.com.au' and 'www.tradeuniquecars.com.au'. Website content 39. From 17 September 2016 to 30 June 2017, the domain name 'raptor.4x4.com.au' contained the word 'RAPTOR'. 40. From 17 September 2016 to 30 June 2017, the website 'www.raptor.4x4.com.au' contained: (a) the word 'RAPTOR' in the URL; (b) the statement 'Raptor is the special vehicle division of Pennant Hill Auto Traders'. 41. From 17 September 2016 to on or about 9 January 2017, the website 'www.raptor4x4.com.au' contained the name 'Pennant Hills Raptor' and a logo which incorporated the word 'Raptor'. 42. Between 28 October 2015 and 30 June 2017, the website 'www.raptor4x4.com.au' did not contain either of the statements in Order 1(e)(i) and (ii). 43. From 28 October 2015 to 30 June 2017, the website 'www.raptor4x4.com.au' contained the statements pleaded in paragraphs [24] and [43] of the SOC. 44. From on or about 30 June 2017 to at least 11 May 2019, the website 'www.raptor4wd.com' contained the statements pleaded in paragraphs [58], [60] and [62] of the SOC. 45. From on or about August 2020, the website 'www.phauto.com.au' has contained the statements pleaded in paragraphs [58], [60] and [62] of the SOC, or statements to similar effect. 46. Fleet Serv is publishing the statements pleaded in paragraphs [58], [60] and [62] of the SOC on the website 'www.dieselauto.com.au'."

Paragraphs 24, 37, 43, 52, 58, 60 and 62 of the Statement of Claim (referred to at [35], [37], [43] and [44]-[46] quoted at [59] above) alleged: "24. In breach of Order 1(e)(iii), Order 12(a) and Order 12(d), in the period from 28 October 2015 to 30 June 2017, Tallevine published the following statements: a. 'We are now part of a specialty vehicle manufacturer group (SVM) authorized to enhance F series trucks, Ranger, Hilux, Navara and Amrok we exceed most manufacturers standards on enhancement quality' [sic]; b. 'Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network'; c. 'The vehicles produced by Raptor can only be retailed to the public through the exclusive dealership base ... Ford Ranger and F Series vehicles are serviceable and warrantable through any of the corresponding dealers in the Australia' [sic]. Particulars The statements appeared on Tallevine's website home page at http://www.raptor4x4.com.au and the 'About Us' page of Tallevine's website at http://www.rapotor4x4.com.au/about-us. … 37. In breach of Order 7(b), from 28 October 2015 to 30 June 2017, Tallevine offered for sale and/or sold motor vehicles fitted with motor vehicle parts or accessories bearing Ford Signs or Ford Raptor Signs that were not manufactured by or with the authority of Ford Australia or its related bodies corporate. Particulars The motor vehicles identified by Ford Australia as being has offered [sic] for sale or sold by Tallevine include but are not limited to the following. i. Tallevine offered for sale, at its principal place of business, a motor vehicle described as a PX Ranger Dual Cab P/UP XLS 4x4 (PX Ranger XLS) which was fitted with a grille bearing the word 'Ford'. ii. Tallevine offered for sale, via www.gumtree.com.au: A. a motor vehicle described as a '2015 Ford Ranger PX Mkll XLT 3.2 (4x4) Cool White 6 Speed Manual Cab Utility', fitted with a grille bearing the word 'Ford'. B. a motor vehicle described as a '2015 Ford Ranger PX XLT 3.2 Hi-Rider (4x2) Black 6 Speed Automatic Super Cab Pick-up', fitted with a grille bearing the word 'Ford'. iii. Tallevine offered for sale, via www.tradeuniquecars.com.au: A. a motor vehicle described as a 'Ford Ranger Raptor Trophy Truck'; B. a motor vehicle described as a 'Ford Ranger XLT Raptor'; and C. a motor vehicle described as a 'Ford Ranger Raptor'. iv. Tallevine offered for sale, via www.raptor4x4.com.au: A. a motor vehicle described as a '2015 Ford Ranger XLT 3.2 Hi-Rider 4x2'; and B. a motor vehicle described as a '2016 Ford Ranger PX MKll'. v. Each of the vehicles identified above has grilles fitted to them that were not manufactured by or with the authority of Ford Australia or its related bodies corporate. Further particulars will be provided following the issuing of Notices to Produce, Subpoenas, the completion of discovery or service of evidence. … 43. In breach of: a. Order 11(a), from 28 October 2015 to 30 June 2017 Tallevine made a representation which suggested that it had a Raptor franchise granted by Ford Australia; Particulars Tallevine's website at 'www.phauto.com.au' referred to a 'Franchise showroom' and displayed an icon with the word 'RAPTOR'. b. Order 11(b), from 28 October 2015 to 30 June 2017 Tallevine made the following representations: i. 'Our F Series trucks are ordered direct from the factory in the US for customization and conversion ...'; and ii. 'Additionally, Raptor can also receive Australian delivered vehicles directly from the dealer network', which suggested that Tallevine or its business was sponsored by, approved by or affiliated with Ford Australia or its related companies; Particulars i. http://www.raptor4x4.com.au/ ii. http://www.raptor4x4.com.au/about-us c. Order 11(c), from 28 October 2015 to 30 June 2017 Tallevine represented that it offers '... Ford Trained Master technicians for peace of mind trouble free maintenance', which suggested that Tallevine's services were those of, or are approved by, Ford Australia or its related companies. Particulars i. http://www.raptor4x4.com.au/ ii. http://www.raptor4x4.com.au/about-us d. Order 11, Tallevine's website at www.raptor4x4.com.au: i. from 28 October 2015 to 30 June 2017 contained the word RAPTOR which appeared in the content of the website including: A. two prominent uses of the name 'Pennant Hills Raptor'; B. the statement 'Raptor is the special vehicle division of Pennant Hill Auto Traders', on the 'About Us' page of Tallevine's website at http://www.rapotor4x4.com.au/about-us; ii. contained, from 28 October 2015 until on or about 9 January 2017, a logo at the top of the page headed 'Pennant Hills Raptor' which incorporated one of the Ford Raptor Signs. … 52. Since on or about the Sale Date, Fleet Serv has and is continuing to offer for sale or is selling motor vehicles fitted with motor vehicle parts or accessories bearing Ford Signs or Ford Raptor Signs that are not manufactured by or with the authority of Ford Australia or its related bodies corporate; Particulars The motor vehicles identified by Ford Australia as being offered for sale or sold by Fleet Serv include but are not limited to the following: i. A motor vehicle described as a 'Brand New' Ranger Raptor MY18 3.2L Turbo Diesel Automatic. ii. A motor vehicle described as a 'new' 2017 Ford Ranger Raptor XLS. iii. A motor vehicle described as a 'new' 2016 Ford Ranger XL SPX Mkll Auto 4x4 Double Cab. … 58. Since on or about the Sale Date, Fleet Serv has made, and continues to make, representations which suggest that it or its business is sponsored by, approved by or affiliated with Ford Australia or its related companies, as follows: a. 'Our F series trucks are ordered direct from the factory in the USA for customisation and conversation ...'; and b. 'The venture as a new dealer with Ford has proved our ability to provide high volume sales with unmatched customer service retention.' Particulars The statements appear on the 'About Us' pages of Fleet Serv's websites at http://www.rapotor4wd.com [sic] and http://www.phauto.com.au. Further particulars may be provided following the issuing of Notices to Produce, Subpoenas, the completion of discovery or service of evidence. … 60. Since on or about the Sale Date, Fleet Serv has made, and continues to make, representations which suggest that Fleet Serv's goods or services are those of, or are approved by, Ford Australia or its related companies, as follows: a. 'Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network'; b. 'Ford Ranger ... vehicles are of course serviceable and warrantable through any of the corresponding dealers in the Australia' [sic]; and c. ' ... with Ford F Series and Ford Ranger at Thornleigh we offer Ford Trained Master technicians for peace of mind trouble free maintenance'. Particulars The statements appear on the 'About Us' page of Fleet Serv's website at http:llwww.rapotor4wd [sic]. Further particulars may be provided following the issuing of Notices to Produce, Subpoenas, the completion of discovery or service of evidence. … 62. Since on or about the Sale Date, Fleet Serv has been publishing the following statements: a. 'Our Ford Rangers and Ford F Series can be serviced throughout the Ford dealer network'; b. 'Ford Ranger ... vehicles are of course serviceable and warrantable through any of the corresponding dealers in the Australia' [sic]."

The primary judge found the following facts: "[10] In summary, I am satisfied that the evidence established that: (1) It was without Ford's authority that Tallevine first began manufacturing and selling a range of "Raptor" branded accessories and parts for Ford vehicles in 2012, while it was an authorised Ford dealer. It then also began offering for sale Ford vehicles which it had fitted with "Raptor" enhancements. Those vehicles bore the trademarked Ford name and badge and in the case of Ranger vehicles, the trademarked Ranger name, as well as the Raptor name which Tallevine affixed. That name was styled in a way which Ford complained was deceptively similar to the name affixed to Ford Raptor vehicles on manufacture by its related companies overseas. (2) Much of the parties' resulting dispute concerned Tallevine's continued "raptorising" of both Ford F series trucks, which Ford did not import into Australia, and of Ford Ranger vehicles, which it did. That continued even after the termination of Tallevine's dealership, the parties' 2015 settlement and the eventual sale of the business to Fleet Serv Pty Ltd. (3) Ford terminated Tallevine's dealership agreement after Mr Creak was convicted in the NSW Local Court of offences under the Motor Dealers Act 1974 (NSW) (repealed), The Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)), the Fair Trading Act 1987 (NSW), and the Crimes Act 1900 (NSW), which included odometer tampering. Some of those convictions were later overturned and the other charges were then withdrawn. (4) Despite this, Ford was not prepared to enter another dealership agreement with Tallevine or with other companies with which Mr Creak was involved, including Maximotion Pty Ltd, now known as Fleet Serv Pty Ltd. The result was a dispute which was resolved without litigation in October 2013, when Ford and Tallevine entered their first settlement agreement. This was how Tallevine ceased being an authorised Ford dealer. (5) The first agreement did not resolve the ongoing dispute about Tallevine continuing to "raptorise" Ford vehicles, accessories and parts. The result was the County Court proceedings which Ford brought. They were settled in mediation in 2015 by a second settlement agreement, reflected in the deed and the consent orders later made by this Court, breach of which are in issue in these proceedings. (6) Ford was still then not prepared to enter into another dealership agreement with Tallevine, or with other companies in which Mr Creak was involved. (7) The background to the 2015 settlement and Ford's attitude included that: (a) Ford did not manufacture vehicles in Australia but imported those manufactured by Ford Motor Company (USA) and other Ford companies overseas, which it sold by wholesale to its authorised dealers. (b) Ford had dealership agreements of the kind it once had with Tallevine with those dealers. They sold those new vehicles by retail under that agreement. They and other dealers, including Tallevine could also sell used Fords, as well as Ford vehicles imported by third party importers. (c) That was because Ford did not import all Ford vehicles manufactured overseas, including Raptor versions of Ford F series trucks. Such trucks were then, however, imported by third party importers and sold here by various Australian dealers, including Tallevine. (d) At that time no Raptor versions of Ford Rangers were being manufactured, but Ford did import Ranger vehicles which its dealers sold. (e) On Mr Creak's evidence there was a market for Raptor Ford vehicles here. Raptor Fords were advertised in magazines and on websites which he described monitoring in order to observe this market and to ascertain what price and style of vehicles were being offered for sale by other dealers. (f) On Mr Creak's evidence the Raptor version of the F series trucks attracted a luxury car tax on import, with the result that Tallevine did not tend to purchase them from third party importers. Instead, it bought F series trucks from those dealers which it then "raptorised" itself and offered for sale. It also "raptorised" Ford Ranger vehicles which, after the termination of its dealership agreement, it had to purchase from other Ford authorised dealers, rather than direct from Ford. It then sold such vehicles as new despite Ford's objections, with the result that it took steps under its dealership agreements, to stop other dealers providing Rangers to Tallevine to sell as new. (g) Despite Ford's objections, even after the termination of its dealership agreement, Tallevine continued to suggest in various ways that it had a continuing connection with Ford and to sell "raptorised" parts, accessories and Ford F series trucks, and Rangers. (8) The 2015 settlement ought to have settled the parties' dispute over what Tallevine was so doing, because it agreed to cease. But even afterwards it and later Fleet Serv not only continued to suggest a connection with Ford, but also to sell "raptorised" Ford F series trucks, Rangers, parts and accessories, in breach of the terms of the deed and the orders and despite Ford's ongoing objections. At the relevant times Mr Creak was the sole director and shareholder of both companies and bound by the deed, which should have precluded this. (9) Underlying Ford's ongoing objections was that when manufactured all Ford vehicles, including Ford Raptor vehicles, bear both the trademarked "Ford" name and blue oval device containing that name, which Mr Creak called its "badge" and which was also referred to as a "rondelle". When manufactured Ford Rangers also bear the trademarked "Ranger" name and Ford Raptors, the trademarked "Raptor" name. Those names are each styled in a particular way. (10) Ford's objections to Tallevine's use of the trademarked names and badge rested in part on provisions of the Trade Marks Act 1995 (Cth) which regulated use of trade marks, as well as use by an "authorised user", which Tallevine claimed to be: s 8. Section 26 permits authorised users to use trade marks and bring proceedings for their infringement. Tallevine had no such rights, as the 2015 deed acknowledged. (11) Ford USA and Ford Canada, another subsidiary, owned the various marks and the Ford badge in issue, but Tallevine was only ever authorised to use them under the dealership agreement. A third party, a Japanese company Hino then held the Raptor SVT trademark in Australia. Other vehicle manufacturers also produced Raptor vehicles. (12) It was in 2015 that Ford USA lodged an application for Australian registration of the marks "Ford Ranger Raptor" and "Ranger Raptor". Tallevine also lodged an application for registration of the "RAPTOR" name just before the 2015 settlement, but it was not obtained. Tallevine had earlier sought authorisation to use the Raptor name from Hino, but that had also not been obtained. Tallevine allowed its 2015 trademark application to lapse after the settlement. It later unsuccessfully sought to pursue its application, that being opposed by Ford and Hino. (13) In 2018 Ford announced that it was going to import a range of Ford Ranger Raptor trucks, which Ford USA had commenced producing. In these proceedings Mr Creak complained that thereby Ford had sought to sell the very product he had developed. (14) Ford did license other third parties, under an established protocol, to produce accessories and other products for Ford vehicles, including grills [sic] which bore Ford trademarks, but neither Tallevine, Mr Creak nor Fleet Serv were so licensed. Mr Creak's only conceivable authority to use the marks arose under the deed, which envisaged limited use by Fleet Serv. (15) Ford considered that accessories and grills [sic] which used Ford trademarks, including the Raptor mark, which were not manufactured by agreement under its protocol to be counterfeit and took steps to protect its brand against such misuse. They included the proceedings Ford brought against Tallevine in the County Court, for contempt in this Court and these proceedings. (16) In the County Court, Ford had pursued its objection to Tallevine's use of Ford trademarks; of its continuing use of the "Ford" and "Raptor" names after the dealership was terminated to suggest an ongoing connection with Ford; as well as to it offering the Ford vehicles it had "raptorised" for sale as new. It considered that Tallevine was not only misusing intellectual property, but involved in passing off and breach of the dealership agreement, relevant terms of which survived its termination, as well as breach of various statutes. (17) The 2015 settlement accepted that Ford had a basis for its objections to what Tallevine had been doing, which Tallevine and Mr Creak agreed would cease. Despite this, after the settlement Tallevine and later Fleet Serv, after it acquired Tallevine's business in 2017, continued the "raptorising" which Ford considered breached both the orders in Tallevine's case and the deed in Mr Creak's. It was in 2017 that Ford thus brought contempt proceedings in this Court against Tallevine and in 2019, these proceedings against Mr Creak."

The principal issues concerning the construction of the deed were the proper construction of order 10(b) and its relationship with the restraints in orders 4, 7, and 8. The primary judge accepted Ford's submission that in cl 10(b) the words "in good faith" provided an excuse for good faith use consistent with ss 120 and 122 of the Trade Marks Act 1995 (Cth). The primary judge did not accept the appellant's submission that all of the other restraints agreed to had to be read down in the light of the chapeau to order 10. The primary judge reasoned: "[227] One of the problems with reading the clause in the way for which Mr Creak contended is that the agreement which the parties freely reached, having been legally advised as they were, is that such a construction would not accord with either the obvious commercial purpose of the deed, or its express provisions. To the contrary, it is reading the clause in the way Mr Creak suggests which raises the possibility of ambiguity, not the words which the parties actually used, they permitting as they do limited use of the words dealt with in in [sic] cll 4 and 8, in good faith. [228] That term is not an ambiguous one, given the dispute which the deed settled, which included claimed breaches of the Trade Marks Act. That statutory context must not be overlooked, given the reference which the deed itself makes to that Act. [229] It is apparent from the deed itself that what was agreed by cl 10 was not the 'uneasy truce' which Mr Creak described. Rather, it was an important part of the final settlement of not only the litigation which Ford had commenced in relation to the disputed use of the words and trademarks with which the deed dealt, but also that which the parties had respectively foreshadowed. Cll 4,8 and 10 thus reflected that the Trade Marks Act permitted good faith use of the marks they dealt with. The deed thus gave practical flesh to this aspect of the statutory scheme, in the parties' particular circumstances. [230] Mr Creak's construction thus also does not pay necessary regard to what lay in issue on the cases which the parties were respectively advancing in the County Court and the foreshadowed proceedings, which the settlement resolved, which is part of the context of the surrounding circumstances known to the parties. Nor does it take account of the purpose and object of the settlement, which also have to be considered in arriving at a conclusion as to what the words used would lead a reasonable person to believe. [231] Accordingly, I am satisfied that it cannot be accepted that any reasonable person would have understood the deed in the way for which Mr Creak contended. The words which the parties used in cl 10 and their ordinary and natural meaning, read in the context of the deed as a whole, simply do not permit the conclusion for which he urged. [232] Clause 10 provided that nothing in the orders, prevented Tallevine firstly, from describing its business as 'Pennant Hills Auto Traders', described as 'Specialising in importing Raptor and F Series vehicles from the United States', provided that the words RAPTOR and F SERIES are in the same size and style of font as the rest of the description. Second, using the words FORD, RANGER and RAPTOR in good faith, to describe the vehicles it offers for sale was also not prevented. [233] This recognised Tallevine's undoubted right to sell used Fords and those it purchased from third party importers. That explains the references in cl 4 to cl 10 when it dealt with the words FORD and RANGER, thus providing an exception to the restraint otherwise agreed in cl 4. Likewise, the references to cl 10 in cl 8. [234] The term 'in good faith' was not defined in the deed and thus, like any other undefined term, takes its ordinary meaning, understood in the contractual context in which the parties used it. That also does not make the term, nor cl 10 ambiguous. [235] The use of that term must be understood in light of cl 2.1 of the deed, which dealt with the consent orders. There the parties also agreed that 'nothing in this Deed or the Consent Orders will cause Tallevine to be an authorised user of any of Ford's trademarks for the purpose of section 26 of the Trade Marks Act 1995 (Cth)'. That the undefined term "good faith" is also used in that legislative scheme, is thus pertinent. [236] Clause 4 restrained 'advertising, distributing, supplying, offering for sale and selling motor vehicles, motor vehicle parts or accessories or any other goods or services under or by reference to' the listed Ford Signs, 'or any sign which is substantially identical to or deceptively similar to any of the Ford Signs', with the specified exceptions. Clause 8 imposed a similar restraint in relation to the specified Raptor signs. [237] Clauses 4 and 8 were thus concerned to restrain the use which Tallevine had been making of those Ford and Raptor signs, which it agreed it would refrain from in future. They were not concerned with it selling Ford manufactured vehicles, which bore the Ford or Raptor names and the Ford badge, which Tallevine was free to do under cl 10. Further, when offering such vehicles for sale it was thus also agreed in cl 10 that Tallevine was permitted to use the words FORD, RANGER and RAPTOR, in good faith, to describe those Ford vehicles, in the manner there agreed. [238] It is the use of the term 'good faith' in that contractual context, referring as it did to the Trade Marks Act, which arises to be considered. The use of that term in the context of this deed, read as a whole, is thus not opaque. It rather accords with the scheme of the Trade Marks Act, as Ford submitted. It follows that the reference in cl 4(a) and (c) to using the specified words in the way permitted by cl 10, thus indicates that use of those words to describe the vehicles being offered for sale involved a good faith use of those words, as s 122(1)(b)(i) also permitted. [239] It is relevant to this conclusion that Tallevine and Mr Creak also agreed in the deed that it would not offer parts or accessories bearing Ford or Raptor signs which were not manufactured with Ford's authority, or that of its related bodies corporates and that it would not fit vehicles which such parts: cl 7. That also supports the rejection of the approach for which Mr Creak contended. … [241] Continuing to 'raptorise' Ford vehicles as Tallevine had before the settlement was reached, which it agreed it would refrain from, did not involve the agreed "good faith use of the word 'Raptor', which cl 10 permitted. Nor did offering for sale vehicles or parts or accessories which Tallevine manufactured without authority, using the Raptor name. [242] By way of contrast, selling a Ford vehicle manufactured by Ford USA as a Raptor, which bore the Ford name and badge as well as the Ranger and Raptor signs affixed on manufacture and describing them as such, as cl 10 permitted, plainly would involve a good faith use. [243] Those conclusions all follow naturally from what a reasonable person reading the words used would believe, in the surrounding circumstances I have discussed."

The primary judge concluded: "[207] … I am satisfied, reading the clause in the context of the deed as a whole and giving it its ordinary and natural meaning, agreed as it was in the circumstances which I have discussed, that a reasonable person would have understood that what was thereby being given by Mr Creak was a simple promise. Namely, that neither he nor his related entities, including Tallevine would engage in the conduct he and Tallevine agreed was to be restrained by the minutes and the orders. [208] True it is that so far as Mr Creak was concerned his promise was given in relation to a wide class of entities and conduct. But despite this, I consider that this is what a reasonable person would have understood the parties had intended. [209] Fairly read it is not open to conclude that a reasonable person would have understood that by cl 2.2(a) Mr Creak was only accepting the economic risk that in future Tallevine or others which were his related entities, would not do the things which it was agreed would be restrained. Rather, Mr Creak, was promising that they would not do so. … [211] It is the words which the parties actually used in the deed, not only in order to settle their dispute and the County Court proceedings which Ford had initiated, but also the other litigation they had foreshadowed, which leads to that conclusion. What was intended by this part of the settlement of that entire dispute, was agreed restraints which would constrain aspects of the future commercial conduct of Mr Creak and his related entities. [212] The words used in s [sic] 2.2(a) must be understood as part of the deed as a whole, it being structured as it is and the words being considered as they must be in the context of the surrounding circumstances known to the parties, as well as the purpose and object of the settlement. They would thus lead a reasonable person to believe that what was intended was to ensure that Mr Creak would in future neither himself, nor through Tallevine or some other corporate or other vehicle or person, which fell within the definition of related entity, pursue what the restraints precluded, with the specified exceptions provided in cl 10 of the minutes."

This case is analogous to World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2002] EWCA Civ 196; [2002] FSR 33. There, the World Wide Fund For Nature (formerly World Wildlife Fund) and World Wrestling Federation Entertainment Inc compromised litigation in relation to the Federation's applications for trade mark registration of its logo using the initials "WWF" outside the United States. The World Wildlife Fund had registered its "WWF" trade mark. There was litigation between the parties around the world. The disputes were compromised by an agreement by which the Federation undertook to cease using the initials except for limited defined purposes. After the Federation breached the agreement, the Fund sought and obtained injunctive relief. The Federation contended that any restriction on its use of the mark WWF was a restriction in restraint of trade and therefore void unless the Fund could justify it (at [40]). Giving the judgment of the Court of Appeal of England and Wales, Carnwath LJ said: "42. …The protection of the intellectual property rights of one business inevitably implies some restriction on the rights of others with potentially conflicting interests. The laws governing those rights are designed to set reasonable limits to the restrictions, but the limits are not always clear-cut. Where there are disputes, it is in the interests of everyone, including the public, for those disputes to be settled by agreement, rather than litigation, and for such agreements to be respected. 43. This proposition does not mean that the doctrine of restraint of trade is altogether excluded. It merely acknowledges that the public interest represented by the doctrine has to be applied in the factual context of the agreement; that the parties, with proper legal advice, are the best judges of what is reasonable in their respective trading interests; and that agreement between them is normally the fairest and most efficient way of drawing the boundaries. … 48. To summarise, where the claimant has been party to a settlement of a genuine dispute, designed to define the boundaries of his trading rights as against the defendant, he is entitled to expect that to be enforced. It is not for him to prove that it is reasonable. The presumption is that the restraints, having been agreed between the two parties most involved, represent a reasonable division of their interests. It is for the Defendant, seeking to avoid the agreement, to show that there is something which justifies such a course, because the dispute was 'contrived' (as in the BAT case); or because there was no reasonable basis for the rights claimed (as, apparently, in Apple); or because it is otherwise contrary to the public interest, for example, going beyond the legitimate purpose of seeking to 'avoid confusion or conflict' between the parties."

The primary judge considered this submission to be raised as an ambush. Her Honour said: "[112] It is relevant that despite all of the interlocutory matters which the parties pursued, up until the hearing there had been no complaint about improper surprise resulting from Ford's failure to file a reply. Nor any suggestion that the hearing on the restraint issue could not fairly proceed without one. It was open to Mr Creak to seek particulars of what Ford relied on to defend the matters he had raised by cl 17 of the defence, about which issue had been joined as the result of the operation of the Rules, if there was any concern about potential prejudice. But that had also not been pursued. … [114] There is no question that there is a real issue lying between the parties about the reasonableness of the restraints agreed by the deed raised by the pleadings and operation of the Rules. If it was considered that a reply needed to be filed, so that Mr Creak could properly understand Ford's case on that issue, he ought to have raised that before the hearing. The legislative scheme does not permit any party to conduct the litigation by ambush or surprise, including as to a pleading issue such as this. [115] It is also relevant that r 14.2 permits the proceedings to be tried without further pleadings, if the Court is of the opinion that the issues between the parties can be defined without them. That the restraint issue had already adequately [been] defined was supported by the evidence served and the issues and facts which the parties agreed before the hearing. [116] Mr Creak also complained that because Ford had not pleaded reasonableness, he had not investigated whether it had an interest in protecting or advancing the brands in issue. Nor had he led evidence about the operation of the restraint on the broad class of those defined to be 'related entities'. He contended that there could thus not be a fair trial on the question of reasonableness. [117] I am satisfied that this cannot be accepted. … [122] In this case I am satisfied that the parties' ongoing dispute, resolved as it was by the 2015 settlement; the pleaded cases; the operation of the Rules; and the evidence which the parties had each served about the circumstances in which the deed came to be entered and what had led to the restraints being agreed as they were, established that Mr Creak was not unfairly surprised by Ford's failure to serve a reply which particularised the basis on which it said that the agreed restraints were reasonable. Nor did the case it advanced genuinely catch Mr Creak by surprise."

Creak v Ford Motor Company of Australia Ltd

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Judgment (11 paragraphs)

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Cases Cited (43)

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