Mortgage House of Australia Pty Ltd v Mortgage House International Pty Ltd

The applicants' opening on the facts 3 The first applicant, Mortgage House of Australia ('MHA'), was incorporated on 4 February 1998, and, since 1 April 1998, has conducted business as a mortgage broker and a mortgage originator. MHA was the successor to the business of the third applicant, One Australia Pty Limited ('OA'). From March 1994 until April 1998 OA conducted business, inter alia, as a mortgage broker under the name 'Mortgage House of Australia'. The second applicant, Mr Sayer, is the sole director of MHA and the sole shareholder of OA. Since 16 August 2001, he has been the registered owner of the trade mark sued upon, namely, Australian Trade Mark No. 885894 'Mortgage House of Australia The Banking Alternative' (word and device), registered in Class 36 in respect of mortgage banking, lending against security, financial affairs, and monetary affairs ('the Trade Mark'). 4 The first respondent, Mortgage House International Pty Limited ('MHI'), was incorporated on 5 January 1999 under the name 'Mortgage House of Asian'. On 17 January 2000, MHI changed its name to 'Mortgage House International'. The second respondent, Dong Yu Xing, is the sole director, secretary and a shareholder of MHI. 5 By their Amended Statement of Claim ('AS/C'), the applicants allege that MHI has engaged in conduct in breach of the TPA by: (a) Use of the words 'Mortgage House' in the name 'Mortgage House International'; (b) use of the trading name 'Mortgage House International'; (c) use of the email address mortgagehouseinternational@yahoo.com; and (d) registration of a business name 'Mortgage House' on 22 May 2003. 6 It is further alleged that by advertising the provision of mortgage broking services under the name 'Mortgage House International Pty Ltd' in advertisements, in a form (a copy of which is annexed to these reasons) MHI has infringed the Trade Mark. 7 It is further alleged that Ms Xing, as the sole director and shareholder of MHI, is responsible for, has been directly and knowingly concerned with, and is a party to, the contraventions of the TPA by MHI. 8 According to the applicants, a 'mortgage broker' is engaged in the business of assisting customers who desire to borrow mortgage funds by preparing loan applications for them for submission for approval to a lender. A mortgage broker will generally work as an approved seller or agent for one or more mortgage originators, who have funds available for the provision of mortgage loans. Thus, a mortgage broker will generally introduce a borrower to a mortgage originator, which will then consider an application by the borrower for mortgage finance. If it is approved, the mortgage broker will receive a commission from the mortgage originator. 9 There is a history of association between the parties extending back to the beginning of 1998. 10 OA began offering mortgage broking services in 1994 under the name 'Mortgage House of Australia'. In the period from 1994 until March 1998, OA secured hundreds of commissions for introducing prospective mortgage borrowers to various mortgage originators, including Citibank and ING. 11 In 1998, MHA was incorporated and began trading under the name 'Mortgage House of Australia'. It provided an expanded range of services to those supplied by OA. It began to offer loans to customers as a mortgage originator as well as the provision of mortgage broking services and other services. 12 MHI was incorporated in January 1999. At the beginning of 1998, MHI's principal, Ms Xing (the second respondent), was engaged in offering mortgage broking services with particular emphasis on Sydney's Chinese community. Ms Xing first offered mortgage broking services under the business name 'Asian Mortgage House' in February - June 1998 by the placement of advertisements in the Australian Chinese Times (a Chinese language newspaper). 13 During 1997, Ms Xing had met one of the founders of MHA, Mr Lee Boueri. In 1998, Mr Boueri introduced Ms Xing to Mr Sayer as a person who could introduce potential mortgage borrowers to MHA, which would then consider their loan applications and, if approved, become the mortgage originator. In return, Ms Xing would receive a commission. 14 Sometime after this, the parties entered into an agreement whereby Ms Xing was permitted by MHA to advertise mortgage broking services under the 'Mortgage House of Australia' name. It is the applicants' contention that this was in circumstances where broking services offered would be for MHA. Ms Xing contests this, and asserts that MHA did not require that she devote her time to the provision of broking services to MHA, but rather that she could provide broking services for other lenders. 15 From July 1998 until at least December 1999, Ms Xing arranged for the placement of advertisements under the name 'Mortgage House of Australia' in the Chinese language press in Sydney. Ms Xing submitted a number of advertisements to MHA for approval before they were published. In all of the advertisements, the address given for the business advertised was that of MHA. 16 From about July 1998 until early 2000, MHA paid commissions to Ms Xing for loans that she introduced to it, and which were subsequently approved, and paid for the advertisements that Ms Xing lodged (although Ms Xing contends that some advertisements have not been paid for). During much of that time, Ms Xing operated from MHA's offices. 17 It is the applicants' contention that, from July 1998, all of the advertising done by the respondents as agent for MHA, and of the use of the 'Mortgage House of Australia' name, was for the benefit of MHA. 18 In late 2000 or early 2001, Mr Sayer noted that the volume of mortgage introductions provided by Ms Xing had diminished and 'confronted' Ms Xing. She replied that she was 'doing business' with other lenders, such as St George and Suncorp Metway. As a result, Mr Sayer informed Ms Xing that she was no longer authorized to use the 'Mortgage House of Australia' name. 19 Ms Xing contends that, in about March 2001, she obtained the business name registration for 'Mortgage House International'. Advertisements dating from October 2002 indicate that MHI has, at least since then, been promoting mortgage broking services to the Sydney Chinese speaking community under that name.

The relief claimed in the applicants' application 20 Against MHI, the applicants claim: 1. An order under s 126 of the TMA restraining the sale (etc.) of mortgage broking services (etc.) under or by reference to: (a) the name 'Mortgage House International'; (b) any other name which includes the name or mark 'Mortgage House'; and (c) any other name which is substantially identical (etc.) with the Trade Mark. 2. An order under s 80(1) of the TPA to similar effect. 3. An order under s 80(1) of the TPA restraining the supply (etc.) of services (etc.) representing (to the public) sponsorship (etc.) by MHA. 4. An order restraining the passing off of services (etc.) as connected with (etc.) MHA. 21 As against Ms Xing, the applicants claim orders restraining Ms Xing from aiding (etc.) MHI in engaging in the above conduct. 22 Orders for delivery up and damages are also claimed, although, as mentioned, at this stage, only liability is in issue.

The issues disclosed in the pleadings 23 The pleadings are complex and thus call for a detailed explanation. 24 By their AS/C, the applicants allege (and this is admitted) that, since 26 March 1998, Mr Sayer is, and has been, MHA's managing director (AS/C par 2); and that (and this is also admitted) Ms Xing is, and was at all material times, MHI's sole director, secretary and shareholder (AS/C par 5). 25 The applicants further allege (AS/C par 6) that MHI has carried on the business of promoting, offering for sale and selling mortgage broking services and related services. The respondents admit (Amended Defence ('AD') par 6) that MHI has carried on the business of promoting, offering to supply and supplying mortgage broking services to the Asian community in Sydney.

The trade mark claim 26 Mr Sayer has, since 16 August 2001, been the registered proprietor of the Trade Mark (AS/C par 7). 27 MHA has, since 16 August 2001, been an 'authorised user' (under s 8 of the TMA) of the Trade Mark which is valid and subsisting (AS/C pars 8, 9). These allegations are not admitted by the respondents (AD pars 8 - 9). 28 It is alleged that MHI has used marks substantially identical with (etc.) the Trade Mark to promote (etc.) its services (etc.), being services (etc.) in respect of which the Trade Mark is registered. Particulars of this alleged use include use of the trading name 'Mortgage House International Pty Ltd', and registration, on 22 May 2003, of the business name 'Mortgage House' (AS/C par 10). These allegations are denied (AD par 10.1) and the respondents further plead, first, that on 7 January 1998, Ms Xing's partner, Edward Mason, became registered as carrying on business under the name 'Asian Mortgage House'; and in 1998 Ms Xing and Mr Mason used the name to provide mortgage broking services to the Asian community in Australia (AD par 10.2(a)). 29 By their Reply ('R') the applicants allege that from 18 to 20 December 1997, Ms Xing was registered in NSW as carrying on business under the name 'Asian Mortgage House'; that Mr Mason was, from 7 January 1998 until its removal on 18 December 2000, so registered; and admit that from 5 January 1999 to 17 January 2000, MHI's corporate name was 'Mortgage House of Asian Pty Ltd' (R par 2). 30 By their Rejoinder ('RJ'), the respondents admit these allegations, but further allege that at the suggestion of Mr Boueri (who later became a director of MHA), Ms Xing changed the registration into Mr Mason's name; that from January 1998, Ms Xing carried on business under the name 'Asian Mortgage House'; and that the respondents did not need the applicants' permission to use the names 'Mortgage House of Asia' or 'Asian Mortgage House' or 'Mortgage House International' (RJ par 2). 31 By their Surrejoinder ('SRJ'), the applicants admit that from 5 February 1998 to 25 June 1998, Ms Xing advertised mortgage broking services in the Australian Chinese Times under the name 'Asian Mortgage House'; but otherwise deny that Ms Xing carried on business under the name 'Asian Mortgage House'; and the applicants further allege that after June 1998 Ms Xing ceased to use the name 'Asian Mortgage House'; that from July 1998 to January 2000 Ms Xing (and after January 1999, MHI) used the name 'Mortgage House of Australia'; and that from July 1998 until at least March 2000, Ms Xing (and from January 1999, MHI) used the name 'Mortgage House of Asia' (SRJ par 2). 32 Furthermore, the respondents plead that since its incorporation on 5 January 1999, MHI has continuously used the names and marks including the words 'Mortgage House', 'Asian Mortgage House', 'Mortgage House of Asian' and 'Mortgage House International' in conducting the business of offering mortgage broking services to the Asian community in Australia, and in particular to the Chinese speaking community in Sydney (AD par 10.2(b)). The respondents plead that, in the event any of the above marks are held to be substantially identical with (etc.) the Trade Mark (which the respondents deny), MHI has continuously used an unregistered trade mark before its registration date (16 August 2001) so that, by virtue of s 124 of the TMA, the Trade Mark was not infringed (AD par 10.2(c) and (d)). By their Reply, the applicants deny these allegations (R par 2(c)). 33 In their AS/C (par 11), the applicants further allege that the activities of MHI alleged in AS/C par 10 were undertaken without the licence, approval or authority of the applicants. The respondents answer by repeating AD par 10 and say further that no such question of licence, approval, or authority of the applicants arises. 34 The applicants then allege that MHI has used, as a trade mark, signs that are substantially identical with (etc.) the Trade Mark and thus has infringed s 120(1) of the TMA (AS/C pars 12, 13).

35 The respondents deny these factual allegations (AD pars 12 - 14) and rely also upon their Amended Defence (AD par 21 (a) - (f)). The respondents allege that from 5 January 1999 to 17 January 2000, on the express directions of the applicants, MHI used the name 'Mortgage House of Asian' (AD 21(a)); and on 28 August 1999, MHA (by Mr Sayer) and MHI (by Ms Xing) signed an agreement confirming MHI's entitlement to trade as 'Mortgage House of Asian', and that MHI had a 'right of first refusal' to conduct the 'franchise' business (i.e. business as Mortgage House) amongst the Asian community (AD 21(b)).

36 These allegations are denied by the applicants (R par 9) who say that (a) in about July or August 1998, MHA granted Ms Xing permission to use the name 'Mortgage House of Asia' as agent for MHA subject to the conditions: (i) that, as agreed in conversation between Mr Boueri and Ms Xing, Ms Xing sell only MHA's products and supply only its services; (ii) that a copy of any proposed advertisement in Asia newspapers be approved by MHA; and (b) that, as was agreed in a conversation between Mr Sayer (on behalf of MHA) and Ms Xing (on behalf of MHI), permission to use the name 'Mortgage House of Asia' was revoked in late 2000 or early 2001 (RJ par 9). 37 In answer, the respondents allege (RJ par 4) that in the middle of 1998 MHA, through Mr Boueri, gave MHI permission to use the name 'Mortgage House of Australia' in advertisements in the Chinese language press in Australia, first submitted to Mr Boueri for approval; that in December 1997 or January 1998, Mr Boueri (subsequently MHA's founding director) was aware of the fact that Ms Xing intended using the name 'Asian Mortgage House'; that Ms Xing used that name in 1998, advertising it from February to June 1998; that in January 1999, MHI was incorporated under the name 'Mortgage House of Asian Pty Ltd' and from that date used that name and 'Mortgage House of Asia'; that in January 2000, MHI changed its name to 'Mortgage House International Pty Ltd' and from that date used this name; and that at no time was any permission to use the name 'Mortgage House of Asia' or any other name including the words 'Mortgage House' revoked (RJ par 4). 38 In response, the applicants restate that although Mr Boueri gave permission to Ms Xing to use the name 'Mortgage House of Australia', this was conditional upon performance by Ms Xing of conditions (i) and (ii) above, and say that revocation occurred either expressly (as alleged above) or automatically upon failure to comply (SRJ par 4). The applicants deny that MHA was aware in December 1997 or January 1998 that Ms Xing intended to use the name 'Asian Mortgage House' (SRJ par 4(b)). The applicants deny that OA was aware of or approved the use by Ms Xing of the name 'Asian Mortgage House' (SRJ par 4(c)). 39 Further, the respondents say that from 17 January 2000 until at least 4 March 2003, on the express direction of the applicants, MHI used the name 'Mortgage House International' (AD par 21(c)). The applicants deny this and say that they were unaware of this use until February 2003 (R par 10). 40 The respondents also say that since at least March 1998, and before any advertising by the applicants, MHI has extensively advertised the names 'Asian Mortgage House', 'Mortgage House of Asia', 'Mortgage House of Asian' and 'Mortgage House International' exclusively to the Asian community in Australia and, in particular, to the Chinese speaking community in Sydney. In those communities, prior to any reputation established by the applicants (which is not admitted), MHI acquired goodwill (etc.) such that substantial numbers of the public recognised services under the above names as emanating from a single source, i.e. MHI (AD 21(d); 19 - 20(a) - (c)). The applicants deny these claims and assert that MHI was registered on 5 January 1999 (R par 6). 41 In further reply to AD pars 19 - 20(a) to (c), the applicants say that to the extent the respondents used (etc.) a name containing the words 'Mortgage House', such use was to the benefit of the goodwill and reputation of the applicants and not the respondents (R par 8). The respondents answer by admitting that use of the name 'Mortgage House of Australia' was to the applicants' benefit (etc.); but that MHI's use of the names 'Asian Mortgage House', 'Mortgage House of Asia', 'Mortgage House of Asian' and 'Mortgage House International' was to the respondents' benefit (RJ par 3). The applicants say that the uses by the respondents of the names 'Mortgage House of Australia', 'Mortgage House of Asia' and 'Mortgage House of Asian' after June 1998 were uses made for and on behalf of MHI and to the benefit of the goodwill and reputation of the applicants in their 'Mortgage House' name and not the respondents (SRJ par 3(a)). In addition, the applicants say that the said uses were made with the consent of MHA on the conditions set out in R par 9 (SRJ par 3(b)).

The TPA claims and the passing-off claim 42 From 30 March 1994 to 1 April 1998, OA supplied mortgage broking house (etc.) services and was the registered owner of the business name 'Mortgage House of Australia' (AS/C par 15). This is, in essence, admitted (AD par 15). 43 From 30 March 1994 to 1 April 1998, OA extensively promoted (etc.) its service (etc.) under 'Mortgage House' names (AS/C par 16). These facts are denied (AD par 16). 44 MHA has operated as a mortgage broking house (etc.) since incorporation in February 1998 and, from April 1998 to March 2000, was the registered owner of the name 'Mortgage House of Australia' (AS/C par 17). Registration of the name is admitted but only in respect of the business of 'finance brokers' (AD par 17). 45 Since 1998, MHA has extensively promoted (etc.) its services (etc.) by reference to the names 'Mortgage House', 'Mortgage House of Australia', 'Mortgage House of Australia The Banking Alternative' and 'Mortgage House the Banking Alternative' (together, the 'Mortgage House Names') (AS/C par 18). But the respondents deny 'extensive' promotion (etc.) under those names and plead that MHA placed only one advertisement in 1998, and did not commence further advertisement (etc.) until at least 1999 (AD par 18). 46 The applicants have acquired an extensive (etc.) reputation (etc.) in each of the Mortgage House Names (AS/C par 19); and their use signifies to consumers that such services (etc.) are sourced from (etc.) MHA and, in the alternative, MHA and OA (AS/C par 20). These facts are denied (AD pars 19 - 20). In addition, the respondents plead the matters in pars AD 10.2 and 19 - 20(b) and (c), already mentioned above. 47 MHI has used a mark similar to each of the Mortgage House Names in relation to mortgage broking services (etc.) which are not sourced from (etc.) MHA (AS/C par 21). The respondents plead that between January 1999 to January 2000, on the express direction of one or more of the applicants, MHI used the name 'Mortgage House of Asian'; that in August 1999, MHA by Mr Sayer, and MHI by Ms Xing signed a written agreement confirming, inter alia, MHI's entitlement to trade as 'Mortgage House of Asian'; that MHI had a 'right of first refusal' to conduct the 'franchise' business (i.e. business as 'Mortgage House') among the Asian community; and that from January 2000 until at least 4 March 2003, on the express direction of one or more of the applicants, MHI used the name 'Mortgage House International' (AD par 21). In addition, the respondents plead pars 19 - 20(a) - (c) (mentioned above) and 21(f) (mentioned below). 48 The applicants deny consenting to the use of the name 'Mortgage House International' and further say that they were unaware until February 2003 that MHI used this name (R par 10). 49 The applicants allege that MHI's activities have been undertaken without the licence (etc.) of any of the applicants (AS/C par 22). In answer, the respondents again rely on AD par 21 and deny the applicants' allegations (AD par 22). 50 Further, and in the alternative, the applicants claim that MHI has, in trade or commerce in connexion with the supply (etc.) of goods (etc.), falsely represented to the public that (i) MHI promotes (etc.) mortgage broking services (etc.) which have the sponsorship (etc.) of MHA, or MHA and OA; and (ii) that MHI has the sponsorship (etc.) of MHA, or MHA and OA (A/SC par 23). 51 The respondents deny that the alleged representations were made (AD par 23(a)) and say that in the period up to at least 4 March 2003 pursuant to, inter alia, the agreement dated 28 August 1999 between MHA and MHI (referred to above), MHI provided mortgage broking services to members of the public, marketed MHA and introduced business to MHA from the Asian community. The respondents also repeat and rely on AD par 10. The respondents admit that since March 2003, MHI does not have the sponsorship (etc.) of MHA, nor promotes (etc.) services (etc.) which have the sponsorship (etc.) of MHA, either separately from or with OA (AD par 24).

The estoppel claim 52 The respondents plead an estoppel claim based on (i) an alleged express representation by MHA (through Mr Boueri) to MHI (through Ms Xing) that the respondents could and should use the name and trading style 'Mortgage House of Asian' in conducting the business of MHI, and, specifically, by advertising in Chinese language newspapers circulating in Sydney; (ii) alleged implied representations in the periods, and in relation to the respective trading names, set out in AD pars 21(a) and (c) consenting to the respondents' use of the trading names evidenced by the applicants continuing to deal with the respondents with knowledge that the respondents were trading under these names (AD par 21(f)). 53 The respondents claim that they have acted in reliance on these representations by conducting business under the names 'Mortgage House of Asian' and 'Mortgage House International', by registering MHI's name, and by the conduct referred to in pars A to D of the particulars to par 10 A/SC. The respondents claim they will suffer detriment if the applicants are able to assert a right to prevent the use by the respondents of the name and trading style 'Mortgage House International' as a provider of mortgage broking services exclusively to the Australian Asian community, and in particular to the Chinese community in Sydney. The respondents claim that it would be unfair and unjust for the applicants to do so. 54 The applicants admit that MHI placed advertisements in the Australian Chinese Weekly (i) for a period which has now past, the dates of which are unknown to the applicants, under the name 'Mortgage House of Asia'; and (ii) from a date unknown to the applicant, under the name 'Mortgage House International'. Otherwise the applicants deny the allegations in AD par 21(f) and repeat pars 8 and 9 of their Reply (R pars 12 - 16).

The factual issues 55 The applicants contend that the following facts should be found (I have set out the effect of the respondents' annotations in italics): 1. In the period from 1994 until April 1998 OA supplied to the public, mortgage introduction services, corporate loans and other mortgage brokering services including advice on financial strategies and wealth creation. (Period not agreed. Proved only that OA carried on business until 1997. Mr Sayer (the sole director) says that he ceased to be a director in February 1998.) 2. The business name of OA was 'Mortgage House of Australia' and OA was known by that name and also known informally as 'Mortgage House'. 3. On about 1 April 1998 MHA: (a) took over the business of OA. (Not agreed -- there is no evidence of any agreement between OA and MHA. On the contrary, Mr Sayer ceased to be a director of OA in February 1998 before MHA changed its name to Mortgage House of Australia Pty Ltd, and the evidence shows that MHA was originally incorporated under another name, but only took the 'Mortgage House of Australia' name after Mr Sayer joined as a director of MHA, and after initial applications for bank accreditation had been refused.); and (b) commenced to offer mortgage origination services; and thereafter conducted its business under the name 'Mortgage House of Australia' and was also known informally by the name 'Mortgage House'. (The bold portion is not agreed. If MHA became known informally under the name 'Mortgage House', this only occurred much later -- indeed only in 2001/2002.) 4. Since April 1998 MHA also began to use the name 'Mortgage House of Australia The Banking Alternative'. 5. In the period from 5 February 1998 until 25 June 1998 Ms Xing placed weekly advertisements in the Australian Chinese Times by reference to the name 'Asian Mortgage House'. 6. In or about May 1998 (date not proved -- probably only June or July) MHA agreed to permit Ms Xing to place advertisements in the Chinese language press by reference to the name 'Mortgage House of Australia' and later by reference to the name 'Mortgage House of Asia' and then 'Mortgage House of Asian' (bold portion not agreed) on the conditions that: (a) Ms Xing used the name in relation to MHA's products and services; (b) Ms Xing obtained MHA's prior approval for the content of the advertisements. (Bold portion not agreed - contradicted by clear evidence that applicants knew that the respondents were only placing home loan business with MHA, that they were placing other loans with other lenders, and Mr Sayer's admission that he was told throughout that the respondents continued to place business with other banks including ING and Suncorp.) 7. From 6 June 1998 Ms Xing began to place advertisements for the services and products of MHA. (Bold portion not agreed -- several products and services that were never provided by MHA advertised by MHI throughout, including 'investment loans for foreigners in Australia', 'home loans for small business owners', 'business loans', 'loans for small business owners, low income earners and non permanent residents', and 'loans for shops, warehouses, restaurants'.) 8. To the extent that the respondents or each of them have used, advertised and promoted the name 'Mortgage House of Australia' the respondents admit that such use was to the benefit of the goodwill and reputation of the applicants (RJ, par 3(a)). (Conceded, but pointed out that advertisements were also for the respondents' business under names including 'Mortgage House of Asian' and 'Mortgage House International'.) 9. From 1 July 1998 Ms Xing ceased all use of the name 'Asian Mortgage House'. (Not agreed -- advertising ceased, thereafter advertising included 'Mortgage House of Asian'.) 10. From 6 June 1998 until the end of 2000, Ms Xing first offered all of her clients' home mortgage applications to MHA. (Not agreed. Certainly by May 2000 the respondents were placing home loans with other lenders.) 11. In the period from about 6 June 1998 until the end of 2000 the advertisements placed by Ms Xing altered from time to time. 12. In summary, the advertisements placed by the respondents: (a) until the end of 1999 all included MHA's address; (b) each advertised the interest rates offered by MHA; (c) after August 1999, when MHA won 17 Mortgage Industry Awards, promoted 'our company' as the recipient of those awards; (d) used the words 'Mortgage House' in prominent positions. 13. By the end of 2000 or the beginning of 2001 MHA had, as a result of its conduct of its business and as a result of its promotional efforts, including the advertising placed and mortgage introduction work performed by Ms Xing, developed a substantial reputation in the general community in the field of financial services including mortgage introduction services by reference to the names 'Mortgage House of Australia' and 'Mortgage House'. (Conceded as proved for the purposes of these proceedings only.) 14. In summary, the relevant promotional and historical activities of MHA in association with the use of the name 'Mortgage House of Australia' and 'Mortgage House' were: (For reasons stated in the notice of objection this evidence was objected to -- objection persisted with.) (a) the inherited reputation in the name 'Mortgage House of Australia' from the business of OA, which operated from 1994 until 1 April 1998; (Not agreed -- there is absolutely no basis for suggesting any 'inheritance' of OA's goodwill. On the contrary, on the evidence, an agreement between OA and MHA in relation to the name 'Mortgage House of Australia' impossible.) (b) the placement of radio advertising in about mid-1998 and continuing; (Not proved) (c) the award in November 1998 of a gold medal in Business Review Weekly's Best Financier Awards for overdrafts supplied; (d) the initiation of MHA's website in late 1998 (Exhibit B); (Date not proved) (e) placements in 1998 and 2000 of advertisements in the Daily Telegraph; (f) placement of advertisements in the Your Mortgage magazine since the Spring 1998 edition; (g) winning of 17 awards in the Your Mortgage magazine awards in the Winter 1999 edition; (h) placement since August 2000 of advertisements in the Sunday Telegraph; (i) appointment in 2000 as a major sleeve sponsor of the Parramatta Eels National Rugby League team. (j) appointment in 2000 as a major sponsor of Sydney Kings National Basketball League Team; (k) appointment in 2000 as a sponsor of the Granville Soccer Club and the Sydney Panthers Women's Basketball team. 15. By the end of 2000 or the beginning of 2001 MHA had, as a result of its conduct of its business and as a result of its promotional efforts and as a result of the advertising placed and mortgage introduction work performed by Ms Xing, developed a substantial reputation in the Chinese speaking community in the field of financial services including mortgage introduction services by reference to the names 'Mortgage House of Australia', 'Mortgage House' and other names the first two words of which are 'Mortgage House'. (Not agreed -- some reputation in 'Mortgage House of Australia' conceded. But no reputation in 'Mortgage House of Asia' or 'Mortgage House International'.)

Date Publication Trade Mark used

1. 6 June 1998 - 27 February 1999 Australian Chinese Weekly Mortgage House of Australia
2. 21 July 1998 - 3 June 1999 Australian Chinese Times Mortgage House of Australia
3. 25 July 1998 & 11 December 1998 The Independence Daily Mortgage House of Australia
4. 27 August 1998 - 26 August 1999 Australian Chinese Post Mortgage House of Australia
5. 6 March 1999 - 28 August 1999 Australian Chinese Weekly Mortgage House of Australia Mortgage House of Asian
6. 10 June 1999 - 26 August 1999 Australian Chinese Times of Australia Mortgage House of Asian
7. 2 September 1999 and 8 September 1999 Australian Chinese Times Mortgage House
8. 2 September 1999 - 16 December 1999 Australian Chinese Post of Australia Mortgage House of Asian
9. 4 September 1999 - 18 December 1999 Australian Chinese Weekly of Australia Mortgage House of Asian
10. 16 September 1999 - 7 October 1999 Highlight Property Weekly of Australia Mortgage House of Asian
11. 16 December 1999 Australian Chinese Post of Asian Mortgage House of Australia
12. 27 January 2000 - 15 March 2001 Australian Chinese Post of Asian Mortgage House of Australia Pty Ltd International Pty Ltd
13. 25 December 1999 - 29 January 2000 Australian Chinese Weekly of Asian Mortgage House of Australia
14. 2000 Sydney Yellow Pages Mortgage House of Asian Pty Ltd
15. 5 February 2000 - 28 October 2000 Australian Chinese Weekly of Asian Mortgage House of Australia Pty Ltd International Pty Ltd
16. 2 March 2000 - ?? Australian Chinese Times International Pty Ltd Mortgage House of Asian of Australia Pty Ltd
17. 2001 Sydney Yellow Pages Mortgage House International Pty Ltd
18. 2001 Sydney White Pages Mortgage House of Asia Pty Ltd
19. 11 November 2000 - 26 July 2003 Australian Chinese Weekly International Mortgage House Pty Ltd
20. 2002 Sydney White Pages Mortgage House of Asia
21. 2002 Sydney Yellow Pages Mortgage House International
22. 2003 Sydney White Pages Mortgage House International Pty Ltd
23. 16 August 2003 - 13 March 2004 Australian Chinese Weekly Mortgage House International Yan's Marketing Pty Ltd

The parties' written submissions 56 In order to understand the issues that arise for determination, it will assist if reference is made to their written outlines of submissions.

The applicants' argument in chief 57 The applicants' submissions in chief, dated 31 May 2004, are to the following effect:

Relief now claimed 58 The applicants seek the relief claimed in the Application in relation to causes of action for breaches of ss 52(1), 53(c) and 53(d) of the TPA, and for passing off. The applicants do not press their claim for trade mark infringement.

The applicants' business 1. MHA was registered on 1 April 1998 as the successor in business to OA. 2. In the period from 1994 until 1 April 1998 OA continuously traded under the name 'Mortgage House of Australia'. Its business was based in Parramatta and included offering commercial loans, corporate hire purchase services and mortgage broking services including advice on financial strategies and wealth creation. 3. By January 1998 OA's business was well established. 4. OA's business was known by and referred to as 'Mortgage House of Australia' and 'Mortgage House'. 5. In April 1998 MHA was formed as a corporate partnership between Mr Sayer, Mr Boueri, Mr Phil De Prima and Mr Kevin Hurley. It began to offer an expanded range of services including mortgage origination as well as mortgage introduction(or broker) work. The funding organization that was operating with MHA, enabling it to act as a mortgage originator, when it was formed was 'AMS'. 6. The market in which OA, and then after 1 April 1998 MHA, operated was for the supply of financial services and loans to domestic and commercial clients.

The Respondents 7. Ms Xing was trained in 1997 as a mortgage introducer (or broker) whilst working for Century 21. She also conducted a marketing business called 'Yan's Marketing'. Prior to that, Ms Xing had worked, inter alia, with Chinese language newspapers. 8. In December 1997 Ms Xing registered the words 'Asian Mortgage House' as a business name. It was her intention to enter business on her own account as a mortgage introducer. In February 1998 Ms Xing was accredited (under the business name 'Yan's Marketing') with ING Bank to offer mortgage introductions to clients on that organization's behalf. 9. From February 1998 (until the end of June 1998) Ms Xing placed advertisements in The Australian Chinese Times by reference to the name 'Asian Mortgage House'. 10. The business so advertised operated as a mortgage introducer, introducing loans on behalf of the ING Bank. It was a direct competitor of the business of OA (until April 1998). 11. The applicants submit that Ms Xing's evidence concerning how she came to promote her mortgage introduction business under the name 'Asian Mortgage House' is unsatisfactory. It is clear that she knew of Mr Sayer's business and of its use of the name 'Mortgage House of Australia' before registering the business name 'Asian Mortgage House' on 18 December 1997. 12. Ms Xing's explanation for how she came to select the name 'Asian Mortgage House' (from a magazine published in the United States) is unconvincing. Nor are the reasons for the change of the business registration from her own name to the name of her future husband, Mr Mason, credible. Mr Boueri denied both that he was involved in the selection of the name and that he suggested the registration be changed into Mr Mason's name (applicants' submissions par 15). 13. The applicants submit that in December 1997, shortly after meeting Mr Sayer, Ms Xing selected the words 'Mortgage House' for use in her business name because of her prior knowledge of the successful business of OA. It is submitted that Ms Xing desired to conduct a business under a name connected with the 'Mortgage House' name from that time (applicants' submission par 16). 14. The reason for the registration of the business name under the name of Mr Mason has not been credibly explained. There is a conflict between Ms Xing's evidence (that Mr Boueri suggested a transfer of the registration) and that of Mr Boueri (who denies making such a suggestion). Mr Mason could have been called to assist the court in resolving that conflict. He was present in court for much of the hearing. It is submitted that an inference arises to the effect that Ms Xing's explanation could have been supported by evidence but was not pursuant to the principles in Jones v Dunkel (1959) 101 CLR 298. Ms Xing's evidence on these related points is contrary to that of both Mr Sayer and Mr Boueri. The applicants submit that the evidence of Mr Sayer and Mr Boueri should be preferred to that of Ms Xing in this regard (applicants' submission par 17).

The relationship between MHA and Ms Xing 15. In about March or April 1998 the businesses of MHA and Ms Xing intersected as a result of Mr Boueri introducing Ms Xing into MHA's business as a loan introducer (i.e. a mortgage broker). Soon after this introduction, Ms Xing, in mid-1998, suggested to Mr Boueri that she should advertise in the Chinese press using the name 'Mortgage House of Australia', asking that MHA pay for the advertisements placed. 16. Approval was given by Mr Boueri (sanctioned by Mr Sayer) for the placement of the advertisements by Ms Xing provided that he saw the advertisements before they went out and that she only promote MHA products by reference to that name. 17. As part of its arrangement with Ms Xing, MHA also agreed to permit Ms Xing to use the MHA offices in Parramatta for meetings with clients. Ms Xing regularly took clients to MHA's offices and introduced Mr Boueri and Mr Sayer to them as her 'boss(es)'. At these premises, the 'Mortgage House of Australia' name was prominently displayed. 18. The use by the respondentsof the name 'Mortgage House of Asia(n)' was also specifically approved by MHA as an adjunct to the use of the 'Mortgage House of Australia' name. (References to 'Mortgage House of Asia(n)' is a composite reference to the use of 'Mortgage House of Asian' and the later use in advertising of 'Mortgage House of Asia'.) Separately, Mr Boueri and then Mr Sayer permitted the use of the name by Ms Xing in association with her promotion of MHA's products to the Asian community. Mr Sayer explained that his permission in 1998 that Ms Xing be allowed to use the name 'Mortgage House of Asia(n)' was conceived by him to be a part of the use of the 'Mortgage House' name. It is submitted that Ms Xing, as a representative of MHA's business, was permitted to use the name 'Mortgage House of Asia(n)' 19. The evidence concerning the respondents entering into a franchise arrangement with MHA confirms that each of MHA and the respondents intended the 'Mortgage House of Asian' business to be a sub-branch of MHA's business. There is no dispute that a document was produced in August 1999 in which 'future plans' for Ms Xing to open a 'Mortgage House of Asian' franchise were discussed (applicants' submissions par 22). 20. In cross examination Ms Xing accepted that she wished for MHA's approval to develop the franchise under that name. This concession is consistent with a perception that the 'Mortgage House' name was one over which MHA had rights and is wholly inconsistent with Ms Xing's later position that a business trading under the name 'Mortgage House of Asia(n)' had developed any separate reputation to that of MHA. 21. No claim is made in these proceedings for breach of contract. It is not alleged that, as a matter of contract law, Ms Xing failed to adhere to the agreement regarding the placement of advertisements. As noted below, however, there was a failure on the part of Ms Xing to seek or obtain the approval of MHA for placing the advertisements. This led to the incorporation of some styles of use of MHA's name in advertisements which were not specifically approved by MHA. 22. From July 1998 at the latest, Ms Xing ceased any promotion of the name 'Asian Mortgage House', and began to advertise only by reference to the name 'Mortgage House of Australia'. It is apparent from her records and commission statements, however, that Ms Xing referred to the mortgage broking business that she conducted in 1998 and during some of 1999 by the name 'Yan's Marketing'. 23. Much of Ms Xing's case is apparently based on the factual assertions (AD par 10.2) that: (a) in 1998 and 1999 she promoted the name 'Asian Mortgage House'; (b) in 1999 and 2000 MHI was incorporated as a business and traded under the name 'Mortgage House of Asia(n)'; and (c) since 2000 MHI has continuously used the name 'Mortgage House International'; in parallel with advertisements placed for MHA under the name 'Mortgage House of Australia'. 24. There is no credible evidence to support the contention that there was any trade under the 'Asian Mortgage House' name after June 1998; Ms Xing abandoned all use of that name from that date. In cross-examination Ms Xing admitted as much. 25. Until the beginning of 2001 there was no independent promotion by the respondents for the supply of any financial services by MHI other than on behalf of MHA (applicants' submissions par 28). 26. After June 1998, Ms Xing devoted her promotional activities entirely to forging an association between herself, as a mortgage introducer, and the supplier of financial services known as 'Mortgage House of Australia', MHA. She offered all of her clients' home mortgage applications to MHA and such other mortgage introductions made by Ms Xing during that period were in respect of loans that did not meet MHA's lending criteria (applicants' submissions par 29). 27. As far as persons reading those advertisements arranged by Ms Xing to be placed in Chinese language publications were concerned, Ms Xing would be recognized as MHA's 'agent' or 'representative' for the supply of MHA's services - International Harvester Company of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Company (1958) 100 CLR 644 at 653. Ms Xing conceded that in 2000 this is how persons regarded her.

The Chinese newspaper advertisements 28. The advertisements placed by Ms Xing in the Chinese newspapers are significant. They were addressed to persons of Chinese speaking and reading background, and altered in content from time to time. Ms Xing, a person with experience in marketing, intended to ensure that at all times the advertisements furthered in consumers' minds the association between her activities as a mortgage introducer, and MHA's financial services business. 29. The content of the advertisements from June 1998 demonstrates that the respondents did, and intended to, use the advertisements as a vehicle for promoting the association between MHA's business and themselves. 30. Schedule 1 demonstrates, in abbreviated form, the prominent use given to the name 'Mortgage House' in the advertising. It is submitted that the drift between the first four numbered advertisements in the schedule and the change in June 1999 to - MORTGAGE HOUSE of Australia of Asia(n) and then from December 1999 to: MORTGAGE HOUSE of Australia of Asia(n) International and then from 11 November 2000 to MORTGAGE HOUSE INTERNATIONAL PTY LTD was a colourable attempt by the respondents to engineer a shift from what Ms Xing perceived to be MHA's name 'Mortgage House of Australia' to what she apparently considered to be 'hers', namely the words 'Mortgage House'. The increasing prominence given to the words 'Mortgage House' in these advertisements is to be noted. 31. On an objective view of the facts, the position stated in par 3(a) of the Rejoinder, is accurate; that is, that advertising placed in the name 'Mortgage House of Australia' was to the benefit of the goodwill and reputation of the applicants. In fact, there was noseparate or distinct advertising placed by the respondent other than that which is referred to in Schedule 1 (applicants' submissions par 34). 32. Further, it has been the respondents' contention that the cost of allof the advertising placed by the respondents at least until August 2003 ought to have been borne by the applicants. That advertising included advertising bearing all of the names 'Mortgage House of Australia', 'Mortgage House of Asia(n)' and 'Mortgage House International'. 33. There can be no doubt that Ms Xing intended, by her advertisements, to promote MHA's business. Whilst it is the respondents' case that a reputation in 'separate' businesses called 'Asian Mortgage House', 'Mortgage House of Asia(n)' and 'Mortgage House International' developed independently to that of MHA (AD par 21(f)(v)(dd)), a reading of the content of the advertisements placed under these names indicates that there was no effective separation between the promotion of the business of MHA and that of other similarly named entities. 34. As an example, the text of the 9 July 1998 advertisement placed in The Australian Chinese Times uses MHA's: (a) Name: 'Mortgage House of Australia', which appears prominently in the title; (b) Address: on the footer of the advertisement; (c) interest rates; and (d) (after 15 October 1998) ACN number. 35. During the following two years, Ms Xing altered some of the content of the advertisements, although the format remained similar. Later advertisements further promoted the association with MHA. Thus, in addition to the features set out above, from August 1999 the advertisements promoted the award to MHA of awards in the 1999 Mortgage of the Year Awards adding: 'Congratulations to our company's Line of Credit 5.98% winner of 1999 Mortgage of the Year Awards'. The applicants submit that these additions were calculated to, and are likely to have, developed an association between the services offered in the advertisements and MHA. 36. Ms Xing freely conceded that in booking advertisements that she was promoting the business of MHA.

Approval for the advertisements 37. Initially, advertisements were supplied by Ms Xing to Mr Boueri for approval, but only for the initial months of the arrangement. As far as Mr Boueri understood, the content of the advertisements did not change from the time of first publication until he left MHA in about December 1999. 38. Ms Xing said that she 'constantly faxed advertisements to MHA for approval'; however, that evidence is not credible in the face of a complete absence of any record to support such an assertion. Ms Xing's oral evidence in this regard is evasive and internally contradictory (for instance, while at one stage Ms Xing said that approval was sought by fax to comply with regulatory requirements, she previously had said that Mr Boueri never insisted that she obtain prior approval: 'he only required me to fax him after I place the advertisement and because his wife is also a Chinese she buys newspaper every day' - while later she asserted that the need for approval was to confirm the interest rates (applicants' submissions par 41). 39. Ms Xing's true attitude to advertising approval was revealed in this evidence: 'Q: I see, but Ms Xing you never asked Mr Sayer to approve an advertisement at all, did you? A: I could not remember but I have to fax in for George to have a look because he had to verify the interest rate. Q: I suggest to you that you never faxed into George a draft advertisement for approval. A: That is not correct because at that time Ken was suggesting to me that we should place bigger advertisement but I thought it was a not safe for me so I placed an advertisement which I think was good for me. Because [Mr Boueri] did not pay me for advertisement and I thought: why should I pay more for the ….and they could not pay me later.'

Termination of MHI and Ms Xing as a MHA 'representative' 40. In late 2000 or early 2001 the applicants terminated all authority previously given to the respondents to use the Mortgage House Names in association with their business. Ms Xing denies that such a conversation took place, but accepts that from the same approximate date she ceased to provide any mortgage introduction business to the applicants. Indeed, it is apparent from Ms Xing's oral evidence that, at that time, she harboured a vehement antipathy for MHA as a result of views that she had formed regarding its probity (applicants' submissions par 43). 41. Mr Sayer's version of the events should be preferred to that offered by Ms Xing.

The respondents' conduct after January 2001 42. Since January 2001 the respondents: (a) until March 2001, promoted the supply of mortgage broking services in advertisements in the Australian Chinese Post under the name: MORTGAGE HOUSE of Asia of Australia P/L International Pty Ltd (b) promoted the supply of mortgage broking services in advertisements in Chinese language newspapers under the prominently displayed name 'Mortgage House International'; (c) used the corporate name 'Mortgage House International'; (d) used the internet address mortgagehouseinternational@yahoo.com; (e) advertised in the Sydney Yellow Pages; (f) advertised in the Sydney White Pages; (g) in May 2003, obtained a business name registration for 'Mortgage House'; (h) in May 2003, registered 'Mortgage House Pty Ltd' as a corporate name.

The claim under s 52(2) of the TPA 43. The relevant date for ascertaining whether the conduct was misleading or deceptive (and also for passing off) is the beginning of 2001, namely, the unauthorisedadvertising of services by reference to the name 'Mortgage House International'; that is the date of the commencement of the conduct of which complaint is made (applicants' submissions par 47). 44. The respondents do not appear to have commenced to use the name 'Mortgage House' by itself, although the registration of the business and corporate names indicates a clear intention to do so in the future. 45. The conduct of which the applicants complain is the promotion and supply by MHI since January 2001 of financial services, including mortgage introduction services, under and by reference to the names: (i) Mortgage House; (ii) Mortgage House International; (iii) each of (i) and (ii) in conjunction with the 'house' logo which is annexure 'A' to the Amended Statement of Claim; and (iv) the use of the domain name mortgagehouseinternational@yahoo.com (applicants' submissions par 49). 46. In so promoting its services to the public, MHI has, in trade and commerce, represented that its services are sourced from, offered for sale by or sold by MHA (AS/C par 20).

The claim under s 53(c) and (d) of the TPA 47. Alternatively, the applicants submit (AS/C par 23) that, in promoting the supply of financial services as alleged, MHI has, in trade and commerce, represented to the public: (a) that the services of MHI have the sponsorship and/or approval of MHA; and/or (b) that MHI is affiliated with MHA;

The passing off claim 48. The respondents have passed off their services as the services of MHA. 49. The relevant 'market' for the purpose of assessing whether MHI has engaged in misleading or deceptive conduct may be described as follows: (a) the broader community to whom MHA has supplied its services; and (b) persons in the Chinese community; (c) the financial services industry, including funding bodies, for whom MHA provides mortgage introduction services and from whom MHA obtains funds. 50. In considering whether conduct is likely to mislead or deceive it is submitted that the following factors are relevant: · The likely imperfect recollection by consumers of the name 'Mortgage House of Australia' or 'Mortgage House' as compared with 'Mortgage House International'; (cf. Australian Woollen Mills Ltd v F S Walton and Co Ltd (1937) 58 CLR 641 at 658); · The words 'Mortgage House' are significant features of the word mark 'Mortgage House of Australia'; · The words 'Mortgage House of Australia' and 'Mortgage House of Asia(n)' had been extensively displayed in the Chinese press side by side in advertisements; · The sound of the marks 'Mortgage House International' and 'Mortgage House of Australia' or 'Mortgage House' is very similar and identical if the words 'Mortgage House International' are contracted (as they would naturally be); · The similar services offered by each of the businesses trading, respectively, as 'Mortgage House of Australia' and 'Mortgage House International'; · The likelihood that the respondents elected to continue to use the name 'Mortgage House' with 'International' in order to take the benefit of the advertising that had been placed by the respondents for MHA's services; (cf. Australian Woollen Mills at 657; Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 at [117]); · The existence of instances of actual confusion, whilst not necessary to establish deception or confusion, will be powerful evidence; (cf. Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592).

The marks distinctive of MHA 51. The common law trade mark 'Mortgage House of Australia' was, by January 2001, distinctive of MHA and the financial services that it supplied. Those words are a particular and distinctive collocation. They are not directly descriptive of the services supplied by MHA. The services of MHA include home lending services which include mortgage broking and mortgage origination services. The combination of words 'mortgage house' and/or 'mortgage house of Australia' had no currency as a descriptive term in Australia before January 2001. There is no reason to suppose that other traders in the financial services industry, actuated by no improper purpose, would have desired to use those particular words in the course of their business; (cf. FH Faulding & Co Ltd v Imperial Chemical Industries (1964) 112 CLR 537 at 555; see also Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 269). 52. The name 'Mortgage House of Australia' is not descriptive. The name employed by MHA by January 2001 was clearly sufficient to supply a basis for a finding that consumers of financial services in the relevant market would recognize that name in association with MHA.

Promotion and sales in relation to MHA's name 53. The relevant promotional and historical activities of MHA in association with the use of the name 'Mortgage House of Australia' and 'Mortgage House' were: (a) the inherited reputation in the name 'Mortgage House of Australia' from the business of OA, which operated from 1994 until 1 April 1998; (b) the placement of radio advertising in about mid-1998 and continuing; (c) the award in November 1998 of a gold medal in Business Review Weekly's Best Financier Awards for overdrafts supplied; (d) the initiation of MHA's website in late 1998; (e) placements in 1998 and 2000 of advertisements in the Daily Telegraph; (f) placement of advertisements in the Your Mortgage magazine since the Spring 1998 edition; (g) winning of 17 awards in the Your Mortgage magazine awards in the Winter 1999 edition; (h) placement since August 2000 of advertisements in the Sunday Telegraph; (i) appointment in 2000 as a major sleeve sponsor of the Parramatta Eels National Rugby League team; (j) appointment in 2000 as a major sponsor of Sydney Kings National Basketball League Team; (k) appointment in 2000 as a sponsor of the Granville Soccer Club and the Sydney Panthers Women's Basketball team. 54. By 30 June 2001 MHA had spent approximately $1.8m on advertising. 55. In addition, MHA had, by the advertising placed by conduct of the respondents, engaged in significant promotional activity in the niche market of Chinese speaking consumers. 56. In the period from July 1998 until January 2001 extensive advertisements were placed for MHA's services. During this time, advertisements placed by the respondents employed the name 'Mortgage House of Australia'. They promoted MHA's interest rates and, after August 1999, the awards won by MHA. Until January 2000, the advertisements contained MHA's address. 57. The cumulative effect of the advertisements was to heavily promote, in association with the services supplied by MHA: (a) the words Mortgage House; (b) the words of Australia in association with 'Mortgage House'; (c) the words of Asia(n) in association with 'Mortgage House'; such that readers of those Chinese newspapers with an interest in financial services would necessarily have come to consider that each of the collocations of words was to be associated with the winner of the awards, the address given and the financial services offered. Further, the inevitable result of this promotion has been that persons contacting Ms Xing in response to these advertisements would consider her to be the provider of services on behalf of MHA. 58. As a matter of fact, the goodwill developed in financial services as a result of the promotions contained in the newspapers, and the services supplied on behalf of MHA by the respondents in the period from July 1998 until January 2001 was the goodwill notof MHI or Ms Xing, but of MHA. An analogous position was recognized by the court in Thai World Import v Shuey Shing (1989) 17 IPR 289 at 296. 59. The respondents' admission to the effect that advertisements placed in the name of 'Mortgage House of Australia' was to the benefit of the goodwill and reputation of the applicants (RJ par 3(a)) was correct. The admission would and should apply equally to advertising made in the name of 'Mortgage House of Asia(n)'. 60. In fact, it is apparent that Ms Xing never really considered that any of her advertising was for the benefit of a goodwill and reputation other than that of MHA; even now she considers that all of the advertising placed until 2001 at least should have been paid for by MHA. 61. A necessary consequence of the formal use of the name 'Mortgage House of Australia' by MHA is that it also acquired distinctiveness in relation to the natural contraction of that name, namely 'Mortgage House'. Persons speaking the name would use that contraction. It was the name used when the telephones were answered in 1998. It was the way that all of the witnesses who deposed as to the use of the name from 1994 - 1998 described it. 62. The names 'Mortgage House of Australia' and 'Mortgage House' had acquired a substantial reputation and distinctiveness within the relevant markets in which MHA operated by January 2001.

The market likelihood of deception (a) Chinese community 63. In relation to the first group, members of the Chinese community, the market is relatively small and specialized. The people within that market speak and read the Chinese language and may also speak and read some English. This was the 'core' market in which MHA's services were promoted by MHI. By 2000, Ms Xing accepted that people who saw the advertisements recognized her as being a representative of MHA. 64. In considering the question of the likelihood of deception or confusion it is necessary to contemplate the effect of the impugned conduct on reasonable members of the community within this class, not displaying extreme or fanciful reactions, though including the astute and the gullible, the intelligent and the not so intelligent, the well educated and the poorly educated; (cf. Sociedad, Limitada v Nike International Ltd (2000) 169 ALR 677 at 705; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182). 65. For those members of the Chinese community, the promotional efforts of MHI (on MHA's behalf) could only have forged one association; namely, between the names used and MHA's services. The entire focus of all prior advertising was to associate 'Mortgage House' names with MHA. The 'drift' in advertisements from 'Mortgage House of Australia' to different 'Mortgage House' styled names would confirm to readers that the entities referred to were related. 66. After January 2001, MHI's advertisements continued in much the way that they had previously. The name so used gave no indication to consumers, acquainted with the reputation of MHA and with MHI's role as agent for MHA, the difference between the services of MHA and those offered in the 'Mortgage House International' advertisements or by the company promoting its business under that name. 67. The limited understanding of English on the part of many consumers is likely to diminish the prospect that niceties of differentiation (such as the difference between 'Mortgage House of Australia' and 'Mortgage House International') would have any effect at all. It would be seen that here were two 'Mortgage House' names, one, perhaps, offering an 'international' flavour to the business supplied by the domestic arm of the same organization. 68. In a market such as this, where English is not the first language (or perhaps any language) of the average consumer, questions of the inherent distinctiveness of the mark adopt a different aspect. Any question of the descriptive characteristics of the marks diminishes in importance. The English language title to the advertisements is likely to be appreciated by non-English readers as a mark that conveys no particular meaning. It is more capable of being recognized as distinctive. (b) The broader community 69. Ms Xing gave evidence that she intended, by the selection of the name 'Mortgage House International' to expand the scope of her business, albeit by still focusing on Chinese-speaking customers. Whilst in cross-examination she denied that she had promoted services to the broader community; her English language flyers (Exhibit D) and website show otherwise. 70. To the extent that MHI does advertise under or by reference to the name 'Mortgage House International' in the broader community this, too, would also be misleading or deceptive. (c) The financial services industry 71. In addition to dealing with consumers, the relevant class of persons who might be misled or deceived by the conduct of MHI includes others involved in the financial services industry, including lending institutions. These are companies for whom MHA has supplied mortgage broking services in direct competition with MHI. 72. The evidence of Ms Yang shows two instances of members of ING Bank and St George Bank assuming, incorrectly, that the business accredited under the name 'Mortgage House International' to provide introduction services is associated with the 'Mortgage House of Australia' business. The former concerned the incorrect crediting of commission in relation to the 'Siebler' account and the latter the 'Nudelman' account. In relation to the 'Nudelman' account, any forensic uncertainty that it might not have been MHI who was wrongly paid is resolved by reference to MHI's own documents, showing a reversal of the commission payment.

The respondents' intention 73. In Australian Woollen Mills the Court said (at 657): 'The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of a trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency.' (See Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd(2001) 49 IPR 286 at 293; Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 104 FCR 61 at 76-77.) 74. Ms Xing was, possibly from a time during 2000, wholly intent on garnering for herself and MHI the benefits of the advertising that had been placed (by her) for MHA and the benefit of the growing reputation that MHA was establishing in the broader market for financial services. 75. Ms Xing regarded the name 'Mortgage House' as one beneficial to her future. In 1999 she wished to be a franchisee of it and open a branch office as a franchise. In 2001, when she asserted that she no longer wished for any association with the business of MHA (making, at the time, some allegations against MHA and Mr Sayer) she did the opposite of what a reasonable person would do and maintained the use of the words 'Mortgage House'. She was unable to provide any rational explanation for that conduct, and has asserted that her registration at ASIC of the corporate name entitled her to use it, regardless of MHA's interests. 76. Ms Xing's explanation is not to be accepted. Her evidence in the witness box was not frank, open or honest. On numerous occasions, she refused to answer questions put to her, and chose instead to make speeches in her own interest. There is evidence that documents put forward in the case were either fabricated or were placed before the Court in a way calculated to give a misleading impression of the true position as follows: (a) the letter said to have been sent regarding registration with ING and the Mortgage Industry Association of Australia; (b) the creation, ex post facto, of invoices which appeared to have been sent to MHA and which were produced on discovery, but which were never sent and appear to have been generated to give an impression of a debt owed by MHA when in fact it was not. In this regard, it is submitted that the non-responsive answers of Ms Xing in cross-examination are telling. Ms Xing 77. Ms Xing is the sole director and shareholder of MHI. She is manifestly in charge of, and responsible for, the day to day operations of MHI. More particularly, Ms Xing is responsible for MHI's promotional activities, the offering of mortgage introduction services and the supervision of agents operating for MHI. In these circumstances, Ms Xing is a person involved in and has aided and abetted and been knowingly concerned in the contravention of ss 52 and 53 of the TPAin the manner required pursuant to s 80 of the TPA.

The respondents' written submissions 59 By their written submissions (dated 8 June 2004) the respondents note that the applicants have abandoned the TMA claim and seek costs in this connection. On the remaining matters, the respondents make submissions to the following effect: 60 The issue is whether the conduct of MHI is misleading or deceptive or likely to mislead or deceive. (In the context of passing off the inquiry is similar - the issue is whether MHI has made representations that it is OA or MHA, or that its goods or services are those of OA or MHA.) In both contexts the alleged conduct relates to the use of the Mortgage House Names. Accordingly, it will be necessary for the applicants to show that OA or MHA has goodwill comprising a reputation amongst a substantial number of members of the public who recognise the Mortgage House Names as emanating from a single source.

Date for assessing the conduct complained of 61 The first (fundamental) inquiry must be a decision as to the date for determination of the issues of misleading or deceptive conduct (or the likelihood of misleading or deceiving) and passing off. 62 On the applicants' Summary Statement of Proved Facts, the applicants claim it to be proved that MHA had acquired a '... substantial reputation ... by reference to the names "Mortgage House of Australia" and "Mortgage House"' by the end of 2000 or the beginning of 2001 (hereinafter, in context, the 'reputation date'). For the purposes of this litigation the respondents accepted that this had been proved. 63 The correct date for the determination of these issues of passing off and contraventions of s 52 of the TPA is the date when the conduct complained of commenced (see Toddler Kindy Gymbaroo v Gymboree Pty Ltd (2001) 51 IPR 1 at 36). 64 But what is the conduct complained of? Where the respondents have used slightly different names over a period, its answer is necessary in order to determine when the conduct complained of commenced. The answer to this question must be found in the Application. From the Application the conduct complained of includes the use of 'the name "Mortgage House International"...' and also '... any other name including the words "Mortgage House".' 65 It is indisputable that the first use by the respondents of a name and trade mark including the words 'Mortgage House' was (at the latest) at the beginning of February 1998. The business name 'Asian Mortgage House' was registered by Ms Xing on 18 December 1997 (transferred into her partner's name for reasons explained on 7 January 1998, and used by her thereafter. (The applicants' submissions relating to the evidence are irrelevant. The important fact is that Ms Xing, not her husband, commenced using the trade mark 'Asian Mortgage House' in conducting mortgage broking services, at least when she commenced placing advertisements under the name in the Chinese press from February 1998.)) After registration Ms Xing commenced using the name and between February 1998 (5 February 1998) and June 1998 advertisements were -placed in the Australian Chinese Times under the name and trade mark 'Asian Mortgage House'. 66 The applicants also accept the following facts to be proved (see the applicants' Summary Statement of Facts and Schedule 1 thereto). MHI's use of other names including the words 'Mortgage House' (apart from, for present purposes, advertisements placed by MHI in Chinese newspapers under the name 'Mortgage House of Australia') included use of 'Mortgage House of Asian' (from at least 10 June 1999 - Schedule 1 to applicants' Summary Statement of Facts item 6), use of 'Mortgage House International Pty Ltd' (from at least 27 January 2000 - Schedule 1 to applicants' Summary Statement of Facts item 12), and 'Mortgage House of Asian Pty Ltd' (from at least 2000 - Schedule 1 to applicants' Summary Statement of Facts item 14). 67 It follows that if, as par 2(b) of the Application seeks, one accepts that the conduct complained of is any use of 'Mortgage House' in a name or trade mark, the date for determination of the s 52 and passing off issues should be 5 February 1998 (on the objective evidence, the first use of 'Asian Mortgage House' in advertising). On the applicants' evidence, MHA commenced operations, at the earliest, in April 1998, after the first use of 'Asian Mortgage House'. 68 But even if one considers the use of MHI's most recent name, 'Mortgage House International', as being the conduct complained of, the date for determination of the s 52 and passing off issues should be January 2000 when that use commenced. On the applicants' Summary Statement of Proved Facts, this is before the reputation date (late 2000 or early 2001). 69 From the applicants' Summary Statement of Facts, MHA had acquired the necessary goodwill in the sense of reputation by reference to the names 'Mortgage House of Australia' and 'Mortgage House' by the '... end of 2000 or the beginning of 2001'. Even if one is to disregard use of 'Asian Mortgage House' (which is not conceded, because the conduct complained of and in respect of which relief is claimed is stated, in the Application, to be any use of a name including the words 'Mortgage House'), the advertising use of 'Mortgage House of Asian' commenced, at the latest, in March 1999 and the use of 'Mortgage House International' commenced, at the latest, in January 2000. 70 On this issue, the crucial question of the relevant date for ascertaining whether conduct was misleading or deceptive (and also for passing off), the applicants make the submission that the date is the 'beginning of 2001' (applicants' submissions par 47 (see above)). The applicants make this submission to enable an argument that the conduct complained of was misleading or deceptive in the light of the chronology comprising the applicants' concession that MHA's reputation existed only by the end of 2000 or the beginning of 2001 (applicants' Summary Statement of Facts par 13). The applicants then contend (applicants' submissions par 49 (see above)) that the conduct of which the applicants complain is the promotion and supply by MHI '... since January 2001' of financial services under and by reference to names 'Mortgage House', 'Mortgage House International' etc. In both of these respects (the date and the conduct complained of) the applicants' submissions are clearly wrong: (a) The use of 'Mortgage House International' did not commence at the '… beginning of 2001'. On the objective evidence it commenced in January 2000 (see above). (b) The conduct complained of is the use of '... any ... name which includes the name or mark "Mortgage House" ...' (Application par 2). 71 On any version (the respondents' case that the use of a name including the words 'Mortgage House' commenced in February 1998, before MHA had even commenced trading; 'Mortgage House of Asian' commenced in March 1999; MHA's attempt to limit the complaint to unauthorised use of 'Mortgage House International' (presumably in an attempt to postpone the date of commencement of the alleged wrongdoing)) the conduct complained of commenced before MHA had established the necessary reputation to support an action in passing off or under the TPA. (As emphasized above, MHA's case is that its reputation, sufficient to found a passing off or TPA cause of action, was established by the end of 2000 or the beginning of 2001.) 72 In support of the case that the alleged infringing use of 'Mortgage House' occurred after the establishment of MHA's reputation, the applicants make a number of additional submissions: (a) MHA, which was registered on 1 April 1998, was the '... successor in business to' OA, and it 'inherited reputation in the name "Mortgage House of Australia" from the business of ...' OA.

There is no evidence of any transmission or assignment of goodwill from OA to MHA and there is no basis for suggesting that MHA is entitled to rely on any reputation in trade marks that OA might have used. (b) After June 1998 Ms Xing devoted her '... promotional activities entirely to forging an association between herself as mortgage introducer and the supplier of financial services known as 'Mortgage House of Australia'; offered all her clients' home mortgage applications to MHA; such other mortgage introductions made by Ms Xing were in respect of loans that did not meet MHA's lending criteria' (applicants' submissions par 29 (see above)). 'From 6 June 1998 until the end of 2000 Ms Xing offered all of her clients' home mortgage applications to MHA' (applicants' Summary Statement of Facts par 10).

The statement that, for a period, the respondents used only MHA in respect of clients seeking home loans is correct, but insofar as the applicants attempt to argue that, between 1998 and the end of 2000, the respondents acted exclusively to promote MHA's products, it is submitted that the argument is misleading. It was common ground in the evidence that, throughout this period, MHA only offered home loans and that the only introduction made by MHI or Ms Xing to MHA were in respect of home loans. But throughout, in the advertisements placed in the Chinese press, MHI, in addition to advertising home loans, advertised at least the following additional loans and services (none of which were available from MHA): Home/Building Construction Loans (residential or investment property); Investment Loans for Foreigners in Australia; Loans for Small Business Owners; Business Loans; Loans for shops, warehouses, restaurants. In providing these services MHI dealt with a number of different companies including Parramatta Mortgage and Leasing Pty Ltd, Mortgage Management Corporation Pty Ltd, and Citibank Ltd. (The documents disclose that business was placed: with Parramatta Mortgage & Leasing and Mortgage Management Corp from at least November 1999; with Mortgage Management Corp in December 1999; and with Citibank from at least August 1999). More recently, but again before the reputation date, MHI placed home loan business' as 'Mortgage House International'' with Citibank from at least July 2000 and with ING Bank (from at least May 2000), and later with other banks including St George and Suncorp Metway.

In fact Mr Sayer admitted in cross-examination that he was told on several occasions during relevant periods (at least in 1999 and 2000) that he was told by Ms Xing that the respondents were continuing to do business with other banks including ING and Suncorp.

(c) The applicants criticise Ms Xing's position that the business trading under the name 'Mortgage House of Asia(n)' had developed a separate reputation from that of MHA (applicants' submissions par 22).

The sole basis of this criticism must be that MHI was, at all relevant times, conducting business solely as an introducer to MHA and that it was promoting and selling only MHA products and services. But clearly this is not correct; MHI continuously advertised a range of services including many not available from MHA; MHI throughout placed business (other than home loan business) with other companies; from at least May 2000 MHI was placing home loan business with other lenders. (d) In the same vein the submission is made '... that until the beginning of 2001 there was no independent promotion by the respondents for the supply of any financial services by [MHI] other than on behalf of MHA' (applicants' submissions par 28 (see above)). 73 For the above reasons, this is not correct. (e) MHI's advertising is criticised as '... a colourable attempt by the respondents to engineer a shift from what Ms Xing perceived to be MHA's name "Mortgage House of Australia" to what she apparently considered to be "hers", namely the words "Mortgage House".'

In support of these submissions, reliance is placed upon advertisements from June 1999:

MORTGAGE HOUSE of Australia of Asian and then from December 1999: MORTGAGE HOUSE of Australia of Asian International and then from November 2000: MORTGAGE HOUSE international pty ltd Contrary to the applicants' submission that, until the end of 2000, MHI's advertising and promotion was all for MHA in relation to MHA products and services, these headlines, particularly when read with the text of the advertisements referring to a number of products and services not available from MHA (see (b) above), demonstrate that the advertiser is not limiting the products and services on offer to those available from MHA, but is offering a range of services available from different sources. And, importantly, this accurately reflects the factual situation - of the advertised products and services only the home loans were available from MHA. In respect of other loans advertised (for example business loans) introductions were made by MHI (until the end of 1999 called 'Mortgage House of Asia(n)' and from January 2000 called 'Mortgage House International') to other lenders. No misrepresentation is made in the advertisements. Some of the advertised services will be provided by MHA, but others will be provided by Mortgage House of Asia(n) or later Mortgage House International (by introduction to other lenders who could provide advertised services). (Indeed in some examples of advertising the statement is made that the advertiser acts as an agent for the big banks, and in one series Citibank is actually mentioned.) After November 2000, references to 'Mortgage House of Australia' are correctly dropped from the advertising because, by that time, MHI ceased to place business with MHA and even the home loan business was going to other lenders (for example ING Bank and Citibank from May and July 2000 respectively).

(f) The respondents' admission that advertising and promotion of the name 'Mortgage House of Australia' was to the benefit of the goodwill and reputation of the applicants (RJ par 3 (a)), is apparently used by the applicants to suggest that all of the respondents' advertising was therefore to the benefit of the goodwill and reputation of the applicants because '... in fact there was no separate or distinct advertising placed by the respondents other than that which is referred to in the Schedule' (applicants' submissions par 34 (see above)). This suggestion is repeated by referring to the fact that Ms Xing '... intended by the advertisements to promote MHA's business' and a further suggestion that, reading the content of the advertisements 'debunks' the respondents' case that the reputation in a 'separate business' called 'Asian Mortgage House', 'Mortgage House of Asia(n)' and then 'Mortgage House International' developed independently to that of MHA, because reading the advertisements '... indicates that there was no effective separation between the promotion of the business of [MHA] and that of other similarly named entities'. These submissions fail to acknowledge that only one of several goods and services advertised (home loans) is available from 'Mortgage House of Australia', and that on any reasonable reading of the advertisements, including the above quoted headlines relied upon so heavily by the applicants, what is conveyed is that loans are available from several entities. Far from demonstrating that only MHA was being promoted and that Mortgage House of Asia(n) could not be said, through this advertising, to have developed its own reputation, the advertisements, by their listing of a variety of products and the reference to several entities, promote the goodwill of each of those entities. Indeed it is facile to suggest that, if the advertisements mentioning both names (or in some cases three names) promote the goodwill of MHA they do not promote the goodwill of the other entities mentioned (Mortgage House of Asia(n) or MHI). (g) The applicants submit that approval for the advertisements was only obtained from MHA for '... the initial months of the arrangement'. Ms Xing's evidence that she continued to fax advertisements to MHA for approval is criticised as being incredible, evasive and internally contradictory (applicants' submissions pars 40 - 41 (see above)).

If correct, this argument is damaging to the applicants' case that all of the advertising was for its benefit only and that Mortgage House of Asia or Mortgage House International did not acquire any goodwill through the advertisements. It is also destructive of the key submission that 'unauthorised' use of 'Mortgage House' (in the name 'Mortgage House International') occurred only in 2001 after Mr Sayer had allegedly instructed Ms Xing not to use 'Mortgage House'. The 'unauthorised' conduct complained of commenced immediately after the 'initial months'.

(h) The applicants rely upon a telephone conversation between Mr Sayer and Ms Xing 2001 as the alleged termination of '... all authority previously given to the respondents to use the Mortgage House Names in association with their business' (applicants' submissions par 43 (see above)). The apparent suggestion is that, thereafter, the respondents' conduct was 'unauthorised' (and that therefore the relevant time for determining passing off and misleading and deceptive conduct is in early 2001).

It is not conceded that the applicants have proved that the alleged conversation occurred. It was denied by Ms Xing. Mr Sayer's motivation and explanation for this alleged conversation, namely, that he had noticed that MHI business with MHA had diminished and that, on learning that the respondents were doing business with other lenders like St George and Suncorp, he instructed Ms Xing not to use the '... 'Mortgage House' name any more', is not credible in the light of his admission in cross-­examination that he had been told throughout, and, in particular, during 1999 to 2000, that the respondents were placing business with other lenders including ING Bank and Suncorp, and his knowledge that MHI in any event only placed home loan business with MHA and introduced other borrowers to other lenders. But, in any event, it is quite clear from the applicants' own version of the case that MHI's 'conduct' was 'unauthorised' from shortly after the 'initial months'. It could never be said by the applicants that the following conduct of MHI was 'authorised': the advertising of a variety of products not available from MHA; in some of the advertisements, the express statements that it acted for the 'big banks', in one series mentioning Citibank; actually obtaining for clients products and services not available from MHA; advertising products from more than one entity - MHA, Mortgage House of Asia(n) and MHI; and importantly, the use by MHI of 'Mortgage House International'. This last mentioned use (of 'Mortgage House International') commenced in December 1999 and has been continuous since then. Initially the advertised use of 'Mortgage House International' was in conjunction with 'Mortgage House of Australia' and 'Mortgage House of Asia'. Later the advertised use was 'Mortgage House International' alone. The applicants' evidence is to the effect that MHA did not approve MHI's use of 'Mortgage House International'. It follows that, even if Mr Sayer's version of the conversation in which he allegedly instructed Ms Xing not to use 'Mortgage House' is to be accepted, it is simply irrelevant. For a long time before that, MHI had been making use of 'Mortgage House' in names and trade marks not authorised by MHA to sell the products of other companies.

MHA's misplaced reliance on OA's goodwill 74 MHA claims to be entitled to injunctions to restrain the respondents from using names and trade marks including the words 'Mortgage House'. The conduct complained of commenced in February 1998 (if one takes the commencement date for use of 'Asian Mortgage House' as the relevant date) or at the latest December 1999 (if one takes the commencement date for the use of 'Mortgage House International' as the relevant date). MHA first started conducting business under 'Mortgage House' in mid-March 1998 or April 1998, but, more importantly, MHA claims to have proved only that its reputation was established by the end of 2000 or the beginning of 2001. 75 On this basis alone MHA is not entitled to relief under the TPA or for passing off. In February 1998, when use of 'Mortgage House' in the name 'Asian Mortgage House' commenced, or in December 1999 when the use of 'Mortgage House International' commenced, that conduct was not misleading or deceptive or likely to mislead or deceive (under the TPA), and made no relevant misrepresentation as to provenance (for passing off), vis-ŕ-vis MHA. At the date of the alleged misrepresentation there was no proved reputation sufficient to found a passing off or TPA application. The first, and therefore also the second, of the three requirements of reputation, misrepresentation and damage are missing (cf. Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 at 246 - 248). 76 Both in the applicants' submissions and in the applicants' Summary Statement of Facts an attempt is made to rely on the use by OA between 1994 and the beginning of 1998 of a name including the words 'Mortgage House' in the provision of mortgage broking services. The suggestion is that MHA 'inherited' this reputation. Thus, on the applicants' evidence, '... after April 1998, the "Mortgage House" business was conducted by...' MHA. 77 Although it was pleaded (in the alternative) that the necessary goodwill and reputation belongs to MHA and OA (AS/C pars 19 - 20) and there was an attempt in chief to suggest that the first and third applicants (MHA and OA) had acquired reputation and goodwill in Australia in the Mortgage House Names there was no evidence in chief to prove that OA had any reputation and goodwill in 'Mortgage House'. 78 The only evidence in chief was a statement that OA conducted business using 'Mortgage House' from '13 Mar[ch] 1994 to 1 April 1998' and that OA's hire purchase and commercial loan business were conducted under the name 'One Australia' and mortgage broking services under the name 'Mortgage House'. 79 In the applicants' evidence in 'reply', there is some evidence that OA used the name 'Mortgage House Australia' between 1994 and 1997. 80 But MHA cannot rely on any use by OA. If OA acquired goodwill because of its use of 'Mortgage House Australia' between 1994 and 1997, that goodwill belonged to it. There is no evidence that OA continued to carry on business after 1997, or even if it carried on business into 1998, after 1 April 1998. It is clear OA operated 'the "Mortgage House" business' from March 1994 until 1 April 1998, and that OA ceased conducting any relevant business in March 1998 at the latest. (There is serious doubt whether OA carried on any business into 1998, and if so until when.) Without any indication of what happened to OA, it is being 'stated' that MHA 'inherited' the business of OA. 81 There is no evidence, and indeed no indication at all, that OA entered into any agreement with MHA. There is no evidence that MHA acquired goodwill belonging to OA, or acquired by assignment or transmission any of OA's trade marks (whether registered or unregistered). Accordingly, MHA's entitlement to relief is clearly to be determined with reference to its goodwill proved (if at all) by its use of trade marks and without any reference to previous use by another company (OA). 82 In February 1998 (or at the latest December 1999, if the conduct complained of is limited to 'Mortgage at House International'), when the conduct complained of commenced, there was no possibility that the use of 'Mortgage House' in any name, and in particular in 'Asian Mortgage House', 'Mortgage House of Asia(n)' or 'Mortgage House International', could be misleading or deceptive or that such conduct would be likely to mislead or deceive, vis-ŕ-vis MHA. 83 For this reason only, the TPA/passing off claims by MHA should be dismissed with costs.

OA's disentitlement to relief 84 Insofar as it might be suggested that OA is entitled to relief in its own right, it is submitted that there is no basis for such suggestion. 85 As pointed out above, there is no evidence that OA established any goodwill comprising a reputation in names or trade marks including the words 'Mortgage House'. In the applicants' evidence in reply there is some evidence of use of 'Mortgage House of Australia' by OA to provide mortgage broking services (see above). However, this is not of significant use. There is no evidence of any advertising or promotion. At best for OA there is evidence of 230 customers being offered mortgage services under the name 'Mortgage House Australia', sometime in 1997. 86 But whatever was the position regarding OA's use of 'Mortgage House Australia' between 1994 and 1997, the applicants' own evidence is that OA has not carried on that business since 1997 (or at least since 'mid­-March 1998' or 1 April 1998). 87 The use by the respondents of 'Asian Mortgage House' (in 1998), 'Mortgage House of Asia(n)' (in 1999) and 'Mortgage House International' (1999 to date) cannot constitute any relevant misrepresentation that their goods and services are those of OA. There is no misleading or deceptive conduct that these services are those of OA. During the whole of the relevant period that the respondents have used names including 'Mortgage House', OA has not carried on any relevant business. OA has not shown that it has any reputation and goodwill that would make MHI's use of 'Mortgage House' in its names misleading and deceptive, vis-ŕ-vis OA (see Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289 at 302). 88 It is submitted that this is even more so, as in the present case, where another company has replaced the one that has ceased operations and has used the very trade mark which was alleged to be reputable in the hands of the defunct trader. 89 In the alternative, even if OA is proved to have carried on business in 1998 (which is not admitted) the use of 'Asian Mortgage House' could qualify as possible misleading and deceptive conduct, vis-ŕ-vis OA, if OA is proved to have had the necessary reputation, and if the conduct of advertising mortgage broking services in the Chinese press under the name 'Asian Mortgage House' made a relevant misrepresentation. But even if that conduct would so qualify as potentially misleading and deceptive conduct the applicants (or, in this context, OA) are (is) not entitled to relief: (a) At the relevant time there was no probability that Ms Xing's conduct in conducting business as a mortgage broker under the name 'Asian Mortgage House' could be misleading and deceptive. All of her advertising was in the Chinese press. In cross-examination all of the witnesses who deposed to OA's reputation in the name 'Mortgage House Australia' did not read Chinese language newspapers, and had never heard of 'Asian Mortgage House'. The only sector of the public that would have been exposed to 'Asian Mortgage House' is the Australian Chinese community. The possibility of confusion between 'Asian Mortgage House', advertising in the Chinese press in Chinese represented by Yan Xing, and 'Mortgage House Australia', the business described by the witnesses, is remote. (b) Even if there was a possibility of deception or confusion at that time in February and March 1998 (assuming, without conceding, that OA was even carrying on business during those months), OA ceased carrying on business at the latest in March 1998. It has not carried on any relevant business for about 6 1/2 years. When MHI was incorporated and started trading OA had been out of business for at least a year. MHI has carried on business continuously since then using various names incorporating the words 'Mortgage House'. 90 OA is not entitled to TPA/passing off relief.

No misleading or deceptive conduct/passing off in any event 91 For present purposes, there is no substantial difference between relief sought under the TPA and for passing off. Indeed, as pleaded, the s 52 case is indistinguishable from a passing off case. The applicants plead business, marketing and promotional activities using names including the words 'Mortgage House' and accordingly the acquisition of '... an extensive and valuable reputation and goodwill in Australia in the Mortgage House Names and each of them' and that the use of the Mortgage House Names in connection with mortgage broking services signifies to consumers in Australia that such goods or services are sourced from the applicants. 92 The applicants then allege that MHI has used a mark similar to the Mortgage House Names in relation to mortgage broking services which are not sourced from MHA. 93 Accordingly, in the present case, principles relevant to passing off are appropriately applied to the facts to determine liability (cf. Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd (1978) 140 CLR 216 at 227). 94 The tort of passing off involves a representation by one person that his product or business is, or is connected in the course of trade with, that of another. The principal elements are reputation, misrepresentation and damage. 95 The first essential element that the plaintiff must prove is the acquisition of a sufficient reputation such that a substantial number of members of the public recognise the plaintiff's mark, sign or get-up as emanating from a single source. The plaintiff must prove that the defendant has used in connection with his own goods or services a name, mark, sign or get-up which has become distinctive in the sense that by the use of (the plaintiff's) name or mark, etc., in relation to goods or services they are regarded, by a substantial number of members of the public or in the trade, as coming from a particular source known or unknown. In other words, the plaintiff must prove that the feature of his product on which he relies has acquired a meaning or significance (often referred to as a 'secondary meaning'), so that it indicates a single source for goods on which that feature is used. If the reputation is established the plaintiff must then show that the defendant's use of the feature concerned was calculated to deceive in the sense of there being a likelihood of deception or confusion. 96 The factual allegations to support claims under the s 53 are again based upon the use of names incorporating the words 'Mortgage House'. 97 An important consideration in the present case is the identity of the respondents' target market - the Australian Asian community, and, in particular, Chinese speakers. The respondents' advertising (consistently and continuously since it began in February 1998 to date) has been exclusively in Chinese language newspapers published in Australia. All of the respondents advertising of 'Asian Mortgage House', 'Mortgage House of Asia(n)' and 'Mortgage House International' has been principally written in Chinese dialects. Ms Xing points out that the Chinese community in Australia constitutes a discreet market and that many Chinese speaking Australians do not read English language newspapers. All of her advertising and marketing efforts as a mortgage broker have been exclusively in Chinese language newspapers. She claims goodwill and reputation amongst Chinese speaking Australians. She does not claim to have established any goodwill or reputation amongst Australian Caucasians. Even accepting that MHA has proved a sufficient reputation in trade marks including the words 'Mortgage House' (relevantly 'Mortgage House of Australia' and 'Mortgage House of Australia The Banking Alternative') to give it standing to pursue TPA/passing off relief against infringers, the question must remain whether there is any likelihood that customers or potential customers of MHI (reading the Chinese advertisements or dealing with the MHI through Ms Xing) will be misled or deceived into believing that MHI is the same as 'Mortgage House of Australia' (i.e. MHA) or that MHI's services are those of MHA (cf. SAP Australia Pty Ltd v Sapient Pty Ltd (1999) 48 IPR 593).

98 It is submitted that the prospects of confusion or deception between MHI with its Chinese connections and MHA (for example, the sponsor of the Parramatta Eels rugby league team and the St Kilda Australian Football League team) are so remote that they can be safely discounted. To characterise the conduct of the respondents as misleading or deceptive or likely to mislead or deceive, it would be necessary to exercise a judgment of the notional cause and effect relationship between the conduct (advertisements in the Chinese press, in Chinese language, aimed at Chinese consumers, advertising a range of services many of which are not available from MHA and representing that loans are available from 'big banks', by Ms Xing dealing with respondents to the advertisements from MHI's own office premises, wearing her own 'uniform', and placing customers' loans with a variety of banks including Citibank, ING Bank, St George, Suncorp and Metway) and the putative (Chinese) consumer's state of mind. Bearing in mind the implication in that judgment of a selection process which can reject some causal connections (such as a connection with MHA's 'Mortgage House of Australia'), which, although theoretically open, as too tenuous, it is submitted that, on the probabilities, customers and potential customers would indeed reject the connection contended for by the applicants.

Estoppel 99 The respondents' case in this regard is pleaded fully in AD par 21 (f). The factual allegations are supported by the evidence. 100 Several aspects of the respondents' case are confirmed by reference to the documentary evidence and the evidence of the applicants' witnesses: (a) Although the witnesses for the applicants claim not to have known of the respondents' use of 'Asian Mortgage House', they were clearly aware of 'Mortgage House of Asia' and 'Mortgage House of Asia Pty Ltd'.

(b) When advertising for MHA, Ms Xing used the name 'Mortgage House of Australia' and Mr Boueri (at the time a MHA director) actually approved these advertisements, but other advertising ('Mortgage House of Asia'), on Mr Boueri's own evidence, had nothing to do with MHA.

(c) Advertising commenced in the name of 'Mortgage House International' in January 2000. The actual change of name of the company from Mortgage House of Asia Pty Ltd to Mortgage House International Pty Ltd took place in January 2000. Thereafter advertising referenced 'Mortgage House International'. That advertising has been continuous since then. (d) In late 2000 and early 2001 several invoices were sent by MHI to MHA in respect of monies owing by the latter to the former. In response to at least one of these invoices Mr Sayer, on behalf of MHA, signed a cheque drawn payable to 'Mortgage House International' dated 2 January 2001.

(e) Cross-examination of Mr Sayer in relation to documents from the applicants' discovery (i.e. invoices and faxes that must therefore have been received by MHA) confirms, inter alia, the handwriting of MHA employees on the documents (as part, for example, of processing payment). This evidence is given in relation to at least three 'Mortgage House International' tax invoices and two 'Mortgage House International' facsimiles. Further, Mr Sayer confirms signing a cheque payable to 'Mortgage House International' in January 2001. (His explanation that he did not read the name of the payee, or only read 'Mortgage House' and not 'International' is not credible.) But even if, despite this incredible explanation, Mr Sayer's version of ignorance of 'Mortgage House International' (until 2003) is accepted, his lack of knowledge is not destructive of the respondents' case in estoppel. 'Mortgage House International' correspondence and tax invoices were sent to MHA, received by MHA and acted upon. MHA has never suggested that recipients of the MHI invoices and facsimiles were not authorised by MHA. The fact that one person in the company (Mr Sayer) may have been ignorant is of no moment. Certainly his personal assistant, who wrote the cheque payable to 'Mortgage House of Australia', was not ignorant.) (f) At least some employees (notably George, an account manager for MHA) saw Ms Xing wearing her 'Mortgage House International' uniform and did not demur.

(g) Mr Sayer's protestation in chief that he was not aware that MHI was placing business with other banks is not borne out in cross-examination. Indeed he admitted that MHI was only placing home loan business with MHA and that other types of loans were placed with other companies. Further, he admitted that on several occasions Ms Xing told him that she was placing business with other banks including ING and Suncorp.

101 In late 2000 and early 2001 MHA, knowing that MHI placed business with several lenders, not exclusively with MHA, received notice of the change of name to 'Mortgage House International' through the receipt of invoices and facsimiles and the uniform. MHA knew of that new name, but did not demur, and in fact drew a cheque payable to MHI in its new name, and thereby represented to the respondents that MHA had no complaint regarding the use by MHI of the name 'Mortgage House International'. Thereafter (now for a period of 3 ˝ continuous years) MHI persisted with its use of the name 'Mortgage House International' and, in so doing, continued to place weekly advertisements in the Chinese press at expense and continued to trade as 'Mortgage House International', establishing a clientele. The first demand that MHI should desist from using 'Mortgage House International' came in March 2003 more than two years after MHA learned of the change of name and paid MHI as 'Mortgage House International' (two years in which advertising and business under the name was continuous). 102 With full knowledge that MHI had commenced operating under the name Mortgage House International, and with knowledge that MHI was not placing business exclusively with MHA, MHA conducted itself in such a manner so as to represent to MHI that it had no complaint regarding the use by MHI of the name Mortgage House International. MHI had no reason to doubt that representation and, by continuing to conduct business under the name, clearly acted to its detriment (at least financial, by placing the advertisements) on the strength of the representation. 103 Even if the applicants have established elements of any of their causes of action, they should be estopped from now seeking to prevent MHI using the name 'Mortgage House International'.

The applicants' written submissions in reply 104 By their written submission in reply dated 11 and 16 June 2004, the applicants make submissions to the following effect:

Introduction 105 The facts underlying the proceedings arise from an acknowledged relationship between Ms Xing (and her corporate vehicle, MHI) and MHA. The respondents' submissions wholly fail to respond to the core issue in the proceedings; namely the fact that Ms Xing chose to align her business with that of MHA and then 'decoupled' from that relationship at a time convenient to her. 106 The respondents' argument that the relevant 'reputation date' is either February 1998 (when 'Asian Mortgage House' was first used by Ms Xing) or December 1999 (when the name 'Mortgage House International' first appeared in an advertisement) is misconceived. The pleaded misconduct is set out in the AS/C and subsequent pleadings (examined below): it is the promotion by MHI of its business of the name 'Mortgage House International'. The applicants submit that the first use of that name as a trading name was in early 2001. 107 If the applicants' contention as to the date of commencement of the impugned conduct is accepted, the respondents concede that at that date MHA had the requisite reputation in the general community (annotated applicants' Summary Statement of Proved Facts, par 13). They argue, however, that in the Chinese community, MHA had no reputation. This submission is inconsistent with the admission made at RJ par 3(a). Clearly, the (many) advertisements placed in the Chinese press on behalf of MHA were responsible for the development of a relevant reputation. The issue is whether, by using the name 'Mortgage House of Asia(n)' in the sameadvertisements, the respondents succeeded in developing a separate and independent reputation. It is submitted that they did not. 108 The respondents contend that an absence of exclusivity of dealing between MHA and the respondents entitles the respondents to the benefit of the reputation in the names 'Mortgage House of Asia(n)' and 'Mortgage House International'. This misconceives the nature of the applicants' business. MHA's business included both mortgage origination services and mortgage introduction services. Representations by a 'Mortgage House of Australia' representative (as Ms Xing considered that she would have been regarded in early 2000) that loans could be arranged from a different source does not signify that the services were not supplied on behalf of the applicants. 109 The respondents further contend that MHA is not entitled to take the benefit of the reputation developed in the names 'Mortgage House of Australia' and 'Mortgage House' as a result of the trade under those names by OA. This contention adopts significance only if the respondents' contention that the relevant date of February 1998 is correct.

The first date - February 1998; pleadings analysis 110 The particulars to AS/C par 10 set out the conduct about which the proceedings are concerned: '…the use of the words "Mortgage House" and "Mortgage House" in [MHI's] corporate and trading name "Mortgage House International Pty Ltd" and additional trading name "Mortgage House International".' 111 The impugned conduct is the use of the words 'Mortgage House' in the name 'Mortgage House International' and also the words 'Mortgage House' by themselves. This is clear from the particulars in AS/C par 10 A-E, which refer additionally to the registration of the name 'Mortgage House' by itself, the use of the name in the form of annexure 'A' to the AS/C and the email address. These particulars also emphasize that it is the use of the name 'Mortgage House International' as MHI's trading name that is impugned. 112 In the AD the respondents pleaded (par 21) that the applicants had consented to the use by MHI of the name 'Mortgage House of Asian' and the name 'Mortgage House International'. It was also pleaded (par 10.2) that since January 1998 MHI had made continuous use of the words 'Mortgage House' in the names 'Asian Mortgage House' (in 1998 and 1999 - clearly incorrect as a matter of fact, that name being abandoned in June 1998) 'Mortgage House of Asia(n)' (1999 until January 2000 - again incorrect as the name was used until at least 2002) and 'Mortgage House International' (January 2000). 113 In the R par 8 and 9 the applicants pleaded that the promotion of the words 'Mortgage House' by the respondents was for and to the benefit of the goodwill and reputation of the applicants. This arose because Ms Xing had sought and obtained MHA's consentin July or August 1998 to use the name 'Mortgage House of Australia'. That consent was revoked in late 2000 or early 2001 (Reply, par 9(b)). 114 The respondents' RJ admitted that in mid 1998 the respondents received permission from MHA to advertise the name 'Mortgage House of Australia' (par 4(a)) and further admitted (par 3(a)) that to the extent that the respondents had advertised or promoted the name 'Mortgage House of Australia' it was to the benefit of the goodwill and reputation of the applicants. 115 The applicants' SRJ relevantly: (a) Admitted that from February 1998 until 25 June 1998 Ms Xing had placed advertisements in the name 'Asian Mortgage House' (SRJ par 2(a)). (b) Admitted that from July 1998 until about January 2000 the respondents had used the name 'Mortgage House of Australia' in providing mortgage broking services (SRJ par 2(d)) and that from July 1998 until a date unknown the respondents had used 'Mortgage House of Asia' (SRJ par 2(e)). (c) Pleaded that the use of the names 'Mortgage House of Australia' and 'Mortgage House of Asia(n)' were used by the consent of MHA and to the benefit of its goodwill and reputation (SRJ par 3(a) and (b)). 116 It is apparent from these pleadings that the use of the names 'Mortgage House of Australia' and 'Mortgage House of Asia(n)' by the respondents until January 2001 was not controversial. 117 The respondents' approach of referring to the plaint for relief in the Application and asserting that the conduct complained of was any use of the words 'Mortgage House' fails to give recognition to the case as pleaded and particularized. In June 1998 Ms Xing abandoned all use of the name 'Asian Mortgage House'. That is not the conduct about which complaint is made. Rather, it is the use of 'Mortgage House International' as the name by which MHI promotes and conducts its business.

The respondents' alternative date; December 1999 118 The applicants submit that the date upon which MHI began to promote its business as 'Mortgage House International' was at the end of 2000 or the beginning of 2001. In this context it is to be noted that: (a) The first advertisement by MHI of the name 'Mortgage House International' by itself was in November 2000 (prior to that date all uses were trivial (cf. Schedule 1 to applicants' Summary Statement of Facts items 15, 16 and 19)). (b) MHI did not elect to advertise under the name 'Mortgage House International' in the Yellow Pages until 2001 (Schedule 1, item 17). (c) (To the extent relevant) stationery used by MHI appeared first to be used in the name 'Mortgage House International' in December 2000 or January 2001. 119 The importance of the relevant date to be selected having regard to the misconduct that is alleged was emphasised in Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177. In these proceedings, it is the naming and promotion by MHI of the trading names 'Mortgage House International' and 'Mortgage House'. 120 Whilst in December 1999 the respondent began, without the knowledge of MHA, to add the words 'International Pty Ltd' as the third subscript to the promoted name 'Mortgage House', it is submitted that such use (continued inconsistently in the advertisements noted in items 12, 13, 15 and 16 of the Schedule) does not represent the commencement of the use of the name 'Mortgage House International' by MHI 'in respect of its mortgage introduction business'. 121 Alternatively, it is submitted that the earlier 'use' should be disregarded as inconsistent with the policy that 'the assiduous efforts of an infringer' should not be rewarded by backdating the time of first use (cf. Johnson & Johnson v Sterling Pharmaceuticals (1991) 30 FCR 326 at 355; Kettle Chip Co Pty Ltd v Pepsico Australia Pty Ltd (1995) 32 IPR 302 at 320).

Relevance of dates of reputation 122 Contrary to the respondents' submission, the applicants' contention that, by the end of 2000, it had developed a substantial reputation in the general community by reference to the names 'Mortgage House of Australia' and 'Mortgage House', cannot be construed as an admission that prior to that date, MHA did not have the requisite reputation. 123 The applicants concede that, by the earlier date of December 1999, it had conducted fewer promotional activities and would be regarded as less well established than by 12 months later. Yet, by that date, MHA did have the requisite reputation in the names to warrant relief being granted pursuant to the TPA and passing off. In this regard the submissions (below) concerning the effect of the trade from 1994 - 1998 of OA are also relevant. 124 Further, as previously submitted, the applicants refer to their submissions concerning the identity of the relevant markets (the broader community, the Chinese community and the financial community).

The relevance of exclusivity 125 The applicants have submitted that from June 1998 until the end of 2000 the respondents were the representatives of MHA and the promotional activities conducted were on MHA's behalf; the use of the names 'Mortgage House of Australia' and 'Mortgage House of Asia(n)' were approved by MHA and the services supplied were promoted for MHA. In answer to this submission, the respondents contend that the fact that Ms Xing did not exclusively provide mortgage introduction services to MHA leads to the conclusion that separate goodwill and reputation was developed by Ms Xing in the names 'Mortgage House of Asia(n)' and, later, 'Mortgage House International'. But MHA was at all times both a mortgage originator anda mortgage introducer. Clients of MHA wishing for loans that were not offered by MHA as an originator would be introduced to third party lenders such as Citibank and ING by MHA. The presence in the respondents' advertisements of references to commercial loans was not inconsistent with MHA's business. Further, to the readers of the advertisements, there was nothing to suggest that MHA, via its representative Ms Xing, was not the party offering to introduce the client to provide the whole suite of services listed. The respondents' submission that, by virtue of the fact that the list of services in the advertisements contained some products not on offer by MHA customers would know that MHA was not the supplier, is plainly untenable. 126 The applicants submit, with respect, that for the following additional reasons the respondents' submissions in this regard are not soundly based: (a) The only promotional activities of the respondents were through the advertisements detailed in the Schedule. In none of those advertisements were any names promoted other than the 'Mortgage House' names. (b) No part of those advertisements conveyed any representation that would enable a consumer to identify any difference between the services promoted by MHA on the one hand and any other entity. (c) As submitted, the use by the respondents of the name 'Mortgage House of Asia(n)' was, in any event, part of the agreement pursuant to which the respondents represented MHA's business. (d) The respondents indubitably provided first refusal to the applicants of all home mortgage introductions until shortly before the termination of the arrangement. (e) Each of Mr Sayer and Mr Boueri was aware that Ms Xing provided introductions for clients who sought finance that was not available via MHA as an originator (i.e. not domestic loans). They understood that she was providing those introductions to Parramatta Partners, which provided the brokering side of the business. (f) To the extent that Ms Xing supplied mortgage introduction services that was not associated with MHA, it was MHA's understanding that those services were provided under the name 'Yan's Marketing'.

Use of 'Mortgage House of Australia' by OA 127 The respondents submit that the reputation in the names 'Mortgage House of Australia' and 'Mortgage House' developed by OA cannot be relied upon by MHA. This argument would appear to be relevant only in the event that the first relevant date - when Ms Xing began to use 'Asian Mortgage House' in February 1998 - is accepted as the relevant date of the complained of conduct. 128 The respondents rely on the absence of a formal assignment of the goodwill in the name from OA to MHA to assert that no weight should be given to the proved trade in the names 'Mortgage House of Australia' and 'Mortgage House' from 1994 to 1998. But the issue here is one of consumer protection, rather than injury to goodwill (see Taco Bell (at 183)). 129 In terms of reputation, the legal rights underlying a reputation are of lesser moment than the perception that consumers are likely to have as a result of the conduct of the applicants. In the current proceedings, the transition of the use of the Mortgage House Names from OA to MHA is seamless. 130 A number of witnesses gave evidence as to the circumstances that gave rise to the selection of the 'Mortgage House of Australia' name for MHA and the relationship between the entities: (a) OA traded from 1994 until 1998 under the name 'Mortgage House of Australia' and 'Mortgage House'. (b) Messrs Boueri, Hurley and Di Prima invited Mr Sayer to join a corporate partnership that they were forming in about May 1998 - they needed Mr Sayer to make an application to AMS, the funder, in the name of 'Mortgage House of Australia' so as to secure the necessary approvals to start trading as a mortgage originator. (c) The partners agreed to use the name. (d) The business still traded from the same premises as those used by OA. (e) On 1 April 1998 the business name registration No. Q8790510 of 'Mortgage House of Australia' was transferred from OA to MHA. (f) After early 1998 witnesses perceived the '"Mortgage House" business' formerly conducted by OA to have then been conducted by MHA. (g) OA's '"Mortgage House" business' did continue after April 1998.

Misleading and deceptive conduct 131 The respondents submit that the prospects of confusion or deception between MHA 'with its Chinese connections and [MHA] (for example, the sponsor of the Parramatta Eels rugby team and St Kilda AFL team) … are so remote as to be discounted.' But this submission proceeds on the false assumption that MHA has no reputation in the name 'Mortgage House of Australia' or 'Mortgage House' with the Chinese community. If it is accepted that such a reputation does exist, then the likelihood of deception or confusion is, it is submitted, inevitable. The two marks are deceptively similar; consumers seeing the offer of financial services under the name 'Mortgage House International' would certainly be caused to wonder whether the provider of those services was related to the company who supplied financial services by reference to the name 'Mortgage House' or 'Mortgage House of Australia' (cf. Australian Woollen Mills).

The respondents' estoppel argument 132 The estoppel argument (AD, par 21(f)) should be rejected for the following reasons: (a) The allegation that MHA 'impliedly represented' that MHI could conduct business by reference to the name 'Mortgage House International' has not been proved. Each of Mr Sayer and Mr Boueri consistently and credibly denied knowledge of such use. There is no evidence to support the contention that any responsible member of MHA was aware that MHI had ever advertised using that name. Ms Xing's evidence of seeking approval for advertisements should not be accepted. Nor does evidence of a cheque signed in January 2001 (after the date of severance of the relationship) lend weight to the argument or the evidence that 'George' might have seen a 'uniform'. To fix MHA with knowledge of this conduct, it is necessary for the respondents to establish that a responsible person had actual knowledge of the conduct of the respondents. There is no such evidence. (b) It is conceded that MHA approved the use of the name 'Mortgage House of Asia(n)'. However, that approval was to permit MHI to act in a representative capacity for MHA's business. The facts supporting this do not admit for a claim in estoppel arising out of that consent. (c) The estoppel argument is wholly inconsistent with the invoicing of MHA for the advertisements. The only promotional activities of the respondents were placed on behalf of MHA: there is no detriment. (d) Further, mere knowledge (which is denied) that the respondents engaged in certain conduct, is not sufficient to found an estoppel. Nor is this a case where MHA would be disentitled to relief in the proceedings because of any delay or waiver. The evidence is that as soon as the applicants became aware of the impugned conduct the respondents were notified. (e) Finally, the respondents have conducted themselves in such a way as to disentitle them to the equitable relief which is sought. In this regard the applicants refer to: (i) The respondents failure (at least) to seek prior approval before placing advertisements in the Chinese press. Had that obligation been met, the respondents would not be driven to rely on the implications which have been criticized above; (ii) The respondents' intention as outlined in the applicants' written argument in chief.

Conclusions on the issue of liability 133 I have also heard oral submissions from the parties, but their respective positions are sufficiently reflected in their written argument. 134 I turn first to the claim made under s 52(1) of the TPA. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, Gibbs CJ stated (at 199): 'Section 52 does not expressly state what persons or class of persons should be considered as the possible victims for the purpose of deciding whether conduct is misleading or deceptive or likely to mislead or deceive. It seems clear enough that consideration must be given to the class of consumers likely to be affected by the conduct… What is reasonable will [of] course depend on all the circumstances… The conduct of a defendant must be viewed as a whole.' 135 The present proceedings were commenced in July 2003. However, in May 2003 MHI sought to register the business name 'Mortgage House' in MHI's name. But in May 2003, as has been seen, the uncontroversial evidence shows that, at least from that date and for some years prior, MHA traded under the name 'Mortgage House' on a substantial scale. The emphasised use of the mark 'Mortgage House' by MHI indicated in Schedule 1 of the applicants' Summary Statement of Facts would indicate to consumers that they were dealing exclusively with MHA. 136 In my opinion, for MHI to seek in May 2003 to register the name 'Mortgage House' would be likely to mislead consumers into believing that, in dealing with the respondents, they were in truth dealing with MHA. In my view, this is a contravention of s 52(1). 137 As has been seen from the parties' written submissions, a number of questions were raised as to the relationship of the applicants and as to whether the respondents may have breached a promise. I can imagine that these issues could arise if any further relief were to be claimed by the applicants. 138 However, since I am now dealing only with liability, I say nothing about them. 139 As has been seen, the respondents have invoked a defence of estoppel. Whatever such a defence may have in a claim for damages brought by the applicants (a matter not before me now), this can provide no answer to a claim under s 52(1) brought to vindicate the interests of consumers. 140 I need not turn to the other issues raised by the applicants, viz s 53 of the TPA and passing off since, even if established, they could provide, from the applicants' perspective, no different relief from the relief I propose to grant under s 52(1). 141 I have been asked by both parties to reserve all questions of costs. As mentioned, I have by consent dealt only with the issue of liability at this stage. Any other relief sought by the parties will need to be applied for with 28 days' notice.

Orders 142 On the issue of liability I make the following orders: 1. The respondents to be restrained from using the name 'Mortgage House'. 2. Costs reserved. I certify that the preceding one hundred and forty-two (142) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont.

Associate: Dated: 8 October 2004 Counsel for the Applicants: S C G Burley

Solicitor for the Respondents: Christopher M Edwards Solicitors

Dates of Hearing: 5, 6, 7, 16, 22 April 2004, 18 May 2004, 15, 16 June 2004