Melbourne Inner City Management Pty Ltd v Melbourne Inner City Developments... [2003] VSC 226 | Case summary

The plaintiff is a wholly-owned subsidiary of Central Equity Limited. It was established in 1993 to provide property management, corporate management and sales services with respect to completed Central Equity developments. It carries on business in the inner areas of Melbourne under its own name, and under other names which include Melbourne or Inner City or both. It employs over 70 full-time staff in seven offices, three in Southbank or nearby. It spends substantial sums on advertising, in much of which it identifies itself as a member of the Central Equity group.

Supreme Court of Victoria|2003-06-16|Before: Teague J

Passing off - Claim of misleading or deceptive conduct under the Trade Practices Act 1974 (Cth) - Application for interlocutory injunction dismissed.

These are my reasons for dismissing with costs an application for an interlocutory injunction. The application was heard in the Practice Court on 16 June 2003. Mr Gilbertson of Counsel appeared for the plaintiff, Mr Tsalanidis of Counsel for the defendant. The principal affidavits relied on were from Mr Otto, Director and Secretary of the Plaintiff, and Mr Moustafa, Director and Secretary of the defendant. Mr Gilbertson sought leave, which I granted, to cross-examine two deponents. One was Mr Moustafa. The other was Mr Hotchkin, the accountant engaged by Mr Moustafa to incorporate the defendant.

The plaintiff is a wholly-owned subsidiary of Central Equity Limited. It was established in 1993 to provide property management, corporate management and sales services with respect to completed Central Equity developments. It carries on business in the inner areas of Melbourne under its own name, and under other names which include Melbourne or Inner City or both. It employs over 70 full-time staff in seven offices, three in Southbank or nearby. It spends substantial sums on advertising, in much of which it identifies itself as a member of the Central Equity group.

The defendant was incorporated in November 2002. Shortly before that, Mr Moustafa had agreed to purchase a property at 285 City Road, South Melbourne. The property was ready for development as apartments with plans and permits in place. The purchase arrangements allowed for a nominee to be purchaser. Mr Moustafa and a business partner Mr Demir contacted Mr Hotchkin, their accountant, to arrange for a company to be incorporated to be the nominee. There was some discussion as to names. Mr Hotchkin searched for availability in one of the appropriate indexes. The first preferred name: "Southbank Developments Pty Ltd" was not available. Likewise, the second preference. Mr Hotchkin ascertained that "Melbourne Inner City Developments Pty Ltd" was available. He sought and was given instructions to incorporate using that name. Within a month, the defendant registered the business name "Dominion Lifestyle Tower Apartments" for the purpose of marketing the apartments. Brochures with the Dominion name were prepared. Advertising was undertaken, using the Dominion name. In late November, the plaintiff's Mr Otto learned of the incorporation of the defendant and contacted the plaintiff's solicitors, Holding Redlich. On 4 December, a letter was sent to Mr Moustafa by Holding Redlich. The letter spelt out what Holding Redlich asserted would be conduct which should not be engaged in by the defendant because such conduct would be seen to amount to an infringement of the Trade Practices Act 1974 (Cth) and the common law of passing off. Shortly after that, there was a telephone conversation of very limited significance between Mr Pullen of Holding Redlich and Mrs Demir.

On or about 21 May 2003, a letter dated 15 May 2003, addressed to the defendant at 285 City Road, South Melbourne, was delivered to the plaintiff's principal office at 365 Queen Street, Melbourne. That apparent mistake by the postal authorities led to Holding Redlich again writing to Mr Moustafa. The threat of proceedings was made unless demands made as to restraints were agreed to. Solicitors for the defendant responded rejecting the demands. Hence the issue of a writ and a summons seeking an injunction restraining the defendant from "carrying on or being engaged in a business of marketing, developing and/or selling residential apartments in the inner city and/or inner suburban areas of Melbourne under a name or style that consists of or includes the expression "Melbourne Inner City".

I need not set out at length the applicable legal principles as to each of injunctions, passing off and claims under the Trade Practices Act 1974 (Cth) of misleading and deceptive conduct. As to the first, I refer to Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 398, Castlemaine Tooheys Ltd v The State of South Australia [1986] HCA 58; (1986) 161 CLR 148, and National Mutual Life Association of Australasia Ltd v GTV Corporation Pty Ltd [1989] VicRp 66; [1989] VR 747. In short, I must assess whether there is a serious question to be tried, and where does the balance of convenience lie. As to the second, I refer to Erven Warnink Besloten Vennoorschap v Townsend & Sons (Hull) Ltd [1979] AC 731, Moorgate Tobacco Co Ltd v Philip Morris Ltd [1984] HCA 73; (1984) 156 CLR 414, and Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261. In short, I must assess whether there is goodwill or reputation in a particular business, and a misrepresentation of a connection between that business and another, and damage or the threat of it. As to the third, I refer to Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, Taco Company of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177, Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 180; (1984) 2 FCR 82, and Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1986) 12 FCR 375. In short, I must assess whether there is conduct which is likely to mislead or deceive as to a name that has acquired a distinct reputation with a relevant section of the public.

In my assessment there is not an issue to be tried on either basis of the plaintiff's claims. The choice of name had the potential for customers being misled or deceived. However, the way in which the defendant has chosen to operate through its Dominion business name effectively eliminated that potential. On the evidence before me, no intention to deceive or mislead could be inferred. There is no basis for my finding that there was anything in the nature of a deliberate ploy to misrepresent the plaintiff as having a connection with the plaintiff. As the common names of both parties suggest, they operate in a particular area, the inner city area of Melbourne. What distinguishes them, as the fourth word in each name makes clear, is that the plaintiff manages property, the defendant develops property. Mr Gilbertson sought to argue that the plaintiff's claim for a wide protection was justifiably enhanced by reasons of its links with Central Equity in the sphere of development. It may be that, in an appropriate case, some extension can be seen to be appropriate. However, I am troubled about the potential for that approach to be capable of shutting out the combined use of geographically and business orientated words in an overly wide way. That smacks of over-restrictive monopolisation. The remedies in passing off and under the Trade Practices Act 1974 (Cth) are calculated to achieve an appropriate balance. Further, on the material before me, there is no evidence of actual damage. There is minimal evidence to indicate the character of the potential for the plaintiff to suffer damage. It appears to lie in the field of what is referred to, almost incidentally, as "secondary sales". The way in which the plaintiff is so involved, and might suffer harm, is not made clear.

Even if my assessment on the question of whether there is an issue to be tried was astray, I would not grant relief having regard to the balance of convenience. If damage can be proved, an award of damages would, in my opinion, be an appropriate remedy. As I have noted, the plaintiff is only potentially suffering damage if no restraint is imposed. On the other hand, if a restraint were to be imposed, the defendant would have to materially change a considerable range of documentation linked to its being the owner of the apartments, which are being marketed in the Dominion name. For these reasons, I made the order dismissing the application.

Melbourne Inner City Management Pty Ltd v Melbourne Inner City Developments Pty Ltd [2003] VSC 226

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