3. In December 1986 the Coopers registered a number of business names commencing with the words "A. Aarons Florist", including the name "A.Aarons Florist Indooroopilly". They inserted a number of advertisements in the Brisbane Yellow Pages 1987, a directory published and distributed to telephone subscribers throughout the Brisbane metropolitan area by the Australian Telecommunications Commission which carries on business as Telecom Australia. The distribution occurred from November 1986. It is an advertisement inserted by the Coopers under the name "A. Aarons Florist Indooroopilly" in the alphabetical listing of florists in the section of the Brisbane Yellow Pages 1987 entitled "Florists - Retail" which gives rise to this action. I shall refer to this advertisement as "the impugned advertisement". At no time did the Coopers have a florist shop physically situated in Indooroopilly.

4. The Australian Telecommunications Commission was initially joined as a respondent. An order was sought against the Commission directing it to disconnect the A. Aarons Florist telephone service and to divert calls made to that number to a recorded message. On the first return of the application, on 15 September 1987, the Commission revealed that a further advertisement similar to the impugned advertisement was to be included in the Brisbane Yellow Pages 1988. This led to an order of the Court made that day that the advertisement be withdrawn from the 1988 publication which was about to go to print. The Brisbane Yellow Pages 1988 were distributed from November 1987. By 1988 the applicant sought no further relief from the Commission and the proceedings against it were later struck out on the application of the applicant.

5. The third and fourth respondents at all material times carried on business as Australian Directory Services, the firm which is the official advertising contracting agent to Australian Telecommunications Commission responsible for receiving and processing entries in the Yellow Pages directories. From September 1985 both the Coopers had been employed by Australian Directory Services as district sales managers in Queensland. They remained so employed until the first respondent, Mrs Cooper, resigned on 9 January 1987, and the second respondent, who is her husband, resigned on 25 May 1987. As employees of Australian Directory Services, their work required them to supervise groups of sales representatives who sold advertising space in the Yellow Pages to telephone subscribers.

6. During 1986 the Coopers decided to establish a florist business which Mrs Cooper would conduct. Mrs Cooper was an ambitious and enthusiastic young woman keen to go into business on her own account, although she had no experience in running a business. She believed she could succeed by making use of the knowledge she had acquired about Yellow Pages advertising as an employee of Australian Directory Services, and by following advertising techniques which she had recommended to others intending to advertise in the Yellow Pages. She proposed an advertising campaign which would have a "dynamic effect". She undertook a night course in floristry at the Queensland Academy of Floral Art during 1986, and looked for suitable premises from which to conduct the business. The Coopers settled on an existing floristry business at Annerley, a suburb of Brisbane. This business, known as Abracadabra Florists, had been operating on a small scale for three years. It had a number of established customers, and was a member of Interflora through which orders for delivery in the Annerley area were received. The Coopers bought the goodwill and took over the lease of a shop at 492 Ipswich Road, Annerley, entering into possession in mid-November 1986.

7. The Coopers had already planned their advertising program. Advertisements by florists are published in the Brisbane Yellow Pages in two sections: "Florists - Retail" followed by "Florists (Retail) Locality Guide". The first section includes both display advertisements and "in-column" entries in alphabetical order. The in-column entries in some instances merely state the business name, address and the telephone number of the florist. Interspersed amongst these entries are other entries called "directional entries". The impugned advertisement is a directional entry. The second section, instead of listing business alphabetically, lists them under locality headings, usually under suburbs. There are for example two entries under the locality heading "Indooroopilly".

8. The Coopers adopted the name A. Aarons Florist as their primary trading name to ensure that in the alphabetical listing of entries they would obtain prominence near the head of the Florists - Retail section. The adoption of a name which is likely to head the alphabetical list is a common ploy used by those advertising in the Yellow Pages, as a quick perusal of the Brisbane Yellow Pages confirms. In the Brisbane Yellow Pages 1987 there were other names ahead of A. Aarons Florists, for example A.A.A. Aabor Florists, and A. Aabagails Art Florist. Then, to have a saturation effect, the Coopers inserted in the alphabetical listing twelve directional entries that followed one after the other occupying more than two full columns. A directional entry is surrounded by ruled lines and, in the case of those inserted by the Coopers, were approximately as deep as they were wide. Each of the twelve directional entries, in prominent type size set against a black background strip, stated a different geographic area as the directional component of the entry. The offending entry is reproduced:

9. The style and content of entries accepted for publication were controlled by the "Yellow Pages Advertising Guidelines", published by Telecom Australia as the national advertising standards for Yellow Page directories. These lengthy and detailed guidelines were well known to all respondents. The third and fourth respondents have in place work practices throughout their operation to ensure that entries published comply with the guidelines. It is necessary to refer to several of the guidelines relating to directional entries to understand the form of the twelve directional entries inserted by the Coopers, and also the attitude since adopted by the respondents that the offending advertisement is not misleading or deceptive or likely to mislead or deceive. Guideline 10, Directional Entries, includes the following requirements:

"10.1 Introduction

A Directional Entry is an in-column advertisement

with a rule surrounding pertinent information

about the business or name concerned. This entry

incorporates a directional component which

identifies the location of, or the area served by,

the advertiser.

10.2 Basis For Directional Entries

a. A Directional Entry will be permitted where

an entry for the same name, address and

telephone number appears, or is to appear, in

the corresponding White Pages directory.

This will replace the Free Entry entitlement

in the same classification.

b. In any one classification, each advertiser is

permitted to take one Directional Entry per

registered business name, provided that the

advertiser in fact services the areas

appearing in each directional component,

E.g.:

(i) The advertiser's address is FITZROY

but his market is COLLINGWOOD. The

directional component of COLLINGWOOD

is acceptable.

(ii) ...

(Refer also 10.3f.)

10.3 Approved Conditions

a. ...

b. ...

c. ...

d. Directional Component of these entries may

include one of the following groups:-

CITY, TOWN OR SUBURB NAME

SHOPPING CENTRE NAME (Approved by the

Directory Officer)

COMPASS POINT SUBURB GROUP NAME (e.g.

Northern Suburbs)

MUNICIPALITY

HOSPITAL OR CEMETERY NAME

SPECIFIC GEOGRAPHIC LOCATION (e.g. Yarra

River, Sydney Harbour)

OTHER ACCEPTABLE DESCRIPTION (e.g. Opera

House, All Areas, All Suburbs, Australia

Wide)

e. ...

f. The insertion of Directional Entries in

Locality Guides is restricted to entries with

Directional Components showing SUBURBS,

TOWNS, MUNICIPALITIES or OTHER DEFINED

LOCALITIES only.

The Directional Component and the Locality

Guide Sub-Heading must be the same (see

Example (i) unless the advertiser uses a

component for a shopping centre name or other

suitable locality description, which is

located within the particular locality area

or adjacent to it. See Examples (ii) and

(iii).

Examples

(i) The advertiser requires an entry under the

Locality Guide Sub-Heading of COLLINGWOOD.

The Directional Component must be

COLLINGWOOD even though his postal address

may be different.

(ii) The advertiser requires an entry under the

Locality Guide Sub-Heading of BROOKVALE.

The advertiser may use his shopping centre

name WARRINGAH MALL as his Directional

Component.

(iii) The advertiser requires an entry under the

Locality Guide Sub-Heading of CENTRAL

COAST (NSW). THE ADVERTISER MAY USE THE

DIRECTIONAL COMPONENT OF GOSFORD.

..."

10. It will be observed that by guideline 10.2.b only one directional entry is permitted for each registered business name. To enable twelve directional entries to be inserted in the alphabetical listing the Coopers were required to register twelve business names. The guidelines elsewhere require that the opening words of an alphabetical listing will be the business or subscriber name. Each of the directional entries had a similar layout to the offending advertisement. The registered business names (shown in each entry in the corresponding position to A. Aarons Florist Indooroopilly in the impugned advertisement) and the corresponding directional component were as follows:

A. Aarons Florist Carindale Carindale Shopping Centre

A. Aarons Florist Indooroopilly Indooroopilly Shoppingtown

11. The respondents contend that the directional component in each entry, including those which give a shopping centre name, comply with the guidelines, and contain no factual inaccuracy as the Coopers serviced the area appearing in the directional component : see guideline 10.2.b.

12. In each instance, the directional entry included the words, with much the same prominence and positioning as in the impugned advertisement :

Ask for Jenni on

8923114

CREDIT CARDS WELCOME

WE DELIVER ALL SUBURBS,

13. The Coopers did not conduct florist shops in any of the places described by the directional component in the entries. Their sole business premises was at Ipswich Road, Annerley, some 14 to 15 kms from the Indooroopilly Shoppingtown, and in some instances even further from the places shown as the directional component. The Coopers say it was their intention to show by the advertisements that whilst A. Aarons Florist operated from Ipswich Road, Annerley the business served a wide cross section of geographical locations.

14. Besides the directional entries, the Coopers inserted alphabetical entries under Florists - Retail for "Aarons Florist", and "Aarons Florist and Gift Baskets". These entries referred to separate quarter page display advertisements for each name. The display advertisements - which were eye-catching in their art work - showed only the Annerley address. The Coopers also inserted an "Abracadabra Florist" entry showing the Annerley address which was repeated under the Florists (Retail) Locality Guide. The twelve registered names associated with the directional entries were not repeated in the Florist (Retail) Locality Guide. In addition the Coopers inserted a quarter page display advertisement for "Aarons Florist and Gift Baskets", showing the Annerley address, under "Gift Services" in another section of the Yellow Pages. The total advertising charges incurred by the Coopers for the Brisbane Yellow Pages 1987 was $23,022.

15. Mrs Cooper has given evidence that the A. Aarons Florist telephone started ringing from the day the Brisbane Yellow Pages 1987 went into circulation. Part of their business originated from Interflora orders, which would be unrelated to the Yellow Page entries, but most of the business was received by telephone order.

16. The applicant also advertised in the Brisbane Yellow Pages 1987. She had a directional entry in the alphabetical listing under the business name "Shoppingtown Florist" with the directional component being "Indooroopilly". She also had an entry under the Locality Guide under Indooroopilly. The applicant had run a similar advertisement in earlier years in the Locality Guide, but in 1987, for the first time, another florist also advertised under the Indooroopilly location heading. The new entry appeared ahead of the applicant as it was an advertisement for "A. Aabigails Art Florist" showing a business address at Mt Gravatt, an after hours number (which the applicant did not show) and advice that the florist made "deliveries to all suburbs" in prominent type. This florist was unrelated to the Coopers.

17. The applicant says she first checked the Brisbane Yellow Pages 1987 in January 1987 and was dismayed by the A. Aarons advertisements, and in February 1987 she detected a decline in her telephone orders. The drop in business became worse in the months which followed, and the downturn in her business did not reverse until early 1988. She attributes the downturn to the inpugned advertisement which she alleges siphoned off a large part of her telephone trade. She attributes the later improvement to the distribution of the Brisbane Yellow Pages 1988 which omitted the impugned advertisement. The applicant's case is that the directional entries were inserted by the Coopers, and in particular the directional entry for Indooroopilly Shoppingtown, as part of a planned deception of the public to ensure that the A. Aarons Florist advertisements were ahead of the applicants in the alphabetical listing where they would attract the attention of potential customers and mislead them into believing that A. Aarons Florist Indooroopilly carried on business at Indooroopilly Shoppingtown. The applicant does not allow that any part of her business downturn could be due to the new entry by A. Aabigails Art Florist in the Locality Guide, or to any cause other than the impugned advertisement.

18. The applicant pleaded in her statement of claim that this Court has jurisdiction to hear the action against the Coopers, as non corporations, by virtue of the provisions of s.6(3) of the Trade Practices Act. The respondents did not plead to this averment, nor, strictly were they required to do so. At the hearing of the applicant's motion for interlocutory relief in September 1985 the jurisdiction of the Court was not challenged. No challenge was made to the jurisdiction of the Court during the five days of the trial. It was surprising, then, to read in the written submissions of the respondents, which were exchanged between the parties after the oral hearing, that they argue that s.52 of the Trade Practices Act can have no application to the Coopers (and if this submission is correct, it would follow that the third and fourth respondents could not incur a liability as persons involved in the contravention). The Trade Practices Act, s.6(3) extends the operation of Divisions 1 and 1A of Part V (which include s.52) to a person not being a corporation who is "engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast".

19. Counsel for the third and fourth respondents, Mr O'Donnell, argues that when s.52 is read in light of s.6(3) (see The Queen v. Australian Industrial Court; Ex Parte CML Holdings Pty Ltd & Anor (1977) 136 CLR 235 at 245), the section would provide :

"A corporation shall not, in trade or commerce, and

a person not being a corporation shall not, in

trade or commerce, to the extent to which the

conduct involves the use of postal, telegraphic or

telephonic services or takes place in a radio or

television broadcast, engage in conduct that is

misleading or deceptive or is likely to mislead or

deceive."

20. He argues that the critical feature of the section so read is that it is in the use of the means of communication specified that the conduct which is, or is likely to be, misleading or deceptive must take place. That is, the conduct must consist of words spoken over the telephone, documents sent by mail, telegrams, words spoken in a radio broadcast or words or pictures transmitted in a television broadcast. He says so much appears to have been recognised in Haydon & Anor v. Jackson & Ors (1988) ATPR 40-845 at 49,103, Smolongov & Anor v. O'Brien & Anor (1982) ATPR 40-312 at 43,847 and on appeal (1983) ATPR 40-418 at 44,847 and Advanced Hair Studio Pty Ltd v. TVW Enterprises Limited (1987) 18 FCR 1 at 11. In the first two cases misrepresentations were made in telephone communications by an individual, and there can be no room to doubt that the impugned conduct involved the use of telephonic services. In the last mentioned case, French J. gave a broad construction to the words "takes place in a ... television broadcast". His Honour held that s.6(3) applied so as to extend s.52 to conduct which took place in the course of a pre-recorded interview intended for later transmission. The decision does not, in my view, support the restricted construction which Mr O'Donnell has advanced. His Honour extended the scope of s.6(3) to conduct that was preparatory to the actual transmission of pictures in a television broadcast.

21. Section 6(3) separately describes two classes of conduct. On the one hand there is conduct which "involves the use of postal, telegraphic and telephonic services" and on the other hand there is conduct which "takes place in a radio or television broadcast". The difference in language used in each description suggests that the nexus between the conduct and the medium of communication in each class is not the same. Even if it were the meaning of "takes place in a radio or television broadcast" that the conduct must occur during and as part of a radio or television broadcast, it would not follow that conduct which involves the use of telephonic services must consist of words spoken over the telephone. Such a reading of the relevant words in s.6(3) is an extremely narrow one. Section 6(3) draws on the breadth of the power conferred on the Federal Parliament by s.51(v.) of the Constitution which has been given a broad construction by the High Court: see R. v.Brislan Ex Parte Williams [1935] HCA 78; (1935) 54 CLR 262, Jones v. The Commonwealth (No. 2) [1965] HCA 6; (1965) 112 CLR 206 and The Herald and Weekly Times Limited & Ors v. The Commonwealth [1966] HCA 78; (1966) 115 CLR 418. In Jones v. The Commonwealth (No. 2), Kitto J. at 226 said :

"Brislan's Case [1935] HCA 78; (1935) 54 CLR 262 shows that a

radio broadcasting system (and it follows that a

television broadcasting system) is a telegraphic,

telephonic or other like service, being an

organized method provided as a means by which a

person may transmit communications, receivable

through the ear (and, in the case of television,

the eye), for reception by such other persons as

put themselves in a position to receive it.

Since the decision in that case it cannot be

denied, I think, that the power under s.51 (v.) is

not confined to providing for the establishment,

maintenance and operation of telegraphic,

telephonic or other like services, but extends to

the choice of the persons who may make use of such

a service either to send or to receive

communications, to the conditions upon which

persons may so use it, and to every aspect of the

use and advantage they may have from it. No

narrower view would be consistent with the broad

understanding, upon which Brislan's Case insists,

of the grant of power in s.51 (v.)."

22. It appears from the provisions of the Trade Practices Act relating to its extended operations that Parliament intended the legislation to have the widest application consistent with the limits of constitutional power, and s.6(3) should be given a broad construction. In my opinion "telephonic services" are not strictly limited to means of transmitting an oral communication from one place to another. I consider telephonic services include the official directories which are published by the Australian Telecommunications Commission in pursuance of its functions under the Telecommunications Act 1975. Directories such as the White Pages and the Yellow Pages are an essential aspect of the orderly use of the telephonic system. The use of that system requires that users have means of identifying the call number of subscribers with whom communication is desired. The directories provide the means of identifying telephone numbers of others, and the Yellow Pages provide a systematically structured way of identifying community and commercial suppliers of goods and services, and the relevant numbers to enable communication to be had with them by telephone. A telephone subscriber, who authorises the insertion of an entry relating to the subscriber's own telephone in the White Pages, so that other people may communicate by telephone with the subscriber, is making use of part of the telephonic services. A subscriber who authorises the insertion of an entry in the Yellow Pages which carries information about goods and services which the subscriber supplies, and the subscriber's telephone number, is also making use of part of the telephonic services. In my opinion the insertion of the impugned advertisement by the Coopers in the Yellow Pages was conduct by them which involved the use of telephonic services within the meaning of s.6(3). I reject the respondents' argument that s.52 can have no application to the Coopers in the circumstances of this case.

23. The next question which is contested by all respondents is whether the Coopers, in authorising the insertion of the impugned advertisement, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive. It is not disputed that the conduct was engaged in by them in trade or commerce.

24. The respondents argue that the impugned advertisement, read alone, was not misleading or deceptive and had no potential to mislead or deceive as by its terms it made clear that "A. Aarons Florist Indooroopilly" had its place of business at 492 Ipswich Road, Annerley. Further, when the impugned advertisement was read in the context in which it appeared, amongst the eleven other A. Aarons Florist directional entries, this fact was made all the more clear. In short the impugned advertisement according to its terms and in context would not lead users of the Yellow Pages into error. In the course of the oral evidence, and in written submissions, the Brisbane Yellow Pages guidelines and the application of them to the directional entries inserted by the Coopers received considerable attention. In my opinion compliance with these guidelines cannot decide the question whether the placing of the impugned advertisement amounted to conduct by the Coopers in contravention of s.52. It is common ground that the guidelines have no legislative force.

25. It is necessary to identify the relevant section of the public by reference to whom the question of whether conduct is or is likely to be misleading or deceptive falls to be tested: Taco Company of Australia Inc. & Anor v. Taco Bell Pty Ltd & Ors [1982] FCA 136; (1982) 42 ALR 177 at 202, Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 199 per Gibbs C.J. In my view the relevant section of the public is not just those people residing in the Indooroopilly area as counsel for the Coopers contends, but members of the public throughout the Brisbane metropolitan area to whom the Brisbane Yellow Pages are distributed. Members of the public in suburbs removed from Indooroopilly can be expected to consult the Yellow Pages for information about florists in or serving the Indooroopilly area. Within that broad geographic section of the public will be a cross section of the community amongst whom levels of education, linguistic skills, experience and intelligence will vary markedly. Of those using the Brisbane Yellow Pages 1987 to locate and identify a florist, it could be expected that some would do so in haste, and some would do so with ponderous care. Some people would search for a number of florists whose advertised services could meet their needs and then make a careful selection; others could be expected to fix on the first entry which they perceived, whether on a quick reading or close study, would meet their requirements. The impugned advertisement, by the prominent emphasis in the black background strip given to "Indooroopilly Shoppingtown" was likely to, as it was intended to, attract the attention of someone using the Yellow Pages whose interest was to identify a florist associated with that geographical area. This would be so whether the consumer was seeking to find a florist located in that area or simply one who serviced that area. Many people using the Yellow Pages could be expected quickly to scan prominent entries, even in the alphabetical list, looking for a word or words which indicated a geographic location, and not read the full text entry by entry until a pertinent one was found. On ascertaining a pertinent location word, the user could be expected then to concentrate more closely on the entry in which that word was placed. It is against this background that the impugned advertisement, its text, its format, and its context amongst other entries, is to be construed to ascertain what representations it may reasonably be understood to convey to members of the public.

26. Apart from the words FLOWERS FOR ALL OCCASIONS, the most prominent words in the impugned advertisement are the business name A. AARONS FLORIST INDOOROOPILLY, and INDOOROOPILLY SHOPPINGTOWN. If the information in the small print appearing lower down in the advertisement were overlooked, the particular business name in conjunction with the place identified by the directional component, would be reasonably understood to mean that A. Aarons Florist Indooroopilly had a florist shop or retail outlet at Indooroopilly Shoppingtown, even by someone familiar with the Yellow Pages practice of allowing directional entries for areas serviced by a business. Construed in this way the impugned advertisement would convey a misrepresentation.

27. However the respondents submit that it is not reasonable to understand the impugned advertisement in this way because attention must also be given to the other information in the advertisement, to the smaller print, and to the impression conveyed by the adjoining advertisements. It is pointed out that the impugned advertisement twice gives a telephone number, and it is submitted that someone influenced at all by the advertisement would read the telephone number. It is said that the prefix 892 would be readily apparent to people in the Indooroopilly area as foreign to that suburb which at the relevant time had telephone numbers commencing with the prefix 378. The witnesses Misses Geale and Waddington, and Mr Larson, called by the applicant said they would recognise the 892 number as foreign to Indooroopilly. Evidence from a number of people to this effect does not prove that all people residing in the Indooroopilly area would recognise the 892 prefix as foreign to the suburb, although I think most of those who had lived in the area for an appreciable time, and were familiar with it, could reasonably be expected to recognise the significance of the 892 prefix. However I do not accept the submission that the relevant section of the public for present purposes is confined to residents of the Indooroopilly area. I think there would be numerous people in other suburbs who would not place significance on the 892 prefix. Then it is said that the Annerley address shown at the foot of the impugned advertisement would correct any misconception that may have arisen from the business name and directional entry. The address is shown in very small print and is likely to be overlooked by many readers. With those who read the address, it is difficult to know what they would make of it. Some could conclude that notwithstanding the inference arising from other parts of the advertisement, the florist is not situated in Indooroopilly. Others could conclude that the address is a head office address, and others could remain uncertain about the meaning of the small print and continue to be guided by the apparent meaning of the prominent words in the advertisement. The respondents contend that the Annerley address, and the telephone numbers, assume more importance when the impugned advertisement is read in conjunction with the adjoining advertisements under the A. Aarons Florist name. It is argued that the user of the Yellow Pages would observe that the impugned advertisement is one of a large block of advertisements, each of which specifies for A. Aarons Florist the same Annerley address and the same telephone number; the overall effect, even on a casual look, is to produce an impression of the one business at Annerley advertising itself as serving all over Brisbane. There are difficulties with this contention. First I think there would be a substantial number of users who on finding an entry for a florist associated with a particular place for which they were looking, would not pay sufficient attention to adjoining entries to observe the repetitive listings which start with the A. Aarons Florist name or to observe that the adjoining entries show a common address and telephone number. Some astute and careful users may observe the relevant features of the adjoining advertisements, but what conclusions would they reach? An outstanding feature of the twelve directional entries is that each is not for "A. Aarons Florist" but for different businesses which incorporate the A. Aarons Florist name, each business apparently being associated with a different area and having a business name which is geographically related to that area. The astute user is likely to be left with the impression that in each area there is a separate floristry business or outlet which has some association with A. Aarons Florist. The common telephone number and the common address, if either or both features were perceived as important, would suggest that all the businesses or outlets were controlled from one location. The user may thereby be reasonably led to think that under the A. Aarons Florist umbrella there was a large organisation with many outlets. I do not think the common telephone number and address would in the case of an astute reader of the impugned advertisement necessarily dispell the misapprehension that the A. Aarons Florist Indooroopilly business had a retail outlet at Indooroopilly Shoppingtown.

28. The respondents also point out that in the second section of the florist entries, under the Locality Guide, there is no entry under Indooroopilly for "A. Aarons Florist" or "A. Aarons Florist Indooroopilly". It is suggested that a user of the Yellow Pages would recognise from this fact that there was no A. Aarons Florist outlet at Indooroopilly Shoppingtown. I think it is unlikely that even the astute user, having found an apparently pertinent advertisement for a florist associated with Indooroopilly in the Florists - Retail section would then check the directional entry so found against the Locality Guide. Even if that measure were taken, and the user found two other florists recorded under the Indooroopilly heading, I do not think it follows that the reader would or should then realise that the directional entry in the alphabetical listing should be understood to mean that "A. Aarons Florist Indooroopilly" did not have a geographical presence in Indooroopilly.

29. In my view the impugned advertisement on being read by reasonable members of the section of the public to which it was addressed, whether those members read it quickly or studied it closely, was likely to mislead or deceive a significant section of them, as it would be understood by them to represent that a business known as "A. Aarons Florist Indooroopilly" had a retail florist outlet in Indooroopilly Shoppingtown.

30. I have reached this conclusion independently of evidence adduced by the applicant, from her witnesses, and in cross-examination, that members of the public had in fact formed an erroneous conclusion from reading the impugned advertisement. The applicant gave evidence of three occasions on which members of the public had been misled. Firstly, in June 1987 she received a letter enclosing a money order for flowers apparently delivered to a shop in the Shoppingtown complex on 15 June 1987. The envelope was addressed to "Flowers for All Occasions", Indooroopilly Florist, Indooroopilly Shoppingtown. Secondly, during July 1987 a man (unidentified) arrived at her shop to collect an arrangement. She knew nothing of the order. The man referred to the Yellow Pages and identified the impugned advertisement as the source of the telephone number through which he had placed the order. Thirdly, on 25 July 1987 several people called to collect corsages about which the applicant had no record. Again, she says the customers identified the impugned advertisement as showing the florist with whom an order was placed. The applicant's evidence about the corsages was corroborated by one of her employees who also referred to another instance when a gentleman came into pay an account for which the applicant's business had no record. He identified the impugned advertisement as naming the florist from which his purchase was made. In no instance was the member of the public who had apparently been misled by the impugned advertisement called to give evidence, and the reasons for the misconception could not be explored: cf the Taco Bell case at 203. In addition there was evidence from Mrs Cooper who in cross-examination said :

"There were a few occasions when someone would

phone up and say, 'I want some flowers. You are

in the Indooroopilly Shopping centre' or whatever

shopping centre and I would say 'I am sorry, no

we're not. We do deliver there, but I will give

you the telephone number of the Indooroopilly

florist' and I would give them that telephone

number."

31. As will later appear, the Coopers abandoned the A. Aarons business in September 1987. After they did so, their premises were taken over by Mrs Hutchinson who maintained the former telephone number. She too received calls saying "Are you at Indooroopilly?".

32. The above evidence provides support for the conclusion that the impugned advertisement misrepresented that the advertiser had a physical presence at Indooroopilly Shoppingtown, but I do not think the evidence leads to the further conclusion that those members of the public who called at the applicant's business about their orders, or any of them, had been misled into thinking that the advertisement related to the applicant's business. Those who called at her shop about their orders may have been unaware of the applicant's business until they went to Indooroopilly Shoppingtown in search of the florist they had identified in the Yellow Pages.

33. It is submitted by the applicant that the impugned advertisement contained a misrepresentation in that it referred to the florist business conducted at Indooroopilly Shoppingtown by the applicant. The advertisement by its terms conveys no such representation. It could carry such a representation only to someone who had been to Indooroopilly Shoppingtown or otherwise knew there was one, and only one, florist situated there, but who was not sufficiently familiar with the applicant's business to be able to correctly identify it in the Yellow Pages, or to directly ascertain her telephone number from the White Pages. These characteristics of the class of person who might construe the impugned advertisement as containing a representation that it related to the applicant's business would be a relatively small class, but not an insignificant one. To members of this class I consider the advertisement was misleading or deceptive, or was likely to mislead or deceive them by causing them to form an erroneous conclusion that the advertisement related to the only florist shop situated in Indooroopilly Shoppingtown. This conclusion is independent of any notion of goodwill which attaches to the applicant's business. It depends on the state of knowledge in the Yellow Pages user that as a matter of geography there was one florist's shop situated in Indooroopilly Shoppingtown.

34. For these reasons I consider there has been a contravention of s.52 by the Coopers.

35. The applicant's contention that the third and fourth respondents should be fixed with legal responsibility for the contravention of s.52 committed by the Coopers is put on two separate grounds in the pleadings. First by paras. 10 and 11 of the amended statement of claim it is alleged that the third and fourth respondents knowingly "assisted" in that contravention so as to attract liability under ss.75B and 82 of the Trade Practices Act. Secondly, by paras. 11A to 12 it is alleged that contraventions were committed by the Coopers as employees acting within the scope of their employment with the third and fourth respondents who thereby incurred a vicarious liability.

36. To establish liability on the part of the third and fourth respondents under s.75B the applicant must show that the third and fourth respondents had knowledge of the essential facts constituting the contravention: Yorke & Anor v. Lucas [1985] HCA 65; (1985) 158 CLR 661 at 670. The third and fourth respondents are companies each incorporated in the State of Delaware in the United States of America. Pursuant to the articles and by-laws of the companies nominated directors of each company constitute a management committee which oversees the operations in Australia of Australian Directory Services. Each member of the committee of management resides in the United States of America, although they travel from time to time to Australia. In the ordinary course of business, advertisements for insertion in Yellow Pages directories would not come to the attention of members of the management committees. Rather, matters of that nature would be handled by production departments in each State. In short, the persons entrusted with the powers of the company are not involved in the processing of advertisements. The affidavit evidence of Mr S.R. Schmidt to this effect filed on behalf of the third and fourth respondents was not challenged by the applicant. Under common law principles, to prove that the third and fourth respondents had knowledge of the essential facts constituting the contravention, the applicant must prove that those entrusted with the exercise of the powers of the corporation had that knowledge: Tesco Supermarkets Limited v. Nattrass [1971] UKHL 1; (1972) AC 153, Universal Telecasters (Qld.) Ltd v. Guthrie (1978) 32 FLR 360 at 364.

37. The applicant seeks to rely on s.84(1) of the Trade Practices Act to establish the requirement of knowledge. That sub-section reads :

"84(1) Where, in a proceeding under this Part in

respect of conduct engaged in by a body corporate,

being conduct in relation to which section 46 or

Part V applies, it is necessary to establish the

state of mind of the body corporate, it is

sufficient to show that a director, servant or

agent of the body corporate, being a director,

servant or agent by whom the conduct was engaged

in within the scope of the person's actual

or apparent authority had that state of mind."

38. The purpose of this sub-section is to overcome the difficulty of imputing intention to a corporation in consumer protection cases and that purpose is achieved by extending the common law principles. It is important to recognise the limitations which the sub-section itself imposes on its operation. It applies "in respect of conduct engaged in by a body corporate, being conduct in relation to which ... Part V applies..." Mr O'Donnell for the third and fourth respondents argues that the sub-section has no application in the present case as the conduct alleged against the third and fourth respondents is conduct to which s.75B applies. That section, and also s.82 pursuant to which the damages claim is formulated, are not provisions within Part V of the Act. Section 75B as construed in Yorke v. Lucas imposes civil liability only on those who, if the particular contravention of Part IV or V were an offence, would be criminally liable for it. The High Court observed (at p 673) "Civil liability is imposed only on those who engage in the conduct prescribed by s.75B with the state of mind which the criminal law calls mens rea". If s.84(1) could be applied in the manner contended for by the applicant, liability would be imposed on a much broader basis. Presumably s.84(3) would have a similarly broad application, and could result in an individual incurring an accessorial liability under s.75B where that person had no knowledge of the essential facts constituting the contravention. I agree with Mr O'Donnell's submission that s.84(1) does not apply to impute knowledge to a corporation against which liability is alleged under s.75B.

39. In any event there is force in Mr O'Donnell's alternative submission that even if the applicant is entitled to take advantage of s.84(1), the applicant has not established that "a director, servant or agent by whom the conduct was engaged in within the scope of the person's actual or apparent authority", had knowledge of the essential facts which give rise to the misleading quality of the advertisement. Employees of the third and fourth respondent who were involved appear to be a clerk in the production department who processed the contract and the advertisement, Miss Miranda Fox, a sales representative who, in that capacity, received the advertisements from the Coopers on behalf of the third and fourth respondents, and Mr Passfield who at the relevant time was a divisional manager of the sales department in Queensland.

40. The clerk in the production department has not been identified. He was one of a number of clerks who would have processed a large number of advertisements each day. There is nothing in the evidence to suggest that he should have, let alone actually did, appreciate that the advertisement made a representation which was incorrect. Mr Passfield's involvement was accidental. He happened to see the advertisements "by chance" in a room occupied by Mrs Cooper during a selling trip at Toowoomba. The contract documents did not come to him in the routine course of his employment. There seems to have been some passing discussion about Mrs Cooper's intention to lodge the advertisements, but the evidence does not establish that Mr Passfield inspected the documents sufficiently closely to become aware of the terms of the draft of the impugned advertisement, or that he realised that it contained an incorrect representation. That leaves the role of Miss Fox. As the sales representative who received the contract documents it might be expected that she, of all the third and fourth respondents' employees, would be the most likely to have an understanding of the facts which would indicate that the impugned advertisement was misleading or deceptive or likely to mislead or deceive. However when she gave evidence it was not put to her on behalf of the applicant that the advertisement was misleading or that she knew the essential facts constituting the contravention of s.52. It is unclear from her evidence whether she was aware of these facts, and I would not be prepared to infer from what she said that she had the requisite knowledge.

41. The alternative ground on which the claim is made against the third and fourth respondents depends on the proposition that the Coopers were acting within the scope of their employment in the preparation and submission of the impugned advertisement. In my opinion this contention is quite untenable. As I understand the applicant's pleadings the case sought to be made is one of vicarious liability, not that the acts of the Coopers are to be treated as the acts of the third and fourth respondents. No authority is advanced by the applicant in support of the proposition that the Trade Practices Act imposes liability on a corporation otherwise than by treating acts of natural persons as acts of the corporation in accordance with the principles laid down in Tesco Supermarkets Limited v. Nattrass [1971] UKHL 1; (1972) AC 153, or under s.84(2) of the Act. The observations of Toohey J. in Trade Practices Commission v. Tubemakers of Australia Ltd & Ors [1983] FCA 93; (1973) 76 FLR 455 at 474-5 and Lockhart J. in Walplan Pty Ltd v. Wallace [1985] FCA 479; (1985) 8 FCR 27 at 36 are opposed to the applicant's submission. The applicant could not make out her case under these principles. The Coopers were not persons entrusted with the exercise of the powers of the corporation so as to make their conduct the conduct of the company, and it would be quite contrary to the evidence to suggest that, within the meaning of s.84(2), the relevant conduct of the Coopers was engaged in "on behalf of" the third and fourth respondents or that the conduct was engaged in within their "actual or apparent authority" as servants of the third and fourth respondents. A claim based on s.84(2) would fail on the same facts as the claim based on vicarious liability must fail.

42. As to the claim that the offending conduct took place whilst the Coopers were acting within the scope of their employment, the Coopers decision to go into a floristry business was totally unrelated to that employment. It was a private decision made by them for their own purposes: Kooragang Investments Pty Limited v. Richardson & Wrench Limited [1981] UKPC 30; (1982) AC 462 at 475. The decision to advertise in the Brisbane Yellow Pages was likewise their own decision for their own purposes. The evidence establishes, as would be expected, that the content of the advertisements was decided on by the Coopers outside of the scope of their employment. In no relevant sense could it be said that the preparation of the impugned advertisement was an incident of their employment. In the preparation of the advertisements and in the submission of them to the sales representative of the third and fourth respondents, Miranda Fox, the Coopers were acting in pursuit of their own interests.

43. On the conclusions which I have reached it is unnecessary to consider the further ground of defence under s.85(3) of the Trade Practices Act, the so called "publisher's defence", which the third and fourth respondents raise in their pleadings.

44. I turn now to the claim for passing off which is made against all respondents. As I understand the applicant's pleadings, it is alleged that the Coopers by their conduct in placing the impugned advertisement in the Brisbane Yellow Pages 1987 committed the tort of passing off, and that the third and fourth respondents have incurred a vicarious liability for this tort as the Coopers were acting within the scope of their employment. The same conduct by the Coopers is relied upon to support this claim of vicarious liability as is relied upon to support the claim of vicarious liability for the contravention of s.52. For the reasons already given I do not consider that the third and fourth respondents could be vicariously liable for that conduct on the part of the Coopers. However it remains to consider whether the Coopers have incurred a liability for passing off their business as that of the applicant. The applicant's pleadings fail to distinctly particularise the conduct said to constitute the passing off. Paragraph 8 of the amended statement of claim reads :

"8. In placing the deceptive and misleading

advertisement aforesaid, the First and Second

Respondents:-

(b) Passed their business off as that of the

Applicant and thus deceived and misled the

Applicant's customers and other members of the

public."

45. In paragraphs 7 and 8(a) it is alleged that the Coopers engaged in conduct that mislead or deceived or was likely to mislead or deceive the users of the Brisbane Yellow Pages 1987 into believing that they operated a florist business at Indooroopilly Shoppingtown. By inference it is the same misleading or deceptive characteristic of the impugned advertisement which is relied upon in para.8(b). A similar understanding is conveyed by paras.11B and 11C of the amended statement of claim. The complaint is that the Coopers falsely represented that they conducted a floristry business at Indooroopilly Shoppingtown and it was this misrepresentation which constituted the passing off.

46. The right protected by an action in passing off is the property in the business or goodwill of the plaintiff from wrongful appropriation by another trader: Cadbury Schweppes Pty Ltd & Ors v. Pub Squash Co. Pty Ltd (1980) 55 ALJR 333 at 335. The property protected is not limited to the name or trade mark of a product or business. In delivering the judgment of the Judicial Committee of the Privy Council in the Pub Squash case Lord Scarman said (at p 336) :

"The width of the principle now authoritatively

recognised by the High Court of Australia and the

House of Lords is, therefore, such that the tort

is no longer anchored, as in its early nineteenth

century formulation, to the name or trade mark of

a product or business. It is wide enough to

encompass other descriptive material, such as

slogans or visual images, which radio, television

or newspaper advertising campaigns can lead the

market to associate with a plaintiff's product,

provided always that such descriptive material has

become part of the goodwill of the product. And

the test is whether the product has derived from

the advertising a distinctive character which the

market recognises.

But competition must remain free: and competition

is safeguarded by the necessity for the plaintiff

to prove that he has built up an 'intangible

property right' in the advertised descriptions of

his product: or in other words, that he has

succeeded by such methods in giving his product a

distinctive character accepted by the market. A

defendant, however, does no wrong by entering a

market created by another and there competing with

its creator. The line may be difficult to draw:

but unless it is drawn, competition will be

stifled."

47. In the present case the applicant's case as pleaded does not allege a wrongful appropriation of a mark, trade mark, get up, trading style or descriptive material. What is alleged is a wrongful appropriation of the geographic location of the applicant's business. The claim appears to be novel in that it relies solely on a geographic location as the distinguishing feature of the applicant's business which it is said that the Coopers have wrongfully appropriated as an attribute of their buisness. No case has been cited where a mere geographic location has been recognised as an intangible property right which the action for passing off will protect. The place of business of a trader may be relevant in determining the area in which his business or his goods have an established reputation which the law will protect, but that is a reputation related to attributes of the plaintiff's business other than the geographic location from which the business is conducted. The geographic location alone of the applicant's business is not entitled to protection from competition by another trader. If a trader, being the first to establish a business in an area, were by that fact alone entitled to claim a monopoly in that area, free competition would be severely stifled. The law allows competitors to set up in the geographic market of others, and had the Coopers actually opened a florist business in Indooroopilly Shoppingtown, without more, the applicant could not maintain an action for passing off against them. In the events which happened the Coopers were guilty of conduct which contravened s.52 because they represented to the relevant section of the public that they conducted a business at Shoppingtown when they did not do so. However that representation, in my opinion, involved no appropriation of an intangible property right of the business or goodwill of the applicant. As I have earlier observed, there may have been some members of the public who were misled into thinking, because of their knowledge that there was a florist in the Indooroopilly Shoppingtown complex, that the impugned advertisement was advertising the applicant's business. But such a belief would arise not from any wrongful appropriation of the plaintiff's business or goodwill but from the mere fact of the geographic location of the applicant's business. The misapprehension would not arise from any false claim to a business name, mark or other distinguishing feature or descriptive material which had become part of the applicant's business or goodwill.

48. Although I do not consider the applicant's pleadings to allege passing off based on the misappropriation of the applicant's business name, the written submissions of the respondents reflect a degree of uncertainty on their part as to what the applicant intended to allege. In case I have misunderstood the applicant's pleadings and her case, it is my view that the evidence would not support an action against the Coopers based on a misappropriation of the applicant's business name. I am not satisfied that the applicant has established that her business has an established reputation in the name "Indooroopilly Shoppingtown Florist". Although that was the registered business name, the name under which she had been advertising in the Brisbane Yellow Pages was simply "Shoppingtown Florist" and this seems to have been the name under which her business was known. In my view the use by the Coopers in the impuged advertisement of the word "Indooroopilly" in the name "A. Aarons Florist Indooroopilly", and the words "Indooroopilly Shoppingtown" in the directional component of the advertisement do not amount to an appropriation of anything that is distinctive of the applicant's business. At the most, these words are descriptive or geographical words associated with a word (Shoppingtown) which forms part of the name of the applicant's business under which she has established her reputation and goodwill. Decided cases demonstrate that it is very difficult to make out a case for passing off in respect of the use of a merely descriptive or geographical name, and I do not think the applicant could do so here: see Hornsby Building Information Centre Pty Ltd & Anor v. Sydney Building Information Centre Limited [1978] HCA 11; (1978) 140 CLR 216 at 229, Burswood Management Limited v. Burswood Casino Motel Hotel Pty Ltd [1985] FCA 202; (1985) 7 FCR 186 and Street & Anor v. Jedsminster Pty Ltd & Anor (1988) 11 IPR 520. I agree with the submission of the third and fourth respondents that the lack of substance in the applicant's case for passing off can be demonstrated by asking the question: if the Coopers had opened a florist shop in Indooroopilly Shoppingtown, under the name in the advertisement, and advertised as they did, would the applicant have had a case for passing off? The answer must be no.

49. In my opinion the applicant has failed to establish a case for passing off against any of the respondents.

50. Although the pleadings do not make the allegation, the written submissions made on the applicant's behalf argue that the evidence discloses that the Coopers and employees of the third and fourth respondents acted in concert to carry out a plan "deliberately calculated to deceive the subscribers to Telecom's Yellow Pages" by publishing the impugned advertisement. Because of the joint participation of their employees it is submitted that the third and fourth respondents are liable as principal actors along with the Coopers in committing the torts of deceit and passing off. Central links in the chain of proof said to establish both the common plan and its implementation are inferences which the Court is asked to draw that the directional entry submitted for publication by the applicant was "very mysteriously" altered so as to exclude information that the applicant occupied "Shop 48, 2nd Level" at Indooroopilly Shoppingtown thereby "watering down" the applicant's directional entry and giving added impact to the impugned advertisement. It must be said immediately that this serious allegation of misconduct is not only without support in the evidence, but is contrary to the uncontradicted evidence of Mr Duke (para. 13 of his affidavit) that this information was deleted on the applicant's instructions, and that a copy of the amended text of her entry was sent to her on 29 August 1986. Other evidence referred to related to events in 1987 involving employees of the third and fourth respondents and their handling of complaints by other florists and their handling of the Coopers directional entries proposed for 1988. These events occurred well after the impugned advertisement had been published, and in any event do not give rise to inferences of misconduct. The evidence is against there being a plan of concerted action between the Coopers and employees of the third and fourth respondents, and I find that there was no such plan.

51. The evidence does not support the allegation of deceit against any of the respondents. The Coopers deny that they knew the impugned advertisement contained a false representation. I accept those denials. The allegation of a planned deceit was not put to the employees of the third and fourth respondents who gave evidence. The allegation was not developed during the trial. It emerged belatedly in the applicant's written submissions.

52. In their pleadings the third and fourth respondents cross-claimed, in the event that they were held liable to the applicant, against the Coopers for indemnity or damages. The cross-claim rested on clause 8 of the Yellow Pages Advertising Contract entered into by the Coopers. The Coopers denied that clause 8 had application in the events which happened, and they cross-claimed against the third and fourth respondents, in the event that they were liable to the applicant, for damages. In light of the conclusions I have reached on the applicant's claim against the third and fourth respondents it is not necessary to resolve the issues raised by their cross-claim. To understand the Coopers' cross-claim it is necessary to refer to the Yellow Pages Advertising Contract. It is sufficient to set out clauses 8 and 14 of the contract which read as follows :

"8. (a) The Customer warrants and declares that

the Customer is the owner of and has the

right to use or is duly authorized by the

owner and permitted to use the business name,

trade mark, trade name or illustrations

comprising or forming part of the directory

advertising the subject of this contract and

that the Customer is authorized to advertise

any business product or service in the

directory advertising and the Customer

indemnifies and agrees to keep indemnified

ADS from all actions claims, costs, demands,

damages or liability arising in any manner

from the use of or publication of or

acceptance for publication of directory

advertising containing any such business

name, trade mark, trade name or illustration.

(b) The Customer warrants and declares that

the directory advertising the subject of this

contract is not false or misleading and is

not likely to deceive or mislead in any way

whatsoever."

14. This contract contains the entire agreement

and understanding of the parties hereto and

to the extent permitted by law all other

warranties, conditions and agreements whether

express or implied are hereby agreed to be

expressly excluded."

53. The Coopers' cross-claim rests wholly on the allegation that it was an implied term of the Yellow Pages Advertising Contract that the third and fourth respondents in carrying on their business "should exercise all due care and skill". In my opinion such a term cannot be implied. To do so would be inconsistent with clause 14 of the contract. The alleged term fails to indicate in what respect all due care and skill should be exercised. The third and fourth respondents' business is very extensive, and it can hardly be thought that the third and fourth respondents would have agreed to such a broad and unrestricted term given the nature of their undertaking which required them to process thousands of advertisements a day and their limited ability to check the truth or otherwise of the advertisements for publication.

54. Notwithstanding the Coopers' submissions to the contrary, I consider the indemnity contained in clause 8(a) which commences with the words "the Customer indemnifies and agrees to keep indemnified..." is not confined in its scope to liability arising from the publication of an unauthorised business name, trade mark, trade name or illustration which is submitted in breach of the warranty contained in the first part of the clause. I consider the indemnity is a wide one which extends to any liability arising in any way from the publication of the advertisement. I also consider that clause 8(b) is a warranty given by the Coopers a breach of which is actionable in damages. I do not consider the warranty is void for uncertainty. It follows the language of s.52 of the Trade Practices Act and in my view is to be interpreted in a similar way. Whatever the precise formulation of the term which the Coopers seek to read into the contract, the effect of the term would be to condition the operation of the indemnity given by clause 8(a) and the warranty given by clause (b) to circumstances where the third and fourth respondents have correctly satisfied themselves that a proposed advertisement submitted by a subscriber meets the guidelines and is not likely to lead to a contravention of s.52 by the subscriber. Such a term would be opposed to the evident purpose of clause 8. The term sought to be implied does not meet the conditions governing the implication of terms in contracts as stated by the Judicial Committee in B.P. Refinery (Westernport) Pty Ltd v. Hastings Shire Council [1977] HCA 40; (1977) 52 ALJR 20 at 26-27 and accepted by the High Court in Secured Income Real Estate (Australia) Limited v. St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 at 605-606, Codelfa Construction Pty Ltd v. State Railway Authority of N.S.W. [1982] HCA 24; (1982) 149 CLR 337, and Hospital Products Limited v. United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41. In my opinion no term as alleged by the applicants, or having the effect alleged by them, is to be implied. In my opinion the cross-claim by the Coopers fails.

55. On the conclusions which I have reached the applicant is entitled to recover damages against the Coopers pursuant to s.82 of the Trade Practices Act in respect of the established contravention of s.52. The applicant says that she suffered a sudden and dramatic downturn in her telephone orders after the distribution of the Brisbane Yellow Pages 1987. The drop was to the extent of seven to ten telephone orders per day, and orders did not start to pick up until after the 1988 Yellow Pages were distributed. The business returned to its former levels by January 1989. To quantify her claim, the applicant has settled on an average loss of nine orders per day except on St Valentine's Day and Mothers' Day when the reduction was about fifty orders. The applicant estimates the average sale price of each telephone order at $30, and the cost of flowers, vase, and other materials at $9 per order. On this basis she lost $21 per order. In December 1987 she calculated her claim as follows (after correcting some double counting) :

Average workings days per month x 24

Gross profit lost per month 4536.00

Loss for 11 months x 11

49896.00

Additional loss

Mothers Day (41 x $21) 1050.00

St. Valentines Day (41 x $21) 1050.00

Gross profit loss 51996.00

Less saving on employees' wages 5742.50

Loss of profits claimed $46253.50"

56. At trial it was suggested that the duration of a loss was not 11 months but 15 months, on the basis that the distribution of the Brisbane Yellow Pages 1988 took approximately 3 months. The evidence does not support a calculation based on 15 months. At best the evidence does not support a longer period than 12 months. Although the applicant initially calculated her loss from 1 January 1987, her evidence is that whilst she noticed a downturn commencing in February 1987, the real impact was felt from March 1987. By the end of November 1987, at which time delivery of the 1988 directory had commenced, she acknowledged that there was an improvement in the telephone orders. Presuming that the time which it took to deliver the 1987 directories was similar to the 1988 directories it would not be correct to allow a 3 months' extension at end of the 1987 year without making a corresponding allowance at the beginning of the year.

57. The applicant's calculation of her damages, even allowing that they should be calculated over not more than 12 months, was hotly contested. The principal submission of the respondents was that the applicant's loss in sales caused by the impugned advertisement cannot have been more than the gain by the Coopers' floristry business during the corresponding period. Mrs Cooper became fully engaged in the business after she resigned her employment in January 1987. Under the variations in style of A. Aarons Florist the business was conducted as one entity. As events turned out the business was anything but successful. At first Mrs Cooper thought it was a success but proper books were not kept. Whereas she thought it was profitable, it was in fact running at a loss. The full extent of the loss became evident later in the year when financial statements for tax purposes for the period ended 30 June 1987 were prepared. To 30 June 1987 the business suffered an operating loss of $51,908. On 1 July 1987 Mrs Cooper moved to Perth to take up full time employment. She returned to Brisbane for a short period between 8 July and 20 July 1987, but then returned permanently to Western Australia. From July 1987 she arranged for her sister-in-law to conduct the business, but that also was unsuccessful. In September 1987 the Coopers simply abandoned the business and vacated the Annerley premises. When they did so, the landlord of the premises contacted a florist, Mrs Hutchinson, and asked if she would be interested in taking over the lease of the premises. She agreed to do so on condition that she could retain the A. Aarons Florist telephone number. The Coopers consented to her doing so. From 1 October 1987 she conducted a floristry business under the style "Aamy's" from that premises and continued to receive telephone orders on the former A. Aarons Florist number.

58. It should be noted that on 27 October 1987 the Coopers entered into compositions with their creditors, and these proceedings have been defended on the Coopers' behalf by their Trustee.

59. Mrs Cooper's evidence is that during the 10 month period from December 1986 to September 1987 the gross receipts of A. Aarons Florist business were $79,028.64, only a small part of which came from deliveries into the Indooroopilly area. She says that all her deliveries were made through Pegasus Floral Transport Pty Ltd, apart from during a short period when she employed Mr Peter Copping to make deliveries for the business. The delivery records of Pegasus Floral Transport Pty Ltd relating to the A. Aarons business were sworn to by Mrs Oliver and delivered during the currency of these proceedings to the solicitors for the third and fourth respondents where they were analysed by Mr C.J. Monsour. I am satisfied that the records produced by Mrs Oliver provide a reliable indication of the orders delivered from the Coopers' business, and I accept the analysis which Mr Monsour has made. The delivery records run to 26 October 1987 (which includes a short time after Mrs Hutchinson went into the Annerley premises). Mr Monsour's analysis divides deliveries into those within the "Indooroopilly area" and those delivered elsewhere. He took the "Indooroopilly area" to include the suburbs of Indooroopilly, Taringa, Chelmer, Fig Tree Pocket, Kenmore, Chapel Hill, Toowong, St Lucia and Sherwood (which may conveniently be called "the greater Indooroopilly area"). From deliveries into the greater Indooroopilly area it can be calculated that during the period the Coopers were operating A. Aarons Florist from November 1986 to the end of September 1987 the total individual orders delivered by Pegasus Floral Transport Pty Ltd into the Indooroopilly suburb was 27 and into the greater Indooroopilly area was 84. Mr Copping, whose evidence I also accept, recalls making two deliveries into the Indooroopilly area. The delivery records for Aamy's Florist were proved through Mrs Hutchinson. I accept that those records are accurate and complete. An examination of those records shows that she made a total of 12 deliveries to Indooroopilly, and a total of 41 deliveries to the greater Indooroopilly area up to 14 February 1988.

60. From these figures the total deliveries into the suburb of Indooroopilly during the period 10 November 1986 to 14 February 1988 were 41, and into the greater Indooroopilly area were 127 - on average less than one delivery a week to Indooroopilly or slightly less than two deliveries per week to the greater Indooroopilly area.

61. The applicant responds to this evidence in two ways. First, she says that there may be people in and about the Indooroopilly area who would have ordered flowers through her business for delivery into suburbs beyond the greater Indooroopilly area who were mislead by the advertisement. In my view the number of people who would fall into that category would be very few. The evidence of Miss Geale, one of the applicant's employees, was that the bulk of the deliveries from the applicant's business were to the Indooroopilly and surrounding areas. The applicant made no attempt to back up this part of her case by proving her delivery records before, during and after 1987.

62. The applicant's second response was to say that there must have been other deliveries which Mrs Cooper was concealing. To this end a strenuous attack is made in the applicant's submissions on the credit of Mrs Cooper. I reject that attack. Specifically I reject the contention that the evidence proves that Mrs Cooper deliberately lied about her role in relation to a directional entry for Indooroopilly Shoppingtown in the Yellow Pages 1988. There is no doubt that an application was lodged with the third and fourth respondents for the inclusion in the Brisbane Yellow Pages 1988 of a directional entry for Indooroopilly Shoppingtown. However, that application and others for 1988 were were signed by Mrs Cooper's sister-in-law. There is no direct evidence that Mrs Cooper knew an application had been made to renew a directional entry for Indooroopilly Shoppingtown. The other entries which were placed for 1988 tend to bear out Mrs Cooper's evidence that her decision had been to abandon directional entries showing shopping centre locations. There is no explanation of how the proposed entry for Indooroopilly Shoppingtown came to be prepared, and I am not prepared to infer against Mrs Cooper that her evidence about the application is false. The impression which Mrs Cooper gave in the witness box does not cause me to think that she was other than truthful.

63. It was also submitted that Mrs Cooper should be disbelieved because there is a discrepancy between her banking figures and the number of deliveries disclosed by the records of Pegasus Floral Transport Pty Ltd. By reference to exhibit IR2, a bundle of original Pegasus invoices produced by Mrs Cooper, the applicant contends it can be determined that a total of 1075 deliveries (or thereabouts) is disclosed. Allowing an average price of $40.00 per order the delivery records disclose sales of only $43,000. It is contended: "The reality of the figures, shows her bank deposits as $86,436. Her deliveries of 1,075 then simply did not make sense". I have been through the various records of the Coopers' business which have found their way into evidence. I find nothing in them which causes me to doubt the reliability of the analysis of Mr Monsour as an indication of the sales made by the Coopers. The answer to the contention of the applicant is that exhibit IR2 is an incomplete set of invoices. It covers only the periods from 17 November 1986 to 22 February 87 and from 9 April 87 to 20 June 87. Mr Monsour however worked from the bound duplicates for the complete period. His analysis shows that there were many more deliveries than 1,075 from the Coopers' business. If it is assumed that the average delivery charge per order were $3.50, the total deliveries from 10 November 1986 to 1 October 1987 from the Coopers' business were approximately 1,930. At $40 per order the gross receipts would be $77,200. Allowing for counter sales, there is no significant discrepancy between the banking and the number of deliveries. I accept the evidence of Mrs Cooper as to the takings of the A. Aarons floristry business, and as to the accuracy of the delivery records.

64. From the delivery records, during the twelve month period of circulation of the impugned advertisement, it appears that less than 110 deliveries were made by the A. Aarons and Aamy's Florists into the greater Indooroopilly area. However, it cannot be assumed that all these orders were received in consequence of the impugned advertisement. Orders were delivered to suburbs to which the directional entries for "Centenary Suburbs" and "Toowong Shopping Village" are directed. Further, the Brisbane Yellow Pages 1987 include the quarter page display advertisements by "A. Aarons Florist" and "A. Aarons Florist and Gift Baskets". The evidence is to the effect that display advertisements of this kind are more successful in attracting customers than directional entries. As well, the Abracadabra business had some established customers, and the records from Pegasus Floral Transport Pty Ltd show deliveries into the greater Indooroopilly area before the publication of the impugned advertisement. Even allowing that there may have been some orders for delivery outside the greater Indooroopilly mistakenly placed as a result of the impugned advertisement with the A. Aarons and Aamy's Florists, the loss of orders suffered by the applicant as the result of the impugned advertisement, as a matter of probability, would not exceed 100.

65. Against these findings I return to the applicant's calculation of her loss. She gave evidence in support of her calculation and sought to corroborate her estimate of lost orders by calling Misses Geale and Waddington who had been employed in her shop at the relevant time. The applicant when giving evidence exhibited a sense of grievance against the Coopers, and showed a determined but unreasonable adherence to the view that all her adversities resulted directly from the impugned advertisement. Her estimate of the loss was not soundly based on records to show the breakdown of her telephone orders compared to counter sales. Nor was any genuine attempt made by her to work out the profitability of the business during the currency of the impugned advertisement, or to compare that period with periods before and after. I found it surprising that the applicant had not taken effective steps to have financial statements for the business for the year ended 30 June 1988 prepared before trial. There is information about the applicant's takings in 1988 in Exhibit A1. This information does not bear out the suggestion in the applicant's evidence that there was a dramatic improvement as soon as the Brisbane Yellow Pages 1988 was distributed. I am not satisfied that the applicant's evidence about her losses is reliable. I am prepared to accept that during 1987 the applicant suffered a significant downturn in her takings as compared to the previous year, but the evidence, apart from hers, does not bear out either her estimate of the extent of that loss, nor the causal relationship between the whole of that loss and the impugned advertisement. There probably were days during the year when the applicant and her staff perceived that there was a low number of orders which was discussed between them, but I think the applicant's calculation exaggerates the extent of the loss by taking the worst days and treating them as the average. The evidence of Misses Geale and Waddington, I think, suffers the same infirmity.

66. The actual bankings of the applicant's business (apparently the takings other than from Interflora orders) dropped by $33,675.64 for the 11 months from January to November 1987 as compared to the previous year. This is a drop in gross receipts whereas the applicant's calculation of her loss is of net profit. To explain why the banking difference was not higher the applicant suggested that the 1987 figures should have been 15% above the previous year to reflect inflation. However, I am not satisfied on the evidence that the takings of florists in the Brisbane area increased in absolute dollar terms in 1987 over the previous year. Statistical information on which the witness Mr Van Homrigh relied showed an overall absolute decrease in turnover for the business category which includes florists, and I was impressed by the general evidence of Mrs McMillan to the effect that the 1987 year was a poor one for florists.

67. A loss of the magnitude alleged by the applicant is not reflected in her financial statements when the gross profit after cost of sales figure for the year ended 30 June 1986 is compared with that of 30 June 1987. The latter figure shows a drop of only $2,133, and the net profit for the financial year ended 30 June 1987 was only $6,314 less than the previous year. However, even accepting that during 1987 the applicant suffered a significant drop in her takings, the onus remains on her to prove that it was due to the impugned advertisement. Quite apart from the evidence, which I accept, as to the number of deliveries made by the A. Aarons Florists, there is cogent evidence that a number of other factors existed which to a greater or lesser extent would have adversely affected the applicant's business. In November 1986 the Toowong Shopping Village opened. It contained a new florist shop. Then, in the Locality Guide of the Brisbane Yellow Pages 1987 the advertisement of A. Aabigails appeared for the first time, and ahead of the applicant's advertisement. Woolworths, a large tenant in Indooroopilly Shoppingtown, moved its cut flower section to the front of its shop and increased its sales. There was also competition, felt by a number of florists, from roadside vendors of cut flowers. And in any event, 1987 was not a good year for florists. It is impossible to determine to what extent these various factors influenced the applicant's takings. There is nothing in the evidence led by the applicant which persuades me that the apparently reliable evidence available from the delivery records relating to A. Aarons and Aamy's Florists should not be acted upon.

68. The applicant led evidence from Mr D.K. Anderson, a senior lecturer in Business Economics and Managerial Accounting, in the Department of Commerce at the University of Queensland, and for the respondents Mr Van Homrigh, a chartered accountant with the firm Touche Ross & Co., gave evidence. I have not found the calculations made by these experts helpful in trying to assess the applicant's loss. Their considerations were based on assumptions not been borne out by the evidence, they were not aware of the evidence about the Coopers' business, and Mr Anderson in particular too readily assumed that the downturn in the applicant's takings was caused by the impugned advertisement.

69. An assessment of damages in a case such as this can only be made on broad grounds. I take as a starting point the conclusion already expressed that the deliveries mistakenly placed with A. Aarons or Aamy's Florists in consequence of the impugned advertisement would not exceed 100. There was no challenge to the applicant's evidence that she would make about $21 on each order. In her own calculation she made an allowance for a saving in wages, but on the assumption that her business was already being affected by unrelated factors the additional loss caused by the impugned advertisement may have had little bearing on her wage and overhead costs. In the circumstances I propose to award damages of $2,000 to compensate for the orders lost in consequence of the advertisement. The applicant is entitled to have an award of interest on this sum included in her judgment pursuant to s.51A of the Federal Court of Australia Act 1976. I propose to allow a lump sum of $600.

70. The applicant also pressed a claim for loss of goodwill. She acquired a one half interest in the business in April 1983 for $22,500, and the remaining half interest in December 1985 for $27,500, in all $50,000. In December 1987 she said her goodwill was reduced to 25% of its former value, but the presentation of her case at trial acknowledged that this figure could not be sustained. The fact is that the applicant has continued to run her business. At no stage has she intended to sell it nor has she any present intention to do so in the future. She acknowledged that by January 1989 the business was no longer affected by whatever adversely influenced it in 1987. The main cause of the downturn has not been proved to be due to the impugned advertisement. In my opinion the applicant has not established any entitlement to damages for diminution in goodwill of her business.

71. The applicant also strenuously pressed claims for exemplary damages against all respondents. Exemplary damages for a contravention of s.52 cannot be sustained as a matter of law. The Court has no power to award damages other than compensatory damages under ss.82 and 87 of the Trade Practices Act: Musca & Ors v. Astle Corporation Pty Ltd & Anor [1988] FCA 4; (1988) 80 ALR 251 at 262. As I have dismissed the claim for passing off it is unnecessary to explore the proposition advanced by the applicant that exemplary damages may as a matter of law be awarded in a passing off action. Even if the power to do so existed, I am of opinion that the applicant has not proved that the Coopers acted in contumelious disregard of her rights. They acted in a mistaken belief that the impugned advertisement did not contain a representation that was likely to be misleading or deceptive as they thought it conveyed only the meaning that A. Aarons Florists were prepared to service the areas designated in the directional component of that and the other directional entries.

72. For the above reasons the applicant will have judgment against the first and second respondents for $2,600.

73. The applicant argues that she should be awarded full solicitor and client costs on the basis that the Coopers conduct was in contumelious disregard of her rights. I have rejected that allegation. There is no reason why, if costs are awarded to the applicant, she should recover solicitor and client costs rather than party and party costs.

74. The applicant has recovered a very small award. The respondents argue that any costs awarded to the applicant should reflect that fact. These proceedings were commenced before O62, r.36A came into force. An award of costs is in the discretion of the Court: s.43(2) of the Federal Court of Australia Act 1976. The low award which the applicant has recovered is a matter properly to be taken into account in the exercise of the discretion. There are however, other important considerations. When the applicant commenced the proceedings Australian Telecommunications Commission was joined so that relief sought to protect the applicant from further loss and damage from the alleged contravention of s.52 by the other respondents could be granted. As events transpired on 15 September 1987 the order originally claimed against the Commission was not made, but injunctive relief requiring the withdrawal of a directional entry by A. Aarons Florist for Indooroopilly Shoppingtown was made in the applicant's favour. There has been some debate whether the order of Pincus J. bound any of the respondents other than the Coopers. I have read the transcript of the proceedings before Pincus J. I construe his order to be one made against all respondents, including Australian Telecommunications Commission which was then a party. The order was however made with the consent only of the Coopers, and was primarily intended to bind them to withdraw the advertisement which had been lodged by Mrs Cooper's sister-in-law on their behalf. Australian Telecommunications Commission was in the position of an outside party to the dispute joined for the purpose of enabling adequate relief to be given to protect the applicant from harm from a threatened contravention of s.52 by the Coopers. At no stage has the applicant alleged agaisnt the Commission that it engaged in conduct which contravened s.52. In light of the conclusions which I have reached on the merits of the case, the third and fourth respondents were in a similar position for the purposes of the order made on 15 September 1987. The action to this extent against the Coopers was vindicated.

75. When the proceedings were commenced the amendment to s.86 of the Trade Practices Act which vested State Courts with Federal jurisdiction with respect to any matter arising under Division 1 or 1A of Part V in respect of which a civil proceeding is issued had not come into force. That amendment, and s.86A which permits the transfer of matters already instituted in the Federal Court to State Courts, came into force shortly after the commencement of these proceedings. The proceedings were therefore not only properly brought in this Court, at the time when they were commenced they could only be brought in this Court. The respondents point out that the applicant could later have had the action transferred into a State District Court. In view of the low award I consider she should suffer a reduction in the recovery of costs for not doing so. In all the circumstances I consider the applicant should be awarded two thirds of her costs of the action to be taxed against the Coopers.

76. The applicant should pay the costs of the third and fourth respondents to be taxed. The question arises whether a "Bullock order" should be made in her favour against the Coopers ordering them to indemnify the applicant against all or some of those costs. The grounds upon which a Bullock order might be justified are discussed by the High Court in Gould & Anor v. Vaggelas & Ors (1985) 157 CLR 215 and by the Full Court of South Australia in Fennell v. Supervision and Engineering Services Holdings Pty Ltd and Santos Ltd (1988) 47 SASR 6. A Bullock order may be made where the costs in question have been reasonably and properly incurred by the plaintiff as between him and the unsuccessful defendant: Gould v. Vaggellas at 247 per Wilson J. (with whom Murphy J. agreed on this point). The costs will be so incurred where the conduct of the unsuccessful defendant in relation to the plaintiff's claim shows that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought: Gould v. Vaggellas at 260 per Brennan J. There must be something about the conduct of the unsuccessful defendant in relation to the plaintiff's claim as to make it fair to impose some liability on him for the costs of the successful defendant: Gould v. Vaggellas at 230 per Gibbs C.J. In Fennell's case at p 7 King C.J. said :

"The principle of justice upon which the Bullock

order rests may, in my opinion, be stated thus.

The unsuccessful defendant has caused the

litigation by his wrongful act and by disputing

liability for it. He therefore ought to pay all

costs reasonably incurred by the plaintiff in

connection with the litigation. If it was

reasonable, as between the plaintiff and the

unsuccessful defendant, for the plaintiff to sue

the successful defendant, the unsuccessful

defendant ought therefore in justice be liable to

indemnify the plaintiff against the costs of so

doing, including those which he is ordered to pay

to the successful defendant. In many cases the

basis for the plaintiff's claim of reasonableness

in joining the successful defendant will be the

conduct of the unsuccessful defendant in placing

the blame on the successful defendant. That

conduct is, however secondary to the underlying

principle of justice indicated above."

77. The applicant's proceedings were issued against the four respondents now before the Court and against the Australian Telecommunications Commission without any prior communication to the Coopers. The Application was issued on 31 August 1987. The Coopers received notice of the applicant's allegations when the papers were served about a week before the return date. On 15 September 1987 at the hearing before Pincus J., when it was revealed by the Commission that another A. Aarons Florist directional entry for Indooroopilly Shoppingtown was about to go to press, the order leading to the withdrawal of that entry was made. The Coopers consented to the order but without any admission that the impugned advertisement was misleading. When pleadings were subsequently filed the Coopers denied the applicant's claim for damages on the ground that the impugned advertisement made no false representation and did not contravene s.52, but at no time have they based this denial on any conduct by the third and fourth respondents so as to make it reasonable and proper to join the third and fourth respondents to ensure recovery. The decision of the applicant to press these proceedings against the third and fourth respondents for damages appears to rest on her belief firstly, that in some manner or another, employees of the third and fourth respondents were part of a nefarious plot with the Coopers to deceive the public (and hence the claim for exemplary damages), and secondly, that as the Coopers were themselves employees of the third and fourth respondents, the third and fourth respondents were vicariously responsible for the Coopers' conduct. I can find no conduct on the part of the Coopers in relation to the applicant's claim which could reasonably have caused the applicant to hold these beliefs. In my view the facts disclose no ground why in justice the Coopers should indemnify the applicant for the costs which she will be ordered to pay the third and fourth respondents insofar as those costs relate to the unsuccessful claims for damages. However, as events turned out on 15 September 1987 it was proper that the third and fourth respondents be before the Court so that they could be bound by the order requiring the withdrawal of the proposed 1988 entry.

78. In January 1988 Australian Telecommunications Commission filed an affidavit in these proceedings by Paul Thomas Watson which disclosed that Mrs Hutchinson's company had become the subscriber for the former A. Aarons Florist telephone number. By January 1988 the applicant had checked that the Brisbane Yellow Pages 1988 did not contain an offending advertisement. Apart from her damages claims against the third and fourth respondents, there was no need for them to remain in the proceedings. In my view justice will be done if the applicant is indemnified by the Coopers against the costs she must pay the third and fourth respondents up to, but not after, 31 January 1988.

79. There remains the question of the costs of the Australian Telecommunications Commission. The Commission seeks costs from the applicant. This is opposed on the ground that the Commission was bound by the order made by Pincus J. on 15 September 1987, but as I have said, I think the position of the Commission was as an outside party joined for the sole purpose of it being bound by the relief to which the applicant was entitled in respect of the threatened invasion of her rights by the Coopers. The statement of claim was filed after the order was made on 15 September 1987, and after the applicant had been advised that the proposed entry in 1988 had been withdrawn. The statement of claim made no claim for damages against the Commission. On 21 January 1988 the Commission filed the affidavit by Mr Watson. When the matter was before Spender J. on 7 June 1988 the applicant's counsel stated that the applicant had no further interest in pursuing the proceedings against the Commission. However it was not until April 1989 that the applicant released the Commission from the proceedings. In my opinion the applicant should have released the Commission not later than the end of January 1988 by which time she knew that the offending directional entry had not been reproduced, and she had received Mr Watson's affidavit. In my view the Commission is entitled to recover its costs from the applicant. I consider the applicant is entitled to be indemnified against those costs by the Coopers up to 31 January 1988. After that date the applicant must herself bear the Commission's costs as she unnecessarily retained the Commission as a party to the proceedings.

80. The Coopers have failed, on their cross-claim. I reserve the questions of costs on the cross-claims. If the third and fourth respondents seek an order for costs against the Coopers I would like to receive submissions from the respondents as to the order which should be made. The issues raised by the cross-claims involved no extra witnesses being called and very little time during the trial. The respondents are at liberty to make submissions in writing.

81. For these reasons I make the following orders :

1. Judgment be entered for the applicant against the first

2. Judgment be entered for the third and fourth respondents

3. The third and fourth respondents recover their costs of

4. Australian Telecommunications Commission recover its

costs of the action to be taxed from the applicant.

5. The applicant recover the following costs from the first

and second respondents:

(a) two thirds of her costs of the action to be taxed

against the first and second respondent.

(b) the costs which she shall pay pursuant to para.3

hereof to the third and fourth respondents up to

and including 31 January 1988.

(c) the costs which she shall pay pursuant to para.4

hereof to Australian Telecommunications Commission

up to and including 31 January 1988.

6. The question of costs between the respondents on the

cross-claims be reserved for further consideration.