Enzed Holdings Ltd & ors v Wythea Pty Ltd & ors [1984] FCA 416

Federal Court of Australia|1984-12-06|Before: Wilcox JJ, Lockhart J

Allo CATCHHORDS Trade practices - misleading and deceptive conduct. - representation that corporation has sponsorship or

affiliation it does not have - analysis of complex evidence - damages - whether on findings of primary Judge he was bound to make an award of damages no matter that the exergcise was

Copyright - artistic work commissioned by second appellant in New Zealand - author resident in New Zealand - whether second

competent applicant to sue for infringement of copyright.

ENZED HOLDINGS LIMITED & ORS. v. WYNTHEA PTY LIMITED & ORS. No. W.A.G 33 of 1984

WESTERN: AUSTRALIA DISTRICT REGISTRY ) No. W.A.G 33 of 1984

- ) GENERAL DIVISION )

DATE OF ORDER : 6 December 1984 WHERE MADE : Sydney

The orders made by Lockhart J. on 26 March 1984 be varied by deleting therefrom the order numbered 4.

The appellants pay one-fifth of the respondents' costs

WESTERN AUSTRALIA DISTRICT REGISTRY ) No. W.A.G 33 of 1984 )

THE COURT: This is an appeal and cross-appeal from a judqment of a single iudae of this Court (Lockhart J.) given on 26 March 1984. The proceedings were brought by the appellants to obtain injunctive relief and damages against the respondents for alleged breaches of s. 52 and para. 53(d) of the Trade Practices Act 1974, infringement of copyright and passing off. The appellants established their entitlement to relief pursuant to their causes of action based onthe Trade Practices Act and upon infringement of

the question of passing off. His Honour granted injunctions

to restrain the respondents committing further breaches and

infringements. He refused to award any damages. It is from

that refusal and also from his Honour's decision to make no order ag to costs that the appellants appeal. The cross-appeal is brought by the respondents in order to have his Honour's decision to grant any relief set aside. The respondents contend that the appellants did not establish any breach of the Trade Practices Act nor any infringement of

The first four appellants are members of a group of companies known as the Enzed group. The group consists of a holding company and a manufacturing and distributing company. The first appellant is the holding company and, the second appellant 1s the manufacturing and distributing company. Both these companies are incorporated in New Zealand and do not carrv on business elsewhere. The third appellant is the Australian distributor of Enzed products. The fourth appellant controls the Australian franchising of the group. Both the third and fourth appellants are companies incorporated and carrying on business in Australia. The £ifth appellants are not part of the group, but on 15 July 1982, the first of them, Compressed Air & Packing Systems Ptv Limited (hereinafter referred to as "CAPS") was given a

franchise to market the qaroup's products in Western

Australia. Subsequently the franchise was taken over by the

. The. first respondent, Wynthea Pty Limited, was formed on 23 January 1981. Fifty per cent of its share capital was taken up by a company, Bendara Pty Limited, and the remaining fifty per cent by another company, Kimden Pty Limited. Prior to 23 January 1981, Bendara Pty Limited had been the Western Australian distributor of Enzed products. It held the distributorship pursuant to an agreement which had been made on its behalf by another of the respondents, Mr. A.G. Smith. The agreement was with a company, not one of the appellants, Enzed Hydraulics Pty Limited, which was until April 1981 the sole Australian distributor of Enzed products. Since 24 April 1980, Bendara Pty Limited has been the reqistered proprietor of a business name, ""Enzed Hydraulic Hose & Coupling Service". Wynthea Pty Limited was formed to accommodate the entry into the business of the respondent, Mr. W.R. Cooper. He controls Kimden Pty Limited. Wynthea Pty Limited was not registered as the proprietor of the business name, Enzed Hydraulic Hose & Coupling Service. This was -.due to an oversight. There is no question but that the name and the business were owned by Wynthea Pty Limited at all material times. Both Mr. Cooper and Mr. Smith were

respondents to the application as well as Wynthea Pty Limited.

The Enzed group was founded in 1972 in New Zealand. It designs, manufactures and distributes hydraulic hoses and

couplings and similar products. On 10 September 1979 Enzed Hydraulics Pty Limited, under the direction of Mr. Peter

Duncan, an Enzed distributor in New Zealand, and Mr. Davey,

the Enzed New Zealand national sales manager, was given sole

distribution rights in Australia. This arrangenent terminated in April 1981.

On 13° March 1980, Mr. Smith made the earlier mentioned agreement with Enzed Hydraulics Pty Limited to become the Western Australian distributor. The terms of the agreement appear in a letter dated 13 March 1980. They inciuded terms as to price, stock and equipment. terms conferring on Mr. Smith's company the sole Enzed distribution and sale rights for Western Australia anda term that the Western Australian company would obtain its supplies exclusively from Enzed Hvdraulics Ptv Limited. The agreement commenced on 1 May

On 14 March 1980 Mr. Smith set up Bendara Ptv Limited to hold the distribution rights. It commenced business as Enzed Hydraulic Hose & Coupling Service on or about 1 June 1980. The business made use of two logos belonqing to Enzed. These were described by the learned primary Judge as "the name logo" and "the drawing logo". The name logo consisted of the

word "ENZED" preceeded by two red flashings or flicks. The

drawing logo was a line drawing of eight hydraulic couplings. Both logos were designed by a Mr. L.L. Anderson, a resident of. New: Zealand, who had been commissioned to design the logos

by the second appellant, Enzed Precision Products Limited.

Upon setting up the business Mr. Smith found that two other companies were carrying Enzed products. The Enzed products were said by him to have a poor reputation in the Western Australian market. His belief in that regard was not

On 6 April 1981 Enzed Hydraulics Pty Limited ceased to be the - Australian 'distributor. . Its operations were restricted to New South Wales. From July or August 1981 the Australian operations were directed from Melbourne. The third and fourth appellants had their headquarters in Australia there: aMr. Rex Falloon was in charge. The

respondent. Mr. Smith, was aware of these changes. By this

time he had become dissatisfied with Enzed products and had

made his dissatisfaction known, firstly to the Sydney, and then to the Melbourne, offices.

Despite discussions between Mr. Smith and Mr. Failoon in September 1981 the relationship deteriorated. On 21 October 1981 Mr. Falloon sent a telex to Mr. Smith saying that the relationship was terminated from that day. The telex

continued, "You are requested to cease using the Enzed trade

° mark and you are requested to remove the Enzed name from your

premises-and the promotional material on vehicles ..."

As earlier mentioned, on 15 July 1982, the fourth appellant appointed CAPS as Western Australian distributor of Enzed products. Later it was decided that a company separate from CAPS should be formed to hold the Enzed franchise. This led to the incorporation of Contender. In the meantime Mr. Smith continued in business under the name, "Enzed Hydraulic Hose & Coupling Service". He continued to use the Enzed

On 4 August 1982, the parties attempted to settle their differences. On that dav a written agreement was made, the parties to which were the third appellant, Bendara Pty Limited and Mr. and Mrs. Smith. Mr. and Mrs. Smith, for.a consideration of $2,250, agreed to cease using the business name, Enzed Hydraulic Hose & Coupling Service, to withdraw from the next vellow pages telephone directory anv advertisement which included a reference to the word "Enzed" or incorporated the name logo or any logo substantially identical with or deceptively similar to it, not to carry on business under or by reference to the style and/or name, Enzed Hydraulic Hose & Coupling Service or a_ style or name which included the word "Enzed" or any style or name deceptively similar thereto. and to sell to the third

appellant the Enzed stock on hand for an amount to be

2 eee etneeLteaytanetttnsiene tmpmabinaliael eT ame A earn

Mr. Smith took steps to comply with the agreement. _He registered a new business name, "C. & S. Hydraulic Services (W.A.)"("C. & S."). He began using a new name logo, notified existing customers, inserted advertisements stating what the position then was and complied with the requirements of the agreement in relation to the Perth yellow pages. However, the white pages continued to have the "Enzed Hydrauli¢e' Hose & Coupling Service" entry. This was published aqain in August/September 1982 when a new edition of the white pages of the telephone book appeared. It is to be

' observed that nothing was said in the agreement about the

drawing logo. Mr. Smith continued to use it on vans, business cards and stationery. What might be described as the van Liverv remained the same. Contender. the new Western Australian distributor. complained but to no effect. The appellants commenced these proceedings on 23 Auaust 1983. Thev sought injunctions pursuant to s. 52 and para. 53(d) of

the Trade Practices Act. They also sought injunctions to

restrain alleged passing off of the respondents' business as that of the third and fifth appellants and to restrain the respondents from infringing the second appellant's copyright

On 24 Auqust 1983 the appellants made application for

interlocutory relief. The application was resolved when the

mesttenae hy, as Upetecbectioen dott ol pal anen Yast denne Ht deen

respondents gave a number of undertakings to the Court. The

undertakings required Wynthea Pty Limited to obliterate the

drawing: logo.*-from its service vans, to destroy all business cards "fn ite possession bearing the drawing logo, not in future to use the drawing logo on any of its plant or literature and to give to the employees of Wynthea Pty Limited a written direction signed by Mr. Smith and Mr. Cooper that any person getting in touch with Wynthea and seeking to deal with any of the applicants was to be informed immediately that Wynthea had no connection with any of the

The learned primary Judge found that the telex sent on 21 October 1981 did not terminate the distribution agreement which Mr. Smith had made with Enzed Hyudraulics Pty Limited. The agreement was already at anend. In his Honour's view the aqreement had been terminated by the conduct of the parties no later than September 1981. His Honour thouaht

that the respondents' right to use the Enzed name and logos

was dependent upon the agreement continuing in force and was

thus also terminated no later than September 1981. He concluded that the respondent, Wynthea Pty Limited, had contravened both s. 52 and para. 53(d) of the Trade Practices

Act between September 1981 and 27 August 1983 because:-

(i) it continued to carry on business under the name

(iL) it continued to use the drawing logo; (iii) Mr. Smith failed to take steps to remove the entry from the 1982 white pages of the telephone directory. The deadline for alterations to the entries therein was the end of May 1982 (not the end of May 1981 as is

Permanent intunctions to restrain further breaches of the Trade Practices Act were granted. His Honour did not deal with passing off because it was common ground that the claim for passing off did not raise wider issues than the claim based on breaches of the Trade Practices Act. His Honour thought the question of whether the appellants were

entitled to relief in respect of their claim based on passing off to be academic. His Honour found that Wynthea had

infrinaed the copyright of the second appellant in the drawing logo. He thought that injunctive relief to restrain further infringements should be aranted. His Honour then went on to consider damages and reached the conclusion that no award of damages should be made in favour of any of the appellants. He also reached the conclusion that there should

The principal matters relied upon by counsel for the

appellants in support of the appeal were as follows:-

l. Upon his Honour's findings of fact, he was bound, no

matter how difficult the task, to make some award of

damages to each of the appellants. His Honour should have ordered the respondents to pay

It was not open to the learned primary Judge to find conduct which was in breach of any provision of the Trade Practices Act in so far as it was alleged that the first respondent had engaged in that conduct prior to September 1982. 'It was said that it was no part of the appellants' case as pleaded or conducted that the first respondent had enqaged in any offending conduct prior to September 1982. The purpose of this submission was to exclude from his Honour's findings a findina that the respondents were under an obligation to secure the removal of the Enzed entry from the 1982 white pades of the telephone directory.

There was either no evidence or insufficient evidence to support the finding by the learned primary Judqe that during the period September 1982 to Auqust 1983 the conduct of the first respondent resulted, ona not insubstantial number of occasions, in confusion in the minds of the public leading some of them to think that

C. & s. Hydraulic Services (W.A.), the respondent's new

ll. name for Wynthea's business, and the Enzed business,

were one and the same and led others, conscious of the

fact' that ¢. & S. and Enzed were different businesses, to think that upon dealing with C. & 8. they were dealing with Enzed.

The learned primary Judge was in error in finding that Mr. Smith's right to use the name Enzed, the name logo and the drawing logo had ended by September 1981.

The learned primary Judge erred in finding that Mr.

Smith was, within the meaning of 3.75B of the Trade Practices Act, a person involved in the contraventions of the provisions of the Trade Practices Act by the first respondent. This was because, so it was submitted, Mr. Smith was the person for whose conduct the first respondent was held to be vicariously liable and could not thereby himself be made liable as an accessorv.

The learned primarv Judae erred in finding that the first respondent had infringed the second appellant's copyright in the drawing logo because neither it nor any of the other appellants was the owner of any copyright .in the drawing logo in Australia; none was therefore a competent applicant to rely on this cause of action.

His Honour should have ordered the appellants to pay the

respondents' costs of the application. Alternatively he should have made an order that the appellants pay some

Because the cross-appeal challenges the fundamental findings made by the learned primary Judge in favour of the appellants, we find it more convenient to deal with the cross-appeal first of all. If it should succeed in whole or in part, there will be a consequent effect on the appellants' position which will need to be taken into account when the appeal, as distinct from the cross-appeal, is being

The various submissions of the parties require an analysis of a number of his Honour's findings and some reference to the evidence. We propose to undertake that analysis and reference before going on to deal with the

His Honour reviewed certain evidence qiven bv persons who were. for the most part, either customers of one or other of the firms or who were potential customers of one or the other. This evidence was to a dearee inconclusive, but having reviewed it, his Honour said that he was satisfied that during the period from the commencement by Contender of its business, that is, about September 1982, until about the end of August 1983, shortly after the undertakings were aqiven to the Court on 24 August 1983, there were occasions on which customers of Contender or other members of the public thought

that they were speaking to or dealing with employees or van

drivers of Contender, whereas in truth they were speaking to or dealing with employees of the respondents' firm. In at least éne_ instance the confusion resulted in the respondents' firm obtaining a small order intended for Contender with the

consequent loss to Contender of that order. His Honour

"The 1982 Perth White Pages seems to have been the major source of this confusion; but

for reasons I shall mention later, it is my view that Mr. Smith should have taken steps before the end of May 1982 to ensure that the 1982 White Pages, which appeared in August-September 1982, did not contain reference to "Enzed Hydraulic Hose & Coupling Service" with his own business address and telephone number. Therefore, in my opinion, the respondents were responsible for some of the confusion that arose."

"Looked at over the period September 1982 to Auqust 1983, I am satisfied that the conduct of Wynthea resulted in a not insubstantial number of occasions of confusion in the minds of members of the public which led some of them to think that C. & S. and "Emzed" were one and the same business and led others, conscious of the fact that 'Enzed' and C. & S. were different businesses, to think that upon dealing with Cc. & S. they were dealing with 'Enzed'."

His Honour then entered upon a review of the evidence concerning the relationship between the appellants and the

respondents and referred to the fact that there had been no

formal termination of the arrangement which had been made

between Mr. Smith and the Enzed Sydney company. However, his Honour. found, as we have earlier mentioned, that that relationship must be taken to have been terminated not later than September 1981. By then, so his Honour said, Mr. Smith had ceased buying Enzed products from any Enzed company, his last purchase having been made in April 1981. His Honour gaid that Mr. Smith's right to use the name "Enzed" and the two logos arose because of his contract with the Sydney company. .: Once the appointment as distributor was terminated, Mr. Smith's right to use the name and the logos ceased. In his Honour's view a term needed to be imported into the contract to give it business efficacy. The term was that Mr. Smith's entitlement to use the name "Enzed", and the two logos and otherwise to represent his business as being affiliated with or associated with the Enzed qroup subsisted only so longa as did his distributorship. Once the contract was terminated, so was his riaht to use the name and the

His Honour concluded that the first respondent's conduct after August 1982 was misleading or deceptive within the meaning of s. 52 of the Trade Practices Act and that it did represent that it had a sponsorship, approval or affiliation it did not have and was thus also in breach of para. 53(d) of

a ania penne ee ae oa See, co remmtalie faba penabadsiiae

"The misleading and deceptive conduct was in Wynthea's continuing to carry on business under the name 'Enzed Hydraulic Hose &

Coupling Service', and by continuing to use ""the- two logos, the vans, documents, promotional and other literature all styled ~ either as 'Enzed' or as being in some way associated or affiliated with it and as representing that its business was that of 'Enzed'. Also Mr. Smith should have taken steps to remove the telephone entry 'Enzed Hydraulic Hose & Coupling Service' before the end of May 1981 (sic. 1982)(which was the deadline for inserting material for the 1982 Perth White Pages). After September 1981, at the latest, Mr. Smith had no right to carry on business as 'Enzed Hydraulic Hose & Coupling Service'. It was certainly open to him to sell Enzed preducts if he could obtain them and to state that he was a seller of them, but he wag not entitled to assert that he continued to be in effect the 'Enzed' Western Australian distributor."

The next matter his Honour considered was the effect of the agreement made in August 1982. In his Honour's view the aqreement did not purport to settle the whole dispute between the parties. He thought that the agreement must be taken as dealina with the matters mentioned in the agreement and with no others. Thus his Honour rejected a submission made on behalf of the appellants that the aqreement extended to require Mr. Smith not to use the drawing logo and a submission of the respondents that anything not dealt with in specific terms by the agreement "assumes that Mr. Smith was in effect given a licence to carry on his business ina manner which otherwise would constitute a violation of the

As earlier mentioned, the August agreement was complied

with. But Mr. Smith continued to use the drawing logo and

the entry, Enzed, remained in the 1982 edition of the white

pages of the telephone directory. Mr. Smith continued to use the drawing logo until the giving of the undertakings to the Court on 24 August 1983 soon after the commencement of the proceedings. His Honour was thus satisfied that between September 1981 and 24 August 1983 the first respondent engaged in conduct which contravened both provisions of the

Trade Prattices Act which were relied upon by the appellants.

His Honour next turned to the question of whether he should grant permanent injunctive relief. 'He referred to the fact that there had been no offending conduct after 24 Auaqust 1983. But he also said that at the time the proceedings were commenced, the first respondent was acting in contravention of the two provisions so that the undertakings qiven to the Court still left open the possibilitv of conduct being committed by the respondent which would constitute a contravention. His Honour emphasised that it was essentially the public interest that he was considering and not merely the interests of the appellants. He concluded that it was in the public interest that injunctions be granted to restrain the first respondent from engaging in misleading or deceptive conduct in its business of selling and servicing hydraulic

hoses and couplings and associated qoods bv representing that

its business was associated with the business of the appellants or any of then. He also thought that similar relief: should be granted against Mr. 'Smith but not Mr. Cooper. As mentioned, his Honour did not find it necessary

to deal separately with the claim based on passing off.

His Honour then dealt with the question of copyright. We need not mention any part of his judgment on the question of copyright except that which is raised for consideration by the cross-appeal. There was no argument that the drawing logo was not an artistic work, that copyright did not subsist in it or that the copyright had not been infringed. It was

nevertheless submitted by counsel for the respondents that the second appellant was not a competent applicant because it was not the owner of the copyright. The second appellant had commissioned Mr. Anderson to design the logo. He was thus the author of the work and the owner of the copvright. He wag not a party to the proceedings with the result that the cause of action based on infringement of copyright should fail. His Honour rejected the submission. He heid that the second appellant was a competent applicant in the circumstances of this case by reason of the provisions of the New Zealand Copyright Act which by sub-sec. 9(3) confers ownership of copyright upon a person who has commissioned a work. Whether his Honour was correct in applying the New Zealand law is the question that arises for consideration.

question "of damages. He said that the appellants took as the starting. point for their claim a budget prepared before Contender commenced business, as amended by a supplementary budget prepared in October 1982. His Honour said that the appellants asserted that the budget as amended was a reasonably accurate forecast of anticipated sales and profits of the fifth appellant. As its-actual sales were lower, the difference represented the base from which any computation of loss or damage flowed. After a lengthy analysis, his Honour concluded that neither the original budget nor the budget as amended provided a reliable base for the determination of any

damage suffered -by Contender by reason of the respondents'

conduct. Nevertheless his Honour went on to consider the claim for damages on the assumption that. notwithstanding his findind, the budget as amended did provide a reliable basis

He said that from the commencement of its tradina activities Contender had fared poorly. Figures for September and the first half of October 1982 were 50 per cent behind the initial budget figures. His Honour concluded that Contender's performance was due to a number of factors, some of which he specified, although making it clear that the list was not exhaustive. The list was not formulated in any order

of priority. Eight factors were mentioned. Seven related to

matters quite unconnected with any conduct on the part of the respondents. They were that the Western Australian market for hydraulic hoses, couplings and fittings was highly competitive, the Enzed pricing policy prevented Contender from granting any substantial discounts, Contender was not efficiently managed, there was a rather unhappy working environment in Contender, it did not obtain the benefit from the International Harvester Group of companies which it had expected, original equipment manufacturers tended to supply customers: with spare parts, and the market for hydraulic hoses, couplings and fittings was not buoyant during much of the period after September 1982. His Honour's fina] factor which involved conduct on the part of the respondents was

"(h) Competition provided bv Cc. & Ss. probablv had some adverse effect on Contender''s business. The problem in this case is that it is impossible to state the extent to which the activities of the respondents caused loss or damage to Contender's business. The matters which I have mentioned as having some bearing upon the poor performance of Contender's business are not capable of being treated piecemeal.

They must be viewed together. I accept that C. & S. caused some loss or damage

calculate the amount of that loss or, indeed, the basis on which it can be determined or measured. Any attempt to determine that loss would be sheer speculation."

After specifving the various matters to which we have

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referred his Honour said, "I am not satisfied, however, that

any substantial loss or damage was suffered by Contender by

After referring to some other matters, his Honour stated

"I am not satisfied therefore that, even if it were legitimate to regard the amended

_ budget of Contender as a reliable base from which to determine ioss or damage resulting from the activities of the respondents, it could be said with any confidence that any such loss or damage is attributable to the conduct of the respondents. The reality is that Contender' s poor performance is essentially due to causes other than any competition presented by the respondents. In addition, it is impossible to say to what extent any diminution of Contender''s business due to the competition of C. & S. can he further severed into legitimate competition and competition attributable to the unfair trade practices of C. & S."

In the result, although the applicants succeeded in their claim for injunctive relief against the respondents, they failed in their claim for damages. It was largely for

this reason that his Honour refused to make any order for

In their cross-appeal the respondents attacked almost all his Honour's conclusions. They contended that they were entitled to continue to use the Enzed name and the drawing

logo after the Auqust 1982 agreement. They disputed his

Honour's finding that the original franchise agreement had come to anend by September 1981 and they submitted that, whether it had" by then come to an end or not, they continued to have the right to use the Enzed name and the logos. These rights were affected by the August 1982 agreement but only so far as was specifically provided. They contended that the August 1982 agreement was intended to bring about a full settlement of all disputes and that what it did not forbid they-were entitled to do.

Having given these various submissions due consideration, we are satisfied that they should be rejected: No error is disclosed in that part of his Honour's judgment

Counsel for the- respondents analyzed the consumer evidence. He said that it disclosed confusion in only one or two cases. These were said to be of a minor kind. We think there is force in this submission, but that does not warrant interference with any of his Honour's findings earlier quoted

"The evidence of the consumer witnesses was relevant to the issue of misleading or

deceptive conduct (also to passing off), but, as has been said more than once by the courts, the determination of these questions ultimately rests with the Court and its assessment of the evidence as a whole."

In other words it was for the Court to determine objectively whether the conduct in question was misleading or deceptive

We have considered the evidence and looked at a number of the exhibits including photographs of the respondents' vans and facsimiles of business cards and stationery which were used. There is also the matter of the entry in the 1982 white pages of the telephone directory. The get-up of the vans ag shown in the photographs has a substantial similarity to that used on Contender's vans. The same is true of business cards and other stationery. As in all these case' one must make a value judqment. One must bear in mind that it is unlikely that members of the public, whether those who are likely to have dealings with either of the parties or not, will see the two vans together so that they are able to make comparisons. Having considered his Honour's findinas on this part of the case we see no reason to disturb them.

Much was said of his Honour's finding that the principal problem was caused by the existence of the entry in the 1982 white pages of the telephone directory. His Honour's conclusion in this regard no doubt stemmed to a large extent from his consideration of the consumer evidence to which we have earlier referred. Undoubtedly his Honour's primary

finding in this regard was well open. But the respondents

said that they had come to meet a case which was based on misleading or deceptive conduct having occurred over the period September 1982 to August 1983. For an entry to be changed, in the white pages, instructions had to be given to Telecom no later than the end of May 1982. It was no part of the appellants' case, so the respondents said, to complain of conduct which had occurred as early as May 1982. That was particularly s0 bearing in mind that Contender did not

His Honour found, (correctly, as we have said), that the original distribution agreement with Mr. Smith came to an end no later than September 1981. The' respondents were not thereafter entitled to use the Enzed name or either of the loaos. They were therefore under an obligation to remove the name from the telephone book as soon as reasonably possible. They could have done so at any time up to the end of Mav 1982. It follows that the entrv in the telephone book as 1t was in the period of twelve months or so prior to August 1983 Was anentry which the respondents were obliged to have removed and which they could have removed if they had taken action in time. They did not remove it, so it seems to us, because they considered themselves entitled to continue to

use it. Their belief in this regard was ill-founded.

The presence of the entry in the telephone book was, in

his Honour's view. "the major source" of the confusion

between the two organizations. More importantly, its

presence had the effect or was likely to have the effect of misleading persons dealing or intending to deal with one or other of the two businesses. Because of their erroneous belief, the respondents failed to take steps to remove the entry well aware that it would remain as an indication of their business name in Western Australia throughout the life of the 1982 white pages. In our opinion, the whole of these circumstances constituted misleading or deceptive conduct on the part' of the respondents. As a result of it the respondents achieved a situation in which the offending entry remained in the white pages throughout the period of 12 months ending about the time of the giving of the undertakings in August 1983, that is, the period during which the respondents agree the appellants did assert misleading or deceptive conduct on their part. For that reason no error is disclosed in his Honour's taking into account the entry in the telephone book as part of the misleading or deceptive conduct in which the respondents enaqaged during the period

Our conclusion in this reqard avoids the necessity of considering whether the appellants did conduct their case upon the basis of misleading or deceptive conduct occurring prior to Auqust 1982. Counsel were not at one in relation to that matter. All we would say is that if the appellants did

confine their case to the period after August 1982, thev were

nevertheless entitled to rely upon the entry in the 1982 telephone book as part of the misleading conduct of the respondents during that period.

Then it was submitted that the appellants had no reputation in Enzed products in Western Australia. It was common ground that the relevant market was the Western Australian market and not the Australian market generally. Counsel for the respondents pointed to the fact that the first two-appellants carried on business only in New Zealand and the third and fourth were in Victoria. Contender did not commence business until September 1982 at the beginning of the period when the: offending conduct " was alleged to have

Counsel for the appellants submitted that reputation was irrelevant. That is not a matter we find necessarv to deal with. If reputation is required, there is ample evidence of it. Enzed products were marketed in Western Australia by companies associated with Mr. Smith between Mav 1980 and about April 1981 or a little later. Prior to 1980 they had been marketed by other companies as well. Mr, Smith's marketing was carried out under the Enzed name and logos. He continued to use the name and both the logos until August 1982, and the name (in the telephone book) and drawing

"logo until August 1983. The inference is open and should be

drawn that during the whole of this period he was purporting

to represent the Enzed group and to be selling products which

were either Enzed products or products sponsored by it.

Those products had had a market in Western Australia since before 1980.

In passing off cases a plaintiff needs to establish reputation in the country or part thereof where the passing off is alleged to have occurred. But this does not require the _plaintiff to be present or to be himself carrying on

"pusiness « in that place. It is the existence of the reputation in that place which is the deciding factor. No doubt Contender developed no reputation until after it began to trade in September i982. But the Enzed group had a reputation for their business and their products in Western Australia at all material times. The evidence is clear that the respondents sought to take what advantage they could from that reputation by continuing to use the Enzed name and the logos. We would therefore reject the submission that the appellants had no reputation in Western Australia at the

. Counsel for the appellants submitted that his Honour erred in granting permanent injunctive relief. Upon the basis of the conclusions which we have so far reached we are of opinion that such a_ submission has no substance. The respondents were carrying on the offending conduct until

restrained bv the undertakinas which thev qave the Court once

27, the proceedings had been commenced and an application for interlocutory relief was on foot. If it had not been for the proceedings, it would seem probable that the conduct would have continued. We are reinforced in that conclusion by a consideration of some of the principal submissions upon which the respondents relied. It was their case that they were entitled to use the drawing logo and to maintain the name Enzed in the telephone directory. This seems tous to indicate that if they had not been restrained by the

interlocutory relief, and subsequently the permanent relief, they would have continued with the conduct of which the

Next it was submitted that no relief should have been qranted aqainst Mr. Smith. It was said that he was the person for whose conduct Wynthea Pty Limited was held to be vicariously liable and could not therefore himself be made liable as an accessory. Reliance was placed upon dicta in Mallan v. Lee (1949) 80 C.L.R. 198 per Dixon J. (as he was)

In Mallan v. Lee the company's liability was vicarious. It would not be in breach of s. 230 of the Income Tax Assessment Act 1936 unless its public officer knowingly and wilfully understated on its behalf the amount of income which it derived. Here the legislation is quite different. The

Court's power to grant injunctive relief is provided for in

s. 80 of the Trade Practices Act. The Court is, inter alia, empowered. to grant such relief against a person who is engaged in; "or is proposing to engage in, conduct that constitutes or would constitute a contravention of a provision of Part V of the Act in which ss. 52 and 53 appear. The Court also has power to grant an injunction restraining a person from aiding, abetting, counselling or procuring a person to contravene such a provision or from being in any way knowingly concerned in, or party to, the contravention by a person*'of such a provision. In our opinion the section conferred clear power upon his Honour to grant injunctive relief against Mr. Smith. The misleading or deceptive conduct was that of Wynthea Pty. Limited. Mr. Smith procured that conduct and was knowingly concerned in Wynthea's contravention of the Act. His Honour did not award damages. But s. 82 of the Trade Practices Act when read together with s. 75B conferred power on the Court to make an award of damages aqainst Mr. Smith if damages were found proved. We

would therefore reject the submission concerning Mr. Smith's

'80 far as the cross-appeal is concerned that leaves the question of copyright to which we now come. Lockhart J. found that the drawing logo was an artistic work, the author of which was Mr. Anderson, a resident of New Zealand. Mr. Anderson was commissioned and paid in New Zealand to make the

drawing for the second appellant. The learned primary Judge

also found that under New Zealand law the second appellant

After a consideration of ss. 115 and 184(1)(a) of the

"In my opinion the Copyright (International Protection) Requlations operate to entitle

_. the second applicant to sue under s. 115 of the Australian Act, as owner of the copyright, for its infringement. One turns to New Zealand law to determine whether the second applicant is the owner of the copyright: see in particular 3s. 9 of the New Zealand Copyright Act.

The question is whether it was competent for the second appellant to sue for an infringement of copyright. Difficulty arises because the Australian and New Zealand Copyright Acts contain different provisions concernina the ownership of the copyright in commissioned work. Sub-section 9(3) of the Copyright Act 1962 (N.Z.) provides, in effect, that where a person commissions, inter alia. the making of a drawing-and pays or agrees to pay for it in money or money's worth and the work is made in pursuance of that commission, the person who commissioned the work shall be entitled to any

Section 35 of the Australian Act provides for the

ownership of copyright in original works. Subject to the section; the. author of a literary, dramatic, musical or artistic work is the owner of any copyright subsisting in the work by virtue of "this Part". Section 35 appears in Part IIIT which is headed, "Copyright in Original, Literary, Dramatic, Musical and Artistic Works." Sub-section 35(5) provides that where a person makes for valuable consideration an agreement with another person for, inter alia, the drawing of a portrait or the making of an engraving by the other person and the work is made in pursuance of the agreement, the first mentioned person is the owner of the copyright. There was- no submission in the present 'case that the drawing logo was a portrait or an engraving; it would seem that no such submission could have been successful (see the definition of "enaravina" in sub-section 10(1) and Ricketson.

Section 32 deals with original works in which copyright subsists. It distinquishes between published and unpublished works. The drawing logo is a published work. In the case of such. a work, copyright. subsists in it only if the first publication of the work took place in Australia and the author of the work was a qualified person at the time when the work was first published. "Qualified person" means in effect an Australian citizen or a person resident in

Australia. Thus s. 32 read in isolation would mean that no

Australian copyright could subsist in the drawing logo because the first publication took place in New Zealand and the artist (i.e. the author), Mr. Anderson, was not a

However, 3. 32 commences with the words, "Subfect to this Act". It is necessary to read it in conjunction with certain of the provisions of Part VIII of the Act. That Part is entitled, "Extension or Restriction of Operation of Act". Section '184, which is one of the sections in Part VIII,

"184.(1)Subfect to this section, the regulations may make provision applying any of the provisions of this Act specified in the regulations, in relation to a country (other than Australia) so specified, in any one or more of the following ways:

(a)so that the provisions apply in relation to literary, dramatic, musical or artistic works or editions first published, or sound recordings or cinematograph films made or first published, in that country in like manner as those provisions apply in relation to literary, dramatic, musical or artistic works or editions first published, or sound recordings or cinematograph films made or first published, in Australia;

(c)so that the provisions apply in relation to persons who, at a material tine, are citizens or nationals of that country in like manner as those provisions apply in relation to persons who, at sucha

(d)so that the provisions apply in relation to persons who, at a material time, are resident in that country in like manner as those

provisions apply in relation to persons who, at sucha time, are

Regulation 4 of the regulations, so far as material, is as

Subject to these Requlations. the provisions of the Act applv in relation to literarv, dramatic, musical and artistic works and editions first published. and sound recordinas and cinematoqraynh films made or first published, in a country that constitutes. or forms part of. the territorv of a Country specified in Part I or Part II of Schedule I in like Manner as those provisions applv in relation to literary, dramatic, musical and artistic works and editions first published, and sound recordings and cinematograph films made or first published, in Australia.

Subject to these Requlations, the provisions of the Act relating to works

and other subject-matter apply in relation to persons who, at a material time, are citizens or nationals of a Country specified in Part I or Part II of Schedule I in like manner as those

provisions apply in relation to persons who, at a material time, are Australian citizens.

and other subject-matter apply in relation to persons who, at a material time, are resident ina country that constitutes, or forms part of, the territory of a Country specified in Part I or Part II of Schedule I in like manner as those provisions apply in relation to persons who, at a material time, are resident in Australia."

New: Zealand is a country specified in Part I of Schedule I to the Regulations. The effect of reg. 4 is that the provisions of the Australian Act apply in relation to the

drawing logo and Mr. Anderson. in like manner as_ the provisions apply in relation to artistic works first published in Australia and to citizens or residents of

Under the Copyright Act the only person who may bring an action for infringement is the owner of the copyright or an exclusive licensee thereof; ss. 115 and 119. Copyright mav be assigned or may devolve by operation of law: s. 196. There is no question of assiqnment or devolution by operation of law here. The question is whether the second appellant who commissioned Mr. Anderson to design the drawing logo may sue. In Australia it could only do so if it were the owner; it would not be the owner under Australian law; see sub-secs.

The question then is whether the operation of s. 184 and

At a glance

Court

Decision date

Before

Source

Judgment (268 paragraphs)