Natural Floor Covering Centre Pty Ltd v Monamy - [2006] FCA 518 - FCA 2006 case summary — Zoe

CTHFCA

Natural Floor Covering Centre Pty Ltd v Monamy

[2006] FCA 518

Federal Court of Australia|2006-04-12|Before: Rares J, Wilcox J

View original source

At a glance

Source facts

Court

Federal Court of Australia

Decision date

2006-04-12

Before

Rares J, Wilcox J

Source

Original judgment source is linked above.

Judgment (11 paragraphs)

[1]

REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) 1 This is an application to have the respondent found guilty on charges that he is in contempt of orders made by Wilcox J on 15 December 2005. On that day his Honour, by consent, made the following orders: '1. The Respondent be permanently restrained from using or displaying any sign, symbol or device that is the same or substantially identical with the Applicant's registered Trade Marks Numbered 981970 and 1013021, including the following: … 3. The Respondent be permanently restrained from using the business name 'Simply Natural Floorcoverings' (with Floorcoverings as one word) in any manner whatsoever and on any advertising, promotion, letterhead, business cards and in the conduct of any business, save that the Respondent may quote the internet domain name www.naturalfloorcoverings.com.au ('Website'). 4. An order that the Respondent change his registered business name No. BN97930782 to 'Simply Natural Floor Coverings' (with Floor Coverings as two words) and use this business name in lieu of 'Simply Natural Floorcoverings' (with Floorcoverings as one word) on any advertising, promotion, letterhead, business cards, the Website and in the conduct of any business. 5. The Respondent shall publish a disclaimer on the Website that his business is not associated with that of the Applicant for a period of 2 years at not less than font size 12 on the first page of the Website above the fold in a prominent position in wording drafted and approved by the Applicant.' 2 A statement of charge was filed in this matter on 7 March 2006. So far as each charge is pressed it seeks to have the respondent found guilty of contempt of orders 1, 3, 4 and 5 of his Honour's orders in the following respects. '2. The Respondent is guilty of contempt of the Court in that in breach of the order referred to in paragraph 1 herein, the Respondent has from 16 December, 2005 to date used and displayed a sign, symbol and device on the website www.naturalfloorcoverings.com.au ('Website') that is the same or substantially identical with the Applicant's registered Trade Marks Numbered 981970 and 1013021, including the following: … 6. The Respondent is guilty of contempt of the Court in that in breach of the order referred to in paragraph 5 herein, the Respondent has from 16 December, 2005 to date used the business name 'Simply Natural Floorcoverings' (with Floorcoverings as one word) on the Website. … 8. The Respondent is guilty of contempt of the Court in that in breach of the order referred to in paragraph 7 herein, the Respondent has from 16 December, 2005 to date failed to change registered business name No. BN97930782 to 'Simply Natural Floor Coverings' (with Floor Coverings as two words). 9. The Respondent is guilty of contempt of the Court in that in breach of the order referred to in paragraph 7 herein, the Respondent has from 16 December, 2005 to date used the business name 'Simply Natural Floorcoverings' (with Floorcoverings as one word) on the Website. … 11. The Respondentis guilty of contempt of the Court in that in breach of the order referred to in paragraph 10 herein, the Respondent has from 23 February, 2006 to date failed to publish a disclaimer on the Website that his business is not associated with that of the Applicant for a period of 2 years at not less than font size 12 on the first page of the Website above the fold in a prominent position in wording drafted and approved by the Applicant.' 3 Mr Monamy, the respondent, appeared in person. The applicant was represented by Mr Freeman of counsel. The evidence in support of the charges can be summarised as follows.

[2]

ORDER 1: 4 This order restrained the respondent from using or displaying any signal, symbol or device that was the same or substantially identical with the two trademarks. The prominent feature of the trademarks is the spiral or roll design. Moreover, as framed, the order used the lettering and name appearing on the respondent's website, 'Simply Natural Floorcoverings'. The significance of the spiral design will presently appear. The significance of the use of the word 'Floorcovering' or 'Floorcoverings' as a single word is that the word 'Floorcoverings', as a single word, is part of the registered trademarks the subject of order 1. 5 As orders 3 and 4 to my mind make clear beyond argument, the purpose of the orders was to ensure that the respondent created a name and traded under and used a name in which the words 'Floor coverings' or the words 'Floor'and 'Coverings' appear as two distinct words with capital letters for each as part of the respondent's name. So much appears in order 4 where such a use of a business name is positively ordered. That use would, of course, create a distinction from the single word 'Floorcoverings' that forms part of the trademarks of the applicant. 6 The evidence reveals that since at least 16 February 2006 the respondent's website has had an appearance which has varied. Initially, Ms Than deposed that on 16 February 2006 she noticed that a similar sign, symbol or device to that the subject of the injunction in order 1 appeared on the website on that day. The logo was not static because the spiral or roll portion moved across the webpage and was no longer to be seen in the precise depiction the subject of order 1. Ms Than said that when the home or top webpage loaded on 16 February 2006 the carpet roll portion, meaning the spiral, appeared first and then unrolled itself as it moved across the page and while that rolling across the page occurred the words 'Simply Natural Floorcoverings' commenced to appear word by word increasing in number as the roll went further across the page then flattened out into a line. 7 Ms Than noticed that once the words had appeared in full then the carpet roll reappeared in full in their place (and the words disappeared). Then the carpet roll started to unroll itself with the whole sequence repeating approximately three times. At the completion of the third sequence the words 'Simply Natural Floorcoverings' as a logo appeared on the screen with the carpet roll partially unrolled. On 21 February 2006 the same sequence appears in substance to have occurred and there were some computer screen grabs depicting that on pages 36 and 37 of the affidavit of Mr Dowe. As appears in the final one of the five screen grabs on those pages the word 'Floorcoverings' appears as a single word in the get-up of the respondent's name on the webpage. 8 On 13 March 2006 Ms Than noted that there had been a slight change to the sequence of carpet rolling and said that the sequence occurred approximately four times instead of three times and that when the sequence ceased, the words 'Simply Natural Floorcoverings' as a logo appeared without any carpet roll or spiral on the page. She made a similar observation on 15, 17 and 20 March. On 10, 11 and again on 12 April, that is today, Ms Than observed that her earlier observations as to the sequencing and appearance of the words as well as appearance and movement of the spiral roll, in substance, appeared to be the same save for the fact that by then there had appeared in the depiction of the words on the webpage a space between 'Floor and 'coverings', which latter word commenced with a small letter. 9 Annexure A to Ms Than's affidavit of 12 April 2006 is a colour reproduction of the homepage of the respondent's site showing the final part of the sequence in which the words 'Simply Natural Floor coverings' appears. There is a very small space between the 'r' and the 'c' separating the words 'Floor' from 'coverings'. The space is so small that although if one looks carefully at the page it is discernible, it is hardly apparent to the ordinary reasonable viewer of the page and it certainly does not comply with the requirement in order 4 made by Wilcox J that the business name be changed to have the last word appear as 'Coverings' with a capital C.

[5]

ORDER 5: 12 Order 5 required the respondent to publish a disclaimer on his website that his business was not associated with that of the applicant in font not less than size 12: '...on the first page of the Website above the fold in a prominent position in wording drafted and approved by the Applicant.' 13 On 22 February 2006, the applicant's solicitors forwarded to the respondent a form of wording to constitute such a disclaimer. It is not suggested that the respondent was in breach of any order prior to his receipt of that wording. I think that the order clearly contemplated that he would have a reasonable time within which to put the wording onto the website. During the course of his address and cross-examination of witnesses today, the respondent has indicated that he is a computer programmer, but I put that out of my mind for the purposes of determining what a reasonable time for compliance might be. 14 The evidence is that there is no disclaimer in words which appears on the first page of the website of the respondent at all when physically viewed on the screen without any other activity by the person viewing the screen. What the respondent did was described by Mr Blanch, an information technology consultant, as follows: Mr Blanch accessed and perused the respondent's website on two occasions on 24 March 2006 and 4 April 2006. When he did that, the first page that was displayed after he entered the website was actually not the homepage of the website at all. Rather that homepage is the one which Ms Than's affidavits and Mr Dowe's affidavits had referred to and which I have described earlier in these reasons. 15 Instead, what was displayed was a page brown in colour which dimly displayed the words 'above this text is the fold line in the page! Welcome to our Natural Floorcoverings store for, Coir, Sisal, Seagrass carpets as well as Marmoleums, Linoleums, Vinyls, Timber Floorings. Back to the Start (flash movie)'. Mr Blanch said that within approximately two to three seconds of that first page appearing on the screen, the viewer of the screen was automatically redirected to another brown page that had the link 'click here to ENTER SITE!', which again appeared only for approximately two to three seconds followed by automatically redirecting the user to the respondent's homepage. 16 Mr Blanch printed out a copy of the first page described above which had been made on 4 April 2006 and that printout showed that the first visible line on the page was the line that said, 'above this text, is the fold line in the page!'. I infer that that was a line that appeared at the very top of the page as it was visible on the screen. Mr Blanch's evidence was that he was able to detect a disclaimer in the following terms: 'Disclaimer: Please note, this business is not associated with the "Natural Floorcovering Centres" and "Natural Floorcoverings of Sydney" which trades at 1-5 Saulsbury [sic] Road, Stanmore, NSW, 2048 and 559 Military Road, Mosman NSW 2088.' 17 However, the way in which that disclaimer was located by Mr Blanch is particularly important. He said that it was situated on the first page and published as an HTML meta tag. He said that a HTML meta tag was an instruction for the computer's browser to interpret, but did not provide the text to be displayed to a person viewing the website. He said: '…any text written within "" does NOT appear on the screen being viewed by the user. The only way to view the 'disclaimer' is to access the menu bar and select the "View" and "View Source" options in order to view the HTML code. An average user viewing the website will not (unless they are a programmer and want to see the code behind the page) view the source code and hence will not be notified of the content of the 'disclaimer'.' 18 I find that any text written with the HTML meta tag does not appear on the screen being viewed by the user. Mr Blanch said that the only way to view the 'disclaimer' which the respondent had put into the HTML meta tag was to access the menu bar on the computer screen and then select the 'view' and 'view source' options in order to view the HTML code. 19 Mr Blanch's evidence was that an average viewer using the website would not, unless they were a programmer and wanted to see the code behind the page, view the source code and hence would not be notified of the content of the disclaimer. Mr Blanch's evidence was also that the page on which the disclaimer was published automatically redirected the person using the site to a new page and hence it would take a user a number of attempts to stop the redirection in order to view the code prior to the redirection. He also gave evidence that the font size was not 12 point. 20 Exhibit 6 was tendered by the respondent as a printout of, among other things, the HTML meta tag containing the disclaimer, which I have just set out above. Exhibit 6 is a 100 line item document which I infer means that there are 100 items on whatever is the part of the webpage on which it is contained. Item 14 consists of the disclaimer.

[6]

Proof of the ChargeS 21 Contempt of court, including that species of contempt which consists of the breach of orders or of the court or undertakings to the court, must be proved beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525 at 534, 548. 22 All contempts are criminal in nature (183 CLR at 534). The court approaches in the adjudication of charges of contempt on the basis that criminal standards of proof and specificity apply. In this case the respondent, as was his right, did not himself give evidence although he tendered some documents. 23 The genesis of the orders made by Wilcox J appears to have been a handwritten heads of agreement signed by the director of the applicant, Mr Dowe, and Mr Monamy following the conclusion of mediation conducted with registrars of the court on 12 December 2005. The respondent has referred to that document as informing his interpretation of the orders. 24 Paragraph 3 of the handwritten document has a number of interlineations in different handwriting but significantly it sets out, in what appears to me to be unarguably clear words, the requirement that the respondent change his registered business name to 'Simply Natural Floor Coverings' (with 'Floor' and 'Coverings' written as two words each commencing with a capital letter) and use this business name on all advertising, letterhead, promotions and the like in lieu of 'Simply Natural Floorcoverings' (written as three words). 25 The respondent raised issues as to the fact that he was not personally present when Wilcox J made the orders and that he was in dispute with his then solicitor as to whether he had agreed to the orders being made in the terms in which they were made. Exhibit 7 contains some material which supports the proposition that there was some dispute between Mr Monamy and his solicitor on that topic. 26 On 9 January 2006 the respondent was served personally with the orders made by Wilcox J although they did not then bear the endorsement required by order 37 rule 2 subrule (3) notifying that: 'The person served is liable to imprisonment or sequestration of property if the order required a person bound to do an act within a specified time the person bound refuses or neglects to do the act within that time.' 27 On 19 January 2006 the respondent was served personally with the orders made by Wilcox J with an endorsement at the foot in the following terms: 'To: Dennis Monamy, if you disobey paragraphs one to six (inclusive) of this order, then you will be liable to sequestration of property and to imprisonment.' 28 The respondent has said that the orders did not specify any particular time for compliance and that he had difficulties in complying with them, having regard to the fact that his website covered, he said from the bar table, something like 530 pages and that he said he had been inundated with paper from the applicant. 29 I note that at the time of service of each of the two sets of orders on 9 and 19 January 2006 the applicant's solicitors said that they insisted on having the respondent comply with the orders by 20 January 2006. Of course, the respondent was in no position to comply with order 5 because no form of wording had been proffered at that stage by the applicant.

[7]

charge 2 30 The terms of order 1 prohibited the respondent from using not only the mark depicted in that order in the form in which it was but any sign, symbol or device that was the same or substantially identical with the registered trademarks. I am satisfied beyond reasonable doubt that the use of the spiral design, or roll, in the way in which it has been used by the respondent as established in the evidence which I have set out does contravene order 1. 31 The association of the roll with the mark or design that is the subject of the two trade marks referred to in order 1 and the depiction there, as is used on the website as established in the evidence, I find, beyond reasonable doubt, is a use or display of a sign, symbol or device that was the same as or substantially identical with the trade mark spiral. Merely because it rolls and unravels itself does not change the fact that initially, what appears on the screen is that which the respondent is prohibited from using. 32 And, the fact that it is thereafter used in a way that may distinguish it from what it was before, does not change the clear evidence of a contravention of his Honour's order, coupled with the fact that until at least 20 March 2006 the respondent used the words 'Simply Natural Floorcoverings' without creating a distinct word 'Covering' as required by order 4, demonstrates the flagrancy of the breach. I am satisfied beyond reasonable doubt that the breach of order 1 has been established by each of the uses of the spiral and the collocation of the three words 'Simply Natural Floorcoverings'. I am satisfied that used together, both of those elements demonstrates beyond reasonable doubt a breach of order 1. 33 The change in the depiction of the word or words 'Floorcovering' or 'Floorcoverings' on the website some time after 20 March and before 4 April is one which does not in my view involve any relevant change in the conduct, the subject of the charge. I am satisfied that the ordinary reasonable person viewing the website would not comprehend or detect that it conveyed a meaning other than 'Floorcoverings' as a single word was being displayed. The evidence of both Ms Than and Mr Blanch confirmed that each of those persons viewed the sign as depicting that. I cannot, of course, regard that evidence as conclusive. Each of them has a connection with the applicant and their own reactions may not be those of ordinary reasonable members of the class to whom this conduct is directed, namely, the public at large viewing the website: see: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 84-85 [100]-[103]. I am satisfied beyond reasonable doubt that the ordinary and natural interpretation by an ordinary reasonable person using a computer to access the homepage of the respondent's site would regard the get-up of the words 'Simply Natural Floorcoverings' as conveying that there are three words there, not four, and that there is no significant enough indication of a distinction between where the word 'floor' ends and the word 'coverings' begins to demonstrate that the business name and mark being used is other than that of a trade mark in which an integral part was the single word 'Floorcoverings'. 34 The difficulty with the formulation of the finding of contempt contained in paragraph 2 of the statement of charge is that it relies on evidence of a number of disparate acts which changed over a period. There is a real possibility that there may be some duplicity in the charge as formulated, having regard to the evidence that I have recited. In Johnson v Miller (1937) 59 CLR 467 at 489-491 Dixon J made clear that a prosecutor had to specify with precision the precise act or omission relied on to constitute the particular contravention charged. That case involved a situation in which a prosecution had been brought alleging that within a particular time period a person had left licensed premises in breach of s 209(1) in the Licensing Act 1932-1935 (SA). The evidence tendered at the hearing revealed that there were many persons who had left during that time, but the prosecutor could not identify which of those many persons was relied on as the person whose departure evidenced the contravention. The charge was found bad for duplicity on that basis. 35 Here it seems to me that the applicant is relying on a number of events and different appearances of the website. I think that in fairness to the respondent the applicant must elect which particular instance it wishes to claim is a contravention and to allow the respondent an opportunity to answer in respect of that instance. I will defer making any final decision on that matter because I did not raise this issue with Mr Freeman when he was addressing.

[11]

CHARGE 11 41 The respondent argued that he was not be treated as having been in contempt of order 5, which required him to display prominently a disclaimer on the website's first page. There is no doubt that until 22 February 2006 the respondent could not have been in contempt of order 5 because the applicant had not provided a form of words to him for the purposes of the injunction. I think also that the injunction must be construed as affording the respondent a reasonable time in which to act. 42 I am satisfied beyond reasonable doubt that the respondent did know that he had a reasonable time within which to act. I find beyond reasonable doubt that a reasonable time expired no later than one week after the respondent was served with the form of words on 22 February 2006. Leaving aside the typographical error in his description of the applicant's address, it seems to me that this contempt is particularly flagrant. 43 I am satisfied beyond reasonable doubt that the respondent has failed to publish any form of disclaimer on the website and that the use of the HTML meta tag is a deliberate evasion of the obligation to publish something that is able to be read in the ordinary way on the website. The contents of the HTML meta tag are not and at no time have been published on the website. What was required by order 5 was that there be published a disclaimer, that is it, be put forward in a form which actually communicated it. The act of publication in a bilateral act of someone putting forward a message and another person being able to read it and actually reading it. In this context it was clear beyond reasonable doubt that the order required that that the publication, in the sense of something which the person accessing the page would see and be able to read then and there, would occur whenever the page was opened. See Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 at 600-601 [26]-[28]. 44 The order in my view, beyond reasonable doubt, should be construed as requiring the disclaimer referred to appear in a way which is immediately apparent on the website in words that can be read in the English language by anyone who opens the webpage. An ordinary and natural reading of the order dictates that construction. 45 I did raise with Mr Freeman the possibility that order 5 was or contained an ambiguity in the sense that the words 'above the fold' were to my mind, and I think on the evidence, meaningless without expert evidence or other evidence as to what they conveyed. I have seen in the evidence copies of the website and I am unable to detect from viewing them what it is that might be referred to as 'above the fold' in the order. However, I am satisfied that this ambiguity makes no difference whatsoever to the construction of the order in the sense that it was a requirement of the order that there be prominence on the website in the position of the disclaimer and that it be published. 46 The HTML meta tag is not visible on the webpage. It is not accessible to the ordinary reasonable person and it can only be accessed in the manner I have described above when it 'appears' in a page which disappears within two to three seconds. The use of the HTML meta tag is in my opinion nothing more than a flagrant device to evade a very clear order that required an active communication by the respondent of the dissociation of his business from the applicant's which the respondent has sought to evade. 47 I am satisfied beyond reasonable doubt that order 5 has been contravened. I find the respondent guilty of contempt of the court in that in breach of order 5 made by Wilcox J he has from no later than 1 March 2006 failed to publish a disclaimer in the words drafted in the applicant's solicitors letter to the respondent of 22 February 2006 on his website that his business is not associated with that of the applicant in font size 12 on the first page of the webpage in a prominent position above the fold or at all. 48 I will direct that the applicant file and serve on or before 4 pm, Wednesday, 19 April written submissions as to whether or not a charge 2 is bad for duplicity, whether that charge ought be amended and if so, what amendment is sought and what evidence is relied on in support of the proof of the charge as amended. 49 I will direct that the respondent is to file and serve any submissions in response to the applicant's submissions related to the charge related to the breach of order 1 made by Wilcox J on 15 December 2005 on or before 4 pm on 28 April 2006. I will have to reserve my judgment about that matter. 50 I will reserve costs. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.